Policymakers have long been concerned with the impacts of energy imports on U.S. trade, especially beginning in the late 1950s as the country moved to negative energy trade imbalances. Despite attempting to remedy these imbalances, they exacerbated the 1970s energy shortages creating ongoing concerns of potential future vulnerabilities.
However, beginning in the 2000s, new extraction technologies knowing as hydrofracking were applied to shale geological formations. With innovation and enhancements these technologies have led to a resurgence of U.S. crude oil and natural gas production.
This resurgence is broadly visible in a variety of realms. With respect to U.S. trade, the U.S. energy trade balance began moving from a deficit to a surplus in late 2018. Where during 2010, the U.S. reported a $20-plus billion monthly deficit, which breached $30 billion in 2012, the bounty of U.S. energy production has caused the balance to rise to a current $9.5 billion surplus with the trend continuing upward
EPRINC is excited to announce the addition of Tristan Abbey to our team as a new EPRINC Distinguished Fellow. Tristan is President of Comarus Analytics LLC. Prior to its founding, he served for nearly a decade in senior policy roles at the Senate and the White House.
As a senior professional staff member of the Senate Committee on Energy and Natural Resources from 2019 to 2020, Tristan developed and implemented Chairman Lisa Murkowski’s Strategic Energy Initiative. He also supported her efforts to address global energy market volatility at the onset of the COVID-19 pandemic.
At the White House from 2017 to 2019, Tristan served as the National Security Council’s Director for Energy and Environment (also with the National Economic Council) and then as Director for Strategic Planning. His responsibilities included developing national energy strategies and overseeing policy development for critical minerals, advanced nuclear technology, and related trade and finance concerns, among other issues.
A more extensive bio for Tristan is available here.
Lucian Pugliaresi participated in the annual symposium of the Hellenic Association of Energy Economists. This year’s program examined energy transitions and the symposium was held in a virtual format from Athens, Greece between September 30 to October 2, 2020. He presented recent EPRINC findings on proposals to prohibit the use of hydraulic fracturing in producing oil and gas from unconventional reserves. His presentation, The Curious Idea to Ban Hydraulic Fracturing in the U.S. can be found here.
EPRINC has hosted another virtual workshop, this one entitled “Keeping the Lights on in California: Some Simple Lessons for Sustaining Reliable Power Generation.”
California has historically faced persistent challenges to the operation of its electric power complex. Commentators have long pointed out that a state with the fifth largest economy in the world, home to advanced technological breakthroughs and a well-educated population, should be able to figure out how to keep the lights on. The roots of the breakdown in California’s power system cannot be tied a single failure, but a perfect storm of operational setbacks, difficult environmental conditions, and technical constraints. Among the operational challenges have been an aggressive program of incorporating renewable and intermittent power generation into the utility system.
The workshop included a discussion of EPRINC’s forthcoming assessment of California power by EPRINC’s Max Pyziur, with accompanying commentary by Erik Rakhou, the former Dutch Utility Energy regulator; KK Sharma, former Director of Operations at India’s largest utility, NTPC; Ash Shastri, EPRINC Fellow and adviser to the European Gas Center; Carmine Difiglio, Professor, Sabanci University (Istanbul); and Ed Randolph, Director, California Public Utility Commission’s Office of Energy Policy (invited). The agenda for the event can be found here and the presentations for the event are here. The workshop recording is available “on demand” here.
The Institute of Energy Economics Japan (IEEJ) and the Energy Policy Research Foundation, Inc. (EPRINC) have jointly hosted a virtual workshop, “Future of Asian LNG: Finding a Path Forward” on September 17, 2020, at 7:30 -11:00 am EDT (20:30 – 24:00 pm JST).
U.S., Japanese, and international experts, policy makers, and industry executives provided presentations and a discussion on government initiatives and market developments of importance in sustaining a path forward to LNG growth in the Indo-Pacific market. The workshop highlighted critical issues facing the LNG industry.
Hon. Takeshi Soda, Director, Oil & Gas Division, Agency for Natural Resources, METI and Hon. Steve Winberg, Assistant Secretary, Fossil Energy, U.S. DOE kicked off the workshop. As in recent years, the workshop will also inform the joint IEEJ-EPRINC recommendations to be presented at the Annual LNG Consumer Producer Conference on October 12, 2020 in Tokyo.
The agenda for the event can be found here, and the link to the presentations from the workshop is here.
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.
Peter Stark and EPRINC Fellow Raphael Sandrea have published this piece, entitled “Deepwater Oil Exploration in the Gulf of Mexico: A Spatial Model Provides Clues for Undiscovered Potential.”
Sandrea and Stark bring long experience and unique expertise in evaluating the resource potential of geologic basins worldwide. Their paper on the isoOIP model demonstrates how simple and inexpensive decision support tools can continue to contribute to cost effective development of the nation’s oil and gas resources.
Oil and gas development throughout the U.S. outer continental shelf (OCS) provides a large portion of the nation’s oil and gas supply. Oil and gas reservoirs are found under the sea in both state and federal lands offshore from Louisiana, Texas, California, and Alaska. However, it is the resources located in the Gulf of Mexico that have proved the most prolific. According to the Energy Information Administration, Gulf of Mexico federal offshore oil production accounts for 17% of total U.S. crude oil production. In calendar year 2019, the U.S. Department of Interior reported that bonus bids, rents, and royalties from offshore oil and development generated over $5 billion USD in revenues to the U.S. Treasury.
On Tuesday, July 7, 2020, EPRINC hosted another virtual workshop in its series on COVID-19 and the Future of Oil and Gas. This workshop was titled “There Will Be Oil,” and the topics covered prospects for recovery for U.S. oil production and world petroleum demand. The discussion examined the nature and timing of U.S. oil production recovery and petroleum demand outlook as the world economies emerge from COVID-19 lockdowns. The presenters at the workshop were EPRINC Distinguished Fellows Trisha Curtis (co-founder, PetroNerds), Ash Shastri (founder, EnerStrat Consulting), and Michael Lynch (President Strategic Energy and Economic Research), EPRINC President Lucian Pugliaresi, and EPRINC’s newest Distinguished Fellow, Glen Sweetnam. As always, workshop participants will also be able to pose questions during the event. A recording of the workshop can be accessed after registering here, and the presentations can be found below.
EPRINC would like to welcome our newest Distinguished Fellow, Glen Sweetnam. As a former senior DOE official and with an impressive background before that, Glen brings a wealth of experience to our organization. We look forward to his input in EPRINC conversations! Glen’s bio can be found here.
On Tuesday, June 16 2020, EPRINC hosted a Virtual Workshop, entitled There Will Be Gas. The discussion covered recent developments in U.S. natural gas supply and implications for the global LNG market as world economies emerge from COVID-19 lockdowns. Assistant Secretary of Energy Steve Winberg; METI Director of Oil and Gas, Takeshi Soda; President and CEO of IEEJ, Masakazu Toyoda; EPRINC staff and fellows; and industry experts all weighed in to discuss developments in these important markets. This was an invitation-only event and space is limited to provide an opportunity for open discussion among all participants, however the workshop is now available on demand by clicking here and the presentations from the workshop can be accessed on DropBox here or by clicking the individual presentations below.
EPRINC’s Director of Downstream, Transportation Fuels, & Natural Gas Projects Max Pyziur has published a new paper entitled “There Will Be Gas” in which he assesses the U.S. natural gas supply in light of the recent low-price environment. He writes:
“With the advent of the COVID-19 pandemic in early 2020, world and U.S. crude oil prices collapsed. Price recovery is underway but it will take time before prices recover to $40-$50/bbl. These low prices are resulting in large reductions in U.S. crude oil production and its associated gas output. However, the U.S. resource base for natural gas, both dedicated (non-associated) and associated, remains vast. Companies may go bankrupt, but the geologic formations remain. A central question for policy makers and the U.S. petroleum industry is whether the current downturn in crude oil prices, particularly if it persists for a considerable period of time, will substantially alter the outlook for large and competitively priced natural gas supplies as a feedstock for LNG. This EPRINC report evaluates the potential for the U.S. to remain competitive as a major provider of LNG to the world market in a low oil price environment and what policies, if any, should be implemented to sustain the competitive outlook for the U.S.”
Max’s paper can be found here.
EPRINC has produced its first webinar, entitled “Crisis in the Oil Market: Remembrances of the Past, Policy Responses for the Future.” The webinar featured a roundtable discussion from EPRINC’s staff, distinguished fellows and trustees. They examined the major forces shaping the oil market since 1973-74 Arab Oil Embargo and what we’ve learned in the interim about opportunities and strategies for the industry and policy makers going forward. One of the takeaways was that yes, the crisis in the oil patch is in many ways unprecedented, but we’ve seen this movie before.
The discussion was led by EPRINC’s president, Lucian Pugliaresi, and drew upon the knowledge base of Larry Goldstein, Michael Lynch and Ivan Sandrea. Lynch and Pugliaresi both presented some slides to facilitate the discussion, and the ones that Pugliaresi used were created by EPRINC’s Max Pyzuir. Both presentations can be found below.
Larry Goldstein is the former president of EPRINC and a co-founder of Petroleum Industry Research Associates in New York City. Michael Lynch is a Distinguished Fellow at the Energy Policy Research Foundation and President of Strategic Energy and Economic Research. Ivan Sandrea is former CEO of Sierra Oil and Gas, a Mexican independent oil and gas company. Prior to becoming CEO of Sierra, Ivan held a number of leadership and technical positions, including senior partner at EY London, where he was responsible for global oil and gas in emerging markets, and president at Energy Intelligence.
If you missed the webinar, it has been recorded and is available “on demand” by clicking here.
EPRINC Fellow Emily Medina was interviewed on April 30, 2020 by El Financiero Bloomberg, which aired on national television in Mexico. She discussed the financial situation of Petróleos Mexicanos (PEMEX), and pointed out that “it is time for the Government to plan a strategy that adapts to the current environment.” A link to the El Financiero Twitter account which has a clip of that interview is here, please note that the interview is in Spanish. Emily has written up an English summary of the interview, which can be found here.
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.
On January 10, 2020, the Trump Administration proposed a series of regulatory reforms to streamline compliance with the National Environmental Policy Act (NEPA). For the uninitiated, the purpose of NEPA is to ensure that environmental factors are weighted equally when compared to other factors in the decision making process for so-called major actions undertaken by federal agencies.
From the concerns raised by critics in the environmental community, one might conclude that this is a rushed and nefarious initiative to “gut” environmental reviews. In contrast, critics of the NEPA process point to a vast number of projects from the construction of new roads to approval of pipelines that remain tied up in judicial reviews which often have little to do with the merits of the projects.
If you need a reminder that concerns over the NEPA process has been with us for some time, we refer you to “EIS’s vs. the Real World,” published in the Public Interest by Professor Gene Bardach and EPRINC’s Lucian Pugliaresi back in 1977. EIS writers at the time, the authors point out that the Bureau of Land Management’s agreement to prepare 212 EIS’s in connection with capital investments in rangelands cost in excess of $100 million (ten times the annual budget for the investments themselves during an average year in the early 1970’s). You can find their article here.
On February 13, 2020 in NYC, Barclays Bank and EPRINC hosted a discussion on U.S. petroleum policy with the investment community and public sector participants. EPRINC Distinguished fellow Michael Lynch presented his findings on the implications of a fracking ban on US production and energy security. EPRINC Distinguished Fellow Trisha Curtis updated the attendees on recent productivity trends in unconventional (shale) oil and gas production in the U.S. Lucian Pugliaresi, EPRINC’s President, moderated the discussion.
Ahead of the 2020 U.S. Presidential elections, several Democratic candidates have been endorsing policies that, to various degrees, would restrict hydraulic fracturing (HF), a drilling technique that has been largely responsible for the rapid expansion of U.S. oil and gas production. The consequences of such a policy initiative have been evaluated and published by EPRINC. The report was authored by Michael Lynch and can be found here and his presentation slides from the event are available here. Trisha Curtis’ slide presentation can be found here.
EPRINC would like to thank Harry Mateer of Barclays and Paul Tice of Schroeders for organizing and coordinating this event.
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