Last updateThu, 20 Sep 2018 3pm


Pipeline Constraints Cause Natural Gas Prices to Drop

“The natural gas price in the Permian Basin in west Texas has slumped so low this year that the annual average is on track for its lowest in 19 years, pummeled by record production and pipeline constraints that also have stymied crude transport out of the region,” Reuters  reports.

“Gas production, a byproduct of drilling in the nation’s largest oilfield, has hit record highs this year, filling available space on existing pipelines and forcing more companies to burn off, or flare, the fuel if they cannot find other ways to deal with it.” 

U.S. Refineries Running Near All-Time Highs

For the week ending July 6, 2018, the four-week average of U.S. gross refinery inputs surpassed 18 million barrels per day (b/d) for the first time on record. U.S. refineries are running at record levels in response to robust domestic and international demand for motor gasoline and distillate fuel oil.

Despite record-high inputs, refinery utilization has not surpassed the record set in 1998. Rather than higher utilization, refinery runs have increased with increased refinery capacity. U.S. refinery capacity increased by 862,000 barrels per calendar day (b/cd) between January 1, 2011, and January 1, 2018. 

U.S. LNG Exports to China Decline

“U.S. exports of liquefied natural gas (LNG) to China in July fell to their lowest level in a year and are expected to decline further as the Sino-U.S. trade dispute forces utilities to seek alternative supplies,” Reuters reports.

“The main beneficiaries of this shift are producers in the Asia/Pacific region, who have been quick to snatch market share from the United States since the trade disputes broke out in June.” 

Court Voids Permits for Atlantic Pipeline

A ruling Monday from the U.S. Fourth Circuit Court of Appeals vacated the U.S. Fish & Wildlife Service’s Incidental Take Statement and the National Park Service’s right of way permit for the Atlantic Coast Pipeline.

“A three-judge panel of the 4th U.S. Circuit Court of Appeals said a U.S. Fish and Wildlife Service permit was ‘arbitrary and capricious’ because it provided no specific limits for the allowable impact on five threatened or endangered species. The ruling elaborates on a decision first issued in May,” the Associated Press reports

Construction of Mountain Valley Pipeline Halted

A project-wide stop work order was issued by the Federal Energy Regulatory Commission (FERC) for the Mountain Valley Pipeline, related to the adequacy of permits issued by the U.S. Forest Service and Bureau of Land Management (BLM) granting a 3.5-mile right-of-way in the Jefferson National Forest for the project. The right-of-way permits in question affect only approximately 1% of the pipeline’s overall 303-mile project route. The two agencies agreed that a report on the environmental impact on the forest was incomplete. 

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