Stillwater White Papers

The RFS Point of Obligation Part 2: How are RINs generated and RFS compliance achieved?

June 6, 2017 , ,

June 6, 2017 by Michael Leister Last month in the first edition in our RFS Point of Obligation series, we discussed the general RFS rules, this month we get more specific about RIN generation and RFS Compliance.  When a renewable fuel producer like an ethanol production facility or biomass-based diesel manufacturing plant produces a compliant renewable fuel, the renewable fuel...
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California’s 2030 Scoping Plan: Changes for the Transportation Fuels Sector

June 6, 2017 , ,

June 6, 2017 by Kendra Seymour Introduction Last week President Trump withdrew the U.S. from the historic Paris Climate Agreement, signaling a lack of commitment at the federal level to combatting climate change. Many states, municipalities, and companies, however, have voiced continued support for the Paris Agreement and have affirmed their intention to fulfill the tenets of the Agreement. Sub-national...
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RFS Point of Obligation Part 1: How Does the RFS Work?

May 16, 2017 , ,

May 1, 2017 by Michael Leister For the past year or more, there has been a lot of discussion in the transportation fuels industry on moving the current Renewable Fuels Standard 2 (RFS2) point of obligation to the point where rack blending occurs. Currently the point of obligation is with refiners and importers, however the RINs for RFS compliance are...
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IMO 2020: The Next Big Thing for the Oil Supply Chain

May 16, 2017 ,

May 1, 2017 by David Hackett The term “oil supply chain” is a way to describe the activities that are required to produce crude oil out of the ground, move it to the refinery, transform the crude oil into fuel, and move the fuel to consumers.  The chief air pollutant in crude oil is sulfur. Governments and industry have been...
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A Closer Look: Integrated Majors Breaking Up with their Refineries

February 28, 2017 ,

February 28, 2017 by Jessica Loomis In recent years, several major integrated oil companies have sold off certain refineries they own because they don’t believe they are positioned to be core to their current business practices. We thought it would be interesting to examine some of these large companies as they continue to turn their focus to upstream assets, and...
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LCFS 101 – A Beginner’s Guide

February 28, 2017 ,

February 28, 2017 by Megan Boutwell Not too long ago a friend checked in looking for an LCFS tutorial. Based on that request we decided to put together a handy dandy LCFS guide. We could go on for days about this stuff, but we’ll show a little discipline and just give you the high points. The LCFS can seem like...
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Gasolinazo! What’s going on with gasoline prices in Mexico?

January 26, 2017 ,

January 26, 2017 by David Hackett The recent rise in gasoline prices in Mexico has driven significant unrest early this month. However, north of the border (where gasoline prices are higher than they were last summer), they are still cheap. What’s going on in Mexico? There are several factors contributing to the crisis. The Mexican government still sets the annual...
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Tier 3: A quick guide to the EPA’s new gasoline sulfur standards

January 19, 2017 ,

January 17, 2017 by EJ Ledet and Mike Leister Effective January 1, 2017, the U.S. Environmental Protection Agency (EPA) began requiring all U.S. gasoline to meet an annual 10 ppm average sulfur requirement as part of their new Tier 3 vehicle and fuel regulations. The 10 ppm sulfur average applies at the refinery gate, which is the point where finished...
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Second Quarter 2016 LCFS Credit Trends

November 17, 2016 ,

November 17, 2016 Each quarter, our Stillwater LCFS Quarterly Newsletter takes an in-depth look at one aspect of California’s Low Carbon Fuel Standard and other low carbon standard efforts around the country. In our latest LCFS Quarterly Newsletter, Leigh Noda analyzes the LCFS credit trends. The following is an excerpt from the latest Stillwater Quarterly LCFS Newsletter. The credits and...
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Oregon’s First Quarter of Clean Fuels Program Compliance

October 11, 2016

October 10, 2016 Each month, our Stillwater LCFS Monthly Newsletter takes an in-depth look at one aspect of California’s Low Carbon Fuel Standard and other low carbon standard efforts around the country. In our latest LCFS Monthly Newsletter, Jim Mladenik compares the first quarter of Oregon’s Clean Fuels Program with California’s LCFS first quarter. The following is an excerpt from...
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Where Demand Outstrips Capacity – U.S. East Coast Supply and Production

June 7, 2016

June 16, 2016 by David Hackett Supply to the East Coast is a complex mixture of local refineries, large pipeline movements from Texas and Louisiana and water shipments both barge and large ships.  The U.S. Energy Information Agency (EIA) divides the U.S. into five regions or PADDs (Petroleum Administration for Defense Districts) as shown in Figure 1.  The East Coast...
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When Good Term Contracts Go Bad – Lessons Learned

June 7, 2016

June 6, 2016 by Michael W. Bloch, with contributions from David Bulfin and David Wilshin Stillwater recently worked with several clients and their attorneys to resolve term contract disputes that led to litigation or arbitration. These disputes were grounded in the poor structure and understanding of the terms and conditions of the contracts. Often, the parties to the contract cannot...
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Politics at play as CFTC tries to regulate excessive speculation of energy commodities

March 29, 2016

March 29, 2016 by Barry Schaps The Federal Commodity Futures Trading Commission (CFTC) began addressing the issue of excessive speculation and its effects on energy commodities since Congress enacted the Dodd-Frank Act following the financial meltdown of 2008. The legislation, passed in 2010, ordered the CFTC to set limits on the number of futures contracts a trader could hold for...
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The Oil Outlook for 2016

February 18, 2016

February 9, 2016 David Hackett About a year ago we wrote in this space that oil prices would continue to go down. We suggested that $35 was possible for a bottom for West Texas Intermediate price, but thought it would hold around $50 or $60 per barrel. (WTI closed on February 9 at $28.39, down 26% since New Year’s Day.)...
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California Gasoline Inventory Woes Keep Retail Prices High

January 18, 2016

January 17, 2016 by John Faulstich California’s gasoline prices were often in the news in 2015 and the trend will continue in 2016. Dave Hackett of Stillwater is one member of the California Energy Commission Petroleum Market Advisory Committee which continues to look into the gasoline prices in California. A topic of discussion at the last PMAC meeting was the February 2015...
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Deregulation in Mexico: Changes to the Petroleum Supply Chain

December 11, 2015

December 10, 2015 Major changes in Mexico’s energy markets will start happening next year and it is important to understand what the landscape will look like in order to take advantage of the opportunities. On November 17th, Dave Hackett spoke about the state of the Mexican petroleum products market at the OPIS Mexico – U.S. Petroleum Summit. Dave’s presentation, Product...
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Pemex Privatization: Something to Keep Your Eye On

December 3, 2015

December 2, 2015 by Barry Schaps Around this time of year, many newsletters and blogs post screaming headlines about the “hottest” items to watch for next year. This is more of a “keep your eye on this space” notice as Stillwater Associates focuses its attention on the planned transformation of Petroleos de Mexico (Pemex). Make no mistake, the reorganization and...
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Gasoline Price Spike: What Caused the Latest Rise in Southern California Retail Prices?

August 6, 2015

August 5, 2015 by David Hackett There are three major refining centers on the West Coast, the Pacific Northwest (PNW), the San Francisco Bay (SFB), and Los Angeles (LA). The refineries in the PNW supply Washington, Oregon and California with gasoline. The SFB plants supply Northern California, Northern Nevada and Southern California with gasoline. Excess gasoline from the PNW and...
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Petroleum Product Flows by Region

June 28, 2015

June 27, 2015 by David Hackett Clients frequently ask us to explain the flows of petroleum from one region to another. Our Bubble Map is often used to explain the flows of crude oil, for example. The chart below illustrates the flow of petroleum products in and out of the U.S. by Petroleum for Administration of Defense District (PADD) for...
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What Accounts for the Recent Surge in Cellulosic Biofuels Production?

May 19, 2015 ,

May 7, 2015   by Dave Hirshfeld, MathPro Inc. EPA has pledged to issue proposed renewable fuels volume requirements for 2014, 2015, and 2016 by June 1 and final renewable fuels volume requirements for all three years by November 30. These volume requirements set the annual Renewable Volume Obligations (RVO) for refiners and other obligated parties with respect to renewable...
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Gasoline Price Hike: Why are Southern California Gasoline Prices on the Rise?

February 25, 2015

February 25, 2015 by David Hackett The press has been buzzing with gasoline price stories since the ExxonMobil Torrance refinery suffered an explosion last week, limiting the amount of gasoline it produces. Indeed retail prices are suddenly 25% higher. Using the EIA’s weekly retail price data, the chart below shows retail gasoline prices in Los Angeles bottomed the beginning of...
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The U.S. Side of the U.S.-China GHG Agreement: The Impossible Dream

February 25, 2015 ,

February 23, 2015 by Dave Hirshfeld, MathPro Inc. In November 2014, the Presidents of the U.S. and China agreed to new curbs on the two countries’ greenhouse gas (GHG) emissions, stating that: “The U.S. intends to reduce its emissions by 26%-28% below its 2005 level by 2025 and to make its best efforts to reduce its emissions by 28%.” “China...
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What Happened to California’s Cap-and-Trade Gasoline Price Hike?

January 19, 2015

January 19, 2015 by David Hackett Oil industry observers, including the Downstream Wizard, predicted that California retail gasoline prices would go up around New Year’s Day as transportation fuels would come under California’s Cap-and-Trade regulation. At current prices for carbon, Covered Entities like refiners and marketers who pay the tax on fuels, should be passing through about 10 cents per...
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The CBO Finds Future RFS Volume Mandates Pose “Significant Challenges”

December 10, 2014

December 5, 2014   by Dave Hirshfeld, MathPro Inc. In June 2014, the Congressional Budget Office (CBO) published an analysis of the feasibility and economic implications of achieving future annual renewable fuel mandate volumes1 for the federal Renewable Fuels Standard (RFS). Here in Regulation City, refining industry advocates praised the CBO analysis; ethanol industry advocates trashed it. Elsewhere, the report...
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Casino Royale: California’s Fuels Under the Cap Program

August 19, 2014 ,

August 19, 2014 by David Hackett Market participants are starting to speculate about the next phase of Cap & Trade under California’s AB32 the Global Warming Solutions Act. That phase, Fuels Under the Cap, is designed to control Greenhouse Gas (GHG) emissions from transportation fuel, including gasoline, diesel, propane and natural gas. The first phase of Cap & Trade includes...
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Crude oil is crude oil – right? Wrong!

August 19, 2014

August 19, 2014 by Barry Schaps Recently, veterans in the oil industry have been questioning their long held assumptions about what really constitutes crude oil produced at the wellhead. One may ask, with everything else going on in the world, “Why is this important?” The short and simple answer is that “traditional crude oil” (loosely defined as liquid hydrocarbons from...
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The Low Carbon Fuel Standard Continues to Evolve

June 25, 2014

June 24, 2014 by Leigh Noda Now in its fourth year to meet a ten-year target, the Low Carbon Fuel Standard (LCFS) continues to be an evolving regulation. With the extension of the 2013 standard to 2014, and the concepts discussed below that CARB introduced in March, we see a regulatory trend of CARB expanding the potential for LCFS credit...
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California and Crude-by-Rail

June 24, 2014

June 24, 2014 by David Hackett The success of drilling technology in North America’s Mid Continent has lead to a huge increase in crude oil production. In 2010, crude oil production in North Dakota was about 310 thousand barrels per day (kbd). This year, production is expected to reach 1 million barrels per day. Light sweet crude oil from the...
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The Effect of Crude-by-Rail on Refining and Logistics

April 4, 2014

On April 25th, Dave Hackett delivered a presentation at the 2014 AFPM Annual Meeting entitled The Effect of Crude-by-Rail on Refining and Logistics. Everyone in the crude oil supply chain is interested in crude-by-rail (CBR), but there are problems that have to be solved.  Crude oil production in the Mid Continent has run way ahead of infrastructure. CBR is helping...
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Upstream Commercial Support: A Simple Example for Design of Export Facilities

March 24, 2014

March 24, 2014 by Michael W. Bloch Often when Upstream projects are under development, it maybe difficult for design engineers to see beyond a specific set of capital investment goals. It is important that new Upstream projects be reviewed with a Downstream perspective in advance of making decisions, reviewing draft development plans and commercial agreements, or agreeing to preliminary or...
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What is LNG?

March 23, 2014

March 23, 2014 by Mark Pilcher LNG has been in the news a lot lately.  Political opponents have been waging a propaganda war over the economic benefits and the environmental impact of LNG exports from the U.S.  LNG has been described as a clean transportation fuel alternative to diesel, and as an environmental Trojan Horse.  More recently, LNG has been...
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Stillwater Authors Paper on Petroleum and Renewable Fuels Supply Chain for BPC

February 28, 2014

February 4, 2014 As part of an effort to foster constructive dialogue and action on reforming the Renewable Fuel Standard (RFS), the Bipartisan Policy Center (BPC) Energy Project has released three of five commissioned background papers on the RFS. Stillwater Associates is proud to be part of this conversation by providing a white paper entitled Petroleum and Renewable Fuels Supply...
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An Industrial Policy Success Story

February 28, 2014 ,

December 12, 2013 by David Hackett For a long time I’ve been concerned about the barriers that have been created to stifle industrial development in the United States. Here in California it is virtually impossible to create new industrial facilities. For example, we have a client who has been working for years to develop a new crude-by-rail unloading facility in...
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BP’s Carson Refinery Sale will Shake Up the West Coast Market

November 15, 2013 ,

Update April 23, 2012: BP has continued to be tight-lipped about the Carson Refinery Sale.  Keep checking in with Stillwater to stay up-to-date on the latest refinery sale news.  Refer to our April Newsletter to find out about East Coast refinery sales.  Be sure to sign up for our email newsletter to get in-depth downstream transportation energy news and analysis....
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What Causes Rack Loading Disruptions?

November 15, 2013

By Dennis Gannaway The distribution of gasoline and diesel from refineries and import points to sales terminal loading racks is a complex activity. Supply programs are often buffeted by shifting economics and a variety of intrusive factors. Most product supply groups have developed operating practices that prevent supply chain problems from affecting tankwagon customers, but past analysis has indicated room...
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Stillwater’s Problem Solving Process

November 15, 2013

Because we want to make a new client’s experience as efficient and productive as possible, we thought it would be helpful to explain the problem solving process Stillwater uses when we first meet a client. Clients come to Stillwater for two main purposes: Companies see opportunities they want to explore and evaluate. Stillwater has long and broad experience in transportation...
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The Impact of Shale Drilling on World Energy Markets

November 15, 2013

June 5, 2013 by David Hackett Who would have thought three or four years ago that natural gas and crude oil production in the U.S. would grow to the point of tipping the energy supply balance around the globe? According to the Wall Street Journal, cheap natural gas in the U.S. has resulted in lower energy prices in Bulgaria. As...
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