Last updateSun, 20 Jan 2019 9pm


Global Chemicals Production Remained at Slow Pace in Fourth Quarter

Data collected and tabulated by the American Chemistry Council (ACC) shows that global chemicals production rose slightly (by 0.1%) in November 2018 after a similar gain in October and weak activity in August and September. With softness earlier in the year, the Global Chemical Production Regional Index (CPRI) was off 0.1% year-over-year (Y/Y) on a three-month moving average (3MMA) basis and stood at 115.9% of its average 2012 levels.

During November, capacity utilization in the global chemical industry eased 0.1 points to 83.1%. This is down from 86.0% last November and below the long-term (1987-2017) average of 86.5%. 

Texas Oil and Gas Sector Growth Stalls

Growth in energy sector activity slowed significantly in fourth quarter 2018, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—remained positive, but barely so, plunging from 43.3 in the third quarter to 2.3 in the fourth. Readings near zero indicate activity was largely unchanged from the prior quarter, a break from the 10-quarter-long trend of rising activity. The decrease in the fourth-quarter index was driven by both exploration and production (E&P) and oilfield services firms. 

Eagle Ford Oil Growth to Stall in 2019 Amid Weak Prices

According to consulting firm Rystad Energy AS “drillers in the Eagle Ford, Texas’s other shale oil patch, will likely scale back activity in 2019 as lower crude prices eat into cash flows,” Bloomberg reports.

“Production has already started slowing. Supplies this month are expected to average below 1.3 MMbod for the first time since May.” 

EPA: Mercury Rules Not ‘Appropriate and Necessary’

The EPA issued a proposed revised Supplemental Cost Finding for the Mercury and Air Toxics Standards (MATS), as well as the Clean Air Act-required “risk and technology review.” The agency proposes to determine that it is not “appropriate and necessary” to regulate HAP emissions from power plants under Section 112 of the Clean Air Act.

The emission standards and other requirements of the MATS rule, first promulgated in 2012, would remain in place as EPA is not proposing to remove coal- and oil-fired power plants from the list of sources that are regulated under Section 112 of the Act. The proposal also contains the required “risk and technology review,” concluding that no changes to the MATS rule are needed, and also takes comment on establishing a separate subcategory for certain units that rely on coal refuse. 

U.S. Coal Consumption the Lowest in 39 Years

The U.S. Energy Information Administration (EIA) expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U.S. coal consumption has been falling since its peak in 2007, and EIA forecasts that 2018 coal consumption will be 437 MMst (44%) lower than 2007 levels, mainly driven by declines in coal use in the electric power sector.

The electric power sector is the nation’s largest consumer of coal, accounting for 93% of total U.S. coal consumption between 2007 and 2018. The decline in coal consumption since 2007 is the result of both the retirements of coal-fired power plants and the decreases in the capacity factors, or utilization, of coal plants as increased competition from natural gas and renewable sources have reduced coal’s market share. 

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