clean air act

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.

Wednesday, 06/19/2013

Emission regulations require that companies planning new olefin crackers in EPA designated nonattainment areas like Houston must buy emission credits prior to construction. The market for credits in Houston for one criteria pollutant – volatile organic compounds (VOCs) skyrocketed from $4.5K/ton in 2011 to $300K/ton this month. The scarcity of emission credits and their rising price threaten to constrain or delay new petrochemical plant builds and will continue to hamper plant development and expansions in the Gulf Coast region. Today we describe the challenge new projects face.

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.

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.