• Lucian Pugliaresi Testifies Before the House Committee on Energy and Commerce

    On Tuesday, November 16 2021, EPRINC President Lucian Pugliaresi participated in a marathon hearing with the House Committee on Energy and Commerce. Some of the notable comments he made, pulling from EPRINC’s research on the ongoing energy transition, are listed below. In addition, the full testimony with charts is here and a video of the hearing in its entirety can be found here.

    1. The Energy System is highly complicated, inter-connected regionally and globally in ways that are not always apparent. The energy transition presents a new set of supply and price risks for consumers and manufacturers. Fully implementing an energy transition over the next 30 years is neither easy nor can it be assured.

    2. Achieving net zero in the developed world will reduce carbon emissions by only a small amount, likely no more than 20 percent of expected global emissions.

    3. Regulatory programs as well as private sector commitments to accelerate the energy transition – whether it be mandates, targets, financial and procurement guidelines create uncertainty and financial risks that limit investment commitments to current legacy fuels, many of which are likely to remain in demand for years to come.

    4. Most of the recent escalation in energy prices can be tied directly to dislocations in energy supplies (largely oil and gas) from the Covid-19 pandemic. However, government policies, such as the halt on leasing on federal lands, the cancellation of the Keystone Pipeline, the potential cancellation of line 5 from Canada, rising regulatory requirements and permitting delays are all threatening North American oil and gas production. We undermine this strategic asset at our peril if we abandon these fuels before the energy transition is well established.

    5. Policy Matters. The US should see the current energy crisis in Europe as a cautionary tale and learn from it.

    6. Policy initiatives that seek to accelerate the U.S. to a fully renewable energy complex will have global implications for energy security.

    7. The transition will establish new environmental challenges and energy security issues in addition to the old.

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  • “The Future of Venezuela’s Oil Industry” by Rafael Sandrea and Martin Essenfeld

    Throughout much of the developed world, there is a consensus that concern over climate change is leading to a rapid downturn in petroleum use and that petroleum will likely have a rapidly declining role in the world’s energy mix over the next 30 years. However, a rapid energy transition to a world no longer reliant on fossil fuels represents a formidable challenge and a high likelihood remains, especially in the developing world, that petroleum’s important and large contribution to the world energy mix will not be so easily displaced. Recent EIA forecasts show that world oil and gas demand has reverted to trend. Supply requirements for the end of 2022 are likely to exceed 100 million barrels/day, a remarkable recovery from a decline in liquids demands of over 15 million barrels a day in 2020 from the Covid-19 pandemic. Although Venezuelan oil production has been constrained by both technical mismanagement and sanctions, the size of its reserve base documents its potentially important role in meeting future world oil demand.

    The timing of Venezuela’s petroleum future depends on whether it can enter the world oil market under traditional commercial conditions. On June 25, 2021, the U.S., Canada, and the E.U. issued a joint communiqué that made clear that a decision regarding the timing and specifics of the sanctions on Venezuela remains the primary determining factor on when and if Venezuela can play a larger role in the world oil market.

    Even if Venezuela were somehow to find its way free of sanctions, the road back to higher production will require massive capital investment. Venezuela, which produced over 3 million barrels in day in the 1970s, is now at only 600,000 barrels per day. The authors estimate that the level of investment and amount of time required to rehabilitate the production potential of Venezuela would approach $30 billion USD in two stages:

    Stage 1 – Pre-sanctions recovery: An investment of $7-9 billion over 2-3 years to get back to production prevalent before sanctions started in 2017 (about 2 million barrels/day).

    Stage 2 – Post-recovery: An investment of an additional $20 billion/year for 2-3 years. These investments would take 4-5 years to yield additional production. This would require investment into offshore and underdeveloped onshore projects to bring them up to full production capacity. With proper investment, Venezuela can sustain a production output of approximately 2.5 million b/d over the next 20-30 years.

    The authors provide an overview of Venezuela’s production potential, and evaluate the technical obstacles that must be addressed to restore Venezuelan oil production. Their paper can be found here.

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  • EPRINC Workshop on The Transport Climate Initiative (TCI): Challenges and Opportunities

    EPRINC held a virtual workshop on The Transport Climate Initiative (TCI): Challenges and Opportunities on June 16, 2021. 
     
    EPRINC staff, policymakers, and regional experts explored the effectiveness of the program to meet its goals of lowering greenhouse gas (“GHG”) emissions. Among the topics discussed were how the program fits in with U.S. and international efforts to accelerate the energy transition, an assessment of the program’s impact on consumers, implementation challenges, and opportunities for green investments.   
     
    The Transportation and Climate Initiative (TCI) is a regional collaboration of potentially 12 Northeast and Mid-Atlantic states and the District of Columbia seeking to reduce consumption of petroleum-based fossil fuels in the transportation sector and introduce cleaner fuels and more effective transportation systems.  The list of potentially participating jurisdictions are: Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, and Virginia.

    The agenda for the event can be found here, the presentations that were given are here, and the full video recording of the event is here.

    A report on the event was written by Ashutosh Shastri, Senior Advisor, Global Gas Centre & Distinguished Fellow, EPRINC, and can be accessed here.

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  •  

    EPRINC and IER Co-Host Virtual Workshop on “Understanding the Safer Affordable Fuel-Efficient (SAFE) Rule for Automobiles”

    On July 27, 2020, the Energy Policy Research Foundation and the Institute for Energy Research jointly hosted a virtual workshop on the recently adopted regulation setting fuel efficiency standards for passenger cars and light trucks. 

    Current and former officials from the U.S. Environmental Protection Agency (EPA), National Highway Transportation Safety Administration (NHTSA), representatives from the auto industry, EPRINC and IER staff, and a cross section of stakeholders discussed the new rule  and its broader implications for energy markets and the future of the U.S. auto industry. 

    The video recording of the workshop can be accessed here, and the presentation from Heidi King is here and the one from Max Pyziur is here.

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  • EPRINC’s Lucian Pugliaresi and Larry Goldstein Publish a Commentary on Policy Responses to the Current Crisis in the World Oil Market in Real Clear Energy

    EPRINC President Lucian Pugliaresi and former EPRINC President Larry Goldstein have written a piece for Real Clear Energy entitled “Oil Quotas and Import Fees? No, Get America Back to Work.” In this piece, they examine the current issues in petroleum in light of the COVID-19 pandemic, as demand destruction coincides with an oversupplied market. They write about their concerns with oil quotas and import fees as realistic solutions to this issue, and provide their thoughts on a possible solution. Click here to read their article.

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Lucian Pugliaresi Testifies Before the House Committee on Energy and Commerce

On Tuesday, November 16 2021, EPRINC President Lucian Pugliaresi participated in a marathon hearing with the House Committee on Energy and Commerce. Some of the notable comments he made, pulling from EPRINC’s research on the ongoing energy transition, are listed below. In addition, the full testimony with charts is here and a video of the hearing in its entirety can be found here.

1. The Energy System is highly complicated, inter-connected regionally and globally in ways that are not always apparent. The energy transition presents a new set of supply and price risks for consumers and manufacturers. Fully implementing an energy transition over the next 30 years is neither easy nor can it be assured.

2. Achieving net zero in the developed world will reduce carbon emissions by only a small amount, likely no more than 20 percent of expected global emissions.

3. Regulatory programs as well as private sector commitments to accelerate the energy transition – whether it be mandates, targets, financial and procurement guidelines create uncertainty and financial risks that limit investment commitments to current legacy fuels, many of which are likely to remain in demand for years to come.

4. Most of the recent escalation in energy prices can be tied directly to dislocations in energy supplies (largely oil and gas) from the Covid-19 pandemic. However, government policies, such as the halt on leasing on federal lands, the cancellation of the Keystone Pipeline, the potential cancellation of line 5 from Canada, rising regulatory requirements and permitting delays are all threatening North American oil and gas production. We undermine this strategic asset at our peril if we abandon these fuels before the energy transition is well established.

5. Policy Matters. The US should see the current energy crisis in Europe as a cautionary tale and learn from it.

6. Policy initiatives that seek to accelerate the U.S. to a fully renewable energy complex will have global implications for energy security.

7. The transition will establish new environmental challenges and energy security issues in addition to the old.

“Shifting Oil Industry Structure and Energy Security Under Investment Phase-Outs” by Michael Lynch

The International Energy Agency (IEA), a collection of member countries formed in the 1970s to secure the energy security of the advanced Western democracies, is now calling for a halt to the development of new oil and gas resources as a fundamental strategy for addressing the threats from climate change.  The halt in development is viewed by the IEA as essential for the world to reach net zero carbon emissions by 2050. Michael Lynch, Distinguished Fellow at the Energy Policy Research Foundation, Inc. (EPRINC) points out the risks of such a strategy in his paper entitled Shifting Oil Industry Structure and Energy Security Under Investment Phase-Outs.  Since only private oil companies in the West are likely to respond, future oil supply probably would be dominated by Middle Eastern and Russian oil companies, mostly state-owned. Such a policy initiative, if successfully implemented, will see OPEC and allied producers (OPEC+) share of the world oil market supply rise to over 80% by 2040, degrading global energy security and severely limited the capability of the IEA to implement its Emergency Sharing System in the case of an oil crisis. The publication can be found here.

“The Future of Venezuela’s Oil Industry” by Rafael Sandrea and Martin Essenfeld

Throughout much of the developed world, there is a consensus that concern over climate change is leading to a rapid downturn in petroleum use and that petroleum will likely have a rapidly declining role in the world’s energy mix over the next 30 years. However, a rapid energy transition to a world no longer reliant on fossil fuels represents a formidable challenge and a high likelihood remains, especially in the developing world, that petroleum’s important and large contribution to the world energy mix will not be so easily displaced. Recent EIA forecasts show that world oil and gas demand has reverted to trend. Supply requirements for the end of 2022 are likely to exceed 100 million barrels/day, a remarkable recovery from a decline in liquids demands of over 15 million barrels a day in 2020 from the Covid-19 pandemic. Although Venezuelan oil production has been constrained by both technical mismanagement and sanctions, the size of its reserve base documents its potentially important role in meeting future world oil demand.

The timing of Venezuela’s petroleum future depends on whether it can enter the world oil market under traditional commercial conditions. On June 25, 2021, the U.S., Canada, and the E.U. issued a joint communiqué that made clear that a decision regarding the timing and specifics of the sanctions on Venezuela remains the primary determining factor on when and if Venezuela can play a larger role in the world oil market.

Even if Venezuela were somehow to find its way free of sanctions, the road back to higher production will require massive capital investment. Venezuela, which produced over 3 million barrels in day in the 1970s, is now at only 600,000 barrels per day. The authors estimate that the level of investment and amount of time required to rehabilitate the production potential of Venezuela would approach $30 billion USD in two stages:

Stage 1 – Pre-sanctions recovery: An investment of $7-9 billion over 2-3 years to get back to production prevalent before sanctions started in 2017 (about 2 million barrels/day).

Stage 2 – Post-recovery: An investment of an additional $20 billion/year for 2-3 years. These investments would take 4-5 years to yield additional production. This would require investment into offshore and underdeveloped onshore projects to bring them up to full production capacity. With proper investment, Venezuela can sustain a production output of approximately 2.5 million b/d over the next 20-30 years.

The authors provide an overview of Venezuela’s production potential, and evaluate the technical obstacles that must be addressed to restore Venezuelan oil production. Their paper can be found here.

EPRINC Workshop on The Transport Climate Initiative (TCI): Challenges and Opportunities

EPRINC held a virtual workshop on The Transport Climate Initiative (TCI): Challenges and Opportunities on June 16, 2021. 
 
EPRINC staff, policymakers, and regional experts explored the effectiveness of the program to meet its goals of lowering greenhouse gas (“GHG”) emissions. Among the topics discussed were how the program fits in with U.S. and international efforts to accelerate the energy transition, an assessment of the program’s impact on consumers, implementation challenges, and opportunities for green investments.   
 
The Transportation and Climate Initiative (TCI) is a regional collaboration of potentially 12 Northeast and Mid-Atlantic states and the District of Columbia seeking to reduce consumption of petroleum-based fossil fuels in the transportation sector and introduce cleaner fuels and more effective transportation systems.  The list of potentially participating jurisdictions are: Connecticut, Delaware, the District of Columbia, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, and Virginia.

The agenda for the event can be found here, the presentations that were given are here, and the full video recording of the event is here.

A report on the event was written by Ashutosh Shastri, Senior Advisor, Global Gas Centre & Distinguished Fellow, EPRINC, and can be accessed here.

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