gasoline

The March appropriations bill passed by Congress and signed by President Biden to fund the federal government mandated the emptying of the federal gasoline reserve in fiscal year 2024, which concludes September 30, followed by its eventual closure. That means about 1 MMbbl — 42 MM gallons — of gasoline will find its way to the market in the next few months, or in as little as a few weeks. The Department of Energy (DOE) is planning to distribute those barrels by the end of June to help keep a lid on gasoline prices ahead of the July 4 holiday and into the heart of the summer driving season. In today’s RBN blog, we look at the decision to close the reserve and the potential impact of those barrels hitting the market. 

The Biden administration recently announced a very ambitious — to say the least — rule on tailpipe emissions. But while the rule’s legal and political standing might be a bit uncertain — it’s seen by many as a de facto ban on conventionally fueled cars and trucks and is likely to face several court challenges — doubts also remain about whether it matches up with the realities of today’s energy world. In today’s RBN blog, we look at the new rule, what it would mean for U.S. consumers and automakers, and how it conflicts with the views of RBN’s Refined Fuels Analytics (RFA) practice on the future of global oil and refined products demand and the rate of electric vehicle (EV) adoption. 

The Environmental Protection Agency (EPA) has approved a request by governors from eight Corn Belt states to remove a summertime waiver for Reid Vapor Pressure (RVP) included in the Clean Air Act (CAA) for E10 gasoline, a 90/10 blend of petroleum-derived gasoline blendstock and ethanol. The motive for the governors’ request was a desire to increase sales of E15 gasoline and, by extension, boost ethanol/corn demand by putting it on the same summertime footing as E10. In granting the approval, the EPA conceded that the distribution system wasn’t ready for the change. In today’s RBN blog, we look at the decision and the impact it will have on refiners, retailers and drivers, and how it is likely to work against the Biden administration’s plans to keep a lid on gasoline prices. 

Normal butane is an important gasoline blendstock, with a great combination of high octane and relatively low cost. It also has a high Reid vapor pressure, or RVP, which is a good news/bad news kind of thing because while regulators allow higher-RVP gasoline — that is, gasoline with higher levels of butane — to be sold during the colder months of the year, they forbid its sale during the warmer months, thereby forcing butane levels in gasoline to be kept to a minimum. As we discuss in today’s RBN blog, air-quality regulations and seasonal shifts in butane blending may add complexity to gasoline production and marketing, but they also create opportunities to increase gasoline supply and earn substantially larger profits through much of the year. 

There’s always a risk when you take a new approach to doing or making something that your expectations won’t pan out — that something you hadn’t figured on happens and messes things up. But oh, the satisfaction that comes when the stars align exactly as you foresaw. The folks who developed Project Traveler, a recently completed Houston-area plant that produces high-value, octane-boosting alkylate from ethylene, isobutane and other widely available and low-cost feedstocks, know that good feeling, as we discuss in today’s RBN blog on the project’s economics. 

Around the world, a lot of smart people in the public and private sectors hold similar views on where we’re all headed, energy-wise. An accelerating shift to renewables and electric vehicles, driven by climate concerns. A not-so-far-away peak in global demand for refined products like gasoline and diesel. There are also what you might call consensus opinions on some energy-industry nuances, like how much global refining capacity will be operational in 2025 and what the spread between light and heavy crude oil will be in the years ahead. In today’s RBN blog, we discuss highlights from the new Future of Fuels report by RBN’s Refined Fuels Analytics (RFA) practice, including RFA’s different take on a few matters large and small — and all of critical concern to producers, refiners and marketers alike. 

When the price of the Tier 3 sulfur credit hit a new high of $3,600 in October 2023, the tradable sulfur credit for gasoline moved from the background to center stage in refining circles. And while credit prices have retreated slightly to about $3,400, they still represent a nearly 10-fold increase over two years and translate to a Tier 3 compliance cost of almost $3/bbl, raising concerns from refiners in a highly competitive market. In today’s RBN blog, we look at how refiners are adapting and the investments that could reduce the cost of compliance. 

The price of the Tier 3 gasoline sulfur credit hit $3,600 in October, up by a factor of 10 since 2022 and roughly in line with the all-time high reached in 2019. The high price of this important credit is a direct indicator of the true cost of compliance with the Environmental Protection Agency’s (EPA) Tier 3 gasoline sulfur standard and has raised some alarm recently in refining and financial circles. In today’s RBN blog, we give some specific examples of how refiners and investment analysts are reacting. 

The price of the Tier 3 gasoline sulfur credit hit $3,600 in October, up by a factor of 10 from two years ago and roughly in line with the all-time highs seen in late 2019. This tradable credit allows refiners to sell gasoline that exceeds the sulfur specification on gasoline sold in the U.S. In today’s RBN blog, we examine what’s behind the credit’s steep and steady rise — and why it matters. 

Florida is entirely dependent on others for the vast amounts of refined products it consumes — every gallon of gasoline, diesel and jet fuel that’s pumped into cars, SUVs, trucks, locomotives and airplanes in the Sunshine State needs to be either shipped or trucked in. Now, a midstream company is planning a project that would enable large volumes of refined products to be railed into Florida by unit trains to three new storage and distribution terminals — and eventually several more. In today’s RBN blog, we discuss the plan. 

The push to decarbonize frequently focuses on the transportation sector, which is responsible for the largest share of global greenhouse gas (GHG) emissions. That has led to increased blending of ethanol into gasoline and the development of several alternative fuels, most notably renewable diesel (RD) and sustainable aviation fuel (SAF). But as production of those two fuels accelerates, an often-overlooked byproduct of their creation is beginning to attract more attention: renewable naphtha. In today’s RBN blog, we explain the similarities and differences between traditional naphtha and renewable naphtha, look at how renewable naphtha is produced, and show how it can be used to help refiners, petrochemical companies and hydrogen producers meet their sustainability goals and reduce the carbon intensity (CI) of their products.

The world consumes about 100 MMb/d of liquid fuels, which are critically important to every segment of the global economy and to nearly every aspect of our daily lives. The size and scope of this market means it’s impacted by all kinds of short-term forces — economic ups and downs, geopolitics, domestic developments and major weather events, just to name a few — some of which are difficult, if not impossible, to foresee. But while these events can sometimes come out of nowhere, there are some long-term forces on the horizon that will shape markets in the decades to come, even if the magnitude of these changes might be up for debate. One is a move to prioritize alternative fuel sources rather than crude oil, but a meaningful shift won’t happen as quickly as many forecasts would indicate — and that has big implications for liquid fuel demand and the outlook for U.S. refiners. In today’s RBN blog, we discuss these issues and other highlights from the recent webcast by RBN’s Refined Fuels Analytics (RFA) practice on their newly released update to the Future of Fuels report.

A wide range of ever-changing economic and other forces — domestic and international — are constantly impacting the U.S. refinery complex, for good and for bad. Fluctuations in crude oil supply and prices. Ups and downs in demand for refined products. Refinery closures and expansions. And don’t forget this: the pace of the much-discussed transition to lower-carbon energy sources. There’s a lot at play in the world of gasoline, middle distillates and resid — renewable fuels too — and while industry players can’t fully anticipate what’s next in the refined-product roller coaster ahead, it’s critically important to keep up with the latest developments and to have a deep understanding of the many factors influencing crude oil and fuel markets — and the relationships among those drivers. In today’s RBN blog, we discuss the key findings in a newly released update to Future of Fuels, an in-depth report by RBN’s Refined Fuels Analytics (RFA) practice on everything you need to know about U.S. and global supply and demand for gasoline, diesel, jet fuel and biofuels over the short, medium and long term.

Consider this fact: Three of every five barrels of crude oil produced in the U.S. are exported, either as crude oil or in the form of gasoline, diesel, jet fuel or other petroleum products. Sure, large volumes of crude and products are still being imported, but the net import number is dwindling toward zero — and if you count NGLs (ethane, propane, etc.) in the liquid fuels balance, the U.S. has been a net exporter since 2020. Yes, folks, exports are now calling the shots, and the role of exports is only going to become larger over the next few years. In today’s RBN blog, we discuss highlights from our recent Drill Down Report on crude oil and product exports and why they matter more now than ever.

Consider this fact: Three of every five barrels of crude oil produced in the U.S. are exported, either as crude oil or in the form of gasoline, diesel, jet fuel or other petroleum products. Sure, large volumes of crude and products are still being imported, but the net import number is dwindling toward zero — and if you count NGLs (ethane, propane, etc.) in the liquid fuels balance, the U.S. has been a net exporter since 2020. Yes, folks, exports are now calling the shots, and the role of exports is only going to become larger over the next few years. In today’s RBN blog, we discuss highlights from our new Drill Down Report on crude oil and product exports and why they matter more now than ever.