Fuel Oil News

Fuel Oil News June 2014

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Biodiesel Producers Hit Hard By Policy uncertainty Policy setbacks in Washington are taking a major toll on U.S. biodiesel producers, according to a nationwide survey of biodiesel producers released on May 14. The survey, conducted by the National Biodiesel Board, found that nearly 80% of U.S. biodiesel producers have scaled back produc- tion this year and more than half have idled production at a plant altogether. Additionally, two-thirds of producers said they have already reduced or anticipate reducing their workforce as a result of the downturn. The cutbacks come in the face of a weak Renewable Fuel Standard proposal from the EPA and Congress' failure to extend the biodiesel tax incentive. Biodiesel producers and other advocates joined a group of U.S. senators at a press conference Wednesday in calling for Congress and the Administration to act quickly to restore the industry's progress by supporting a strong RFS and reinstating the tax incentive. "Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry," said Anne Steckel, NBB's vice president of fed- eral affairs. "It's not just hurting these producers. It is a setback for local economies where these plants operate, for our environment, for our national energy security, and for drivers who are tired of ever-increasing fuel prices that result from the petroleum industry's monopoly at the pump." Among the other survey findings: • 78% have reduced production versus 2013 • 57% have idled production altogether or shut down a plant this year • 66% have reduced workforce or anticipate reducing workforce • 85% have delayed or canceled expansion plans The producers nearly universally attributed the industry decline to the weak RFS proposal and loss of the tax incentive. The RFS proposal, which has not yet been finalized, would estab- lish a biodiesel standard of 1.28 billion gallons this year. That is a sharp cut from last year's record production of nearly 1.8 billion gallons that would likely force many producers to shut their doors. The biodiesel tax incentive expired on Jan. 1, marking the third time in five years that Congress has allowed it to lapse. The incentive is included in the tax extenders bill currently under consideration in the Senate, but remains unclear when or if the incentive might be reinstated. The survey of NBB members was conducted between April 14 and April 25. Fifty-four biodiesel producers from across the country participated in the survey. GenscaPe launcHes new york HarBor storaGe rePort Genscape has launched the New York Harbor Product Storage Report. The new weekly report is available one day before the widely used EIA estimates are published. Currently, Genscape has identified a 90% correlation between the gasoline and distillate storage measurements in the NYH Product Storage Report and the EIA estimates for PADD 1B. In addition to aggregate storage levels, the Genscape report offers volumetric detail down to the tank level for a more specific, rel- evant, and complete data set. The latest issue of the NYH Product Storage Report, which includes the new ethanol storage data, is available at no cost at http:// info.genscape.com/nyh-free-report. Genscape is a global provider of real-time data and intelligence for commodity and energy markets. natural Gas outPut uP 0.8% in aPril: Platts' Bentek enerGy April 2014 is now the most prolific natural gas producing month in U.S. history, according to the latest estimates from Bentek Energy, an oil and natural gas analytics and forecast- ing unit of Platts. Production for the lower 48 U.S. states last month averaged 67.3 billion cubic feet per day, about 0.5 Bcf/d higher than March 2014 production levels of 66.8 Bcf/d. April 2014 also saw six of the top 10 highest natural gas production days on record and peaked at 68.0 Bcf/d on April 13. The remaining four top ten producing days all occurred in March. Average April 2014 gas production was up 2.7 Bcf/d or 4.2% from April 2013 levels. April 2014 is the highest natural gas produc- ing month on record since March 2014, followed by November 2013 when production averaged 66.6 Bcf/d. The U.S. Energy Information Administration will publish its domestic production estimates for April on or around June 30. "The natural gas market has been focused most recently on record low storage levels, but the natural gas production records have gone relatively unnoticed," said Jack Weixel, Bentek direc- tor of energy analysis. "With storage inventories so low, U.S. consumers need the production levels seen in March and April to continue throughout the summer to avoid higher prices this winter. Conversely, natural gas producers are enjoying a relatively robust price environment despite substantially increased output the past two months." Bentek data analysis suggests 2014 production will average approximately 67.5 Bcf/d due to a higher overall price environ- ment for producers and continued growth in liquids-rich basins such as the Eagle Ford in Texas, Bakken in the upper U.S. Midwest, and Permian and Greater Anadarko in Texas and U.S. Midwest, in addition to continued increases in dry production in the Marcellus in upper U.S. Northeast. The Bentek data analysis is based on an extensive sample of near real-time production receipt data from the U.S. lower 48 interstate pipeline system. Bentek Energy's production models are highly cor- related with and provide an advance glimpse of federal government statistics from the U.S. EIA. This Bentek Energy U.S. natural gas production data estimate will be published within the first 10 days of every month, covering the previous month's output activity. Bentek's dry gas production estimates are not observed data and are based on pipeline receipt nominations and certain state production data. Fuels N e w s 12 June 2014 | Fuel oil news | www.fueloilnews.com

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