• For links to the reports on the SPR, click here

     

     

     

    Revisiting The Strategic Petroleum Reserve (SPR)

    The prospect for conflict in the Middle East, pending collapse of production in Venezuela, and turmoil in North Africa all remind us the world oil market still faces substantial threats of disruption.  The North American petroleum renaissance, which has lifted U.S. oil production to the point where net exports are rapidly moving into positive territory, has also opened opportunities for  Congress to sell off a substantial volume of strategic stocks to fund a range of domestic programs. EPRINC has argued that while some adjustments to the reserve size may be justified, on balance, it still plays a critical role in the security of the United States and decisions on the size of the SPR should take the long view. The SPR remains an important strategic asset.

    Given the current geopolitical environment, we are highlighting some previous EPRINC papers published on this topic.  In addition, our friend and colleague, Dr. Carmine Difiglio, has shared with us his insightful analysis of the value of strategic stocks in sustaining economic growth. Professor Difiglio, formerly with the U.S. Department of Energy, is Director of the Istanbul International Center for Energy and Climate (IICEC) at Sabanci Univerity.

    John Shages, former Deputy Assistant Secretary for Strategic Reserves, writes on Policy Challenges in Managing the Nation’s Strategic Oil Stock  (July 2014).

    For access to the report, click here

    Lucian Pugliaresi of EPRINC and Fred Beach of UT, Austin debate the value of the SPR in the Wall Street  Journal (November 2015).

    For access to the report, click here

    Larry Goldstein and Lucian Pugliaresi of EPRINC comment on Congress’s initiative  to fund health care by reducing the size of the SPR  in Politico (July 2015)

    For access to the report, click here

    Carmine Difiglio’s extensive analysis of the negative consequences of world economic growth from oil supply disruptions. Oil, economic growth and strategic petroleum stocks, Energy Strategy Reviews (2014).

    For access to the report, click here

    Michael Lynch, EPRINC Distinguished Fellow and President of Strategic Energy and Economic Research, Inc. presents a retrospective on the 1979 oil disruption and the role uncertainty and hoarding can play is amplifying the cost of an oil supply disruption. The article was recently published in Forbes and can be found here.

     

  • EPRINC Releases Report on the Role of Octane in U.S. Transportation Fuels

    Over the course of the last forty years, automobile manufacturers have had to comply with a variety of increasingly stringent Federal and State requirements. CAFE (Corporate Average Fuel Economy) regulations were enacted in the 1970s to require higher fuel efficiency in motor vehicles. Beginning in 2005 through the passage of the RFS (Renewable Fuel Standard) increasing volumes of biofuel blending have been mandated.  As both of these sets of regulations have created formidable compliance challenges, there has emerged an opportunity to link the two to bring some convergence to these two important public policy concerns and offer some resolution through requiring higher-octane fuel.

    EPRINC’s Lucian Pugliaresi and Max Pyziur have written a report which presents an estimate of the cost of transforming the U.S. gasoline fuel system from one in which about 89 percent of sales can be characterized as “regular” and “midgrade” gasoline into a fuel system that, over time, nearly 100 percent of sales can be characterized as “higher-octane” gasoline. Several methodologies were used to estimate the cost of this transformation, and the merits and demerits of each system for calculating the cost are discussed in the report. The report can be found here.

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    Lucian Pugliaresi Presents at the Energy Mexico Oil Gas Power 2019 Expo & Congress

    Photo: Panelists for the Session on Energy Implications of the new U.S. Mexico Canada (USMCA) Trade Agreement (Left to Right) Jesus Seade Kuri (Key NAFTA Negotiator for the Administration of President Andrés Manuel López Obrador), Ildefonso Guajardo (Former Minister of Economy and Chief Negotiator of NAFTA), Carlos Pascual (Senior Vice President, Global Energy, IHS Markit), Herman Franssen (Panel Chairman, Executive Director,  Energy Intelligence Group), Lucian Pugliaresi (President, Energy Policy Research Foundation), Moisés R. Kalach Balas (Coordinator of the Strategic International Business Council, Consejo Coordinador Empresarial)   Lucian Pugliaresi made two presentations in Mexico City at the Energy Mexico Oil Gas Power 2019 Expo & Congress, a key event for the entire value chain of the Mexican energy sector.  He made presentations on a panel discussion on the new U.S. – Mexico – Canada (USMCA) trade agreement as well as a panel evaluating the implications of shifts in national energy policies.  His two presentations can be found here and here.    

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    EPRINC Releases Report on Mexico’s Petroleum Future

    The energy reform measures implemented in Mexico over the last few years, also known as the New Energy Model, offer considerable potential to lift oil and gas production, increase employment and deliver technological advances, and crucially additional revenues for federal, state, and local governments. These reforms, if fully implemented, will also enhance long-term energy security for Mexico and North America. Energy reform in Mexico is contributing to the likelihood that North America will become a sustained net exporter to world markets in both petroleum (crude oil and refined products) and natural gas in the coming years. In a just-released EPRINC assessment, Michael Lynch, EPRINC Distinguished Fellow, presents his findings on the economic value to Mexico of the energy reforms in the petroleum sector. A link to the full report can be found here. A Spanish translation of the report will be posted on the EPRINC’s website in early January 2019.

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    London Argus Biofuels 2018 Conference

    On October 8-11, 2018, Argus Media held their Biofuels 2018 Conference in London.

    Offering a U.S. perspective, EPRINC’s Max Pyziur participated in a panel titled, “Political will for ethanol in transport fuels.” He also chaired a Roundtable themed “Ethanol Growth in the US markets.”

    The pdf of his powerpoint slides used at the Roundtable can be found here.

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    IEEJ and EPRINC Commentary on the Future of Asian LNG
    As the 7th Annual LNG Producer Consumer Conference opens in Nagoya, Japan, Masakazu Toyoda, CEO of the Institute of Energy Economics Japan (IEEJ) and Lucian Pugliaresi, President of the Energy Policy Research Foundation, Inc (EPRINC) outlined the important role of  U.S.-Japan cooperation in meeting rising Asian LNG demand with U.S. shale gas exports.  Their views appear in two separate  articles published in the Nikkei Asian Review  and the Japan Times.
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    IEEJ and EPRINC Release 2018 Assessment on the Future of Asian LNG

    The Institute of Energy Economics Japan (IEEJ) and EPRINC have published a follow-on assessment to their 2017 joint report on the future role of liquefied natural gas (LNG) in Asian power and fuel markets. This second year of our joint effort has taken a more in-depth evaluation of trends and longer-term uncertainties in Asian natural gas markets and the potential role of U.S. LNG exports in serving those markets. The joint research findings were presented at the 7th Annual Producer Consumer LNG Conference held in Nagoya, Japan on October 22, 2018. The event was attended by energy ministers, government officials, and industry representatives from the entire LNG value chain.

    A copy of the 2018 joint report can be found here.

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    EPRINC and IEEJ Host Workshop: “Future of Asian LNG Part Two, The Road to Nagoya”
    On September 5th, 2018, EPRINC co-hosted the third workshop in the 2018 “Future of Asian LNG” series at the Willard InterContinental Hotel in Washington D.C. IEEJ and EPRINC are in the second year of a joint assessment of the future role of LNG in Asian power and fuel markets. Among the more important objectives of this joint effort are identifying recent trends and longer-term uncertainties in Asian natural gas markets and the potential role of U.S. LNG exports in serving those markets. The final workshop in the 2018 program included presentations and discussion on the U.S. LNG value chain, opportunities and challenges for financing the expansion of U.S. LNG exports and regasification receiving facilities in Asia, and prospects for expansion of natural gas storage and LNG bunker facilities, among other topics.
    The workshop presentations and accompanying discussion will contribute to the final joint IEEJ-EPRINC report and recommendations. The findings and recommendations will be presented at the 7th Annual Producer Consumer Conference on October 22, 2018 in Nagoya, Japan.






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    Lucian Pugliaresi Delivers LNG Briefing at the Embassy of Panama

    On August 2, Lucian Pugliaresi met with officials at the Embassy of Panama to present on the developments of the LNG industry.  A link to the presentation can be found here.

     

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    The Permian Basin Produces Gas, Too

    This report by EPRINC Non-Resident Fellow Trisha Curtis is part of the Energy Policy Research Foundation’s multi-year research program evaluating the scale and scope of the North American petroleum renaissance. As U.S. producers expand production to meet domestic requirements and the rapidly growing market for pipeline exports and Liquefied Natural Gas (LNG), it is essential that policy makers have a full understanding of the sustainability of the U.S. natural gas production platform. This report addresses the range of challenges and opportunities for expanding U.S. production of natural gas for both domestic uses and export markets through an in depth look at North America’s most prolific oil and gas basin, the Permian. The report can be found here.

Revisiting The Strategic Petroleum Reserve (SPR)

The prospect for conflict in the Middle East, pending collapse of production in Venezuela, and turmoil in North Africa all remind us the world oil market still faces substantial threats of disruption.  The North American petroleum renaissance, which has lifted U.S. oil production to the point where net exports are rapidly moving into positive territory, has also opened opportunities for  Congress to sell off a substantial volume of strategic stocks to fund a range of domestic programs. EPRINC has argued that while some adjustments to the reserve size may be justified, on balance, it still plays a critical role in the security of the United States and decisions on the size of the SPR should take the long view. The SPR remains an important strategic asset.

Given the current geopolitical environment, we are highlighting some previous EPRINC papers published on this topic.  In addition, our friend and colleague, Dr. Carmine Difiglio, has shared with us his insightful analysis of the value of strategic stocks in sustaining economic growth. Professor Difiglio, formerly with the U.S. Department of Energy, is Director of the Istanbul International Center for Energy and Climate (IICEC) at Sabanci Univerity.

John Shages, former Deputy Assistant Secretary for Strategic Reserves, writes on Policy Challenges in Managing the Nation’s Strategic Oil Stock  (July 2014).

For access to the report, click here

Lucian Pugliaresi of EPRINC and Fred Beach of UT, Austin debate the value of the SPR in the Wall Street  Journal (November 2015).

For access to the report, click here

Larry Goldstein and Lucian Pugliaresi of EPRINC comment on Congress’s initiative  to fund health care by reducing the size of the SPR  in Politico (July 2015)

For access to the report, click here

Carmine Difiglio’s extensive analysis of the negative consequences of world economic growth from oil supply disruptions. Oil, economic growth and strategic petroleum stocks, Energy Strategy Reviews (2014).

For access to the report, click here

Michael Lynch, EPRINC Distinguished Fellow and President of Strategic Energy and Economic Research, Inc. presents a retrospective on the 1979 oil disruption and the role uncertainty and hoarding can play is amplifying the cost of an oil supply disruption. The article was recently published in Forbes and can be found here.

 

For links to the reports on the SPR, click here

 

 

 

EPRINC Welcomes Rafael Sandrea as a Distinguished Fellow

EPRINC is excited to announce the addition of Rafael Sandrea as a Distinguished Fellow. Rafael is President of IPC Petroleum Consultants, Inc.,a Tulsa based international petroleum consulting firm which specializes in oil and gas reserves appraisals and risk analysis for international upstream petroleum investments.  He is very active giving Webinars, Masterclasses online, and speaking on the themes of reserves, IOR/EOR, shale oil and gas assessment, and global oil & gas supply, around the world.More of Rafael’s background can be found here.

Emily Medina Crafts Mexico Gasoline and Diesel Market Overview

EPRINC Non-Resident Fellow Emily Medina has crafted a primer on the Mexican Gasoline and Diesel Market as part of the EPRINC Mexico Initiative.

The U.S.-Mexico-Canada Agreement (USMCA) contributes to both the strength and sustainability of the North American petroleum renaissance. North American cross-border energy trade is extensive and the movement of crude oil, refined petroleum products, and natural gas contributes to the expanding national economies in the USMCA.

An essential element to ensure efficient energy production throughout the production platform is allowing energy flows to move unimpeded. The expanding trade in petroleum products, especially gasoline and diesel, is a case in point. This trade has been beneficial to the U.S. refining industry by allowing processing facilities to operate efficiently at high volume. Mexican consumers benefit from product exports from the U.S. (and Canada) by gaining access to secure and competitively priced gasoline and diesel fuel. Some Mexican officials have raised energy security concerns arguing that Mexico is too dependent on U.S. supplies and that domestic production should be encouraged or subsidized as a substitute for imports.

Addressing energy security concerns is a complicated issue and will be the subject of a more in- depth treatment of the Mexican petroleum products market in a subsequent report. This policy brief presents an overview of the current gasoline and diesel market in Mexico.

Click here to access the paper.

A Report on Resource Pessimism by EPRINC Distinguished Fellow Michael Lynch

EPRINC Distinguished Fellow Michael Lynch has penned a report on resource pessimism. A summary of the report is as follows:

The modern era has seen two major threads of neo-Malthusian thought: fears that agriculture cannot sustain the future population and concerns about possible scarcity of nonrenewable resources like minerals and energy. This has caused various governments to undertake population control policies, crash programs to develop substitute fuels, and even suggestions that exploitation of asteroids for their mineral resources might soon be necessary. The proposed Green New Deal was seen to be motivated in part by a concern for the finite nature of resources.

But the various apocalyptic predictions based on these theories have virtually all failed, although proponents insist that only their timing is in error, not the concept. This report finds that most neo-Malthusian arguments are based on an incorrect understanding of resource estimates, including the nature and terminology, leading to the use of woefully conservative figures which then generate the apocalyptic warnings. Combined with the assumption that, since technological advances can’t be predicted, technological progress should not be assumed, arguments that consumption must be curtailed and even that economic growth should cease are based on fallacious notions.

This paper argues that neo-Malthusians suffer from an underspecified model, not just bad input parameters but omitted variables that guarantee the pessimistic, and invalid, predictions.

Correcting these errors results in a much better understanding of resources and a more optimistic outlook for the global economy and hopefully less economic waste.

The report can be found here.

EPRINC Publication “China’s Search for Blue Skies” Highlights Growing Demand for LNG

Driven by a growing political requirement to fight air pollution, record growth has been recorded in natural gas demand in China over the past decade. China surpassed South Korea as the second largest LNG importer in 2017 and is projected to surpass Japan as the world’s largest natural gas importer in 2019.  The massive scale of the Chinese energy sector matters; a small change in the Chinese natural gas demand can lead to an oversized impact on global markets. As part of EPRINC’s ongoing assessment on the future role on LNG in Asia, this publication evaluates market and policy trends placing China in a central role as the driver of world LNG demand growth. The report can be found here.  A translation of the executive summary in Chinese can be found here.

 

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