EPA

Thursday, 10/01/2020

If you’ve filled up the tank in your car, SUV, or pickup in the past few days, you probably bought your first batch of winter-blend gasoline since the spring. It’s unlikely that you noticed a difference — only a refining geek with a nose for this sort of thing would — but winter gasoline has a higher Reid Vapor Pressure than summer gasoline, and therefore evaporates more quickly and emits more fumes. There’s a logic to EPA’s mandated switchover from lower-RVP gasoline to higher-RVP gasoline each September, and their switch back to lower-RVP each April/May. For one thing, using different gasoline blends during the colder and warmer months helps ensure that your engine runs well year-round; for another, reducing gasoline vapor pressure in the summer reduces emissions that contribute to smog. Today, we discuss gasoline RVP, why it matters, and how refineries ramp it up and down. (A hint is in the blog’s title.)

Wednesday, 10/26/2016

New “Tier 3” requirements to limit sulfur content in gasoline are set to take effect in just over two months — on January 2017. In March 2013, the Environmental Protection Agency (EPA) proposed to limit the sulfur content of gasoline produced or imported into the U.S. to no more than 10 parts per million (ppm) from the current “Tier 2” 30 ppm standard by January 1, 2017.   With these upcoming “Tier 3” requirements, refiners have been developing their strategies to meet the regulations and in some cases have already invested hundreds of millions of dollars in their facilities. Today, we look at the various approaches refiners can take for compliance and their impacts on the industry.

Monday, 07/25/2016

The rising cost of Renewable Identification Numbers (RINs) –– ethanol credits used by refineries to prove compliance with the federal Renewable Fuel Standard –– is putting added financial pressure on the refining sector, which already is squeezed by too-high inventories and thin crack spreads. In fact, for some refiners RIN expenditures may soon be their biggest single operating cost category. (Yes, you read that right.) The cost of ethanol credits is being driven up to record levels by several factors, chief among them the concern there may not be enough to go around this year and next. And things may only get worse from there. In today’s blog, we begin a two-part examination of the 2016-17 market for RINs, a regulatory must-do that rankles and vexes most refiners and gasoline importers.

Tuesday, 11/03/2015

It is certainly no secret that hydraulic fracturing, the process used to crack shale to yield natural gas and oil, is highly controversial.  Numerous reports, claims, protests, etc. have asserted that hydraulic fracturing poses a danger to drinking water, which has led to a storm of argument and opposition in many areas of the country.  Anyone wondering how oil and gas markets will work in the future must have in the back of their mind the possibility that opposition could lead to rules that would stifle supply development.  So many were anxiously awaiting an Environmental Protection Agency (EPA) study of hydraulic fracturing and drinking water that had been going on for five years.  The draft of that study was released in June.  What does it do, and what does it mean for oil and gas future development?  Today, we explore some of the findings of the draft report and focus on its implications for the natural gas industry.

Wednesday, 09/09/2015

Natural gas has always had a yin-yang relationship with coal. When coal’s fortunes were on the rise, as they were only a few years ago, the long-term role of gas as a U.S. power plant fuel was being questioned—there simply wasn’t enough gas in the ground, some said. Now, with the shale revolution and a push to slash greenhouse gas emissions, coal is frequently portrayed in a death spiral, with gas the clear victor. But it is not that simple. Today, we examine the ongoing interplay between the electric industry’s two favorite fossil fuels, and whether coal is heading out or hanging on—and what it means for natural gas producers.

Monday, 02/23/2015

Arnold Schwarzenegger said “Hasta la vista, baby” to the governor’s office in Sacramento four years ago, but his 2007 executive order establishing a low-carbon standard for transportation fuels is only now starting to have a real effect on California refineries. Some refiners say the rule aimed at reducing “life-cycle” greenhouse gas emissions from the transportation fuel sector 10% by 2020 is unrealistic and could result in refinery closings and gasoline and diesel shortages. Others say California’s goal is achievable. Today, we consider the Golden State’s low-carbon fuel standard (LCFS) and what it may mean for refiners.

Thursday, 12/04/2014

The US Environmental Protection Agency (EPA) June 2014 Clean Power Plan (CPP) proposal to reduce greenhouse gas emissions from the power sector 30% from 2005 levels by 2030 would result in a sharp increase in natural gas consumption and potentially major changes in infrastructure to deliver more gas to power plants. The proposal would radically increase the pace at which coal-fired power plants are replaced by gas-fired generation. Today, we consider the proposal and its likely impact on gas demand and the industry.

Monday, 06/24/2013

A couple of months back in March 2013, the US Environmental Protection Agency (EPA) released proposed Tier 3 gasoline regulations that, if approved, will go into effect on January 1, 2017. The new rules include lower sulfur specifications for gasoline and tighter emissions controls for motor vehicles. Tier 3 also encourages acceptance of higher percentages of ethanol in gasoline. These regulations come at a time when US refinery gasoline blenders are jumping through hoops to handle a flood of new light shale crudes and increased demand for natural gasoline exports to Canada. Today we examines the proposals and their impact on gasoline and natural gas liquids markets.

Tuesday, 06/18/2013

Cheap feedstocks resulting from dramatic increases in US shale production of natural gas and natural gas liquids (NGLs) have led petrochemical companies to plan at least 7 new processing plants - known as olefin crackers - all but one on the Gulf Coast. These plants are expensive (think $billions) and take years to permit and build. They also produce significant quantities of emissions that are restricted by the Clean Air Act (CAA) – some of which trade in a market that has been skyrocketing for the past few months – threatening to delay or constrain the Gulf Coast cracker building spree before it gets started. Today we describe the regulations.

Thursday, 03/07/2013

Does lightning strike twice?  How about three times?  Sure seems like the coal industry has been hit by three lightning bolts in the past several years: a recession that reduced demand for electrical power, low prices for competing fuels (i.e., natural gas), and new federal regulations on smokestack emissions.  Today we review regulations that have left coal power generators singing the smokestack blues.

Sunday, 09/30/2012

Next time you fill up with regular; spare a thought for what the product went through to make it into your tank. Before you got a chance to put the pedal to the metal, the tiger in your tank had to treat a digestive problem that was causing too much gas. It was all in honor of something called Reid Vapor Pressure (RVP) regulations. Today we open the window on the issue to air the pungent details. 

Check out Kyle Cooper’s weekly view of natural gas markets at

http://www.rbnenergy.com/markets/kyle-cooper

RVP stands for "Reid Vapor Pressure" a measure of gasoline volatility indicated in pounds per square inch (PSI) at 100 degrees Fahrenheit. The higher a gasoline's RVP the more quickly it evaporates. The RVP for gasoline should always be below normal atmospheric pressure or 14.7 PSI. If the RVP gets higher than 14.7-PSI fuel might evaporate in the gas tank on a hot day resulting in a vapor locked engine (car won’t start) or worse yet, an explosion. At the same time you need a certain RVP level in the winter when it gets cold or your car won’t start because the fuel won’t vaporize in the carburetor.

Tuesday, 07/24/2012

Ethanol from corn as a motor gasoline blend stock seems like a good idea.  As an oxygenate it is supposed to clean up the air, and as a U.S grown renewable it reduces our dependence on fossil fuels and foreign oil.  The catch is that ethanol is being mandated under a morass of mind-numbingly complex government regulations, some of which conflict with each other, or worse yet are out of step with the realities of the market.  For example, the mandatory volumes of ethanol required may soon exceed the quantity that the market can use.  At the same time, high corn prices have driven margins on ethanol manufacture into the red forcing many ethanol producers to shutter their operation, reducing ethanol supplies.  And if that were not enough, a government program created something called the   renewable identification number – RIN – a 38-digit serial number that ‘tags’ batches of renewable fuels and has resulted in all sorts of complications.  Today we’ll begin an examination of the ethanol market to understand how we got in this predicament and where we go from here.  In Part I we tackle one of the most intractable problems – the Blend Wall.

Tuesday, 07/17/2012

King Coal is hurting. NYMEX Central Appalachian Coal prices have fallen 18 percent so far this year from $68.67/ short ton (ST) on January 3, 2012 to $57.23/ST on Monday (July 16, 2012). Coal consumption is down and coal company profits are hurting. Patriot Coal filed for bankruptcy last Monday. On top of these woes, new environmental regulations look set to pull the rug from under new coal power plant construction. Today we ask what the future holds for the US coal industry.

United States coal consumption is falling. Over 90 percent of the coal consumed in the U.S. is used to generate electricity.  According to the Energy Information Administration (EIA) power-sector coal consumption fell from 975 million short tons (MMst) in 2010 to 929 MMst in 2011. The July 2012 EIA short term energy outlook forecasts that coal consumption for 2012 will fall to less than 800 MMst . Coal production for the first five months of 2012 was 6 percent below last year's level for the same period and EIA predicts an overall fall in production of 9 percent for 2012. Despite lower production EIA forecasts secondary stocks (at power generation facilities) to be close to record levels by the end of 2012 and to remain at those levels during 2013 (see chart below).