It’s one thing to have genuine differences over energy regulatory policy – as the oil and natural gas industry has with EPA’s proposed Tier 3 rule further lowering sulfur levels in gasoline. It’s quite another to see that the rulemaking process is being gamed.

API highlighted substantive and procedural concerns about the Tier 3 proposal at recent public hearings. The rule would require refiners – who invested about $9 billion over the past decade to reduce sulfur in gasoline 90 percent (300 parts per million to 30 ppm) – to lower sulfur content another 6 percent, to 10 ppm. According to one study, the reduction would produce little environmental benefit, while another said it could add 6 to 9 cents per gallon to the cost of making gasoline. API Senior Policy Advisor Patrick Kelly, f... more »

Nice video below on the “downstream” folks of America’s oil and natural gas industry – the people who run refineries and deliver petroleum products across the U.S.:

As the video says, these highly trained workers are the heart of the oil and natural gas industry.

They work in refineries, which support 540,000 good-paying jobs and contribute $268 billion to U.S. GDP, making fuels that literally run our economy and make modern mobility an afterthought for most of us.

They produce the feed stocks for countless petroleum-based products – from chemicals and clothing to plastics and fertilizers – that make all our lives easier and healthier, every day.

They operate 170,000 miles of secure pipeline to transport products to each corner of the country.

They keep America moving.

AEI Ideas – Economic Fact of the Day

According to new Bureau of Labor Statistics data, Midland, Texas, has the lowest metro jobless rate in the U.S. at 3.2 percent. What’s different about Midland, asks blogger Mark J. Perry. The town is in the heart of the Permian Basin oil field’s surging shale production – thanks to hydraulic fracturing.

Associated Press – Energy Secretary Nominee Backs Natural Gas ‘Revolution’

The AP recaps the nomination hearing for Ernest Moniz. During the hearing, Moniz noted the “stunning increase in domestic natural gas production” that has led to “reduced carbon emissions and a dramatic expansion of manufacturing and job creation.”

Bloomberg Business Week – Natural Gas Resources Seen at Record in U.S.

The Potential Gas Committee says that recoverable U... more »

Reasons why the oil and natural gas industry talks about a regulatory “tsunami” coming down from EPA:

• A newly proposed Tier 3 rule to further lower sulfur content in gasoline – that would have “very small” additional environmental benefit, according to a recent study. At the same time, it could increase the manufacturing cost of gasoline by up to 9 cents per gallon. (More on Tier 3 below.)
• Increases in the federal ethanol mandate under the Renewable Fuel Standard – which could add to the manufacturing cost of gasoline by about 30 percent by 2015, according to a study by NERA Economic Consulting. (Posts on that here, here, here and here.)
• A potential vapor pressure reduction requirement that could increase refinery costs.
• An expected Refinery Sector Rule, new ozone requir... more »

Hurricane and tropical storm activity can put a strain on U.S. oil and natural gas operations, particularly if the storm tracks through the production-heavy Gulf of Mexico or makes landfall along the Gulf Coast region.

The Gulf Coast region of Louisiana, Mississippi, Alabama and Texas is the heart of the nation’s oil and natural gas industry. According to EIA statistics in 2011, this area accounted for approximately 44 percent of U.S. refining capacity.  When production is lost and demand surges, fuel prices sometimes rise –even in areas far from hurricane-affected states.

Regarding Hurricane Isaac it is too soon to know what will happen without knowing landfall impacts.  Given the size of the storm it is possible that offshore production would resume fairly quickly and have only... more »