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Expect higher food prices but little relief at the pump with Biden’s latest questionable move to combat inflation… Last Friday, Biden’s EPA Mandated the Most Ethanol Use Ever.

The EPA, after gathering comments since releasing it proposed blending requirements in December, said Friday it will require refiners to blend 20.77 billion gallons of ethanol, biodiesel, and other renewable fuel this year.

Additionally, the oil industry must blend 250 million more gallons of renewable fuel, both this year and next, after a federal court found the Obama administration inappropriately reduced the 2016 blending requirements.

The agency also denied roughly 70 exemptions for small refineries, many of which had been granted under former President Donald Trump.

Corn Growers Cheer

“The Biden EPA is to be commended for restoring sanity to the refinery exemption program,” Monte Shaw, the Iowa Renewable Fuel Association’s executive director, said in a statement. “These exemptions have never been justified and were simply being used to illegally undermine the RFS. We are grateful this long nightmare is over.”

Refiners Complain

But Chet Thompson, CEO of the American Fuel & Petrochemical Manufacturers, said the blending requirement for this year is “contrary to the administration’s claims to be doing everything in their power to provide relief to consumers.”

“Unachievable mandates will needlessly raise fuel production costs and further threaten the viability of U.S. small refineries, both at the expense of consumers,” Thompson said.

EPA Raises Ethanol Mandate for 2022

Also on Friday, the Wall Street Journal reported EPA Trims Ethanol Fuel Mandate for 2020-21 But Raises It for 2022

The Biden administration on Friday retroactively reduced the amount of ethanol that must be blended into gasoline for 2020 and 2021 but raised the level for 2022, saying the changes are aimed at helping boost domestic fuel supplies.

The agency can adjust these requirements retroactively, signaling to refiners how much they will have to spend to buy market credits that help them comply with obligations lingering from past years.

Biden’s Ethanol Gas Price Trick

Flashback April 12, 2022: Please consider Biden’s Ethanol Gas Price Trick

In Iowa on Tuesday, Mr. Biden announced an environmental waiver to allow sales of 15% ethanol gasoline blends (E15) this summer. The Clean Air Act prohibits this because higher ethanol blends can increase smog in hot weather. They can also erode older car engines, gas pumps, storage tanks and pipelines.

In 2019 Mr. Trump directed the EPA to let E15 be sold year-round to help Midwest farmers. EPA then rewrote the Clean Air Act, claiming the text was “ambiguous.” The D.C. Circuit of Appeals disagreed and ruled that EPA had exceeded its statutory authority.

Mr. Biden says E15 can save drivers on average 10 cents a gallon, but the waiver will have a negligible impact on gas prices nationwide since so few stations sell it.

It’s also unclear what legal authority EPA intends to invoke. Under the law EPA can only issue emergency waivers to address temporary fuel-supply shortages in discrete regions or states. 

Meantime, Congress’s ethanol mandate is causing many small refiners to shut down and the U.S. to import more foreign fuel. Last week EPA denied 36 hardship exemptions for small refineries, so even more could close.

Synopsis 

•  30% higher corn prices with other crops rising by 20%, according to the National Academy of Sciences.
• Growing more corn for ethanol causes increased amounts of water pollutants from U.S. farms
• Expect more fertilizer use when fertilizer costs are soaring
• More summer smogE15 erodes older car engines, gas pumps, storage tanks and pipelines.
• Small refiners will suffer and some will go out of business allowing Elizabeth Warren to moan about the concentration of “Big Oil”. 

To top things off, when Trump tried the same thing, the courts struck it down as illegal. 

OilPrice.com by ZeroHedge, June 17, 2022

Italian Ambassador to Saudi Arabia Roberto Cantone said his country was making great efforts to diversify its gas supplies to achieve independence from Russia, by expanding its cooperation with other gas-exporting partners.

He stressed in this regard that his country was looking forward to establishing a long-term partnership with a future source of hydrogen such as the Kingdom.

In remarks to Asharq Al-Awsat, Cantone noted that cooperation in the field of energy would cover renewable energy sources and hydrogen, as the Kingdom is investing in the transition towards carbon neutrality through its Saudi Green Initiative, while Italy has extensive experience in all types of renewable energy sources.

The Italian ambassador stressed that the Saudi-Italian political dialogue was aimed at addressing relevant international issues within the framework of the G20 joint action and security challenges that affect both countries in the Mediterranean and the Middle East. In this context, he pointed to a memorandum of understanding on strategic dialogue signed last year between Saudi Foreign Minister Prince Faisal bin Farhan and his Italian counterpart Luigi Di Maio.

“Italy has always imported oil from the Kingdom at an estimated level. In general, 80 percent of Italian imports are oil and petrochemical products, while many Italian companies support Saudi Aramco’s operations at various levels,” he told Asharq Al-Awsat. He noted that Saudis were interested in Italian-made products, such as food, fashion and interior design.

Cantone added that infrastructure was another very important area of cooperation.

He said that as part of investments planned within Saudi Vision 2030, many Italian construction companies were applying to tenders launched by the government to develop the giga-projects, as well as Saudi projects in the field of sustainable mobility and connectivity.

Regarding imports from Saudi Arabia, the diplomat noted that the stock market depended on the direction of the oil sector. He said that imports declined during the pandemic, but stressed that recovery was now on the right track, with imports amounting to 4.8 billion euros in 2021, compared to 2.9 billion euros in 2020.

The level of trade exchange remained essentially unchanged despite the coronavirus pandemic, amounting to 3.1 billion euros in 2020 and 3.3 billion euros in 2021, according to Cantone, who said that last year, the total balance was in favor of the Kingdom, while it is likely to remain the same in 2022, given the current high oil price per barrel.

“Our bilateral relationship is also based on an important economic partnership, taking into account the number of Italian firms that show a tangible interest in Vision 2030 and invest in the Kingdom by opening branches or new companies,” the ambassador remarked.

By FuellCellWorks, June 17, 2022

The petroleum ministry said in a statement on Sunday.

Egypt plans to set up new area for crude oil storage in El- Tebbin, south of Cairo, the petroleum ministry said in a statement on Sunday.

The project, with an estimated cost of 1.8 billion Egyptian pounds ($96.21 million), aims to receive crude from Ain Sokhna terminal on the red sea and pump it to Upper Egypt.

ZAWYA by Ahmed Ismail, June 17, 2022

ABB, working alongside Hyundai Engineering and Técnicas Reunidas, has been employed to install their market-leading distributed control system (DCS) ABB Ability™ System 800xA at the new Olefin III complex in Plock, Poland.

Integrating ABB Ability™ System 800xA control architecture across the entire mega-development, PKN Orlen will be able to constantly monitor and analyze plant productivity, maximize asset performance, manage power consumption, ensure product quality, and optimize process efficiency in real-time.

Harnessing this continuous stream of data, the company, in line with its objective to achieve a 30 percent reduction in CO2 emissions per ton of product, will be able to make more accurate, informed decisions to drive efficient use of energy. This includes maintaining tight controls over raw material consumption, plant energy levels, and waste by-products. 

 “As part of our sustainability strategy, ABB is committed to supporting our customers in reducing their annual CO₂ emissions by more than 100 megatons by 2030. Combining our expertise in the market alongside our leading DCS technology for complex plant operations we can help PKN Orlen to maximize its return on investment,” said Brandon Spencer, President of ABB Energy Industries. 

Alongside the DCS, ABB will also deliver several systems aimed at ensuring the complex operates at optimum safety levels, including a Burner Management System (BMS), an Emergency Shutdown System (ESD), and High-Integrity Pressure Protection System (HIPPS). These will be complemented by an industrial cyber security solution focused on mitigating cyber threats towards the complex. 

Olefins from the base compound made up of hydrogen and carbon produce a mix of everyday products including cleaning, hygiene, and medical products, including the synthetic fibers used in protective clothing and masks (PPE). The global market was valued at USD 232.45 Billion in 2020, and it is expected to grow at an annual rate of 4.5 percent reaching a value of USD 329.30 Billion by 2028. This exponential growth is driven by consumer demand and increased use across the global plastics industry. 

The project is scheduled for completion in 2024 with operations due to start in 2025. To support this timeline ABB will apply its unique project methodology Adaptive Execution™. Adaptive Execution™ harnesses virtual engineering and digitalization to deliver a streamlined, standardized, and agile experience for all stakeholders. Through this methodology, ABB can lower delivery time by up to 30 percent, start-up hours by up to 40 percent, and overall automation-related capital costs by up to 40 percent.

ABB is a leading global technology company that energizes the transformation of society and industry to achieve a more productive, sustainable future. By connecting software to its electrification, robotics, automation, and motion portfolio, ABB pushes the boundaries of technology to drive performance to new levels. With a history of excellence stretching back more than 130 years, ABB’s success is driven by about 105,000 talented employees in over 100 countries.

THE OGM by Tina Olivero, June 17, 2022

The oil giant is pumping billions of dollars into a plan to clean up the oil patch’s emissions profile.

ExxonMobil doesn’t believe fossil fuels will become extinct. It sees oil and gas playing a vital role in fueling the economy in the future, even as the adoption of cleaner alternatives accelerates. That’s partly due to their lower relative costs and the huge technological leaps needed before replacement fuels like green hydrogen become commercially viable.

Another reason Exxon sees a future for fossil fuels is that it can lower its carbon emissions profile through carbon capture and storage. The oil giant foresees a $4 trillion market opportunity by 2050 for cleaning up the oil patch.

What is carbon capture and storage?

Carbon capture pulls carbon dioxide emissions from fuel combustion and industrial processes out of the air so that it doesn’t get into the atmosphere and negatively impact the climate. The captured carbon dioxide then moves on pipelines or ships to underground geological formations for storage. There’s also the potential to reuse captured carbon dioxide for other purposes.  

One potentially major market for captured carbon dioxide is a process known as enhanced oil recovery (EOR). Oil companies, including Exxon, Occidental Petroleum (OXY -5.76%), Denbury Resources, and Kinder Morgan, pump carbon dioxide into legacy oil formations to increase pressure, resulting in higher production. Many of these companies currently use carbon dioxide produced from underground reservoirs for EOR. However, they’re increasingly seeking out captured carbon for EOR purposes.

In addition to EOR, potential uses of captured carbon include manufacturing other fuels like synthetic jet fuel and making building materials like concrete.

Betting big on carbon capture and storage

While carbon dioxide has a range of potential uses, the initial focus of Exxon and others in the energy sector is on sequestering it underground. The company is investing more than $15 billion over the next six years to lower greenhouse gas emissions through carbon capture and storage, hydrogen, and biofuels. It’s already the world leader in carbon capture, pulling more carbon dioxide out of the air than any other company. 

However, it has grand ambitions to build an even larger carbon capture and storage business. For example, Exxon is working on an up to $100 billion plan to capture carbon produced by petrochemical plants, power generating facilities, and other heavy industries along the Houston Ship Channel. The plan would see industrial facilities install devices to capture carbon dioxide before it leaves their plants. They could either use it to develop products or transport it via pipelines to the Gulf of Mexico, where it will get injected into sub-sea formations. 

Exxon is also looking into developing a large-scale carbon capture and storage hub in Australia. It would capture emissions produced by industries in the Gippsland Basin and transport the carbon dioxide to a depleted oilfield off the country’s coast via existing pipelines. 

Growing interest in capturing carbon

Exxon is one of many energy companies working on developing carbon capture and storage projects. EnLink Midstream (ENLC -6.96%) and Talos Energy (TALO -5.43%) are working to jointly develop a complete carbon capture, transportation, and sequestration solution for industrial-scale carbon dioxide emitters along the Mississippi River. The proposed project would use significant portions of EnLink’s pipelines in the region to transport captured carbon dioxide and move it to Talos’ River Bend sequestration site in Louisiana.

Meanwhile, EnLink and Enterprise Products Partners (EPD -5.14%) are working with a subsidiary of Occidental Petroleum on potential carbon capture and storage solutions. EnLink’s project with Occidental would focus on another section of the Mississippi River corridor, while Enterprise Products Partners is working on developing a project along the Houston Ship Channel. The midstream companies would provide existing and new pipelines to transport captured carbon to sequestration hubs operated by Occidental Petroleum. 

Carbon capture could keep the oil patch from going extinct

ExxonMobil believes carbon capture and storage is an answer to the world’s energy problem. It can make fossil fuels much cleaner while keeping the costs low compared to alternative fuels. That’s leading the oil giant to bet big on the future of carbon capture. If it’s correct, that wager could pay big dividends by enabling it to continue producing oil and gas while earning meaningful income from carbon capture and storage.

The Motley Fool by Matthew DiLallo, June 17, 2022

India and other Asian nations are becoming an increasingly vital source of oil revenues for Moscow despite strong pressure from the U.S. not to increase their purchases, as the European Union and other allies cut off energy imports from Russia in line with sanctions over its war on Ukraine.

Such sales are boosting Russian export revenues at a time when Washington and allies are trying to limit financial flows supporting Moscow’s war effort.

A report by the Helsinki, Finland-based Centre for Research on Energy and Clean Air, an independent think tank released Monday said Russia earned 93 billion euros ($97.4 billion) in revenue from fossil fuel exports in the first 100 days of the country’s invasion of Ukraine, despite a fall in export volumes in May.

“Revenue from fossil fuel exports is the key enabler of Russia’s military buildup and aggression, providing 40% of federal budget revenue,” it said.

India, an oil-hungry country of 1.4 billion people, has guzzled nearly 60 million barrels of Russian oil in 2022 so far, compared with 12 million barrels in all of 2021, according to commodity data firm Kpler. Shipments to other Asian countries, like China, have also increased in recent months but to a lesser extent.

In an interview with The Associated Press, Sri Lanka’s prime minister said he may be compelled to buy more oil from Russia as he hunts desperately for fuel to keep the country running amid a dire economic crisis.

Prime Minister Ranil Wickremesinghe said Saturday said he would first look to other sources, but would be open to buying more crude from Moscow. In late May, Sri Lanka bought a 90,000-metric-ton (99,000-ton) shipment of Russian crude to restart its only refinery.

Russia is moving to diversify its exports. Russian Ambassador Marat Pavlov met Philippine President-elect Ferdinand Marcos Jr. on Monday and offered Moscow’s help to provide oil and gas. He did not specify the terms.

Marcos Jr., whose six-year term is set to begin June 30, did not say if he was considering the offer.

Since Russia’s invasion of Ukraine in late February, global oil prices have soared, giving refiners in India and other countries an added incentive to tap oil Moscow is offering them at steep discounts of $30 to $35, compared with Brent crude and other international oil now trading at about $120 per barrel.

Their importance to Russia rose after the 27-nation European Union, the main market for fossil fuels that supply most of Moscow’s foreign income, agreed to stop most oil purchases by the end of this year.

“It seems a distinct trend is becoming ingrained now,” said Matt Smith, lead analyst at Kpler tracking Russian oil flows. As shipments of Urals oil to much of Europe are cut, crude is instead flowing to Asia, where India has become the top buyer, followed by China. Ship tracking reports show Turkey is another key destination.

“People are realizing that India is such a refining hub, taking it at such a cheap price, refining it and sending it out as clean products because they can make such strong margins on that,” Smith said.

In May, some 30 Russian tankers loaded with crude made their way to Indian shores, unloading about 430,000 barrels per day. An average of just 60,000 barrels per day arrived in January-March, according to the Centre for Research on Energy and Clean Air.

Chinese state-owned and independent refiners also have stepped up purchases. In 2021, China was the largest single buyer of Russian oil, taking 1.6 million barrels per day on average, equally divided between pipeline and seaborne routes, according to the International Energy Agency.

While India’s imports are still only about a quarter of that, the sharp increase since the war began is a potential source of friction between Washington and New Delhi.

The U.S. recognizes India’s need for affordable energy, but “we’re looking to allies and partners not to increase their purchases of Russian energy,” Secretary of State Antony Blinken said after a meeting of U.S. and Indian foreign and defense ministers in April.

Meanwhile, the U.S. and its European allies are engaged in “extremely active” discussions on coordinating measures, perhaps forming a cartel, to try to set a price cap on Russian oil, Treasury Secretary Janet Yellen told a Senate Finance Committee meeting on Tuesday.

The aim would be to keep Russian oil flowing into the global market to prevent crude oil prices, already up 60% this year, from surging still higher, she said.

“Absolutely, the objective is to limit the revenue going to Russia,” Yellen said, indicating the exact strategy had not yet been decided on.

While Europe could find alternative sources for its purchases of about 60% of Russia’s crude exports, Russia also has options.

India’s foreign minister, Subrahmanyam Jaishankar, has emphasized his country’s intention to do what is in its best interests, bristling at criticism over its imports of Russian oil.

“If India funding Russian oil is funding the war … tell me, then buying Russian gas is not funding the war? Let’s be a little even-handed,” he said at a recent forum in Slovakia, referring to Europe’s imports of Russian gas.

India’s imports of crude from Russia rose from 100,000 barrels per day in February to 370,000 a day in April to 870,000 a day in May.

A growing share of those shipments displaced oil from Iraq and Saudi Arabia, most of it going to refineries in Sika and Jamnagar on India’s western coast. Up until April, Russian oil accounted for less than 5% of the crude processed at the Jamnagar oil refinery run by Reliance Industries. In May, it accounted for more than a quarter, according to Centre for Research on Energy and Clean Air.

India’s exports of oil products like diesel have risen to 685,000 barrels per day from 580,000 barrels per day before the invasion of Ukraine. Much of its diesel exports are sold in Asia, but about 20% was shipped via the Suez Canal, headed for the Mediterranean or Atlantic, essentially Europe or the US, said Lauri Myllyvirta, a lead analyst at CREA.

It’s impossible to quantify the exact amount of Russian crude in refined products being shipped out of India, he said. Still, “India is providing an outlet for Russian crude oil to get through the market,” he said.

China’s imports also have risen further this year, helping Russian President Vladimir Putin’s government record a current account surplus, the broadest measure of trade, of $96 billion for the four months ending in April.

It’s unclear if such exports might eventually be subject to sanctions meant to cut the cash flowing to Russia.

Regarding the sanctions, “Are those measures effective? And if not, how is the oil market working around them?” Myllyvirta said.

By AP NEWS, June 14, 2022

Three South Korean companies have signed an agreement to build a $1 billion green hydrogen and ammonia production plant in the United Arab Emirates, their UAE partner said on Friday.

Korea Electric Power Corporation, Samsung C&T Corporation and Korea Western Power, alongside the UAE’s Petrolyn Chemie, will build a plant that can produce up to 200,000 tonnes of green ammonia a year, Petrolyn said.

Green hydrogen – obtained by passing renewably-produced electricity through water to split the element from oxygen – has been touted by some as a key fuel for energy users looking to cut greenhouse gas emissions.

Both the UAE and neighbor Saudi Arabia have set out ambitious plans for hydrogen.

The plant will be built in two phases in the KIZAD Industrial Area near the capital Abu Dhabi, with the first phase producing 35,000 tons before the second phase takes the project to full scale.

“Participating companies will achieve their respective Net-Zero vision through the Project. They are expected to…expand the drive of future growth in the global green hydrogen market by expanded reproduction of their future business model,” Petrolyn said.

By ALARABIYA, June 7, 2022

The U.S. hasn’t constructed a major petroleum refinery since 1977 even as fuel demand and domestic oil production have surged in recent decades.

Major refinery operators have largely opted to upgrade facilities rather than construct new greenfield plants because of the projected fuel demand decline in coming years and lengthy regulatory process required for such projects, according to industry experts. There have been 14 small refineries, each processing 4,100–46,250 barrels of oil a day, constructed since Marathon Oil opened its 200,000-barrel-per-day facility in Garyville, Louisiana, in 1977.

“The COVID pandemic really drove down gasoline and diesel demand which accelerated some things that were already happening,” Geoff Moody, the vice president of government relations at the American Fuel & Petrochemical Manufacturers (AFPM), told The Daily Caller News Foundation in an interview.

“There was already some contraction happening in the industry as a result of projected declines in U.S. gasoline demand into the future and companies just deciding that the assets were better used as other projects or shut down completely,” Moody continued. “Some of it [has] been very policy-driven and companies decided that it wasn’t worth it to keep operating those assets.”

The U.S. and other western nations have accelerated plans for a global green transition away from fossil fuels even as prices have skyrocketed to record levels this year. AFPM and other industry groups have urged the Biden administration to focus on long-term solutions, like boosting domestic oil production and shoring up refining capacity, amid the current energy crisis.

Global refining, which is vital for producing fuels like gasoline and diesel, decreased by 1.4 million barrels a day between 2019 and the first quarter of 2022, according to the International Energy Agency. Most of the refinery closures occurred in western countries, the data showed.

In the U.S., refineries processing a total of more than 800,000 barrels a day have closed since 2019 leaving the nation with a total operating refinery capacity of 17.7 million barrels a day, its lowest level since 2013. In addition, there are five idle U.S. refineries — the highest number since 2012 — which have a total capacity of 408,000 barrels a day, an issue the White House is reportedly considering addressing.

“Some refineries just shut down because of lack of demand, and they’re not coming back on,” Hugh Daigle, a professor of petroleum engineering at the University of Texas at Austin, told Minnesota Public Radio.

Moody, from the AFPM, added that companies have chosen to grow the footprint and throughput of existing refineries rather than make risky investments in new facilities. Refinery capacity has grown by about 3.3 million barrels per day as the number of refineries has fallen from 199 to 124 since 1985.

Dan Kish, a senior fellow at the Institute for Energy Research, blamed the decreased refinery capacity and lack of new greenfield projects on the growing number of environmental regulations and required permits.

“We’ve gone from many smaller refineries to refineries operating more efficiently and more economically,” Kish told TheDCNF in an interview. “Just like everything else, it’s very difficult to build anything or to keep anything operating in the United States where we have the strictest environmental laws in the world.”

“They keep squeezing emissions through Clean Air Act, through [the National Environmental Policy Act],” he continued. “They just throw lots of red tape at these folks and it makes it harder and harder to stay afloat.”

Since 2000, the Environmental Protection Agency (EPA) has entered into 37 settlements covering 112 refineries across 32 states with companies that control more than 95% of total U.S. refining capacity, according to a database of EPA enforcement actions. In March, Chevron Phillips Chemical Company agreed to make facility upgrades worth $118 million and pay a $3.4 million penalty over alleged Clean Air Act violations.

Meanwhile, a refinery being built in North Dakota, the largest greenfield refinery since the 1977 Marathon plant, began its permitting process in 2013 and isn’t expected to be completed until 2023, Forbes reported in 2020.

Another greenfield project located in Utah appears to have stalled since receiving a permit from the state’s Department of Air Quality (DAQ) eight years ago. The plant remains permitted but still hasn’t been constructed, Utah DAQ spokesperson Ashley Sumner confirmed in an email to TheDCNF.

The STREAM by Thomas Catenacci, June 1, 2022