A Look in the Rear View, Part II

A Look in the Rear View, Part II

The oil and gas industry’s adaption of renewable energies quickened its pace in 2020 as producers, midstream operators, and refiners rolled out new initiatives and investments to power their operations and reduce emissions. Here’s a look at just a few. Houston-based Occidental, a longtime developer and investor of low-carbon technologies and fuels, announced this month it will design and build the world’s largest carbon capture facility in N.D. The company last Fall completed a 174-panel, 120-acre solar farm in the Permian, which now replaces all grid power and supplies all energy for Oxy’s Goldsmith oilfield operations. Tulsa-based midstream giant Williams in May announced it, too, would add solar to its natural gas transmission and processing operations in nine states. But oil refiners, in particular, have been left with little choice to accelerate their shift from fossil fuels to renewable sources. The fallout from COVID and ever-stringent emissions regulations have prompted the largest to the smallest refineries to convert feedstocks to biofuels, such as soybean oil, fats, and kitchen grease. Time to: adapt, re-think, survive.

What do you think? Learn more about our upstream, midstream, and downstream expertise at www.ReeseEnergyConsulting.com.

 

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American LNG Demand Comes Roaring Back

American LNG Demand Comes Roaring Back

Global demand for natural gas is pouncing like a lion on U.S. LNG with American exports crushing pre-COVID records. Reese Energy Consulting today is following the latest news on the surge of LNG tonnage being dispatched to recovering global markets in need of low-cost fuel to return to some semblance of normal. Back in June, the EIA reported that U.S. LNG exports had declined by more than one-half due to the COVID fallout of cancelled shipments and month-long hurricane shutdowns. This, after a record 9.8 BCFD in late March by a relatively new domestic energy sector that had witnessed runaway growth and expansion in four short years. But as of last Friday, U.S. exports not only tipped—but toppled—the scales at 11.4 BCFD. Top destinations between July and September weren’t limited to Asia either, but included the Middle East, Europe, South America, and Mexico. Say what you will, but this is a major bright spot in a topsy-turvy year for our abundant natural gas supplies, which have now reached all-time highs in new demand. The world is getting back on its feet.

What do you think? Learn more about REC and our natural gas and LNG expertise at www.ReeseEnergyConsulting.com.

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Maybe Grease Really Is ‘The Word’

Maybe Grease Really Is ‘The Word’

The next time you order a burger and fries, you just might help a refinery reduce emissions. At least four refiners this year have stepped forward with plans to convert their existing facilities from diesel produced from crude, to renewable diesel produced from cooking oil.

Phillips 66, Marathon, CVR Energy, and HollyFrontier have ramped up their projects amid the slowdown in gasoline demand. Phillips 66 in August announced plans to repurpose its refinery in Rodeo, Calif., to produce 100% renewable fuels from oils, fats, and greases. Retooling is expected to take 18-20 months. Once operational, Rodeo Renewed will produce more than 800 million gallons a year, making it the largest plant of its kind in the world. Acquiring enough greasy supplies for use as feedstock, however, could pose its own challenges. Curiously, the U.S. doesn’t produce enough. Getting ahead of the demand, Valero has inked a deal for fats and used cooking oil with Darling Ingredients, which collects and converts animal-based products across the globe. So, the next time you hear “Fries with that?” yep, you know what to say.

What do you think? Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.

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What’s Mine Is Now Yours

What’s Mine Is Now Yours

After a year plagued with disappointments and back-to-square-ones, Houston-based Occidental Petroleum finally has something to smile about. In the company’s efforts to reduce its debt load by more than $2 billion by year end, Oxy has scored a big win with the $1.33 billion sale of 4.5 million mineral acres and 1 million surface acres in Wyo., Colo., and Utah.

Occidental Petroleum

Occidental Petroleum Corporation is an American company engaged in hydrocarbon exploration in the United States, the Middle East, and Colombia as well as petrochemical manufacturing in the United States, Canada, and Chile. It is organized in Delaware and headquartered in Houston.

www.oxy.com

The deal also includes mineral rights to the world’s largest trona deposit. When refined into soda ash, trona is a key element to manufacture glass, paper products, laundry detergents, and even baking soda. Not surprisingly, the winning bidder knows a thing or two about mining. N.Y.-based, private equity firm Orion Mine Finance was one of 13 bidders on the package and invests exclusively in base and precious metals operations across the globe. For now, Occidental will keep its oil and gas assets in the Rockies, specifically in the DJ and Powder River basins. The sale is expected to close in 4Q. Oxy inherited the Rockies’ spread as part of its $38 billion purchase of Anadarko Petroleum last year, making the company the largest landowner in the state of Wyo.

What do you think?

Learn more about Reese Energy Consulting at www.ReeseEnergyConsulting.com.