Topic: So, how full is your tank.
started by: grassman
Posted by grassman on Jan. 27 2014,11:13 am
ANALYSIS-Propane Freeze Squeeze May Harden Resistance To U.S. Oil ExportsBy Julia Edwards and Sabina Zawadzki
Reuters
NEW YORK, Jan 26 (Reuters) - A shortage of propane heating fuel during a brutal U.S. cold snap this month threatens to sharpen the year's most urgent energy policy debate - how much of its newfound shale oil and gas bounty should America export?
Millions felt the pinch last week as another wave of biting, bitter cold strained already low propane supplies in the Midwest, causing prices to surge three-fold over two weeks to record highs and forcing suppliers to ration deliveries.
While the shortage was likely caused by a confluence of events, including extraordinary cold, a temporary pipeline shut-down, and low stocks, some industry observers and at least one politician blamed the spike in part on soaring exports of liquefied petroleum gases (LPGs) such as propane.
Unlike crude oil and natural gas, both of which are now at the center of a national debate over restrictive export rules, LPG and other fuels can be freely shipped abroad.
Ron Wyden, Senate Energy Committee Chairman and an Oregon Democrat who has opposed unlimited exports that could raise consumer prices, believes the propane squeeze is a "concrete example" of the risks that consumers may face, he said via a spokesman. It shows why "the United States needs to take a cautious approach to energy exports".
Iowa Senator Chuck Grassley called on the Federal Trade Commission to review the cause of the price spike to ensure markets weren't being manipulated.
By Friday evening, wholesale prices had begun to subside, offering hope that the shortage may be easing as traders ship cargoes of compressed LPG to the East Coast and truckers divert more supplies from the Gulf Coast refining hub.
Still, the scare may fuel more resistance to easing export constraints of any type of energy, and shows how the unexpected eruption of U.S. shale oil and gas is also creating temporary pockets of scarcity, as energy companies adjust their supply chains and transport networks to a new era of abundance.
UNLIMITED EXPORT
Propane production has grown across the country from shale wells that typically produce LPGs alongside oil and gas, rising 27 percent over the past five years to 1.4 million barrels per day (bpd), Energy Information Administration data shows.
As output rose, prices slumped to well below global rates, because producers lacked the specialized, pressurized facilities to ship propane abroad. By mid-2012, benchmark prices in Conway, Kansas, fell to 50 cents a gallon.
But with a profitable price gap, companies including Enterprise Product Partners and Phillips 66 invested millions in export facilities, and shipments have swelled. After rising to 170,000 bpd on average in 2012, exports reached 300,000 bpd last May and topped 400,000 bpd for the first time in October, EIA data show.
Politicians and energy analysts explain the shortage as the culmination of several unusual factors - a record-breaking freeze at the start of January came just as propane inventories were abnormally low due to a bumper corn harvest last fall, which used up propane for drying out the crop.
A pipeline outage during most of December exacerbated the situation.
Nonetheless, opponents of energy exports believe there is more to the coincidence of an export boom with a price spike.
"I know some want to characterize the situation as the perfect storm," said Brandon Scholz, managing director of the Wisconsin Propane Gas Association. "But we believe that less and less. ... The high level of exports came at a time when they contributed to a significant fall in propane inventories."
Propane is not the only market to experience sudden shortages this winter. Northeast and New York natural gas prices have surged 10-fold in recent weeks due to a lack of new pipelines to meet growing peak-winter demand.
ENERGY INDEPENDENCE
The situation with natural gas and oil is not the same as LPG.
The United States imposed a ban on crude oil exports during the 1970s Arab Oil Embargo and it became the backbone of U.S. energy security policy. Decades later, as oil production soared thanks to the fracking-led shale revolution, some in the industry have said the time has come to lift the curbs.
Natural gas exports to non-Free Trade Agreement countries was essentially barred under separate laws, although the Obama Administration has begun approving a handful of the near two-dozen requests to ship liquefied natural gas (LNG) abroad.
Few expect a knee-jerk ban on LPG exports, as some would like. But the arguments presented by some propane associations, tinted as they are with energy security concerns, may be hard for lawmakers to contend with during an election year.
"The notion of energy independence that everyone bought into with the shale revolution apparently doesn't mean anything," said Steve Ahrens, executive director of the Missouri Propane Gas Association. "If the price moves (propane) somewhere else, it is not available to us," Ahrens said.
Ahrens and Scholz said they would be talking to their congressmen about the shortage, urging them to act.
Eventually, as in most open commodity markets, prices should subside as more fuel is rushed inland. Gulf Coast propane prices rose this week by barely 20 cents, and at $1.50 per gallon offer a lucrative arbitrage to the Midwest. Many states have eased rules on propane trucks to speed deliveries.
But even then, the political implications may linger.
"This is definitely an issue that will come to the surface as the fallout (of the shortage) becomes more well known," said John Kilduff, partner at Again Capital LLC, a hedge fund. "The industry has been caught short, a lot of consumers are going to ask the question - why are we allowing this?"
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See what happens when you pipe it to the gulf. They actually get people to believe their crap and back them. Then they pull the rug out and shorten the supply for the people here who depend on it. If nothing else, it highlights alternative energy. That is why they fight so hard against it, you cannot ship the wind or the sun. Anyone starting to see the picture?
Posted by Self-Banished on Jan. 27 2014,1:18 pm
I was reading the fish wrap yesterday, wow, what a kick in the teeth if you burr LP.
Posted by MADDOG on Jan. 27 2014,1:48 pm
(grassman @ Jan. 27 2014,11:13 am)
QUOTE
See what happens when you pipe it to the gulf. They actually get people to believe their crap and back them. Then they pull the rug out and shorten the supply for the people here who depend on it. If nothing else, it highlights alternative energy. That is why they fight so hard against it, you cannot ship the wind or the sun. Anyone starting to see the picture?
Not sure where you're punching at. Obama's green fantasy? Believe what crap?
Posted by Glad I Left on Jan. 27 2014,2:03 pm
Solyndra (et al) is the wave of the future!
Posted by grassman on Jan. 27 2014,3:15 pm
(MADDOG @ Jan. 27 2014,1:48 pm)
QUOTE
Not sure where you're punching at. Obama's green fantasy? Believe what crap?
Well for one, the people that are all fired up about the Keystone pipeline. Just another way to get the oil to the refineries to process and ship out of the country. These companies are tapping our resources and sending to far away lands. Ching ching badda bing. Got it now? These tankerships that they are filling with LP are huge and I would presume dangerous. Just another way of manipulating. Instead of filling caverns with the LP, they are making a fortune. Big business has shipped our jobs away, now they are shipping our energy away. Third world here we come. Unless of course, you are part of the ones collecting that check.
Posted by MADDOG on Jan. 27 2014,3:57 pm
(Glad I Left @ Jan. 27 2014,2:03 pm)
QUOTE
Solyndra (et al) is the wave of the future!
Didn't we already
to Solyndra?
Posted by irisheyes on Jan. 27 2014,4:07 pm
Reuters:QUOTE
"The notion of energy independence that everyone bought into with the shale revolution apparently doesn't mean anything," said Steve Ahrens, executive director of the Missouri Propane Gas Association.
"Drill, baby, Drill" was thought to help lower prices for the American consumer. But it's been said that after it was drilled it turned into "Ship, baby, Ship!"
Posted by Self-Banished on Jan. 27 2014,4:07 pm
We're ready to become a third world country as it is. Open borders, fiscal irresponsibility, we are on a slippery slope and I fear there's no coming back. So what would you have done GM, make all energy exploration a gov. only entity? That worked real well in Mexico, so well that they just opened it up after years and years to private exploration again.
Posted by MADDOG on Jan. 27 2014,4:21 pm
QUOTE
Well for one, the people that are all fired up about the Keystone pipeline.
The Keystone XL pipeline has nothing to do with LPG.As far as shipping petroleum products overseas; well, evidently it's more profitable. Since the '75 Energy Policy and Conservation Act there has been a ban on crude oil exports. But there is no ban on petroleum products.
By the way, there are some pushing to lift the ban to allow for crude exports which in turn will open up more jobs, but may affect prices here as well.
Posted by grassman on Jan. 27 2014,4:25 pm
Read the book; Betrayal of the American Dream. At the end it has some ideas. The problem is that there are to many people who refuse to see the forest for the trees. Closed eyes only hide what you are afraid to see.
Posted by Self-Banished on Jan. 27 2014,4:50 pm
Forest for the trees?? I've thought this of liberals for a long time.
Posted by grassman on Jan. 27 2014,5:50 pm
(MADDOG @ Jan. 27 2014,3:57 pm)
QUOTE
(Glad I Left @ Jan. 27 2014,2:03 pm)
QUOTE
Solyndra (et al) is the wave of the future!
Didn't we already
to Solyndra?So fixated on them now aren't you. I wonder how they compare to what the oil industry has cost us? Peanuts. Closed eyes I say.
This 'shortage' is just another showing of how we are helpless against suppliers of fuel. We are at their mercy once again. Yet there are still those that are completely against alternative energy. My view is, if you are against the progress of something that could be very beneficial to all, you either have something to lose by it personally or just down right stubborn.
Posted by Glad I Left on Jan. 28 2014,9:42 am
I will speak for myself on this one, I am NOT against alternative fuel sources. In fact I encourage and welcome them.What I AM against is subsidizing something so heavily only to make it competitive with other proven sources.
And don't get me started on the obvious political/monetary favors (both ways) played out by this administration to the providers of these alternative sources. I'm not saying Bush Inc. isn't guilty of the same type of stuff in regards to other things, but this isn't about Bush, he was a POS too, but his time is over.
Posted by grassman on Jan. 28 2014,10:29 am
...and it all comes back to money and power. 
You don't think the oil industry has got the power in their pockets? They have convinced people that they are the only way to go.
Posted by Self-Banished on Jan. 28 2014,10:41 am
So what else is there but "pipe dream" green energy?
Posted by grassman on Jan. 28 2014,11:36 am
(Self-Banished @ Jan. 28 2014,10:41 am)
QUOTE
So what else is there but "pipe dream" green energy?
Right there is the attitude that will keep it a pipe dream. Remember when we used to have kitchen telephones and that was all?
Posted by Self-Banished on Jan. 28 2014,11:47 am
If technology is to advance it's going to have to happen in the private sector.
Posted by grassman on Jan. 28 2014,12:54 pm
Such as NASA? The energy companies have been fighting instead of embracing alternative energy. Why? Probably because it could possibly become something out of their control. Control is very important to people with power and money.
Posted by twingroves on Jan. 28 2014,1:21 pm
and the jews got the power and money
Posted by Self-Banished on Jan. 28 2014,2:05 pm
(twingroves @ Jan. 28 2014,1:21 pm)
QUOTE
and the jews got the power and money
Normally I don't f*%k with anybody till they say something ungodly stupid.
I just got a new toy.
Posted by grassman on Jan. 28 2014,4:49 pm
I recognize that shirt....Romney, isn't it! 
Posted by irisheyes on Jan. 28 2014,7:04 pm
(MADDOG @ Jan. 27 2014,4:21 pm)
QUOTE
Since the '75 Energy Policy and Conservation Act there has been a ban on crude oil exports. But there is no ban on petroleum products.
By the way, there are some pushing to lift the ban to allow for crude exports which in turn will open up more jobs, but may affect prices here as well.
By the way, there are some pushing to lift the ban to allow for crude exports which in turn will open up more jobs, but may affect prices here as well.
Someone may have to explain how crude oil exports can be outlawed while at the same time the U.S. is currently a net exporter of oil.
When the Reuters article mentioned that '75 Energy Policy and Conservation Act I figured it must've been a mistake, because we're exporting a lot of oil already.
Posted by Self-Banished on Jan. 29 2014,5:10 am
(irisheyes @ Jan. 28 2014,7:04 pm)
QUOTE
When the Reuters article mentioned that '75 Energy Policy and Conservation Act I figured it must've been a mistake, because we're exporting a lot of oil already.
Because it's a world economy
The assets being exported are most likely from private lands.
Posted by grassman on Jan. 29 2014,10:19 am
(Self-Banished @ Jan. 29 2014,5:10 am)
QUOTE
(irisheyes @ Jan. 28 2014,7:04 pm)
QUOTE
When the Reuters article mentioned that '75 Energy Policy and Conservation Act I figured it must've been a mistake, because we're exporting a lot of oil already.
Because it's a world economy
The assets being exported are most likely from private lands.
Private lands! Good one!
Posted by Self-Banished on Jan. 29 2014,10:24 am
(grassman @ Jan. 29 2014,10:19 am)
QUOTE
(Self-Banished @ Jan. 29 2014,5:10 am)
QUOTE
(irisheyes @ Jan. 28 2014,7:04 pm)
QUOTE
When the Reuters article mentioned that '75 Energy Policy and Conservation Act I figured it must've been a mistake, because we're exporting a lot of oil already.
Because it's a world economy
The assets being exported are most likely from private lands.
Private lands! Good one!
So you're saying there's no such thing a private land or property?
Posted by grassman on Jan. 29 2014,10:42 am
No, I never said that, I said I doubt that it all comes from private land.So, Drill Already: Obama to Oil Industry
May 17, 2012
After a drumbeat of complaints from energy companies that the Obama administration is blocking domestic oil and gas production, the Interior department released a report claiming that U.S. oil and gas producers are sitting on millions of acres of idle government land leases.
Secretary of the Interior Ken Salazar says that if producers were sincere about wanting to increase energy production, they would activate millions of acres of public land already leased to them. What should they be doing on that land? Drilling.
In a statement issued Tuesday, Salazar says the administration wants companies "to develop the tens of millions of acres they've already leased but have left sitting idle."
A report released by the Department of the Interior claims that of 36 million government acres leased offshore for oil and gas production, 72 percent sit idle. Onshore, in the lower 48 states, says the report, more than half of federally leased acreage sits idle, "neither producing nor under active exploration or development by companies who hold those leases."
The American Petroleum Institute calls the administration's claim "absurd" and "willfully misleading."
In a statement, API CEO Jack Gerard says that just because a lease doesn't fit the government's definition of active doesn't mean it's idle. Where a lease truly is idle, the reason often is that the producer must hold off drilling while they wait years to get the necessary government permissions.
Erik Milito, API director of upstream and industry operations, says there's another reason some leases aren't being used: There's only a 30 to 40 percent success rate to finding oil. A producer has to narrow down its leases to find the few ones good enough for drilling.
The fallacy behind Salazar's assertion--which Milito characterizes as being, 'We don't have to open up any more public land to you, because you're not using the leases you've already got'--is the belief "that you just put a pipe in the ground, and you're ready to go--that there's always oil there."
Kathleen Sgamma, vice president of government and public affairs for the Western Energy Alliance, whose members produce, she says, 27 percent of the natural gas and 14 percent of the oil in the U.S., cites a more basic reason a lease may be idle: Its oil and gas may be uneconomic to extract.
As energy prices fluctuate, and as technology improves, she says, idle leases are brought into production. The most dramatic and most recent example is the 200,000-square-mile Baaken oil field underlying North Dakota and Montana. As recently as five years ago, she says, many leases here sat idle. Then technology and economics made production possible, and production boomed.
The DOI report, she says, "Actually is useful, since it shows that we're becoming more efficient at operating on public lands. To have 44 percent of public lands in production is very high, compared to the 30 percent it's been historically. There will always be maybe 30 percent of leases that don't pan out. But of the rest, we estimate half are somewhere in the [drilling] process. If government is truly serious about increasing production, they would remove some of the red tape."
The Alliance says that when you add up the time required for prospecting, drilling, and waiting around for government approvals, 19 years can pass before a lessee actually sees oil. During part of that time, the government counts the lease inactive.
She says she knows the government can move energy projects ahead more aggressively when it wants to, because it has done exactly that with wind and solar projects. It's only politics, she says, that accounts for the different treatment accorded oil and gas.
A spokesman for the Department of the Interior, asked to respond to the industry's contention that DOI's report is both misleading and absurd, says, "The report speaks for itself. The notion that we have somehow locked up federal lands clearly doesn't square with the facts. Our goal is to continue expanding safe and responsible development, and we will continue to take steps to deliver on that priority."
So, you see, they are using public land. They have access to even more.
Posted by Self-Banished on Jan. 29 2014,11:09 am
The article even says that some of these lands are marginal. Typical the the gov. Tries to run business and they haven't a clue how to do it.
Posted by grassman on Jan. 29 2014,2:25 pm
Yes, but the question at hand is, are they drilling and recovering oil on public land? The answer is clearly, yes.
Posted by MADDOG on Jan. 29 2014,2:59 pm
QUOTE
Where a lease truly is idle, the reason often is that the producer must hold off drilling while they wait years to get the necessary government permissions.
Waiting years to get necessary government approval is idle? 
Evidently, the Keystone XL pipeline must be idle too.
Posted by MADDOG on Jan. 29 2014,3:23 pm
IE, everything I'm reading is that there still is a ban on crude with limited exceptions allowed by the president. I've only seen that small quantities have been sold in recent years, mostly to Canada and Mexico.
As per the < Anchorage Daily News > some would like the ban lifted. Also
QUOTE
Although American producers can't export crude oil, they can and do export refined products like diesel fuel and gasoline. Petroleum products, in fact, have been among the fastest-growing U.S. exports in recent years. Some European refiners have been driven out of business by the flood of U.S. products.
Posted by grassman on Jan. 29 2014,5:30 pm
So, there you have it. It does not matter how much oil comes out of our soil. It is going to be processed and shipped out. So tell me why everyone is backing the oil companies so much anyway. It does not help us one bit. Makes a few rich. Same ol same ol.