New sulfur caps for shipping fuels will help make the shale boom even bigger

[Elderberry]

Washington Examiner  by Bruce Thompson May 06, 2019

The shale revolution here in the U.S. has reduced energy prices for consumers and saved taxpayers money on heating, cooling, and transportation bills. Because of our record production levels, America is less dependent on imports of crude oil and natural gas, which strengthens our trade balances, enhances energy security, and provides widespread economic benefits.

Now the shale revolution will help shippers across the world comply with the International Maritime Organization’s 2020 standards, called “IMO 2020,” which cap sulfur emissions from ships. These standards will have significant benefits for American competitiveness, public health, and the U.S. shale revolution itself.

IMO 2020 reduces the sulfur content in marine fuels from 3.5% to 0.5%, bringing the global limits more in line with what America has already been doing for years. The United States has a proven track record of producing next-generation fuels that are five times more stringent than IMO 2020 and getting them to market. The rest of the world is just now catching up, and U.S. shale is poised to benefit. Other countries will look to the U.S. for help in procuring fuels needed to comply with IMO 2020.

U.S. industry has invested tens of billions of dollars to upgrade the infrastructure necessary to comply. But less complex European refiners have not. They will need to run their facilities more economically by refining lighter, sweeter crude that naturally has lower sulfur content.

More: https://www.washingtonexaminer.com/opinion/op-eds/new-sulfur-caps-for-shipping-fuels-will-help-make-the-shale-boom-even-bigger

[IsailedawayfromFR]

Danger Will Robinson!

There is a finite growth in the unconventional drilling for liquid hydrocarbons.  There simply is not enough suitable basins to provide a continually-extractable amount of liquids technically.

Too many people are simply extrapolating current trends to provide a basis to predict the future.

Won't happen.

Sometime during the next decade, those places in this country suitable for producing commercial new oil well drilling will be exhausted and an inevitable decline will result.

Natural gas is another matter entirely.  It is virtually unlimited and capable of phenomenal growth for decades.

[thackney]

Danger Will Robinson!

There is a finite growth in the unconventional drilling for liquid hydrocarbons.  There simply is not enough suitable basins to provide a continually-extractable amount of liquids technically.

Too many people are simply extrapolating current trends to provide a basis to predict the future.

Won't happen.

Sometime during the next decade, those places in this country suitable for producing commercial new oil well drilling will be exhausted and an inevitable decline will result.

Natural gas is another matter entirely.  It is virtually unlimited and capable of phenomenal growth for decades.

I suspect much of the Low Sulfur Marine Fuel will move to LNG.

IMO sulfur cap rules spark increasing appetite for LNG
https://www.lngindustry.com/lng-shipping/16082018/imo-sulfur-cap-rules-spark-increasing-appetite-for-lng/

Tough new rules on marine fuel are forcing shipowners to explore LNG as a cleaner alternative and ports such as Gibraltar are preparing to offer upgraded refuelling facilities in the shipping industry’s biggest shake-up in decades, reports Reuters.

From 2020, International Maritime Organisation (IMO) rules will ban ships from using fuels with a sulfur content above 0.5%, compared with 3.5% now, unless they are equipped to clean up sulfur emissions. To meet the sulfur rules in 2020, shipping companies can use low-sulfur fuel, install a scrubber and continue to use heavy fuel oil, or switch to LNG.

Using LNG to power ships instead of heavy fuel oil or the lighter marine gasoil can reduce polluting emissions of nitrogen oxides and sulfur oxides by 90 to 95%, according to industry estimates. Analysts at Swiss bank UBS estimate that the green shipping market could be worth at least US$250 billion over the next five years....

[IsailedawayfromFR]

I suspect much of the Low Sulfur Marine Fuel will move to LNG.

IMO sulfur cap rules spark increasing appetite for LNG
https://www.lngindustry.com/lng-shipping/16082018/imo-sulfur-cap-rules-spark-increasing-appetite-for-lng/

Tough new rules on marine fuel are forcing shipowners to explore LNG as a cleaner alternative and ports such as Gibraltar are preparing to offer upgraded refuelling facilities in the shipping industry’s biggest shake-up in decades, reports Reuters.

From 2020, International Maritime Organisation (IMO) rules will ban ships from using fuels with a sulfur content above 0.5%, compared with 3.5% now, unless they are equipped to clean up sulfur emissions. To meet the sulfur rules in 2020, shipping companies can use low-sulfur fuel, install a scrubber and continue to use heavy fuel oil, or switch to LNG.

Using LNG to power ships instead of heavy fuel oil or the lighter marine gasoil can reduce polluting emissions of nitrogen oxides and sulfur oxides by 90 to 95%, according to industry estimates. Analysts at Swiss bank UBS estimate that the green shipping market could be worth at least US$250 billion over the next five years....

And that seems a likely scenario, at crude's detriment.

It is the continued, escalating drilling toward liquids that will not occur during the next several years.

I have been involved in too many drilling programs where companies deem it will last forever, the bane of our industry.