Monday, June 9, 2014

EIA Updates U.S. CO2 Emissions Trends


graph of U.S. energy-related CO2 emissions, as explained in the article text
Source: U.S. Energy Information Administration, State Energy Data System (SEDS) 2014

U.S. energy-related carbon dioxide (CO2) emissions in 2013 were 10% below the benchmark year of 2005. Emissions in 2013 were roughly 2% above their 2012 level and 1.5% below their 2011 level, when emissions were 8.6% below the 2005 level. Recently released state-level data through 2011, calculated from the State Energy Data System (SEDS) and aggregated here by Census regions, show different parts of the country generally experiencing this downward trend, but at variable rates by region.
Between 2005 and 2011, all four Census regions—West, South, Midwest, and Northeast—experienced emissions declines, with the Northeast experiencing larger emissions reductions than the other regions. Underlying state-level emissions changes spanned an even wider range, from a 20% emissions increase in Nebraska (Midwest) to a 33% decrease in Nevada (West). Regional and subregional spreads reflect differences in local energy economics, population distribution, and other factors.
graph of U.S. energy-related CO2 emissions, as explained in the article text
Source: U.S. Energy Information Administration, State Energy Data System (SEDS) 2014

Drivers of faster, larger emissions declines in the Northeast include extensive urbanization, translating into denser, more energy-efficient population centers, and increasingly low-carbon electricity generation from natural gas, nuclear, and renewables, instead of coal. The Northeast includes the top-three lowest emitting states per unit of economic output (New York, Connecticut, and Massachusetts) and two of the top-five states with the cleanest electricity sources (Vermont and New Hampshire).
Compared to the Northeast, the other regions (Midwest, West, and South) have more diverse state-level characteristics, which contributed to relatively slower net emissions declines. Steep emissions reductions in some states were partially offset by escalating emissions elsewhere. For example, states like Wyoming (West), North Dakota (Midwest), and West Virginia (South) have more carbon-intensive energy production, higher and less efficient energy use in more sparsely populated areas, and heavily coal-reliant electricity generation compared to other states in those regions. Since 2009, factors driving the uptick in Nebraska's emissions profile included marked expansion of the biofuels (corn-based ethanol) industry, as well as increased production of crude oil and the temporary closure of the Fort Calhoun nuclear power plant. Conversely, Nevada's lower-bounding trend shows the effects of substantially decarbonizing its electric power sector—between 2005 and 2011, Nevada significantly reduced its coal use, while increasing solar and geothermal use.
Earlier this week, the Environmental Protection Agency (EPA) issued a proposed rule that would require reductions in carbon dioxide emissions from existing fossil-fueled electric power plants. The EPA proposal includes emission rate targets for each state, measured as pounds of carbon dioxide emissions per megawatthour of covered generation, as well as guidelines for the development, submission, and implementation of state plans. The emission rate targets vary significantly across individual states, reflecting the application of a series of common building blocks to states with widely different starting points in their respective electricity markets.

Source: EIA

Friday, June 6, 2014

EIA Updates U.S. Crude Production Trends

graph of U.S. crude oil production by type, as explained in the article text

Source: U.S. Energy Information Administration, DrillingInfo, Colorado DNR, Texas RRC
Note: Higher API numbers indicate lighter crude oil.

U.S. crude oil production has grown rapidly in recent years, primarily from light, sweet crude (a characteristic of crude quality, as measured by API gravity and sulfur content) from tight resource formations. Roughly 96% of the 1.8-million-barrel per day (bbl/d) growth in production from 2011 to 2013 consisted of light sweet grades with API gravity of 40 or above and sulfur content of 0.3% or less.
EIA's new forecast of U.S. crude production by quality indicates that the U.S. supply of light, sweet crude will continue to outpace that of medium and heavy crude through 2015. More than 60% of EIA's forecasted production growth for 2014 and 2015 consists of sweet grades with API gravity of 40 or above.
The growth in this particular type of crude oil (as well as many forecasts for a continuation of this trend) has sparked discussion of how rising crude oil volumes will be absorbed into the market. Given the likelihood of continued growth in domestic crude production, and the recognition that some absorption options, such as like-for-like replacement of import streams, are inherently limited, the question of how a relaxation in current limitations on crude exports might affect domestic and international markets for both crude and products continues to hold great interest for policymakers, industry, and the public.
This new production forecast along with a series of analytic papers will provide a starting point for further EIA analyses on the market outlook and the effects of a possible relaxation of existing restrictions on crude oil exports.

Source: EIA

Wednesday, June 4, 2014

Bakken News Links - May 2014

5/28 2014 Some eastern towns try to stop oil trains
5/23/2014 Hamm says Bakken oil threatened by safety missteps
5/22/2014 Researcher talks of recovering more Bakken oil with CO2
5/21/2014 Conference tackles waste disposal
5/21/2014 ND regulator calls Bakken an 'exclusive club'
5/21/2014 Oil, brine spill reported near Crosby
5/21/2014 Big role seen for natural gas (Williston Basin Conference)
5/20/2014 Shared role in oil safety (Williston Basin Conference)
5/20/2014 Energy companies try new methods to address fracking complaints
5/20/2014 Hess shows off upgraded Tioga gas plant
5/19/2014 Petroleum conference starts Tuesday in Bismarck
5/15/2014 Rail transload facility approved by Divide County commissioners
5/15/2014 Refiners say Bakken crude does not need special handling
5/14/2014 PSC considers plan to use oil gathering pipeline for crude transport
5/13/2014 Can Bakken natural gas flaring be cut to Texas-like levels?
5/13/2014 Out-of-control oil well in Williams County plugged
5/13/2014 North Dakota oil production returns to record territory
5/13/2014 Decreasing the volatility of Bakken crude
5/12/2014 Spill reported at oil well near Tioga
5/9/2014   DOI official visits ND to talk flaring
5/9/2014   EPA considers fracking fluid disclosure rules
5/9/2014   Oil traffic moving again but rainy forecast could stop it
5/9/2014   Railroad says Federal order won't affect oil shipments
5/9/2014   Development of Tyler formation in prospect mode
5/8/2014   First LNG plant in North Dakota announced
5/7/2014   States must be warned of oil by rail cargoes
5/7/2014   ND oil lease sale raises $16.5 million
5/6/2014   Vantage pipeline transports ethane to Alberta
5/1/2014   ONEOK proposes $280M gas processing plant near Watford City

Monday, June 2, 2014

EPA Issues Proposed Rule on CO2 Emissions

The Environmental Protection Agency (EPA) today issued a proposed rule that would require reductions in carbon dioxide emissions from existing fossil-fueled electric power plants. The EPA proposal includes emission rate targets for each state, measured as pounds of carbon dioxide emissions per megawatthour of covered generation, as well as guidelines for the development, submission, and implementation of state plans. The emission rate targets vary significantly across individual states, reflecting the application of a series of common building blocks to states with widely different starting points in their respective electricity markets. Read more

Tuesday, May 13, 2014

State Oil Production Update - March 2014

According to preliminary data released today by the North Dakota Industrial Commission, North Dakota produced 30,288,575 barrels of oil in March 2014, compared to an adjusted total of 26,657,540 barrels in February 2014. Total gas production for March was 33,671,853 MCF (preliminary), compared to 29,793,672 MCF in February (adjusted). Total number of wells actually producing during March was 10,457 (preliminary), compared to 10,199 in February (adjusted).

The following comments from NDIC Mineral Resources Director Lynn Helms accompanied today's report...

The drilling rig count was up slightly from February to March and back down from March to April. The number of well completions was up sharply from 70 to 200. Investor confidence remains strong. There were still approximately 50 wells shut in for the Tioga gas plant conversion in an attempt to minimize flaring, but the biggest 5/13/2014 production impact was still the weather. March began with 2-3 days of temperatures well below zero, add to that 7-12 days with wind speeds too high for completion work, and then 8 inches of snow on the last day of the month. In like a lion and out like a lion makes oil and gas work difficult. more

Monday, May 12, 2014

PSC Considers Wind Farm Proposal

The North Dakota Public Service Commission is holding a public hearing on a wind farm proposal submitted by Sunflower Wind Project LLC. The project would consist of 59 wind turbine generators on about 12,700 acres of private land in Stark and Morton counties, with construction tentatively set to begin in early 2015.  Read more

Saturday, May 10, 2014

EPA Considers Fracking Fluid Disclosure Rules

The Obama administration announced its first steps on Friday toward possibly tighter regulation of hydraulic fracturing, or fracking, seeking public input on whether companies should be required to disclose the contents of fluids used in the oil and natural gas drilling technique. Read more

Thursday, May 8, 2014

New LNG Plant Announced for Tioga

North Dakota LNG has announced plans to build a liquefied natural gas (LNG) production facility in Tioga, North Dakota. The plant will be the first-to-market in the state and is projected to produce 10,000 gallons per day (GPD) starting in Summer 2014. A phase two facility is scheduled to be operational in the fourth quarter of 2014 and capable of producing 66,000 GPD. NDLNG targets the drilling, fracking and transportation sectors of the unconventional oil and gas industry and will help meet the need for a cost-effective power source by converting natural gas feedstock into value-added liquid fuels. Read more

EIA Updates Wet Natural Gas Trends

graph of natural gas liquids prices are now roughly halfway between natural gas and crude oil prices, as explained in the article text

Source: WTI and Henry Hub spot prices from Reuters, NGPL composite price from EIA via Bloomberg
Note: NGPL Composite price estimates for March and April 2014 were calculated using February weights from form EIA-816, Monthly Natural Gas Liquids Report.

In recent years, high levels of natural gas production have pushed prices down. The Henry Hub spot price averaged $3.73 per million British thermal units (MMBtu) in 2013. In 2012, the average annual Henry Hub price was $2.75/MMBtu, which reduced profit margins for many natural gas producers. The relatively high value of natural gas liquids (NGL) has led producers to target wet gas. NGL prices have traditionally been linked to crude oil, resulting in a significant price premium over pipeline-quality dry natural gas. More recently, the natural gas plant liquids composite spot price (which approximates a value of NGL produced at natural gas processing plants) has hovered roughly halfway between West Texas Intermediate (WTI) crude oil and natural gas spot prices.
The result of this liquids price premium is that wet natural gas production is increasing at a faster rate than dry natural gas production. Liquids extracted from wet natural gas at natural gas processing plants accounted for 5.2% of the volume of marketed production in 2013, up from a low of 4.5% in 2008. September 2013 represents the highest liquids share of monthly production on record, at 5.5%.
When wet natural gas first comes out of the ground, it contains both methane (which is the primary ingredient of natural gas) and NGL. NGL (ethane, propane, butanes, and natural gasoline) are a subset of hydrocarbon gas liquids (HGL) as they do not include olefins. Between 2008 and 2013, volumes of liquids produced from wet natural gas grew at an average of 7% annually, with increases concentrated in the Gulf Coast. Production in theMarcellus region is still relatively small, but is growing rapidly.
Increased liquids production has driven NGL prices down, particularly of ethane and propane. Ethane, which is currently priced below natural gas, is being left in the dry gas stream in large volumes by gas processors and sold as natural gas, a phenomenon known as ethane rejection. Were ethane production more economical for processors, ethane production volumes would be higher, and ethane would occupy a larger share of total NGL production. As new ethane-consuming petrochemical plants continue to become operational, and as ethane demand is supported by new export projects, ethane prices will rise, and production volumes will begin to grow. Estimates of ethane rejection volumes range between 200 and 400 Mbbl/d.
Refineries also produce NGL, predominantly propane, but their rate of production growth has not been keeping pace with increases in production from the wet natural gas stream. Refinery production of finished products is closely tied to crude oil inputs, which have not increased in recent years. With production at natural gas processing plants growing and refinery production flat, refinery NGL has accounted for a progressively smaller share of total NGL production. In 2013, refinery output of NGL accounted for about 12% of total NGL production, down from 19% in 2008.

Source: EIA

Tuesday, May 6, 2014

Vantage Pipeline Used for Purity Ethane

graph of Vantage and Mariner West ethane pipelines, as explained in the article text











Mistral Energy confirmed on Friday, May 2, that it has received exports of purity ethane in an inaugural shipment along the Vantage pipeline from the Williston basin in North Dakota, to connect with the Alberta Ethane Gathering System near Empress, Alberta, in Canada. Purity ethane is at least 95% pure ethane.
This announcement comes almost five months after Nova Chemicals announced the December receipt of purity ethane at its petrochemical complex near Sarnia, Ontario, from the recently completed Mariner West Pipeline. EIA's Petroleum Supply Monthly estimates this pipeline transported 24,000 barrels/day (bbl/d) ofMarcellus ethane from southwestern Pennsylvania to Nova's petrochemical complex. Before these two announcements, purity ethane had not been shipped to Canada for the past 25 years.

Source: EIA

Thursday, May 1, 2014

Xcel Sets New Wind Power Record

Xcel Energy achieved a milestone at 3 a.m. April 27, when wind power met 46 percent of customers’ electricity needs in the company’s Upper Midwest service territory.
At the time the company’s Upper Midwest record was set, wind resources provided 1,622 megawatts of the 3,512 megawatts Xcel Energy’s customers were using in Minnesota and neighboring states. The previous record was set in April 2013, when wind generation met 42 percent of customer demand.
Xcel Energy is currently adding 750 megawatts of wind resources in its Upper Midwest territory. Four wind projects have been approved by Minnesota regulators, representing a 42 percent increase in the company’s wind power capacity in the Upper Midwest. All four projects – two in Minnesota and two in North Dakota – are scheduled to be in service by the end of 2015.  
Wind generation produces 12 percent of the energy used by Xcel Energy’s Upper Midwest customers. Along with the wind additions coming on line by the end of 2015, the company is working towards the goal of generating 25 percent of its energy from wind resources by 2020, as required by Minnesota law.

Source: Xcel Energy

Thursday, April 24, 2014

NTSB Rail Safety Webcasts Available

Webcasts of the rail safety forum held by the National Transportation Safety Board this week are available using the links below...

Flash Media
April 22 webcast
April 23 webcast

Windows Media
April 22 webcast
April 23 webcast

An interview aired on PBS with Deborah Hersman, Chairwoman of National Transportation Safety Board is available here

Renewable Energy Report Released

The American Council on Renewable Energy (ACORE) published The Outlook for Renewable Energy in America: 2014PDF, a report that assesses the marketplace and forecasts the future of each renewable energy technology sector from the perspectives of U.S. renewable energy trade associations. The American Wind Energy Association provided the industry perspective for the wind section.

NREL Releases Wind PTC Extension Report

The National Renewable Energy Laboratory (NREL) published Implications of a PTC Extension on U.S. Wind DeploymentPDF, a report that examines the level of continuing policy support necessary to avoid significant disruption to domestic wind industry manufacturing and employment. The analysis includes a PTC expiration scenario and five conceptual designs for a PTC extension. The report concludes that "extension of the PTC at its historical level could provide the best opportunity to support deployment consistent with recent levels across a range of market conditions; it therefore could also provide the best opportunity to sustain the existing wind installation and manufacturing base at its current level."

Lack of Cooperation Hampering Rail Safety Efforts

Efforts to improve rail safety reportedly are being hampered by a lack of cooperation among the key players. The oil industry and the rail industry are refusing to share data about the characteristics of oil being shipped and the basis for recommendations for safer tanker cars, respectively, according to an article in the Bismarck Tribunemore

Wednesday, April 23, 2014

NTSB Holds Rail Safety Forum

 The National Transportation Safety Board (NTSB) concluded its forum titled, "Rail Safety: Transportation of Crude Oil and Ethanol" today. 
The two-day event addressed rail safety, specific to the transportation of crude oil and ethanol. Crude oil and ethanol transportation by rail has seen phenomenal growth in North America over the last decade, altering the way these flammable liquids are transported. Trains made up predominately, if not entirely, of crude oil and ethanol cars, consisting of DOT-111 general-purpose tank cars and many thousands of barrels of liquid, have become increasingly common. 

A number of rail accidents, both in the United States and Canada, involving dedicated trains or large blocks of flammable liquid tank cars, have highlighted the vulnerabilities of the DOT-111 tank car and the need for comprehensive risk mitigation and emergency response strategies. The severe consequences resulting from the release of flammable liquids have underscored areas of concern identified in recent NTSB safety recommendations. 

The NTSB invited researchers, crude oil and ethanol shippers, tank car builders, railroad carriers, emergency responders, and federal regulatory agencies to discuss the safety of crude oil and ethanol transportation by railroad. The invited panelists provided presentations about current and proposed initiatives affecting these issues. Panelists also discussed ways to reduce the consequences from accidents involving flammable liquids through tank car design, railroad operations, and emergency preparedness.
The forum panels included:
  • Tank Car Design, Construction and Crashworthiness
  • Rail Operations and Approaches to Risk Management
  • Emergency Response to Tank Car Releases of Crude Oil and Ethanol
  • Federal Oversight and Industry Initiatives Related to Crude Oil and Ethanol
  • The forum opened with a brief review of past crude oil and ethanol railroad accidents, including those investigated by the NTSB and Transportation Safety Board of Canada.
A webcast of the April 22 session can be viewed here

Source: NTSB

Canada Announces Rail Safety Actions

Canada's Minister of Transport, The Honourable Lisa Raitt, today announced actions to address the Transportation Safety Board of Canada's initial recommendations regarding the ongoing investigation into the Lac-Mégantic train derailment. Effective immediately, Transport Canada will:
  • Issue a Protective Direction removing the least crash-resistant DOT-111 tank cars from dangerous goods service;
  • Require DOT-111 tank cars used to transport crude oil and ethanol that do not meet the standard published in January 2014 in Canada Gazette, Part I, or any other future standard, to be phased out or refitted within three years;
  • Issue a Protective Direction requiring Emergency Response Assistance Plans for crude oil, gasoline, diesel, aviation fuel, and ethanol;
  • Create a task force that brings stakeholders such as municipalities, first responders, railways and shippers together to strengthen emergency response capacity across the country; and
  • Require railway companies to reduce the speed of trains carrying dangerous goods and implement other key operating practices.
Source: Government of Canada

Update 4/24/2014 Rail industry responds to Canada on oil rules

NDIC Considers Flaring Measures

The North Dakota Industrial Commission is considering proposals to reduce the flaring of waste gas from wells in the Bakken play. One solution being discussed is a reduction in the state's oil production. Oil companies are opposed to this idea and want the NDIC to consider alternatives such as requiring oil companies to submit a plan for natural gas gathering as part of the well permit application process. North Dakota drillers currently burn off  36 percent of the gas produced by new wells due to a lack of pipeline and processing facilities. According to the U.S. Energy Department, less than 1 percent of natural gas is flared from oil fields nationwide, and less than 3 percent worldwide. Read more

Monday, April 21, 2014

U.S DOT Secretary Coming to Casselton

The U.S. Transportation Secretary Anthony Foxx reportedly plans to meet this week with Casselton officials to discuss the oil train derailment that occurred near the eastern North Dakota community last December.  Foxx is slated to meet with local leaders on Thursday and provide an update on efforts to improve rail safety. more

Study Questions Advantages of Cellulosic Biofuel

A federally-funded study reportedly has shown that biofuels made from the leftovers of harvested corn plants are worse than gasoline for global warming in the short term, challenging the Obama administration's conclusions that they are a much cleaner oil alternative and will help combat climate change. read more
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