Category: US Energy Information Administration

Source: US Energy Information Administration

September 18, 2023

Data source: China General Administration of Customs, as compiled by Bloomberg, L.P.

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Record volumes of crude oil were imported into China during the first half of 2023 because of refinery expansions in the country and initiatives to reopen the economy after the government eased COVID-19 mobility restrictions. China imported an average of 11.4 million barrels of crude oil per day (b/d) in the first half of 2023, a 12% increase from 2022’s annual average of 10.2 million b/d.

In the first half of 2023, China’s crude oil imports increased from 8 of the 10 top countries it imported crude oil from in 2022, according to China’s General Administration of Customs data.

China sourced much of the additional crude oil it imported in the first half of 2023 from Russia, Iran, Brazil, and the United States. Compared with 2022 averages, China’s imports from Russia increased by 23% (400,000 b/d), from Saudi Arabia by 7% (130,000 b/d), and from Brazil by 49% (250,000 b/d). The 2.6 million b/d of crude oil that China imported from Russia in June is the largest volume China has ever imported from any country in any month. China’s imports from the United States in the first half of 2023 more than doubled from 2022.

Customs data also indicate that imports from Malaysia increased 330,000 b/d (46%) to 1.0 million b/d in the first half of 2023. During this period, the import volume from Malaysia exceeded total production in Malaysia. Industry analysts indicate that much of the oil that was shipped from Iran to China was relabeled as originating from countries such as Malaysia, the United Arab Emirates, and Oman to avoid sanctions.

Data source: China General Administration of Customs, as compiled by Bloomberg, L.P.
Note: First half of 2023=January to June. UAE=United Arab Emirates. Many imports attributed to Malaysia, the UAE, and Oman originated in Iran and were relabeled to avoid detection from customs authorities.

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According to its General Administration of Customs, refiners in China used the crude oil to process a record 14.7 million b/d of crude oil in the first half of 2023, an 8% increase from 2022’s annual average of 13.5 million b/d and more than China’s record-high annual average, set in 2021.

New refinery capacity was one reason for the record crude oil processing. The 320,000-b/d Shenghong Petrochemical refinery in Lianyungang began operations in November 2022, and the 400,000-b/d PetroChina Jieyang refinery began trial runs in February 2023.

Principal contributor: Jimmy Troderman

Source: US Energy Information Administration

(Fri, 15 Sep 2023) This report contains monthly summary data for the photovoltaic industry in the United States. Data include manufacturing, imports, and exports of modules in the United States and its territories. Summary data include volumes in peak kilowatts and average prices. Where possible, imports and exports are listed by country, and shipments to the United States are listed by state.

Source: US Energy Information Administration

September 14, 2023

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Use of energy for transportation remained low in the United States during 2021 compared with pre-pandemic levels and only increased in 12 states. Average U.S. transportation energy use decreased by 5% from 2019 to 2021, according to our State Energy Data System (SEDS). Although transportation energy use did increase in every state in 2021 compared with 2020, transportation in the majority of states still remained below 2019 pre-pandemic levels in 2021.

Our transportation sector estimates encompass energy used by vehicles to transport people and goods from one place to another, such as cars, trucks, trains, planes, and boats.

Transportation energy use increased 15% in Alaska, the largest percentage increase of any state from 2019 to 2021, mostly because of increased jet fuel use for air travel. Alaska is a major fueling stop for military, cargo, and commercial flights between North America and Asia. In 2021, jet fuel use in Alaska increased by 36% compared with 2019, the largest state-level increase, as passenger and cargo traffic exceeded pre-pandemic levels.

In Louisiana, increased use of petroleum for large marine vessels drove the second-largest increase in transportation energy use (13%), largely because of changes in shipping technology to meet international regulations. In 2021, residual fuel oil use in Louisiana, a major shipping hub along the Gulf of Mexico, more than doubled compared with 2019. Residual fuel oil is a petroleum product commonly used by international vessels. U.S. demand for residual fuel oil rose in 2021, increasing by 16% compared with 2019, in part because vessels added scrubber technology to reduce sulfur emissions and meet international standards.

Transportation energy use increased by 11% in Alabama in 2021 compared with 2019, largely because of more motor gasoline used for car travel. Although motor gasoline use in most states remained about 6% lower on average nationwide in 2021 than in 2019, motor gasoline use increased in Alabama, South Dakota, Montana, Idaho, Maine, New Mexico, Indiana, and Missouri.

The largest drop in energy use for transportation was in the District of Columbia (DC), where transportation energy use decreased by 21% in 2021 compared with 2019 because of less petroleum used by vehicles and less electricity use by its subway system. In 2021, DC’s use of diesel for trucks was down 35%, and motor gasoline for cars was down 14% compared with 2019. Electricity use for transportation in DC was down 22% over the same period in part because ridership on Metrorail (the third-largest subway system in the United States) remained 75% lower than pre-pandemic levels.

Energy use for transportation decreased by 18% in Hawaii in 2021 compared with 2019, mostly because less jet fuel was used for planes. Jet fuel accounts for more total petroleum use in Hawaii than any other state except Alaska because of its large commercial and military air travel economy. Jet fuel use in Hawaii was 24% lower in 2021 than in 2019.

Principal contributors: Mickey Francis, Sheila Hayati

Source: US Energy Information Administration

(Wed, 13 Sep 2023) This spreadsheet contains detailed information on liquids (crude oil, petroleum products, and hydrocarbon gas liquids) pipeline projects. We do not collect the data on an EIA survey, but rather we compile the data from various sources including trade press, pipeline company websites, and government agencies. These data are not a forecast. They represent last-known public information on projects, as of June 30, 2023. The status of each project is categorized as completed (since 2010), announced, under construction, on hold, or canceled.

Source: US Energy Information Administration

Source: US Energy Information Administration

(Thu, 07 Sep 2023) This site contains spreadsheets with wholesale electricity and natural gas data from eight major trading hubs that cover most regions of the United States. The data are through September 5, 2023, and are republished, with permission, from the Intercontinental Exchange (ICE).

Source: US Energy Information Administration

Form EIA-63C, Densified Biomass Fuel Report, a new EIA survey launched in January 2016, gathers information on wood pellet and other densified biomass fuel production, sales, and inventory levels from approximately 90 operating pellet fuel manufacturing facilities in the United States. Facilities with an annual capacity of 10,000 tons or more per year are required to report monthly. Smaller facilities (those with a capacity of less than 10,000 tons per year) report their production capacity annually.

EIA proposed this survey in early 2014, and got feedback from the industry on how to best collect the data. EIA received approval from the Office of Management and Budget to conduct the new survey on August 28, 2015.

Densified biomass fuel, a growing energy source in the United States, consists primarily of compressed wood pellets, briquettes, and logs. These fuels are easy and economical to store and transport. The manufacture of wood pellets utilizes wood residues from sustainably managed forests as well as high-quality wood waste from a variety of industrial activities such as construction and logging. Wood pellet combustion has a high efficiency level, averaging about 80%, and extremely low particulate emissions. Additionally, wood pellets are a renewable energy source.

Densified biomass fuel is used for heating in wood pellet stoves or furnaces in residential settings and in large-scale boilers in commercial buildings. Industry uses utility-grade wood pellets in processes that require thermal energy, such as generating electricity.

Table descriptions and definitions

Individually identifiable data on production, inventories, and sales are protected from public disclosure.

Table 1: Densified biomass fuel manufacturing facilities in the United States by state, region, and capacity
Lists the respondents to the survey, the state the facility is located in, the operating status, and annual production capacity of the facility.

Table 2: Number of operating densified biomass manufacturing facilities, full-time equivalent employees and annual capacity by region (excludes planned and small facilities)
Summarizes the number of reporting entities and the number of full-time-equivalent employees (FTEs), and the total annual capacity by region.

Table 3: Feedstocks and average cost per ton for the manufacture of densified biomass products received at densified biomass fuel facilities
Displays the feedstock purchases (tons) and average weighted cost (USD per ton) for four categories of raw materials: roundwood timber (generally, logs harvested for industrial use from sustainably managed forests), sawmill residue, wood product manufacturing residue, and other residuals. Other residuals is an aggregated category to protect individual data from disclosure and includes bark, logging residues, wood chips, post-consumer wood, unmerchantable wood (wood products that are too poor in quality or too small to convert to industrial use), and other. Details by region are not provided to protect confidentiality.

Table 4: Production of densified biomass fuel by U.S. region and densified biomass product type.
Displays the tons of wood fuel products manufactured in each region during the reporting month for three categories: heating wood pellets which includes both PFI certified as well as those without PFI certification; utility-grade wood pellets; and compressed bricks/logs. Included in heating pellets are PFI certified and not certified premium, super-premium, and standard pellets. These pellet types are primarily used for heating residences, schools, and other buildings. Utility-type pellets are generally used for electric power generation and include both those with and without certifications, such as PFI or ENplus (a European certification program) and other sustainability certifications. Compressed bricks/logs are a small part of the industry, generally used in residential heating applications.

Table 5: Characteristics of densified biomass
Displays the average heat values (Btu per pound) and moisture and ash contents (percentage by weight) of the manufactured products reported in Table 4.

Table 6: Inventories of densified biomass fuel by U.S. region and densified biomass product type
Displays end-of-month inventories (tons) for three broad categories (wood pellets, premium and standard; wood pellets, utility; and compressed bricks/logs) of densified biomass fuel products by region for the reporting month.

Table 7: Domestic sales and average price of densified biomass fuel by U.S. region.
Displays sales (tons) and average price (revenue per ton) of primarily wood pellets in the domestic heating market for the reporting month. Sales and average revenue per ton include both retail and wholesale sales.

Table 8: Export sales and average price of densified biomass fuel.
Displays U.S. export sales and average price (revenue per ton) of primarily utility-grade pellets to global markets. Protection of data precludes display of destination countries and ports.

The Pellet Fuel Institute (PFI)
The Pellet Fuel Institute is a non-profit organization made up of about 100 member companies. PFI establishes and maintains densified biomass fuel standards, among other industry-specific tasks.

PFI certification
Wood pellets that are PFI certified meet certain standards that are set by PFI and regulated by third-party inspections. PFI graded fuel is manufactured to ensure optimal performance of pellet burning stoves.

Contact: Connor Murphy (connor.murphy@eia.gov)

Source: US Energy Information Administration



Permian Region operators are drilling shorter wells, decreasing effects of higher input costs

Permian operators are drilling shorter wells, blunting the effects of rising costs of oil and natural gas production. Shorter wells help mitigate higher prices for inputs such as iron and steel tubing. In particular, these operators are moving away from drilling deep wells, which take longer to drill and require more materials, and are instead focusing on short- or medium-depth wells.

Against the backdrop of a decreasing total horizontal oil rig count in the Permian, the rig count for medium depth wells has increased compared to pre-pandemic levels. Each rig in the Baker Hughes rig count is categorized by well depth. According to data as of September 8, 2023, the rig count for wells deeper than 15,000 feet (>15,000) decreased by 69% (58 rigs) from the March 13, 2020, pre-pandemic rig count (Figure 1). In contrast, the rig count for wells between 10,000 feet and 15,000 feet increased by 2% (4 rigs) compared with March 13, 2020. This decline in >15,000 wells suggests a strategic change. Although deeper wells produce more oil per well—thereby increasing revenue—they are also more expensive to drill. We outlined this trend of rising input costs—which included drilling and other costs—in an earlier This Week in Petroleum“>This Week in Petroleum article, which showed that the costs of goods sold for large U.S. oil producers remained elevated through 2023.

The permitted depth indicates the total depth of the well, which includes vertical, directional, and horizontal portions. The permitted well depth is the depth that is reported to state authorities as the target depth of the well. Due to the variable nature of directional drilling, the permitted depth is an estimate of the final depth.

Most rigs are permitted for wells between 8,000 feet to 12,999 feet (Figure 2). Notably, the 10,000 feet to 10,999 feet range accounts for 22.9% of the total, or 64 rigs. This distribution underscores Permian operators’ inclination toward medium-depth wells that fall into the 5,000 feet to 10,000 feet or 10,000 feet to 15,000 feet categories.

One of the largest cost components of a drilling program is steel piping. The main drilling use for steel pipe is casing pipe, which is a large-diameter pipe that runs the length of the well and provides structural support to the well hole. Oil and natural gas casing strings are sometimes installed in descending diameters, depending on the operator’s drilling program.

As of July 2023, the Iron and Steel Pipes and Tubes index from the U.S. Bureau of Labor Statistics’ Producer Price Index (PPI) remains significantly higher than before the COVID-19 pandemic, which—because it is one of the largest factors in drilling costs—is having a lasting effect on operator costs and drilling strategies (Figure 3). The PPI for Drilling Oil and Gas Wells and for Support Activities did not increase as significantly as it did for Iron and Steel Pipes and Tubes, which remains elevated. In contrast, the Oil and Gas Extraction Index has declined since 2022, yet it is still higher than in March 2020. Oil and Gas Extraction costs are operating costs and account for a smaller portion of an operator’s total well expenditure, whereas drilling and support costs tend to be the most capital-intensive part of a drilling program.

Aside from the PPI, industry surveys offer further evidence that high input costs are influencing operator drilling programs. According to the Dallas Federal Reserve’s June 2023 survey, 60% of executives in the oil and natural gas industry expect non-labor input costs to increase by year-end 2023 compared with the previous year. In addition, 71% expect higher drilling and completion costs per well (Figure 4).

Output from a crude oil well depends on several factors in addition to well depth, such as the geology of the formation, the amount of proppant used, and other technological adaptations. As operators focus on minimizing costs while maintaining output, the effects on output per well from drilling shorter wells could be small but will depend on these other factors.

For questions about This Week in Petroleum, contact the Petroleum and Liquid Fuels Markets Team at 202-586-5840.

Source: US Energy Information Administration

September 13, 2023

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U.S. ethane production reached a new monthly record of 2.7 million barrels per day (b/d) in April 2023, continuing the upward trend that started in 2013, according to data from our Petroleum Supply Monthly. Increased natural gas and ethane production in the Permian Basin, which spans Texas and New Mexico, drove the national increase.

U.S. ethane production rose because of increased natural gas production. Ethane, which serves mainly as a petrochemical feedstock, is recovered along with other natural gas plant liquids (NGPLs) at natural gas processing plants as raw natural gas from wells is processed to meet natural gas pipeline specifications. Marketed natural gas production, in which we include both dry natural gas and NGPLs before they are separated out, also set records this year. For the first half of the year (1H23), U.S. marketed natural gas production averaged 111 billion cubic feet per day, a record high.

Ethane production in the Texas Inland region and New Mexico areas that include the Permian Basin accounted for 60% of U.S. ethane production during 1H23, slightly higher than the 58% share in 1H22. Ethane production in these two districts averaged 1.5 million b/d in 1H23, a 10.3% (0.1 million b/d) increase from 1H22. Ethane production during 1H23 in other U.S. refining districts was essentially unchanged from 1H22.

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U.S. ethane production grew in response to rising demand from both domestic and global consumers. An average of 2.1 million b/d of ethane was consumed in the United States in 1H23, essentially unchanged from 1H22, and ethane consumption set a record of 2.2 million b/d in May 2023. U.S. ethane exports set a record in March 2023, averaging 537,000 b/d. In 1H23, the United States exported an average of 493,000 b/d, a 90,000 b/d increase from 1H22. The United States has exported ethane for nearly a decade and became the world’s largest exporter of ethane in 2015 .

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In our Short-Term Energy Outlook, we expect ethane production to average 2.6 million b/d in 2023, a 9% increase compared with 2022, and 2.7 million b/d in 2024, a 2% increase compared with 2023. We expect domestic ethane consumption to average 2.1 million b/d in 2023, a 6% increase compared with 2022, and 2.2 million b/d in 2024, a 2% increase compared with 2023. We expect U.S. ethane exports to continue growing through the rest of 2023 and 2024, averaging 500,000 b/d by December 2024.

Principal contributor: Jordan Young

Source: US Energy Information Administration

U.S. ENERGY INFORMATION ADMINISTRATION
WASHINGTON DC 20585

FOR IMMEDIATE RELEASE
September 12, 2023

The U.S. Energy Information Administration (EIA) expects global oil inventories to decline by almost a half million barrels per day in the second half of 2023, causing oil prices to rise over the remainder of the year. In its September Short-Term Energy Outlook (STEO), EIA forecasts the Brent crude oil price will average $93 per barrel in the fourth quarter of this year, up from its August forecast of less than $88 per barrel.

Oil production cuts from OPEC+ members, including Saudi Arabia’s recently announced extension of additional voluntary production cuts, contribute to EIA’s forecasts for decreasing supplies.

“We expect crude oil prices to rise as global oil inventories decrease through the end of this year,” said EIA Administrator Joe DeCarolis. “High oil prices combined with uncertain economic conditions could lessen global demand for petroleum products through 2024.”

Even as OPEC+ continues limiting oil production, EIA expects global production of liquid fuels to continue increasing in 2023 and 2024 due to production growth in non-OPEC+ countries.

Other highlights from the September STEO include:

• Electricity: EIA estimates that natural gas consumption for electricity generation was a record high this summer, surpassing the previous record set in 2022. Natural gas consumption for electricity generation has been primarily driven by increased air conditioning demand, especially in large population centers such as Texas, Florida, and Southern California. “This summer has been another in a string of hot summers, and natural gas and renewables have played a particularly strong role in the electricity fuel mix,” DeCarolis said.

• Gasoline: EIA expects the U.S. regular-grade gasoline price to average $3.69 per gallon in the fourth quarter of 2023, up from its August forecast of $3.57 per gallon. The revised forecast is largely the result of higher crude oil prices, which are the primary component of gasoline prices. EIA also lowered its forecast for domestic gasoline consumption following a revision by the U.S. Census Bureau to its U.S. population estimates, which, in turn, reduced EIA’s estimates of how many miles U.S. motorists are driving. EIA expects U.S. gasoline consumption to average 8.9 million barrels per day in 2023, down slightly from its August forecasts.

• Propane: EIA expects propane prices at Mt. Belvieu to average 77 cents per gallon this winter heating season of October 2023 through March 2024, a slight decrease from the 81 cents per gallon average of the previous heating season. EIA will publish its full Winter Fuels Outlook on October 11, which contains forecasts for heating fuel prices, consumption, and average household fuel and energy expenditures for the coming heating season.

The full September 2023 Short-Term Energy Outlook is available on the EIA website. EIA also published Between the Lines supplements on propane prices and on small-scale solar capacity.

The product described in this press release was prepared by the U.S. Energy Information Administration (EIA), the statistical and analytical agency within the U.S. Department of Energy. By law, EIA’s data, analysis, and forecasts are independent of approval by any other officer or employee of the U.S. government. The views in the product and this press release therefore should not be construed as representing those of the U.S. Department of Energy or other federal agencies.

EIA Program Contact: Tim Hess, STEO@eia.gov

EIA Press Contact: Chris Higginbotham, EIAMedia@eia.gov