Posts from Jason Lindquist

Wednesday, 09/28/2022

The recently passed Inflation Reduction Act (IRA) offers a lot of incentives, mostly in the way of tax credits, to advance the Biden administration’s clean-energy initiatives and reduce greenhouse gas (GHG) emissions. There are inducements for everything from carbon capture and electric vehicles to renewable energy and hydrogen production, but very few penalties. One exception is included in the new law’s Methane Emissions Reduction Program (MERP), which features the federal government’s first-ever fee on the emissions of any GHG. In today’s RBN blog, we look at recent attempts to mitigate methane emissions, how the new methane charge will work, and how it could one day be replaced by new federal rules.

Wednesday, 09/21/2022

Economic sanctions can be a powerful tool to punish a country or group, especially if they involve an essential commodity like crude oil. Imposed for a variety of reasons (military, political, social), sanctions can cause serious harm to the targeted entity. But levying them effectively is not as simple as it may seem, and even the most well-intentioned plans can fall short or have unintended consequences or backfire altogether. In today’s RBN blog we look at a plan by the U.S. and its allies to limit the price of Russian crude oil and the significant challenges in designing a cap that is effective and enforceable.

Monday, 09/19/2022

The high cost of gasoline and diesel and their impact on inflation and the global economy has been a major market development this year, with the blame typically being cast on politicians, oil producers and policies intended to limit development of traditional energy resources and encourage decarbonization — and sometimes all of the above. Prices have retreated in recent weeks amid lower consumer demand and worries about the state of the global economy, but long-term concerns about global refining capacity and the possibility of another price spike remain. In today’s RBN blog, we discuss highlights from our new Drill Down Report on the state of global refining.

Sunday, 09/04/2022

Not long ago, many considered large-scale industrial carbon capture to be a pie-in-the-sky concept. But neither the capturing of carbon dioxide (CO2) nor permanent underground sequestration is new — naturally occurring sources of CO2 have been used in enhanced oil recovery (EOR) for decades. And, with new financial incentives and a renewed sense of urgency regarding climate action, things are changing fast — so quickly, in fact, that the carbon-capture industry may be poised for exponential growth, both in the U.S. and abroad. In the encore edition of today’s RBN blog, we discuss highlights from our second Drill Down Report on carbon capture.

Tuesday, 08/30/2022

Not long ago, many considered large-scale industrial carbon capture to be a pie-in-the-sky concept. But neither the capturing of carbon dioxide (CO2) nor permanent underground sequestration is new — naturally occurring sources of CO2 have been used in enhanced oil recovery (EOR) for decades. And, with new financial incentives and a renewed sense of urgency regarding climate action, things are changing fast — so quickly, in fact, that the carbon-capture industry may be poised for exponential growth, both in the U.S. and abroad. In today’s RBN blog, we discuss highlights from our second Drill Down Report on carbon capture.

Thursday, 08/25/2022

Conversations about decarbonization and the energy transition often turn to the transportation sector, which accounted for about 27% of U.S. greenhouse gas (GHG) emissions in 2020. Electric vehicles typically dominate these talks, but alternative fuels like renewable diesel (RD) and sustainable aviation fuel (SAF) also come up, not only because of their lower emissions but also because they are considered “drop-in” replacements for conventional diesel and jet fuel. Policies at the state and national level have already encouraged some production growth, but a tax credit established as part of the recently enacted Inflation Reduction Act (IRA) provides a major incentive for cleaner fuels. In today’s RBN blog, we look at the new 45Z Clean Fuel Production Credit (CFPC), how it will impact the production of RD and SAF, and why facilities that can produce fuels with the lowest carbon intensity (CI) stand to benefit the most.

Thursday, 08/18/2022

The 45Q tax credit has been the federal government’s main tool to incentivize the development of a carbon-capture industry. If the original legislation that created the credit in 2008 was intended to get things started, and the credit’s 2018 expansion designed to give the industry a further boost, the newly enacted Inflation Reduction Act (IRA) — which focuses on clean energy, despite its name — aims to propel carbon capture into the big time. In today’s RBN blog we look at changes made to the 45Q tax credit under the IRA, from the scope of the enhanced incentives to how they could boost carbon-capture opportunities for all types of projects.

Thursday, 08/11/2022

The energy industry — everything from oil and gas production and transportation to oil refining, gas processing and NGL fractionation — has a myriad of variables influenced by dozens of factors. It’s a value chain so vast you’d think it would be impossible to explain in simple terms. But behind it all is a well-oiled machine for developing the resources that literally fuel our modern economy. And, by understanding what happens at each link in the value chain, you can ultimately gain a clearer picture of what’s happening in energy markets. In today’s RBN blog, we kick off a series aimed at examining and explaining the oil and gas value chain, starting with the upstream world of exploration and production — what happens in production areas, the types of companies that operate in that segment, and the critical role of oil and gas reserves.

Thursday, 08/04/2022

As a piece of legislation makes its way through Congress, the name it’s given can say a lot about its overall importance and what it intends to accomplish, but also a little bit about the current political environment. Surging inflation has been one of the biggest stories of the past year and politicians of all stripes have been looking for ways to ease the pressure on consumers. Those concerns were a big reason why the Biden administration’s Build Back Better Act (BBBA), which included several climate- and energy-related measures, ultimately died in Congress late last year. The Inflation Reduction Act of 2022, which Democrats in Washington hope to pass soon, embraces the fight against inflation and includes other significant provisions, but clean energy is at the heart of the bill. In today’s RBN blog, we look at the legislation's climate and clean-energy initiatives — including a methane-reduction program, more tax credits for electric vehicles, and incentives for renewable energy and clean hydrogen — and how they would help reduce greenhouse gas (GHG) emissions.

Wednesday, 08/03/2022

It’s one thing if you’re 25 or 30 years old and your 401(k) is just getting started — you’ve got time to build it up, so don’t sweat it — but it’s quite another if you’re 60 or 65 and you’ve still got to sock away a lot of money before calling it quits. It could be argued that the environmental community is facing a quandary very similar to that of an aging boomer short on retirement savings. The fact is that the International Energy Agency’s (IEA’s) target of achieving net-zero man-made carbon emissions globally by 2050 in order to blunt the human impact on climate change will require massive new investment and a complete and well-coordinated transformation of the world’s energy complex. In the near-term, progress along that path must include an extraordinarily rapid ramp-up in the use of carbon capture and sequestration (CCS). And like an aging worker whose late discipline may be thwarted by an unforeseen health challenge, as we’ve seen with the recent energy crisis, there’s a lot that could derail progress toward those goals. Is the IEA's goal achievable? Maybe. But, as we discuss in today’s RBN blog, it won’t be easy.

Thursday, 07/14/2022

The global reaction to Russia’s invasion of Ukraine was swift, with calls of condemnation and plans quickly surfacing for the U.S. and other countries to stop their purchases of Russian crude oil and natural gas immediately, or at least as soon as practical. The strategy has been to make the situation as politically and financially painful as possible for Russia, which has not been shy about using its energy supplies as a weapon, before or after the invasion. But those plans haven’t worked as well as hoped, and some impacts are bringing back memories of the 1973 oil embargo which, though driven by a far different series of events, may provide insight into the current situation. In today’s RBN blog, we look at the many parallels to today, including weaponized oil, regional supply shortages, price spikes and well-intentioned (if sometimes ill-conceived) government responses.

Monday, 07/11/2022

As concerns about energy security have come to the forefront, some in the mainstream have begun to pump the brakes on the idea of energy transition at any cost and reevaluate the practicality of some proposed solutions. But that hasn’t changed the long-term outlook for energy transition nor the fact that numerous individual projects focused on alternative fuels, carbon capture, hydrogen and renewable energy are in the works, gaining in prominence and attracting a prodigious amount of investment. There is still an anticipation among investors that the market will increasingly demand greener production methods — they just need to be well-conceived, planned and executed. The good thing for Fidelis New Energy — a Houston-based firm focused on climate-impact infrastructure, including low-carbon, sustainable fuels  — is that, among renewable producers, they’re building a sustainable cost advantage through efficient, integrated design. In today’s RBN blog we look at what Fidelis calls the Grön Fuels GigaSystem.

Thursday, 07/07/2022

Carbon-capture projects have begun to pick up steam in recent months, especially in the Midwest and Great Plains, with three major developments already taking shape and the potential for more. At the same time, the need to move natural gas east from the Rockies has declined over time and Tallgrass Energy Partners — a leading midstream player in that space — is looking for ways to make fuller use of its Rockies Express and Trailblazer gas pipelines. In today’s RBN blog, we look at an agreement between Tallgrass and Archer Daniels Midland (ADM) to capture and sequester carbon dioxide (CO2) emissions from a corn-processing complex in Nebraska, how that deal relies on the planned conversion of the Trailblazer Pipeline from natural gas to CO2, thought to be the first of this scale, and why Tallgrass sees potential in carbon-capture projects across the region.

Thursday, 06/23/2022

It’s well understood that methane is a significant greenhouse gas and that reducing methane emissions from oil and gas production is critical to hitting long-term emissions targets, but that’s about where most of the common ground ends. There are serious disagreements about the actual magnitude of methane emissions, the proper role of government regulation, and whether requirements to control those emissions would place an undue burden on the energy industry and lead to decreased supply. In today’s RBN blog, we look at how emissions estimates are made, why they can vary significantly, and how the disagreements about how to curb those emissions might be resolved.

Thursday, 06/09/2022

California faces a broad set of challenges when it comes to reducing wildfires, which have been increasingly frequent and intense over the last decade — impacting the lives of those dealing with the threat, not to mention effects on the economy and environment. Separately, the state has been working to reduce transportation-related pollution and incentivize the development and use of a wide array of alternative fuels. Yosemite Clean Energy (YCE), which announced plans for its first plant site in late 2021, has an approach it says will not only make the state a cleaner and safer place but also foster the development of new transportation fuels. In today’s RBN blog, we look at YCE’s plans to turn wood waste into renewable fuels, how its unique “Stump to Pump” approach relies on partnerships with local communities, and the green hydrogen and renewable natural gas it plans to produce at sites across California.