The International Energy Agency highlights the transformative nature of the US oil boom in its latest Medium-Term Oil Market Report, released today. “Rising supplies of US light, tight oil (LTO) have turned upside down, or at least called into question, the conventional wisdom about what oil is, how it is extracted, how much of it… Keep reading →
The Intersection of Energy Law and Project Finance
It’s critically important to understand the regulations associated with financing multi-billion dollar energy projects so as to avoid delays and cost increases that can imperil event the best laid plans. Whether it be an oil & gas project or a major renewable energy initiative, getting the financing right means having the legal pieces in order, and a major law firm with a large energy practice highlights some examples of this in their spring newsletter. Keep reading →
Last week the US EPA proposed regulations known as Tier 3 rulemaking that would increase fuel efficiency and tighten controls on sulfur in gasoline. The EPA described the new rules as “sensible standards for cars and gasoline that will significantly reduce harmful pollution, prevent thousands of premature deaths and illnesses, while also enabling efficiency improvements in the cars and trucks we drive.”
The environmental community, many politicians and some business associations are strongly in favor of the regulations, while the refining industry is bitterly opposed. Both sides claim the regulations will save money and have very different views on how the rules will affect gasoline prices. The following is a collection of statements EPA sent in an email from prominent environmental, political and trade group voices speaking in favor of the regulations: Keep reading →
Oil products are needed to fuel the development of, well more oil. Booming oil production in the Bakken formation primarily located in North Dakota and Montana has driven up local demand for diesel fuel used to run the hundreds of rigs and thousands of trucks and locomotives that undergird the industrial supply chain.
“Much of the increase in demand has been fueled by the boom in crude oil production from the new wells in the Bakken Formation in North Dakota’s northwest corner. The demand for these middle distillates rose 80% in North Dakota from 2009 to 2012, providing the incentive to invest in local refineries,” said the EIA in its “Today in Energy” update. Keep reading →
It’s telling that a panel discussion about using technology to reduce the environmental impacts associated with Canadian oil sands development ended up mainly being about dire market access issues impacting producers.
At the FT Global Investment Series: Focus on Canada conference held in New York City this week, corporate executives were clearly concerned about reducing greenhouse gas emissions from oil sands projects, but they were also very concerned about the billions of dollars being lost from commodity price differentials between Canadian heavy oil and other grades. Keep reading →
At its annual securities analyst day held today in New York City, Chevron touted its upstream growth strategy, which includes some of the world’s largest energy projects, and the success of its downstream reorganization.
The company reported $26 billion in total 2012 earnings and detailed its $36.7 billion 2013 capital spending program, 42% of which will be deployed in the Asia Pacific region. A majority of Chevron’s 2013 capital expenditure – 69% – will be focused on 3 major business segments: Upstream base projects, LNG and deepwater. Keep Reading →
The use of rail cars to transport crude oil in the U.S. reached a record in 2012 and continues to rise, the Association of American Railroads said Thursday.
There is no question that the US has remained an energy giant in production terms throughout its history, but its role as a giant energy consumer has outpaced even the capacity of its prodigious resource base to serve industry and consumer demand.
Roughly 14% of US crude oil comes from Saudi Arabia with substantial amounts also coming from Venezuela, Nigeria and Mexico – the largest single importer is Canada, which provides the US with close to a third of its crude oil supply. Keep reading →
US refining economics have been under pressure in recent years, particularly on the East Coast, where lack of infrastructure or bottlenecks forced some refineries to process crude imported from overseas markets at prices linked to the more expensive Brent benchmark. But independent refiner PBF Energy saw an opportunity and bought 3 major facilities between late 2010 and early 2011 in an effort to access increasing volumes coming on from the Bakken region and Western Canadian oil sands via rail.
PBF acquired 2 refineries located in Delaware City, Delaware and Paulsboro, New Jersey from Valero with a combined refining capacity of 370,000 b/d. Crude was traditionally transported to these plants via barge and ship along the Delaware River, but PBF constructed a crude rail unloading facility at the Delaware City refinery designed to accept shipments from the Mid-Continent and Western Canada at prices linked to West Texas Intermediate – the US benchmark grade – currently trading at a roughly $20/barrel discount to Brent. Keep reading →
It is an urban myth that if the oil industry drilled more, gasoline prices would decrease. The myth relies on the premise that as more oil supplies are introduced, market forces would take over and domestic prices would fall. But it turns out that increasing domestic production has virtually no effect on gasoline prices.
The US already increased production. According to the Energy Information Administration (EIA), US oil production reached 310,403,000 barrels per month in October 1970 that became the historic peak. Ever since that time, production changed course and it has been in a steady decline. By 2005, production sank more than 50 percent to approximately 150,000,000 barrels per month. The bottom was reached in September 2008 when production sank to 119,477,000 barrels per month. Since then, for the first time since the 1980′s, monthly production changed direction and it has been trending upward. Last July, the US touched a new record of 196,405,000 barrels per month, a production level the US has not witnessed for over a decade. Keep reading →
Jared Anderson
Conway Irwin
Peter Gardett