In Memoriam: Larry Goldstein (1942-2024)
December 20, 2024
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Before the Trump administration’s 2018 actions, Iran shipped petroleum to multiple destinations including Syria, Korea, India, Turkey, Japan, and others; during this period China purchased 30% to 50% of Iran’s exports. Through sanction evasion, China has since become the dominant buyer of Iran’s petroleum with purchases that range from 75% to 95% of Iran’s total exports during 2023 and 2024
Before the Trump administration’s 2018 actions, Iran shipped petroleum to multiple destinations including Syria, Korea, India, Turkey, Japan, and others; during this period China purchased 30% to 50% of Iran’s exports. Through sanction evasion, China has since become the dominant buyer of Iran’s petroleum with purchases that range from 75% to 95% of Iran’s total exports during 2023 and 2024.
The production of oil and gas from unconventional geologic formations (generally called shale oil and gas) has lifted the U.S. into the world’s largest oil and gas producer. In the midst of the Covid pandemic and the associated worldwide government initiatives to lockdown large segments of the world’s economies, petroleum demand cratered. Analysts, academic researchers, and a large number of commentators viewed the reduction of petroleum demand accompanying the pandemic as a signal that a sustained decline in oil demand had finally arrived. But pandemics have a tendency to return to trend once infections run their course. According to the International Energy Forum (IEF), and referencing the authoritative Joint Organizations Data Initiative (JODI), world oil demand rose in December 2022 (year-over-year) by 1.3 million barrels per day (mb/d). The most recent forecast from the U.S. Energy Information Agency (EIA) points to rising petroleum requirements worldwide. The agency expects global liquid fuels consumption to increase by 1.5 million barrels per day (b/d) in 2023 from 2022 and by an additional 1.8 million b/d in 2024.
So does the U.S. have the capacity to raise domestic oil production to remain an important force in the global market? In this paper, Trisha Curtis, CEO of the PetroNerds consultancy and an EPRINC Distinguished Fellow, takes a deep dive into the unconventional petroleum space and examines its capacity to sustain the U.S. as a world leader in oil and gas production.
On April 18, 2023, EPRINC hosted its first in-person Energy Security Series workshop. The workshop also coincided with the official launch party of the new EPRINC offices at 25 Massachusetts Ave, NW Washington DC, which boast a large conference space that enables us to more easily host subsequent workshops.
This Energy Security Series workshop was called “Energy Security, Petroleum Markets and the Transition: Perspectives on the Road Ahead”, and was well-attended. The agenda can be found here.
The U.S. Senate Budget Committee has jurisdiction over the Congressional Budget Office. In that position, its roles are to draft the U.S. Congress’ annual budget and to monitor that budget’s implementation.
Under the chairmanship of Senator Sheldon Whitehouse (D-RI), the Committee has held five hearings since the 118th U.S. Congress was seated in January. Four of these hearings have focused on the risks and costs of extreme events and weather such rising seas, wildfires, and hurricanes, with the balance on President Biden’s 2024 Fiscal Year Budget Proposal.
Using the novel definition of “stranded assets” that is gaining currency in certain parts of economic academic literature and some general interest publications, the Committee held a hearing titled: “Left Holding the Bag: The Cost of Oil Dependence in a Low Carbon World” at 10am on Wednesday March 29, 2023. Lucian Pugliaresi (on Twitter at @LPugliaresi), President of the Energy Policy Research Foundation (EPRINC), testified along with four other witnesses. His testimony can be found here, and the testimony of the other witnesses as well as a video recording of the event are accessible at the link above.
While that pipeline could supply China with a cheaper alternative to liquefied natural gas, Xi’s government remains focused on securing diversity of supply — essentially not repeating the European error of excessive reliance on Russia. And there’s a lot of countries seeking to sell gas at the moment, including the US, Qatar, Australia and Turkmenistan, according to Batt Odgerel, a senior research analyst at the Energy Policy Research Foundation, Inc.
“It’s a buyer’s market for China,” he said. “Unless Russia gives an extremely pleasant offer, China can wait as long as it wants. Additional gas from Russia is not required, especially after the lockdown-induced economic downturn.”
On Tuesday, March 7, 2023, concurrent with CERAWeek in Houston, the leadership of several prominent energy trade associations and think-tanks convened a half-day meeting with senior G7 energy delegates dubbed The Joint Energy Security Forum. Ahead of the deliberations that will lead to and be a part of the G7 leadership meeting on May 19-21, 2023 in Hiroshima, Japan, the Forum discussed the importance of natural gas in meeting global energy security and climate-related goals, especially in the context of Russia’s maligned use of its natural resources.
Washington Times reporter Sean Salai pursues the Montgomery County, Maryland imminent natural gas ban story. With a population of 1.1 million, Montgomery County is Maryland’s largest county and adjacent Washington, DC. In December 2022 and seeking to mitigate GHG emissions, the County Council unanimously passed legislation to ban natural gas heating in new buildings beginning in 2026.
The leadership of the U.S. House Energy & Commerce Committee (E&C) under Chairwoman Cathy McMorris Rodgers are hosting a series of roundtables in order to help establish its agenda for the 118th Congress. Critically, some of these roundtables are focused on Energy. The first one was held on January 10th, 2023 with the theme of “Unaffordable Energy Costs” (the link is here). The second, with the broad theme of Energy Security, took place on Thursday, January 26th, 2023.
EPRINC’s President Lucian Pugliaresi presented at this E&C Roundtable. His remarks and associated charts can be found here. The Committee also invited David Gattie, Associate Professor of Engineering, University of Georgia, and Senior Fellow, Center for International Trade and Security, Pat O’Loughlin, President and CEO, Buckeye Power, Inc. and Ohio Rural Electric Cooperatives, and Dr. Edmund O. Schweitzer, III, Founder, Schweitzer Engineering Laboratories. The recording of the Roundtable is accessible at this link.
EPRINC has been at the forefront of U.S. policy discussions relating to Energy Security. During the early 1970s and under the leadership of John Lichtblau and Larry Goldstein, EPRINC (then known as PIRINC) were critical in informing leadership of the U.S. Congress on the importance of the establishment of the Strategic Petroleum Reserve as a key component of America’s energy security apparatus/architecture (choose one).
Per its mission, EPRINC has continued to be involved in energy policy discussions, security and otherwise, providing its perspective on the need for efficiency and matching benefits to costs. More recently, beginning in November 2021, EPRINC has presented testimony four times on a broad range of energy matters (RFS, leasing on public lands, cost challenges of the Energy Transition) to the U.S. Senate’s EPW Committee as well as the U.S. House E&C and Natural Resources Committees.
Based on the expertise that EPRINC presented at these Hearings, EPRINC received further inquiries from commercial and governmental entities for comment, perspective, and data on the energy matters of the day.
The Institute of Energy Economics Japan (IEEJ) in Tokyo and the Energy Policy Research Foundation, Inc. (EPRINC) in Washington DC have hosted an in-person workshop on December 15-16, 2022 in Washington, DC. The workshop, Global LNG, Energy Security, and the Transition, brought together a small group of policymakers, practitioners, and experts from the U.S., Asia, and Europe to chart a path forward to address fundamental challenges of meeting rising global requirements for LNG, new threats to energy security, and measures to cost-effectively address the challenges of the energy transition. The workshop supported the six-year joint effort of IEEJ and EPRINC on the role of LNG in sustaining global energy security and worldwide requirements for new energy supplies.
Background
Prior to the Russian invasion of Ukraine, world energy markets were experiencing sustained shortages and rising prices from years of underinvestment in oil and natural gas production. Today, pricing pressure on LNG continues to rise well above historic trends from rising demand in Europe as the continent searches for alternative sources to replace lost supplies from Russia. Of special concern in the current market environment for Asia is the severe cost constraints in using LNG. The rapidly rising cost of LNG is especially troublesome for the developing world in Asia as sustained high prices will incentivize continued reliance on coal and petroleum liquids. High prices for LNG will undermine initiatives throughout Asia to pursue Net-Zero aspirations.
Securing adequate new supplies of LNG for the world market requires overcoming a series of unique financial, policy, and regulatory challenges. LNG projects require large-scale financial commitments binding sellers and buyers for much as 20 years for projects to reach final investment decision. In many cases, aspirational goals seeking to abandon so-called legacy fuels and leap directly to the renewable fuels and low carbon technologies of the future can be counter-productive and undermine long-term progress to Net-Zero outcomes. The energy transition will be both long and difficult. LNG and natural gas offer numerous opportunities for both the developed and developing world to enhance energy security, accelerate the transition away from coal, and make substantial progress in achieving lower carbon emissions. International financial institutions, public financial institutions and private banks will have to work together to ensure that LNG development can proceed with adequate long-term commitments and sufficient investment to bring substantial volumes of new supplies to the market.
Venue and Discussion Topics
Our excellent venue, the Cosmos Club, permitted extensive opportunities to discuss the broad challenges of energy supply and geopolitical stress points. We identified five subject areas to focus the panel presentations and discussions. These were:
Additionally, EPRINC and the Embassy of Japan in Washington DC cohosted a dinner to facilitate more discussion between participants the evening of December 15.
The presentations from the workshop can be downloaded from this link, the agenda from the workshop is here, and photos from the two day event are here.
On Wednesday, November 9 at noon, EPRINC President Lucian Pugliaresi and EPRINC Fellow Trisha Curtis participated in a Heritage Foundation panel called “What Will Happen to Energy in the Next Congress?” The panel, hosted by Heritage’s Diana Furchtgott-Roth, was described by Heritage as follows:
“The soaring price of energy concerns all Americans, from high costs at gasoline pumps to exorbitant electricity bills. The solution is under our own feet. The United States has energy reserves of oil and natural gas that would allow us to lower prices by increasing production of energy and pipelines, which are needed to move the resources across the country. So, what might the next Congress do to lower energy prices?”
The video of the event can be found on the Heritage Foundation website, here.
EPRINC Fellow Tristan Abbey has written this open letter titled “Did Biden Break the Strategic Petroleum Reserve?” The letter was sent on October 27, 2022 to Senators Joe Manchin and John Barrasso, chairman and ranking member, respectively, of the U.S. Senate Committee on Energy and Natural Resources.
The letter calls for a bipartisan investigation into the operational impacts of the White House’s “historic 180-million-barrel drawdown” focusing on the following quetisons:
EPRINC President Lucian Pugliaresi has co-authored an article published on October 25, 2022 in RealClear Energy entitled “Bad Energy Policy Ideas Never Die“. In it, they discuss their concerns with recent public policies related to energy that have been proven to be major issues that will be difficult to recover from. A quote from the article with their proposed solution is below:
“To the fearful leaders in our country: step out on your turf and support the domestic oil and gas industries in ways that will build investor confidence and calm markets. There simply is no other way to meet the future without a strong domestic base for energy and materials. Others will take note, including troublemakers we face now and those we’ll face in the future.”
https://www.realclearenergy.org/articles/2022/10/25/bad_energy_policy_ideas_never_die_860905.html
10/18/2022
Members of the Organization of Petroleum Exporting Countries (OPEC) have recently made the decision with other oil producers (OPEC+) to slash production by 2 million barrels a day. The move—seen as led by Saudi Arabia and Russia—immediately sent oil prices higher, defies entreaties by the Biden administration for production increases to ease inflation and stabilize the global economy, and could provide a vital cash lifeline to Vladimir Putin’s war efforts in Ukraine.
JINSA held a discussion of the factors that contributed to this move, what it signals about Saudi relations with the United States, Russia, and other world actors, why the Biden administration was unable to prevent the production cut, and what the United States should do next. EPRINC’s Larry Goldstein participated and provided his insight based on his years of experience and expertise on the matter.
A transcript of Larry’s comments can be found here. The video of the event is below
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