May 10, 2021 By Olivier (Olly) Macé Over the coming months, Stillwater plans to publish a series of articles highlighting potential paths to Net Zero here in the U.S. and globally. We kick off this series with an article from one of our newest Senior Associates who lives in England. Greetings from old Europe, where the interest in the energy...
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April 30, 2021 This afternoon, CARB posted the fourth quarter 2020 data for the LCFS program. The 4Q2020 report gives us insight into the credit bank situation for the nine months following COVID-19 stay-at-home orders. In today’s flash report, we offer a quick look at the fourth quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter...
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April 26, 2021 Over the weekend, the Washington State Legislature passed HB 1091, the state’s Clean Fuel Standard. The bill is now on Governor Jay Inslee’s desk awaiting signature. Assuming Governor Inslee signs the legislation, which is all but certain, Washington will join California, Oregon, and British Columbia as states/provinces on the West Coast to enact LCFS style programs that mandate the reduction of carbon emissions in the transport fuel...
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April 26, 2021 by Mike Newman, Director of Parhelion Underwriting As the aviation industry seeks to reduce its greenhouse gas (GHG) emissions, decoupling airline growth from carbon growth, Sustainable Aviation Fuel (SAF) has emerged as the leading approach to further reduce GHG emissions from jet aircraft. The world’s aviation sector currently accounts for approximately 2-3% of manmade global carbon emissions....
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April 1, 2021 By Steve Holton In the first quarter of 2021, prices at the pump have been rising steadily, leading many people to complain once again about the price of gasoline. Have you ever wondered how the price of gasoline or diesel is derived? A multitude of factors impact the price we pay at the pump including, of course,...
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March 29, 2021 By Marcy Casement The Social Cost of Carbon (SCC) represents an estimate (in dollars) of the damage to society and the environment over time from each additional metric ton (MT) of carbon dioxide emitted into the atmosphere. This figure takes into account damage from the effects of climate change, such as sea-level rise, extreme weather, and water...
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March 25, 2021 By Barry Schaps The entire transportation fuels supply chain, from crude oil wellhead to the retail service station dispenser, is full of commercial contracts requiring parties to perform specified acts in specified ways within specified timeframes. The impacts of COVID-19 have disrupted normal business activities and upended commercial transactions which may result in years of litigation. You...
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March 17, 2021 by Jim Mladenik The Washington state legislature is currently considering legislation (HB 1091) that would require fuel producers and importers to reduce the greenhouse gas emissions attributable to each unit of transportation fuel, a measure known as “carbon intensity.” Carbon intensity includes not only the emissions associated with burning fuels but also the emissions created in extracting...
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March 4, 2021 By Gary Yowell Over the last few years, the California state legislature has considered numerous bills which seek to incentivize the replacement of diesel fuel with hydrogen in the transportation sector. Such a transition would require significant investments in hydrogen retail infrastructure and hydrogen fuel cell vehicles (FCVs), and the legislature aims to soften that blow with...
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March 1, 2021 By Adam Schubert With the completion of the current season of refiner quarterly earnings reports, federal Renewable Fuel Standard credits – known as renewable identification numbers, or RINs – prices are once more in the headlines. As RIN prices have increased since the beginning of 2020, it is worth taking another look at this key element of...
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February 15, 2021 Low Carbon Fuel Standard (LCFS) programs are structured to reduce the carbon intensity (CI) of transportation fuels over time by setting progressively stricter CI reduction standards each year. All fuels with CI values higher than the standard, such as petroleum gasoline and diesel, generate deficits. Fuels produced or imported with CIs lower than the standard, such as...
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February 1, 2021 By Leigh Noda California has a history of having the highest gasoline prices in the country. Why? For one, the West Coast fuels market is isolated from other supply/demand centers. As such, the West Coast is susceptible to unexpected outages of West Coast refineries as it is unable to backfill an unexpected loss in supply by quickly...
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January 29, 2021 On Friday afternoon, January 29th, CARB posted the third quarter 2020 data for the LCFS program. The 3Q2020 report gives us insight into the credit bank situation for the six months following COVID-19 stay-at-home orders. In today’s flash report, we offer a quick look at the third-quarter data. Our comprehensive analysis will be published in Stillwater’s Quarterly LCFS Newsletter...
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January 15, 2020 By Vaughn Hulleman with Leigh Noda and Barry Schaps In our first article in this three-part series, we identified the unique impacts of the pandemic on oil products’ demand and pointed out that by the time the pandemic has resolved, there will likely be increased environmental legislation risk negatively affecting the sector. As such, acquiring downstream oil...
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December 18, 2020 by Jim Mladenik A previous Stillwater analysis determined that roughly 75% of credits in Oregon’s Clean Fuels Program (CFP) and California’s Low Carbon Fuel Standard (LCFS) programs are derived from fuels produced outside of those states. The same analysis suggested that a similar trend is likely for Washington state should it adopt an LCFS-style program. In the...
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December 15, 2020 By Vaughn Hulleman with Leigh Noda and Barry Schaps On November 15th, we published the first article of a three-part series on downstream oil and gas mergers and acquisitions. That first article covered macro and regional factors that may help answer the question at hand. This is the second article in our Downstream Oil & Gas M&A...
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November 15, 2020 By Vaughn Hulleman & Jim Mladenik The petroleum industry is known for its cyclic nature, and, traditionally, value-buyers find opportunity to acquire assets during periods of stress. The current reduction in oil products’ demand brought on by the pandemic, along with other factors, have severely distressed downstream oil and gas assets. Several refineries have already shut down...
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On November 17th, Stillwater Associates launched the West Coast Watch. This market information portal provides refined petroleum product and renewable fuels supply and demand data, industry news, and analysis to help industry leaders understand the market, spot opportunities, and act confidently. The West Coast transportation fuels market is often referred to as an island, full of complexities and obstacles...
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November 18, 2020 Through our new West Coast Watch platform, Stillwater is pleased to offer this forward-looking view on the possible changes to medium- and heavy-duty vehicle fuel demand and emissions under California’s Advanced Clean Truck Regulation. This Stillwater Special Report provides an overview of California’s Advanced Clean Truck Rule (ACT) and its impacts on medium- and heavy-duty vehicle (MHDV)...
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November 2, 2020 On Friday afternoon, October 30th, CARB posted the second quarter 2020 data for the LCFS program. The 2Q2020 report gives us insight into the credit bank situation for the three months following stay-at-home orders due to COVID-19. In today’s flash report, we offer a quick look at the second quarter data. Our comprehensive analysis will be published...
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October 22, 2020 By Kendra Seymour and Leigh Noda The West Coast transportation fuels market is often referred to as an island, and refiners in California and Washington face unique market pressures even in the best of times. West Coast refiners are isolated geographically, must produce gasoline and diesel to unique specifications, and are subject to greenhouse gas (GHG) reduction...
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October 20, 2020 by Jim Mladenik Summary California’s Low Carbon Fuel Standard (LCFS) and Oregon’s Clean Fuel Program (CFP) are designed to provide significant financial incentives for the production and blending of low-carbon fuels into the states’ transportation fuels systems. These incentives can be large enough to spur development of numerous projects to reduce the carbon intensity (CI) of ethanol,...
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September 22, 2020 By Megan Boutwell The West Coast transportation fuels market is often referred to as an island, and refiners in California and Washington face unique market pressures even in the best of times. West Coast refiners are isolated geographically, must produce gasoline and diesel to unique specifications, and are subject to greenhouse gas (GHG) reduction regulations including the...
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August 27, 2020 By Megan Boutwell The West Coast transportation fuels market is often referred to as an island, and refiners in California and Washington face unique market pressures even in the best of times. Geographic isolation, unique gasoline and diesel specifications, and greenhouse gas (GHG) reduction regulations including the federal Renewable Fuel Standard (RFS), California’s Low Carbon Fuel Standard...
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August 26, 2020 By Kendra Seymour By now, it’s no secret that the fallout from the COVID-19 pandemic and the ensuing quarantine culture has had serious effects on transportation fuels markets as people are traveling by car and by plane much less frequently. These effects are likely to linger for some time, but eventually life will return to a new...
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July 6, 2020 By Adam Schubert A number of Stillwater’s clients come to us with questions concerning ethanol-free gasoline (E0). These questions include items such as: Who uses E0 and why? How much E0 is being sold and where? What are the economics behind the product? In this article, we provide brief answers to those questions and more. Before diving...
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July 6, 2020 By Dave Hackett We have all had a wild ride the last three months, and you can see that in transportation fuel statistics. This article builds on two earlier pieces in this series (one from April 15th and a second from May 7th), tracking the wild ride that fuels have taken along with everything else since the...
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May 7, 2020 By Dave Hackett I started the first article in this series on April 15th with a question: “When was the last time you filled up?” Well, I still have not had to fill up either car, but I am down to a quarter tank on mine. Maybe this week. From a gasoline perspective, the fallout from COVID-19...
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April 30, 2020 Today, CARB posted the fourth quarter 2019 data for the LCFS program. Although probably not the thing at the front of everyone’s minds given everything else going on in the world, the LCFS program rolls on, and the 4Q2019 report gives us insight into the credit bank situation going into 2020 and forms a basis to assess...
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On April 30th, 2020, Stillwater President Dave Hackett participated in a webinar hosted by Parhelion Underwriting on the topic of how the fallout from COVID-19 will affect environmental commodities. Dave spoke about the federal Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS) credit markets. To view a PDF version of Dave’s slide deck, click here.
April 21, 2020 By Kendra Seymour As editor of Stillwater’s LCFS Newsletter and a contributor on many of Stillwater’s LCFS-related client projects, I spend most of my time working in renewables markets. Yesterday, as crude markets began showing particularly rare volatility, however, I caught up with my colleague Barry Schaps via Slack to get a better understanding of what was...
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April 15, 2020 By Leigh Noda For the past month, the Stillwater LCFS team has been publishing regular reports on how COVID-19 is affecting the LCFS program and the fuels markets governed by the program. This is the latest of that series. You can read our previous updates here. Want to receive updates like this and other in-depth analysis of the...
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April 15, 2020 (This article has been updated from the original April 14th version) By Dave Hackett When was the last time you filled up? For me, it was about a month ago. Since then, I’ve driven maybe 50 miles, mostly to the store and back. I used to fill up about once a week; now my next fill-up could...
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April 14, 2020 By Adam Schubert For U.S. refiners, profitability is tightly linked to production of the three major “light” petroleum fuel products – gasoline, diesel, and jet fuel. Individual refineries are typically configured to optimize the yield of these three products with the most economical crudes available in their region and demand in accessible markets. Relative demand for the...
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April 3, 2020 Note: The title of today’s analysis pays tribute to onetime Navy aircraft mechanic and three-time Grammy Award winner Bill Withers who died March 30th. As AP reporter Mark Kennedy observed, Withers’ “death comes as the public has drawn inspiration from his music during the coronavirus pandemic, with health care workers, choirs, artists and more posting their own renditions on...
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March 20, 2020 A month ago, WTI crude oil price closed at $52.10 per barrel, the Dow Jones closed at 29,232 and the S&P at 3,370. Yesterday, these values were $25.22, 20,087 and 2,409 respectively. Clearly, the past month has been unprecedented for both the crude oil and financial markets. Socially, almost everyone in the U.S. has had their everyday...
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March 11, 2020 By John Wolff Worldwide natural gas markets are unsettled by the current and plausible impacts of the COVID-19 virus. There has been a widely reported reduction in Chinese crude oil and products demand as auto travel, commercial deliveries, and airline flights have been reduced. The likely duration of the economic impacts is not clearly understood at present....
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March 10, 2020 By Leigh Noda The last week of February marked the biggest drop in the stock market since the financial crisis of 2008. The S&P index was down 11.5% on the week ending February 28th. The Dow Jones was down 12.4% over the same week. This compares to the week ending October 10, 2008 when the S&P index...
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February 11, 2020 By Ralph Grimmer Over the past three years, Stillwater Associates has offered a series of articles on various aspects of IMO 2020. The long-awaited IMO 2020 regulations were implemented on January 1, 2020 – 40 days ago. In this article, we will provide our takeaways on how the initial rollout has gone, a recap of strategies/tactics that...
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February 6, 2020 By Jim Mladenik Alternate jet fuel (AJF, also known as bio-jet or renewable jet fuel) has made the news lately as it is now included as an opt-in fuel under California’s Low Carbon Fuel Standard (LCFS), and many airlines are clamoring to reduce their carbon footprints and paint themselves as more climate-friendly. But the production of and...
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January 15, 2020 By Ron Pike In an effort to further reduce hydrocarbon consumption in the U.S., 95 RON (Research Octane Number) gasoline has been suggested as a way to help achieve proposed higher corporate average fuel economy (CAFE) requirements. A higher RON allows an internal combustion engine to run at a higher compression ratio, achieve more power, and, therefore,...
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January 10, 2020 By Kendra Seymour In the course of our work, and due to our own curiosity, Stillwater tracks the California gasoline market. We thought our findings might be interesting to our readers as well! In our latest review of the data, we see that the strength of the retail margin (retail less taxes less climate change costs less...
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January 5, 2020 by Mike Leister and E.J. Ledet Effective January 1, 2017, the U.S. Environmental Protection Agency (EPA) began requiring all U.S. gasoline to meet an annual 10 parts per million (ppm) average sulfur requirement as part of its new Tier 3 vehicle and fuel regulations. (Stillwater wrote a quick guide to Tier 3 back then, and it’s still...
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October 22, 2019 By Dave Hackett On Monday, October 21, my friends at the California Energy Commission (CEC) released “Additional Analysis on Gasoline Prices in California.” This report is a follow-on to a May 2019 report that had been requested by Governor Gavin Newsom. Both reports examine why California gasoline prices are higher than the rest of the country. These...
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October 15, 2019 By Gary Yowell Estimating vehicle miles traveled (VMT) has important implications for analyzing and forecasting transportation fuel use and carbon dioxide CO2 emissions. VMT estimates are frequently used as the foundation for transportation fuel use analyses and forecasts. This practice should be carefully examined, especially given the four widely varying VMT estimates found for the same historic...
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September 25, 2019 by Simoon Cannon The recent bombing of the Saudi Arabian Abqaiq gas-oil separation processing plant on September 14th sparked a frenzy of conversations among oil and gas professionals. Wall Street wanted to know how this geopolitical event would affect the price of crude oil, whether it would become a macroeconomic nightmare for the demand and supply balance...
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September 20, 2019 by Jeff Kennedy “The more things change, the more they stay the same.” I’m sitting here on a Friday afternoon, contemplating just how true that old adage is. More than 25 years ago, before Stillwater was launched and before the ExxonMobil merger, I was with Mobil West Coast Supply in Long Beach working with many of the...
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On September 19th, Stillwater Senior Associate Ralph Grimmer presented at the 2019 West Coast Harbor Safety Committee Summit on the Queen Mary off the coast of Long Beach. The summit was sponsored by the California Department of Fish and Wildlife’s Office of Spill Prevention and Response (OSPR) and the Pacific States/British Columbia Oil Spill Task Force. Ralph spoke about the...
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September 1, 2019 by Mike Newman of Parhelion Underwriting 2018 saw the shipping industry take its first steps towards addressing the challenge of climate change when, at its 72nd session in April, IMO’s Marine Environment Protection Committee (MEPC) adopted an initial strategy to reduce greenhouse gas (GHG) emissions from shipping by at least 50% by 2050. The United Nations body...
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June 27, 2019 By Ralph Grimmer IMO 2020 implementation is six months away, and shipowners will likely start purchasing IMO 2020-compliant marine fuel (for vessels without onboard scrubbers) in the next three months. Stillwater Associates has offered a series of articles on various aspects of IMO 2020 over the past two years. In this month’s article, we provide an update...
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June 26, 2019 By Dave Hackett Last month, I wrote about spot California gasoline prices and promised to write about California retail gasoline prices this month. As explained by my Petroleum Market Advisory Committee (PMAC) colleague, Professor Severin Borenstein, the retail gasoline prices in this state are higher than the U.S. average, even after deducting California’s high taxes and fees....
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June 22, 2019 By Adam Schubert Rising gasoline prices are making headlines, and though there are many forces at work, one of those contributing factors isn’t receiving the same buzz as others. Corn farmers are facing incredible challenges this year, creating upward pressure on ethanol prices which in-turn increase the prices of the final, blended gasoline. Stillwater is tracking the...
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May 28, 2019 By Dave Hackett Stillwater has been writing about California gasoline prices for a long time. Because gasoline prices on the West Coast, and in California in particular, tend to be volatile toward the upside, this issue always gets the attention of consumers and politicians. Our first engagement to look at this subject came from the California Energy...
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By Megan Boutwell We first created the graphic below, illustrating the flow of petroleum products in and out of the U.S. by PADD for the year, for a talk at a conference a few years ago. One of our friends who attended that conference asked for an update, so today we’re offering just that! As the figure shows, the U.S....
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April 17, 2019 By Kendra Seymour California’s gasoline prices consistently outpace average pump prices across the U.S., but in the past month, Californians have experienced an average price increase of roughly 60 cents per gallon, spiking the Golden State’s fuel prices even higher than usual, as you can see in the chart from GasBuddy, below. What’s going on here? Why...
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April 16, 2019 By John Faulstich With the recent increase in gasoline prices in California (the retail gas price average just bumped up over $4 per gallon) and renewed interest in this subject, we thought it timely to present an overview of the major components of what goes into the price of gasoline at the pump. The U.S. Energy Information...
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March 20, 2019 By Jim Mladenik & Ralph Grimmer Over the past two years, Stillwater Associates has offered a series of articles on various aspects of IMO 2020. Implementation of IMO 2020 is now less than ten months away. In this article, we will provide information on data sources providing visibility to spot and futures prices for IMO 2020-compliant blends...
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March 1, 2019 By John Wolff Anthony Teo discussed DNV GL’s 2018 Energy Outlook during the Liquefied Gas Senior Executive Forum in Houston which was hosted by the U.S. Coast Guard (USCG) on December 4, 2018. DNV GL’s second annual independent energy modeling outlook extended the forecast to 2050, from a forecast to 2030 in its 2017 report. In his...
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Acuity Commodities has partnered with Stillwater Associates to model three scenarios reflecting implementation of new International Maritime Organization (IMO) marine fuel rule from January 1, 2020, when the maximum sulphur content in bunker fuel oil has to be reduced to 0.50%. With the IMO 2020 implementation deadline unlikely to be postponed and less than 12 months away, sulphur and acid...
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November 14, 2018 by Mike Newman of Parhelion Underwriting Under the Renewable Fuel Standard (RFS), the Environmental Protection Agency (EPA) imposed a “buyer beware” approach to the purchase and sale of Renewable Identification Numbers (RINs). This creates a liability for any buyer of RINs, making them responsible for purchases of invalid RINS, even if done inadvertently.[1] The liability includes the...
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October 17, 2018 by Dave Hackett Stillwater is often asked to provide forecasts for petroleum demand. Clients use these forecasts to understand how the market is likely to change. For the last four or five years, we have predicted a drop in gasoline demand, mostly driven by cars and light-duty trucks getting better gas mileage as the result of the...
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by Brian Conroy When Stillwater Associate Brian Conroy worked for BP in 2006 as Global Sales and Market Development Manager of Specialty Chemicals, he was offered an opportunity to try something new. With a background in chemicals, beginning in research and progressing to various roles in business, he was ready for the change. BP’s CEO had mandated the launch of...
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July 25, 2018 By Jim Mladenik and Kendra Seymour Showing the line-item cost to consumers of carbon-reduction programs assists legislators in crafting effective policy and helps fuel consumers make informed decisions. To that end, Stillwater’s carbon policy team recently conducted an analysis of the potential impact of California’s Low Carbon Fuel Standard (LCFS) and Carbon Cap & Trade (C&T) programs...
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July 11, 2018 by Ralph Grimmer The International Maritime Organization (IMO) will make a significant change to the maximum allowed sulfur content of marine fuel consumed on open oceans beginning January 1, 2020. This global change (via IMO revision of its MARPOL VI rule) was triggered by an IMO decision in 2008. Over the past year, Stillwater Associates has offered...
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On June 19, 2018, Stillwater’s President, Dave Hackett, participated as a panel member in an informational hearing on the Low Carbon Fuel Standard (LCFS) held by the California State Assembly’s Select Committee on California’s Energy Future. The panel included an overview of the LCFS offered by the Legislative Analyst’s Office followed by comments from regulated parties and interested stakeholders. Dave...
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The last time we checked in on crude oil spot prices in bubble map form, the map showed how restricted pipeline capacity had led to big Western Canadian Select (WCS) discounts. Now, four months later, the bubble map tells the same story of crude oil production outpacing logistics – only this time in West Texas. On June 5th, spot West Texas...
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June 5, 2018 by Kendra Seymour Contributors: James Ahrens, John Faulstich, Ralph Grimmer, Jim Mladenik, and Arshad Sheikh Let’s go back in time, to the late 1970s when sulfur regulations for fuel oil were less stringent and heavy San Joaquin Valley (SJV) crude was priced extremely low. This SJV was often minimally processed then dumped into the bunker fuel market...
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May 2, 2018 by Stillwater Staff There’s a battle brewing between two provinces in Canada over a pipeline, and it may cause transportation fuels prices to spike at least in the short-term. Here we offer the backstory to get you up-to-date. In 2013, Kinder Morgan filed an application with the Canadian National Energy Board to essentially twin the existing 1,150...
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As the passage of AB 398 has strengthened and extended California’s Cap and Trade program, we think our readers will benefit from a spotlight on the trends in the carbon credit market. As such, we periodically feature guest articles on California’s Cap and Trade program from our friends at CaliforniaCarbon.info. CaliforniaCarbon.info is a comprehensive information service covering the Western Climate Initiative...
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February 9, 2018 By David Hackett Stillwater Associates is often retained to analyze markets. Currently, we have a project for the Fuels Institute to look at the demand for higher octane gasoline in the future. This analysis is driven by the growing demand for higher octane gasolines that cars increasingly need to maximize the performance of their turbocharged engines. In...
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As the passage of AB 398 has strengthened and extended California’s Cap and Trade program, we think our readers will benefit from a spotlight on the trends in the carbon credit market. We will be featuring guest articles on California’s Cap and Trade program from our friends at CaliforniaCarbon.info. CaliforniaCarbon.info is a comprehensive information service covering the Western Climate Initiative...
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As the passage of AB 398 has strengthened and extended California’s Cap and Trade program, we think our readers will benefit from a spotlight on the trends in the carbon credit market. Starting this month, we will be featuring guest articles on California’s Cap and Trade program from our friends at CaliforniaCarbon.info. CaliforniaCarbon.info is a comprehensive information service covering the...
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July 12, 2017 By Jessica Loomis The word “fracking” is as tied to the state of Colorado these days as “skiing”, “mountains” and “snow”. Fracking is the process of drilling vertically or horizontally far below the surface to inject water, sand. and chemicals at a very high pressure into rocks that are believed to have crude oil and natural gas...
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January 25, 2017 This month, we decided to take a look back at January 2016 and compare it to our first Bubble Map of 2017. Last year at this time oil prices were in the basement. In our January 15, 2016 blog, WTI was listed at $29 per barrel, with Brent in the same spot. Oil prices are definitely looking...
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October 12, 2016 This month in Wisdom from the Downstream Wizard we thought it might be a good idea to dust off the Bubble Map and take a look at the differentials around the country. Back in January when we declared the Mid Continent crude oil arbitrage closed, WTI was $29 a barrel. While prices have gone up since then,...
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December 10, 2015 The December Bubble Map shows crude oil prices dropping overall while differentials to WTI have remained relatively stable. Prices on December 9th show WTI dropping from $46 to $37 since our last blog in October. The WTI/Brent differential has widened slightly at $3 over WTI. The Bakken discount has widened to $8 under WTI. The Western...
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July 28, 2015 by Dave Hirshfeld, MathPro, Inc. Refining is the key link in the global supply chain extending from the production of crude oil to end-use consumption of refined products. Crude oil as it exists at the wellhead is essentially worthless; a crude oil’s value is in the value of the products made from it. Petroleum products produced...
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