Last updateMon, 22 Jan 2018 6pm


Gas Market Flexibility Improving, Security Still a Concern

While gas markets are currently well supplied, the transformation of natural gas markets from regional systems to more globalized and interdependent markets is creating new security challenges, according to the International Energy Agency’s latest assessment of global gas security.

The report details how importing countries in mature and well-interconnected markets can still experience unexpected shocks that put strong pressure on the market. Even in the current low-price environment, suppliers are still exposed to low-probability but high-impact events that could have potentially serious consequences for global gas supplies. 

Refining Industry Back on Track Post-Harvey

“Outages as a result of Hurricane Harvey highlighted the vulnerabilities in the U.S. refining industry and, by extension, the country’s overall energy security. However, the sector’s recovery in the past six weeks and its flexibility during the difficult hurricane season reflect its resilience, sophistication, and continued competitive advantage in the global market,” writes Matt Piotrowski for The Fuse.

“Unlike most of the oil and gas industry, the refining industry was able to make money when oil prices crashed, and it is still performing well. U.S. refining should continue to see its market power grow, since domestic refiners are capturing market share throughout the globe.” 

Projects Valued at $17B Increase Sept. Construction Starts 31.5%

According to ConstructConnect, September’s volume of construction starts, excluding residential activity, was $42.8 billion. The month-to-month change versus August was an outsized +31.5%. The big improvement in the latest period was thanks to go-aheads for three mega projects combining for a total of $17 billion.

The three extraordinary projects were an Exxon Mobil petrochemical plant in Texas ($10 billion categorized as industrial); the new Delta Airlines Terminal at LaGuardia Airport in New York ($4 billion categorized as civil/engineering); and the Atlantic Sunrise natural gas pipeline in Pennsylvania ($3 billion, also in the civil/engineering type-of-structure category).  

Crude Oil, Petroleum Product Exports Reach Record Levels

According to the U.S. Energy Information Administration (EIA), crude oil exports in the first half of 2017 increased by more than 300,000 barrels per day (b/d) from the first half of 2016, reaching a record high of 0.9 million b/d. Petroleum product exports also grew over the same period with propane and distillate exports reaching record highs of 0.9 million b/d and 1.3 million b/d, respectively.

Canada remained the largest recipient of U.S. crude oil exports at 248,000 b/d in the first half of 2017 but imported an average of 46,000 b/d fewer than in the first half of 2016. China increased its crude oil imports from the U.S. by 154,000 b/d and became the second-largest importer of U.S. crude oil, averaging 163,000 b/d in the first half of the year. 

Energy Intensity in U.S. Manufacturing Decreased

Energy intensity in manufacturing in the U.S. decreased from 2010 to 2014. U.S. manufacturing overall fuel intensity decreased by 4.4% from 3.016 thousand British thermal units (Btu) per dollar of output in 2010 to 2.882 thousand Btu in 2014. According to the Manufacturing Energy Consumption Survey (MECS), U.S. manufacturing fuel consumption rose 4.7% from 2010 to 2014, although real gross output increased more rapidly at 9.6%.

Generally, the most energy-intensive U.S. industries' share of manufacturing gross output declined from 2010 to 2014 (35.1% of total manufacturing to 32%), although they maintained the same share of fuel consumption (80.7%). The group of energy-intensive industries as a whole actually increased in energy intensity by 4.6% as the rest of manufacturing decreased by 8.5%. The shift in output toward less energy-intensive manufacturing contributed to the decline in overall manufacturing energy intensity in the U.S. 

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