The home heating oil industry has a long and proud history, and Fuel Oil News has been there supporting it since 1935. It is an industry that has faced many challenges during that time. In its 77th year, Fuel Oil News is doing more than just holding
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FUELS EIA N E W S 12 MAY 2015 | FUEL OIL NEWS | www.fueloilnews.com U.S. NATURAL GAS SUPPLY IS EXPECTED TO REACH 110 BILLION CUBIC FEET PER DAY BY 2035 A new report from Navigant's global Energy Practice, the North American Natural Gas Market Outlook, Year-End 2014, examines the state of the natural gas industry and pro- vides forecasts for supply and demand through 2035. Driven by ongoing gas shale growth in the Northeast, pro- duction of natural gas in the United States continued its strong growth trajectory in 2014, increasing by 6.1 billion cubic feet per day, or 9.2%, over the course of the year. More growth in gas production is expected in the future, particularly from the Marcellus shale formation, with the only possible constraint the rate of infrastructure development in the region. "Supply side growth continues to drive most other aspects of the natural gas industry in North America," said Gordon Pickering, director with Navigant's Energy Practice. "As we explain in the Natural Gas Market Outlook, this strong sup- ply basis is giving rise to a new chapter of the gas industry, with the culmination of a half decade of new LNG project development and the beginning of a new, global market for natural gas." The opening of this new market is signaled by the open- ing of new export capacity on the U.S. Gulf Coast, according to the Natural Gas Market Outlook. The opening of Sabine Pass will signify the point at which North America becomes connected to the global gas market for the first time in his- tory—with truly global consequences for gas markets in North America and around the world. Those consequences will become fully apparent as more LNG export projects come online, the report concluded. Other findings from the Natural Gas Market Outlook, Year-End 2014: Annual average natural gas prices at Henry Hub are expected to stabilize over the near to mid-term, and grow steadily over the long-term—albeit reaching only moderate levels compared to historical gas price levels seen earlier this century. Additional infrastructure in the Marcellus and Utica shale gas regions, coming online around 2017, is expected to relieve bottlenecks and allow stranded gas to move to market, enabling prices to recover to levels similar to the broader North American gas market. U.S. natural gas demand is expected to grow steadily through 2035, particularly for electricity generation, reaching around 90 Bcfd annually by 2035. Developed by Navigant's global Energy Practice, The North American Natural Gas Market Outlook, Year-End 2014 uses an integrated process and a full suite of commercial software and proprietary energy market models to analyze the electric and fossil fuel markets. Navigant's natural gas and power models are based on key assumptions driving natural gas prices and consumption from gas-fired generation over the outlook period. The Outlook includes updated forecasts for natural gas prices, dry conventional and shale gas produc- tion, natural gas demand, and gas storage activity. NEXT STEP: ASTM RELEASES SPECIFICATIONS FOR B20 USE IN HEATING OIL The door has opened for building-and-homeowners who want to use higher blends of cleaner burning biodiesel in their heat- ing oil. ASTM International, an organization which sets industry consensus standards for fuels, on March 24 released new per- formance specifications for blends of 6-to-20% biodiesel with traditional heating oil. The existing No. 1 and No. 2 grades in ASTM D396 already cover 5% biodiesel or less. The blend is branded Bioheat® fuel. "The oilheat industry is reinventing itself as a 21st century fuel by moving to higher blends of low carbon biodiesel and ultra-low sulfur levels across the board," said John Huber, presi- dent of the National Oilheat Research Alliance. The new B6-B20 grade is a blend of all the parameters con- tained in the existing No. 1 and No. 2 oilheat grades, but adds parameters for stability and allows a slightly higher distillation temperature for the blends. The changes are the same as those for B6-B20 in on-and-off-road diesel fuel passed by ASTM in 2008. "The data set behind these changes is one of the most exten- sive I've seen in more than 20 years at ASTM," said Steve Howell of M4 Consulting, an ASTM Fellow who chairs the ASTM Biodiesel Task Force. "Having an official standard for higher bio- diesel blends in heating oil will help foster consumer confidence, and give blenders and distributors a needed tool to incorporate more low carbon, ultra-low sulfur biodiesel into heating oil." With this accomplishment, Howell said work will now begin on the next level of research needed to secure official specifica- tions for even higher blends of biodiesel in heating oil. This will likely extend to the use of pure biodiesel (B100), a stated goal of the oilheat industry. "Brookhaven National Laboratory surveys of customers already using biodiesel blends not only showed similar or better experience than with traditional fuel oil, they also showed many already use B20 or higher blends with great success," Howell said. "The technical data with this ballot for the new B6-B20 grade verified what we have known for years — that B20 made with high quality biodiesel works well," said Seth Obetz, president of Pennsylvania-based Bioheat distributor Worley and Obetz. "We have marketed high quality B20 for 14 years and our customers see fewer problems with B20 than with conventional heating oil." The official vote to change the standard took place at the December 2014 ASTM meeting. At that meeting, wholesale fuel provider Amerigreen reported that it has more than 100,000 B20 customers. The company said that number is growing in part because Bioheat fuel customers see less maintenance than with conventional fuel oil. The newly updated ASTM D396−15a "Standard Specification for Fuel Oils" will shortly be downloadable ASTM.org.