US Energy Information Administration Research Articles

Sustainable utilization of biogas technology: A promising solution to combat the energy crisis in India

India is facing a significant energy crisis due to its rapidly growing population, which is not being met by an equivalent increase in energy supply. According to the US Energy Information Administration, India's electricity consumption is projected to grow by 3.3% annually until 2035. Biogas technology, which converts waste into clean energy, offers a promising solution to this problem and accounts for 9% of global energy consumption. Despite being introduced in 1981, biogas technology's potential in India remains largely untapped, with only 7.34 MWe of off-grid projects generated by 2020. However, Tamil Nadu and Karnataka have significant potential for biogas generation. The National Biogas and Manure Management Program (NBMMP) have installed 5,056,139 biogas plants between 1981-82 and 2020-21, with Maharashtra being the top performer. India's agrarian economy provides ample raw materials for biogas generation, making it a crucial renewable resource for the country's energy crisis. Given the pressing need to address global warming, greenhouse effects, depleting fossil fuels, and pollution, biogas technology is essential for a cleaner, more sustainable future. Focusing on biogas technology can help India meet its increasing energy demands and contribute to a cleaner and more sustainable future. From 2018-19 to 2020-21, the NBMMP received a total allocation of INR 1,439,249,000.

Georectified polygon database of ground-mounted large-scale solar photovoltaic sites in the United States

Over 4,400 large-scale solar photovoltaic (LSPV) facilities operate in the United States as of December 2021, representing more than 60 gigawatts of electric energy capacity. Of these, over 3,900 are ground-mounted LSPV facilities with capacities of 1 megawatt direct current (MWdc) or more. Ground-mounted LSPV installations continue increasing, with more than 400 projects appearing online in 2021 alone; however, a comprehensive, publicly available georectified dataset including spatial footprints of these facilities is lacking. The United States Large-Scale Solar Photovoltaic Database (USPVDB) was developed to fill this gap. Using US Energy Information Administration (EIA) data, locations of 3,699 LSPV facilities were verified using high-resolution aerial imagery, polygons were digitized around panel arrays, and attributes were appended. Quality assurance and control were achieved via team peer review and comparison to other US PV datasets. Data are publicly available via an interactive web application and multiple downloadable formats, including: comma-separated value (CSV), application programming interface (API), and GIS shapefile and GeoJSON.

Location is a major barrier for transferring US fossil fuel employment to green jobs

The green energy revolution may displace 1.7 million fossil fuel workers in the US but a Just Transition to emerging green industry jobs offers possibilities for re-employing these workers. Here, using 14 years of power plant data from the US Energy Information Administration, job transition data from the Census Bureau, as well as employment and skills data from the Bureau of Labor Statistics, we assess whether people employed in fossil fuel resource extraction today are co-located and have the transferable skills to switch to expected green jobs. We find that these workers could leverage their mobility to other industries and have similar skills to green occupations. However, today’s fossil fuel extraction workers are not co-located with current sources of green energy production. Further, after accounting for federal employment projections, fossil fuel extraction workers are mostly not located in the regions where green employment will grow despite attaining the appropriate skillsets. These results suggest a large barrier to a Just Transition since fossil fuel extraction workers have not historically exhibited geospatial mobility. While stakeholders focus on re-skilling fossil fuel extraction workers, this analysis shows that co-location with emerging green employment will be the larger barrier to a Just Transition.

Intraday Return Predictability in the Crude Oil Market: The Role of EIA Inventory Announcements

We study the impact of the announcements released by the US Energy Information Administration (EIA) on crude oil storage every Wednesday at 10:30 ET (the beginning of the third half-hour interval) on intraday return predictability, that is, intraday momentum. Our results indicate that returns on the third half-hour on EIA announcement days can significantly and positively predict the returns in the last half-hour, whereas, on non-EIA announcement days, only returns in the first half-hour have significant predictability. The dominant source of prediction in the first half-hour return mainly comes from the overnight component. EIA announcements contribute to intraday momentum because they attract more informed traders and because the period surrounding their release is often associated with a reduction in liquidity. Substantial economic gains can be made by using efficient intraday predictors as trading signals.

Determinant of Forex Rolling Spot Contracts on Indonesia Commodity andDerivative Exchange (ICDX)

One of the derivative futures contract types is the Forex Rolling Spot Contracts (FRSC) traded in the Indonesia Commodity and Derivatives Exchange (ICDX). So far, no research has been conducted on this product type, which can be used as an investor reference. This study aims to find empirical evidence of how far macroeconomic variables affect the returns of ten FRSC investment instruments: AUD/USD, EUR/USD, GBP/USD, USD/JPY, USD/CHF, GBP/JPY, EUR/JPY, AUD/NZD, NZD/USD, and USD/CAD traded at ICDX during the period 2021 - 2022. The statistical analysis method used in this research is quantitative with descriptive explanations. Data collection techniques were obtained from secondary data through library research. Secondary data was obtained through the internet sites of ICDX, Indonesia Stock Exchange (IDX), Bank Indonesia, London Bullion Metal Association, Bloomberg, and the US Energy Information Administration. The analytical method used in this study is panel data analysis. The study type was an explanatory study with data processing using the STATA application. The study results showed that the determinant of interest rate and inflation did not affect FRSC return; JCI return and gold price return had a significant positive on FRSC return; bond index return and crude oil price return had a negative effect on FRSC return.

Petroleum++: The Expanded Scope of the Industry and Our Role in It

The expanded scope of our industry as it evolves means that members of the petroleum engineering profession will enjoy a long, rewarding career. At the same time, we need to continue developing our competencies to enable expected contributions in producing new forms of energy resources and mitigating climate change concerns, as well as the constant changes and advancements in our traditional role of producing oil and natural gas. Based on the projections of multiple groups including the US Energy Information Administration (EIA), the International Energy Agency (IEA), and several international and national oil companies, it is clear the world energy demand will continue to grow into the 2040s. Lower-carbon sources will be the fastest-growing among the various sources of energy, demand for oil will continue to increase at least into the 2030s, and demand for natural gas will continue to grow into the 2040s. The latest projection from IEA (October 2022) illustrates these points. For example, as I am writing this column, Norway approved more than $18 billion investments to develop 19 oil and gas fields. Consensus also appears to indicate that policy will influence the speed of change of the energy landscape, that energy transition will vary by region, and that the pace of the energy transition will depend on costs, infrastructure, project execution, and geopolitics. This indicates that multiple solutions are needed to satisfy energy demand, oil and gas will remain essential for decades, and technological developments will continue to be needed in all sources of energy and may end up changing the mix of energy sources in the future. Data and projections also show two important points. The required levels of investment to provide the world with its energy needs are lagging, and there will be a shift in the regional demand of energy. Needed investment in oil and gas should be about $900 billion annually. Following the COVID-19 pandemic, when investment dipped to $600 billion, investments have gradually increased but are not yet to the desired levels. For the new energy sources to reach the level needed for IEA’s Net Zero 2050 target, annual investment in the range of $2,600 billion is needed. Right now, this investment is around $1,700 billion. Projections for the regional share of the world economy indicates that Asia will have about 43% of the world economy by the year 2040 (currently at 35%) followed by North America at about 24% (currently at 26%) and the EU and the UK at about 17% (currently at 20%). Shares of Latin America and the Middle East will stay around the current levels of 7% and 4%, respectively, while Africa’s share will increase from about 4 to 5%. The tables show the changes in global primary energy demand as well as the changes in different regions. I obtained the information from the sources cited earlier. However, I converted the values from exajoules (1e18 joule, a measurement unit I cannot relate to) to BOE using a conversion factor of 1 exajoule = 163.45e6 BOE.

Accuracy assessment of energy projections for China by Energy Information Administration and International Energy Agency

Energy projections are of great importance to energy policies but have consistently shown noticeable and repeated errors, and thus require accuracy assessment for improvement. International Energy Outlook (IEO) of the US Energy Information Administration and World Energy Outlook (WEO) of the International Energy Agency publish widely used energy projections, whose accuracy for China – the largest energy consuming economy and carbon dioxide emitter – has been rarely explored. This study investigates accuracy of China's reference energy projections in the annual reports of IEO and WEO from 2004 to 2019. Results show that most projections in IEO and WEO underestimated China's total energy consumption, particularly over longer projection horizons. The use of coal, natural gas and renewable energy tended to be underestimated, and nuclear energy was overestimated. The errors of industry and transport sectors were comparable and higher than for the other sectors. WEO showed substantially better accuracy than IEO in projections of total energy consumption, primary energy resources (except for nuclear energy) and end-use sectors. Projection horizon, errors in projected population's size, oil price and gross domestic product per capita were four leading factors related to the projection errors and hence they require particular attention in future modeling. For policy makers, this study shows that, if IEO and WEO projections are used to guide the policy making, China needs more aggressive policies in order to achieve the carbon neutrality goal.

Greenhouse Suppliers 100: A ranking of corporate producers of greenhouse gas precursors in the USA

This paper presents the first comprehensive database of corporate suppliers of fossil fuels and greenhouse gas supply stocks in the U.S. economy. The database is a publicly available resource that adds value to existing information sources in two ways. First, we combine several high-quality public data sources, including the US Environmental Protection Agency (EPA) Greenhouse Gas Reporting Program (GHGRP), which reports on most products that would result in GHG emissions if those products were released, combusted, or oxidized, with the notable exception of coal, and data on coal from the US Energy Information Administration and the US Mine Safety and Health Administration. In this paper, we discuss the importance of coal as a GHG source and describe its exclusion from coverage by the GHGRP. Second, we aggregate facility-level data (on individual mines, wellheads, refineries, pipelines, and import facilities) to the corporate level, with the corporate final parent as the unit of analysis. While the data collection of the EPA focuses on individual facilities as the reporting units, the analysis of corporate ownership shifts attention to control and responsibility. Here we use these data to explore the corporate concentration of GHG activity, and we compare the degree of concentration between GHG supply and emissions, and between the facility level and the corporate level. Finally, we discuss current and potential applications and possible extensions, such as the development of environmental-justice metrics for fossil-fuel suppliers.

Navigating the Energy Trilemma: Oil and Gas Industry Making Strides

_ Energy is vital to human flourishing. Since the dawn of time, humans have sought to find more efficient ways to power and propel their lives forward. With each generation, we’ve made progress in unlocking energy density—moving from burning wood for warmth inside caves thousands of years ago through our current age, where a revolution in modern energy is transpiring. However, recent global events have certainly tested the upstream oil and gas sector’s “can-do” attitude and spirit of innovation. In the 3 years since West Texas Intermediate Crude (WTI) futures dipped below zero—dropping more than 300%—to settle at negative $37.63/bbl, there has been a global COVID-19 pandemic and recovery, supply chain and logistical challenges, and a war. The oil and gas industry is more adept at riding the market volatility wave than in the past. WTI futures climbed out of the negative, reaching as high as $123.70/bbl on 8 March 2022, as the pandemic began to ease, and the lockdown ended in many regions worldwide. Geopolitical tension with Russia and its full-scale invasion of Ukraine in the first half of 2022 contributed to the crude oil price increases. Also contributing to higher pricing in the first half were concerns over supply levels. The Russian invasion of Ukraine came during eight consecutive quarters of crude oil level decreases, according to the US Energy Information Administration (EIA). In the year since, the price has dropped but not nearly as profoundly, with recent prices ping-ponging in the mid-$60 to mid-$80/bbl range. The EIA cited as reasons for the lower price concerns over a possible economic recession and China’s severe COVID-19 containment measures as keeping global demand lower. The Russian invasion of Ukraine turned global markets upside down. The International Energy Agency (IEA) cited it as the trigger of a worldwide energy crisis that “has the potential to hasten the transition to a more sustainable and secure energy system,” in its World Energy Outlook 2022. “Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come,” said IEA Executive Director Fatih Birol at the time of the outlook’s release. “Even with today’s policy settings, the energy world is shifting dramatically before our eyes.” Transition and Trilemma The energy transition changes how the world views and uses oil and gas. While it is not the first energy transition the world has faced, it is proving to be the most significant and complicated. “It is needed if we are to prevent the 1.5°C increase in temperature,” Kjetil Hove, the executive vice president of development and production in Norway for Equinor, said during his keynote address at the SPE/IADC International Drilling Conference and Exhibition held in Stavanger on 7 March. “The future carbon intensity of the energy mix needs to be reduced significantly. Last year’s energy crisis and the war in the middle of Europe showed that the energy transition needs to be done wisely and that it addresses the energy trilemma,” he said.

US LNG Boom Puts Producers on Pace To Lap the Competition

The US is poised to retake the crown from Australia as the world’s top LNG exporter, a title the country held briefly in 2022 before Freeport LNG went offline due to a fire in June 2022. Freeport LNG recently began supplying cargoes again and may be up to full speed during the second half of this year. In 2021, the US was third in exports behind Australia and Qatar, which sold about 10.5 Bcf/D and 10.1 Bcf/D of gas as LNG, respectively. According to the US Energy Information Administration (EIA), the US began exporting LNG in February 2016, and within 7 years developed the world’s largest LNG export capacity with seven LNG export facilities totaling 13.9 Bcf/D of peak production capacity. US LNG exports exceeded pipeline exports of natural gas for the first time on an annual basis in 2021. Monthly LNG exports set new records throughout 2021 and averaged 11.3 Bcf/D during that winter, 2.2 Bcf/D more than the previous winter. In March 2022, US LNG exports reached a new high of 11.9 Bcf/D. US exports will be further bolstered by new projects moving forward. According to the US Energy Department (DOE), there are currently five export terminals that have received regulatory approvals and are under construction with another dozen either expansion or greenfield projects that have received regulatory clearances but have yet to break ground. Analysts at Wood Mackenzie see a massive investment opportunity for this next wave of US LNG terminals and predict three new projects with a total capacity of over 34 mtpa could start up as soon as 2024—New Fortress Energy’s Louisiana FLNG, Venture Global’s Plaquemines LNG Phase 1, and ExxonMobil/QatarEnergy’s Golden Pass LNG. Another dozen or so projects could find their way to first cargoes by 2028. If the majority of these projects proceed to final investment decision (FID), the market could see a $100-billion infusion over the next 5 years, with three quarters of that investment coming in pre-FID projects, according to Wood Mackenzie. Planned liquefaction terminals range from additional trains on existing plants to ground-up projects, which even includes a pair of offshore ports utilizing FLNG vessels. While the outlook for the US LNG export market looks strong, inflationary issues are threatening to take the bloom off the rose. The overall cost of these projects is on the rise. According to Wood Mackenzie, Calcasieu Pass LNG, which had its FID made in mid-2019, was expected to cost around $580 per tonne. By March 2022, that number had risen to more than $650 per tonne. Other projects are also experiencing inflationary pressures on planned capex. Despite this, the competitive nature of takeaway contracts has kept those fees lower, even as the cost of the terminals rise. That combination could start to squeeze developer returns. The war in Ukraine has been a major factor contributing to the appetite for US LNG and thus, a key driver in securing long-term contracts for future deliveries. European countries dependent on Russian natural gas have pulled back and are attempting to rein in their dependence while seeking new supplies. While many of the newest supplies will not be available for a couple of years, European counties are expected to push through a period of higher volatility and pricing until fresh US imports start to arrive.

Power-Supply Geopolitics. The Dependence of European Economies on Imports of Fuels from Russia

Abstract International relations (including those revolving around economic cooperation between states, or the economic dependence of one state on another) actually entail the development of a concept of power and its efficacy, interlinkage, and a systemic configuration. Geography’s input is, then, to place these issues within the space of economic activity and life, linking these to an analysis of resources. Geography also provides for the construction of models for the spatial relations between different actors. In turn, analysis from a geopolitical point of view, inter alia, involves itself in the study of dependency and power through reference to relations which entail domination, the exerting of influence, independence or mutual dependence, territorial integrity, development, political and social stability, and security (Dallanegra Pedraza 2010). Then there are the issues concerning the use of natural resources, as these affect relations between states, thus representing research topics for geography. Through the analysis of the interactions between variables which recall the aforesaid relations, it has here proved possible to construct models describing, or helping to account for, present-day world relations, characterised by dependence on fossil fuels (as raw materials supplying energy) which originate in Russia. This process makes use of available statistical data and reports, including ENERDATA 2021 and Key World Energy Statistics 2021, from the US Energy Information Administration (EIA).

Asymmetry and interdependence when evaluating U.S. Energy Information Administration forecasts

We evaluate US Energy Information Administration (EIA) forecasts of the world petroleum market, emphasising the importance of taking a multivariate perspective, considering asymmetric loss and allowing for time-variation. Forecasts for total demand, total supply, total stock withdrawals and the oil prices are biased, with biases that change over time and differ across variables. A loss function that takes into account asymmetry and interdependence can rationalise these biases. The implied asymmetric loss gives less weight to under-prediction of both demand and supply, while for oil prices, we document significant regime changes in the implied loss due to asymmetry. The EIA forecasts dominate a simple random walk benchmark when evaluated using symmetric and independent loss in the form of MSE statistical criteria. Yet, when allowing for asymmetry and interdependence that rationalise the EIA forecasts, the performance of the EIA forecasts worsens and is comparable to the random walk benchmark.

Geothermal Potential Runs Hot in Texas

When it comes to oil and gas production in the US, Texas is king. In 2022, the Lone Star state pumped out 1.83 billion bbl of crude in total—that’s over three times the next state on the list, New Mexico. Over the same period, Texas set a record with 11.2 Tcf of natural gas production, more than 3.5 Tcf higher than second place Pennsylvania. With renewables, Texas can hang its hat on being the number one wind energy producer in the US, generating about 93 TWh of electricity from wind in 2020, according to the US Energy Information Administration (EIA)—almost triple that of second-place Iowa. Texas is number two on the list when it comes to solar capacity with around 15 MW as of the second quarter of 2022. California has just over 37 MW of capacity. With leadership positions in most commercial power-generation endeavors, Texas is behind the curve when it comes to exploiting geothermal energy. In fact, most of the nation has yet to embrace geothermal power, beyond some projects in California. According to the EIA, in 2020, consumption of renewable energy in the US grew for the fifth year in a row, reaching a record high of 11.6 quadrillion British thermal units (Btu), or 12% of total US energy consumption. While wind led the way with 26% of the total, only 2% was geothermal. All of this, however, could be changing. A recent report about the future of geothermal energy in Texas—a year-long multidisciplinary, cross-collaborative effort from researchers at five Texas universities, the University Lands Office, and the International Energy Agency—found the state’s geology presents a large and promising opportunity to develop geothermal resources. The 400-page report showed the amount of heat below state lands is many thousands of times larger than what would be needed to power not only Texas, but the world. The report was funded and supported by the Cynthia and George Mitchell Foundation, The Educational Foundation of America, and Project InnerSpace, a nonprofit organization focused on expanding the use of geothermal energy globally. The heat beneath Texas varies with the geography, but most of the population is at or near good temperature environments, particularly in the eastern, coastal, and far west regions. However, all areas are hot enough if you drill deep enough. It becomes a matter of continually improving economics of drilling to deeper depths. In general, the hotter the better, but a good minimum rule of thumb is about 150°C (or 300°F) as a target temperature (Fig. 1). Houston’s subsurface temperatures in that ballpark, for instance, can be found around 4.5 km to 5.0 km deep (2.5 to 3.0 miles). Under Austin, Texas, which is more centrally located in the state, those temperatures lurk deeper—6.0 to 9.0 km (3.5 to 5.5 miles). “Rock is a great heat battery and the upper 10 km, or 6 miles, of the earth’s crust as a battery of heat holds an estimated 1000s of years’ worth of our energy needs in the form of accessible heat energy,” said Ken Wisian, associate director of the Bureau of Economic Geology at University of Texas at Austin. “That’s an immense resource to tap and one that gets us all excited.” Additional oilfield drilling has helped better define the temperatures of the rock below the state. In a recent preliminary update of the assessment of temperatures below Texas, it was found that temperatures are generally 10 to 15% hotter than were previously thought. This is compared to studies conducted over a decade ago and marks a significant improvement in the area’s geothermal potential.

Permian Basin Earthquakes Rattling Up a Mess of Trouble in Texas

_ Few sounds in the American Southwest make the heart race like a rattlesnake’s warning. But lately it’s the rattle of glass windows and grandma’s dishes making hearts skip a beat across the Permian Basin as these tattletale signs indicate an earthquake is slithering through the subsurface. Two of the five largest earthquakes in Texas history—a magnitude (M) 5.4 on 16 November and a M 5.2 on 16 December—occurred in the Permian during the fourth quarter of 2022. In the 30 days following the December temblor, there were more than 230 lower-magnitude seismic events across the basin recorded by TexNet, the Texas state earthquake monitoring network managed by the Bureau of Economic Geology (BEG) at The University of Texas at Austin (UT). In 2017—the first year that TexNet began data collection—there were 46 M ≥2.5 earthquakes recorded in the Permian’s Delaware Basin and 26 in the Midland Basin. In 2022, there were 634 and 72 earthquakes recorded, respectively. This increase in the number of seismic events is troubling as the Permian is the nation’s leading oil and gas production basin. Roughly shaped like a butterfly—with the left wing the Delaware Basin, its body the Central Basin Platform, and the right wing the Midland Basin—the Permian Basin spans more than 75,000 square miles, with the breadth of the historic basin’s century of hydrocarbon production as equally wide. The first commercial oil well was completed in 1921, with oil production continuing through the decades before peaking at nearly 2 million B/D and natural gas production reaching almost 10 Bcf/D in the 1970s. The combination of directional drilling and hydraulic fracturing, along with the application of new technologies, returned the Permian to its perch as the nation’s top producer after many years of production declines. In 2022 the Permian accounted for more than 43% of all oil produced in the US, according to the Federal Reserve Bank of Dallas. December’s oil production surpassed 5.5 million B/D and natural gas exceeded 21 MMcf/D, the US Energy Information Administration reported. While Prosperity returned to the Permian, she did so with considerable produced water baggage that the industry and its regulators are working to address as the complexities of the basin’s geology are rattling dishes and nerves. Slippery When Wet Thirty billion barrels or 1.3 trillion gallons: that’s the volume of produced water disposed underground in the Permian over the past 10 years, according to Rob Bruant, director of product and research at B3 Insight. It’s the equivalent of 2 million Olympic-sized swimming pools. Therein lies the irony of the Permian’s expansive growth. For every 1 bbl of oil produced from formations so impermeable that explosive charges and sand are needed to open and prop up pathways for fluid to flow, there are anywhere from 2 to 15 bbl of brackish and saline formation water produced, requiring proper management and disposal by the operator. Historically, the most common way of managing this produced water was through disposal into EPA Class II injection wells. It was estimated in 2012 that 99% of produced water in Texas was managed through injection, either for disposal or enhanced oil recovery, according to a Groundwater Protection Council report, with about 53%, or 5.3 billion bbl, disposed that year.

An evaluation of EIA gasoline price predictions

ABSTRACT This study evaluates the accuracy of the US Energy Information Administration (EIA) monthly forecasts of gasoline prices for 2005–2021. Our findings indicate that the 1-, 3-, 6-, 9-, and 12-month-ahead EIA forecasts do not, on average, significantly over- or under-predict gasoline prices, and they generally outperform the random walk and the nowcast-based benchmarks in terms of both the mean squared forecast error and the predictive information content. We further show that the shorter-horizon (longer-horizon) EIA forecasts predict directional change under asymmetric (symmetric) loss. Additional results indicate that the 1-, 3-, 6-, 9-, and 12-month-ahead EIA forecast errors are all orthogonal to consumer expected change in gasoline prices, actual change in core consumer price index, consumer vehicle-buying attitudes, and consumer sentiments. However, the 1-month-ahead (1- through 12-month-ahead) EIA forecast errors fail to be orthogonal to crude oil price changes (consumer expected inflation), meaning that these indicators can potentially help improve the accuracy of the EIA forecasts of gasoline prices.

Permian Basin Power Surge

_ Like its salty neighbor to the east, the Permian Basin of west Texas and southeastern New Mexico has been proclaimed dead on many occasions. Such proclamations of their demise, however, are mere exaggerations as the Gulf of Mexico and the Permian Basin continue to thrive. These historic oil and gas production powerhouses have delivered to global markets billions of barrels of oil and trillions of cubic feet of natural gas over the past century. Through the booms and the busts, the resiliency of each was made possible by the combination of ingenuity and perseverance and by advancements in techniques and technologies. Specifically, the Permian’s unconventional resources were “opened by the confluence of two major technologies—horizontal drilling and hydraulic fracturing—more than a decade ago. And since then, we have not stopped,” Nicole Champenoy, director of Chevron’s shale and tight-asset class division, said at the recent SPE Permian Basin Energy Conference (PBEC) held in Midland, Texas. “From incredible advances across the board—from completions optimization to execution efficiencies where one rig today is doing the work of three rigs from several years ago—the list goes on and on. We did that in a decade. The innovation and technology we have deployed has been remarkable,” she said. Growth Engines The basin’s remarkable success occurred in a decade that saw more than one market downturn and was capped off with a crude-oil supply glut eliminated by the global COVID-19 pandemic. Before the widespread pandemic-related closures began, the Permian produced 4.9 million B/D in March 2020, with production a year later dropping to 3.6 million B/D in February 2021, according to the US Energy Information Administration (EIA) data. Two years later, in March 2022, production finally shattered the 5 million B/D mark just as the world began to emerge from the pandemic. In November production in the region stands at more than 5.4 million B/D, according to the EIA’s Drilling Productivity Report. The Permian continues its reign as the largest oil-producing region in the US, with the Eagle Ford of south Texas and North Dakota’s Bakken plays coming in at 1.2 million and 1.1 million B/D, respectively. As for natural gas, the Permian produced more than 21.2 MMcf/D, second only to the Appalachia region’s production of 35.4 MMcf/D, per the EIA data. The US is on track to produce 11.8 million B/D in 2022, with that number growing to 12.3 million B/D in 2023, according to the EIA’s Short-Term Energy Outlook. Much of that oil will likely come from the Permian. In June 2022, the basin accounted for about 43% of US crude oil production and 17% of US natural gas production, the EIA said. “When we talk about the growth engines of the US hydrocarbon system, they are the Permian’s Midland and Delaware basins,” Chris Paulsen, vice president of business development and strategy for Pioneer Natural Resources, told PBEC attendees. “Everything else for the most part of the US is nominally increasing and not declining in terms of gas production.” He noted that it will be interesting to see how the growth trajectory plays out with companies pulling back on spending, citing concerns over ESG, free cash flow, and capital efficiency as inflation takes root. But he does see several positives that will help moving forward. “We’ve gone from standalone developments, growth at all costs, and a lot of urgency to people standing back and thinking about how to best complete reservoirs to ensure we’re not leaving behind hydrocarbons,” he said.

Petroleum++: Facing the Challenges Ahead

Petroleum engineers are facing challenges just as they have for the past 100 years. We have been addressing these challenges and delivering solutions to continue our mission to provide the world with the energy it needs. Some of these challenges are technical in nature, some are due to economic situations, and now we are also facing challenges because of political positions. We are not alone in this regard. For example, handling the challenge the world faced with COVID-19, which should be based on medical and scientific results, was also mired in political debates. I have chosen the theme of Petroleum++ for my presidency to characterize the work in front of us to continue our mission. But I am getting ahead of myself. Let me start by mentioning that I am honored to be elected to the position of 2023 SPE President. I have been a member of this Society for more than 50 years and have volunteered for just about every function and service it offers to members. I have benefited from working with several distinguished members who dedicated a lot of their time and effort to enhance the petroleum engineering profession. I want to take this opportunity to thank the members of the SPE International Board of Directors who just completed their term of service on the board. This includes Tom Blasingame, 2021 President; Zach Evans, the regional director for North America; Qasem Al-Kayoumi, the regional director for the Middle East and North Africa; Robert Pearson, the technical director for Production and Facilities; and David Reid, the technical director for Drilling. I would also like to thank Dr. Kamel Ben-Naceur who led the Society as the 2022 President. Over the past year, SPE dealt with several events that I plan to discuss in later columns. Among these events were the proposed merger with AAPG, having an election for the open seats on the board for the first time in a couple of decades, and the work on updating the strategic plan for the Society, a task that is carried out once every 5 years. I would like to talk about the theme for this year’s SPE presidency which is Petroleum++. I chose this theme because it encompasses how we should address the challenges we are facing as petroleum engineers. First, we need to produce the needed hydrocarbons which will be a significant source of energy for the world until the year 2050 and beyond. The graph by the US Energy Information Administration shows that at least 50% of the world energy until 2050 will be obtained from oil and natural gas; similar results are shown for both the US and the entire world.

Medhat M. Kamal 2023 SPE President

Medhat (Med) M. Kamal Medhat (Med) M. Kamal is a Chevron Fellow Emeritus and an Honorary Member of SPE. He previously worked for Cairo University, Amoco Production Company, Flopetrol Schlumberger, and ARCO Exploration and Production Company. Kamal has more than 45 years of industry experience in well testing, reservoir description, and production and reservoir engineering. He was an SPE Distinguished Lecturer in 1997–1998 and 2018–2019 during which he presented his lectures more than 80 times in 35 countries. He served as a member and chairman of SPE Annual Meeting Well Testing subcommittee and textbook and monograph committees, and as executive editor, associate editor, and technical reviewer for SPE Reservoir Evaluation & Engineering and the Journal of Petroleum Technology. He chaired the first SPE conference on research and development in 2007 and the Western Regional Meeting (2019). He served on the boards of directors of Mid-Continent, Gulf Coast, Dallas, and Golden Gate sections of SPE and chaired the Dallas and Golden Gate sections. He also served on the SPE International Board of Directors (2007–2009) as the Regional Director of Western North America. Kamal has been recognized with several regional and international awards including the SPE Cedric K. Ferguson Medal, SPE Formation Evaluation Award, SPE Distinguished Service Award, SPE North and East Texas Regional Service Award, and the Texas Petroleum Engineer of the Year Award. He holds a BSc in petroleum engineering and an MSc in engineering from Cairo University and an MS and PhD in petroleum engineering with a minor in computer science from Stanford University. Let’s begin with a brief introduction of the theme you’ve selected for your presidency, Petroleum++. What will you be emphasizing? There are three elements to this theme: petroleum, the first plus, and the second plus. Let me explain them one at a time. “Petroleum” refers to the challenges petroleum engineers face now and for the foreseeable future to provide the world with the hydrocarbon energy it needs. By hydrocarbons, I mean oil and natural gas, not coal. We can think of the entities that study and predict the world’s future need for energy as three groups: the government entities like the US Energy Information Administration (EIA) and the European Union International Energy Agency (IEA); the major international operators like ExxonMobil, Shell, etc.; and the national oil companies. The predictions provided by all three groups indicate the oil and natural gas share in the energy mix may decline slightly from a little over 50% currently to a little below 50% by 2050. However, the needed volume of hydrocarbons will increase as the world population moves from around 8 billion now to about 9.8 billion in 30 years and as the standard of living continues to improve in the developing regions such as Africa and Asia. When we look at the world’s current reserves and the current technology to produce these, you can add things up and see that we must continue our technical advancements to meet the growing demand for energy.

Comments: The Stark Realities of Energy Supply

Natural gas is considered the transition fossil fuel to move the world toward a meaningful reduction in global greenhouse-gas emissions. But the clampdown of Russia’s natural gas supplies shifted the market’s dynamics, and the repercussions are being experienced around the world. Europe is one of the hardest hit by this disruption in natural gas supplies. In a commentary posted on 18 July, Fatih Birol, executive director of the International Energy Agency, called for coordinated actions across Europe to prepare for the coming winter months and for worst-case scenarios of a complete shutoff of Russian gas and limited availability from other sources. Although Russia resumed a reduced flow of gas to Germany via the Nord Stream pipeline on 21 July, there is no certainty about the fluctuations or duration of the flow. Birol wrote, “Europe is now forced to operate in a constant state of uncertainty over Russian gas supplies, and we can’t rule out a complete cutoff.” The start of Europe’s winter heating season is 1 October. Birol called for action to fill European gas storage to adequate levels by reducing current gas consumption and to put that conserved gas into storage. High natural gas prices have led to gas conservation to some extent, but more efforts are required. He wrote that the gas required to be saved over the next 3 months “is in the order of 12 billion cubic metres—enough to fill about 130 LNG tankers,” equivalent to 424 Bcf. To lend some perspective to this, consider that US LNG exports averaged 10.1 Bcf/D in June. This reflects a 1.5 Bcf/D decrease from May because of a fire on 8 June that shut down Freeport LNG in Texas, according to the US Energy Information Administration (EIA). The agency expects US LNG exports to remain below average at 10.5 Bcf/D in the second half of this year. The Freeport LNG shutdown, and the resulting lower demand for LNG export gas, decreased the US benchmark Henry Hub natural gas spot price. It fell by $1.27/MMBtu to $8.16/MMBtu on 9 June and averaged $7.70/MMBtu in June. EIA expects the spot price to continue to decline to an average of $5.97/MMBtu in the second half of this year. European imports of LNG rose by more than 50% in the first 5 months of 2022 compared with the period a year earlier, according to Bernstein, a Wall Street research firm. Although a wide range of shippers have sent fuel to Europe, the major increases in its LNG imports have come from gas produced from US shale. The increased European demand also increased the price of its imported LNG to nearly nine times what it was about 2 years ago, and those higher prices enticed LNG shippers away from Asia. European futures prices have been around $40/MMBtu. The Wall Street Journal compared that to more than $200/bbl for oil, about twice the price for Brent crude, the international benchmark, as of 22 July. In most years, China, Japan, and South Korea have been the major markets for LNG. During the first 5 months of 2022, Asian imports fell by 8%—in part because of slowing demand from China caused by COVID-19 lockdowns. Birol’s commentary began with this sentence: “The world is experiencing the first truly global energy crisis in history.” For Europe, the Russian invasion of Ukraine also sparked a cost-of-living crisis when oil and gas prices soared. Crises, by definition, require immediate and effective actions.

A Study on Nexus Between Renewable Energy and Fossil Fuel Consumption in Commercial Sectors of United States Using Wavelet Coherence and Quantile-on-Quantile Regression

The inertia of fossil fuels in the commercial sector of the United States has maintained its momentum throughout, and efforts to replace it with renewable energy has continuously been made. This dynamic relationship is impacted by multi-economic and political variables both in the domestic and international markets. In this paper, we have explored the dynamic impact of total renewable energy consumption (RE) on the decomposed wavelet frequencies of energy consumed by fossil fuels (FE) in the commercial sectors of the United States economy. In particular, we have applied wavelet coherence and quantile-on-quantile regression methodologies to evaluate this relationship. The monthly data from the US Energy Information Administration over a period of January 2001 to July 2021 was procured for the present study. Our empirical findings based on wavelet coherence showed significant co-movements between FE and RE with positive association in short-run while negative association in long-run monthly frequency bands. For our five models based on quantiles and decomposed wavelet frequencies of FE, four models show that renewable energy consumption has an antagonistic relation with the FE in the commercial sector of the United States.