Monday, July 20, 2015

Rosetta Resources Now A Wholly-Owned Subsidiary Of Noble -- July 20, 2015

Rigzone is reporting:
Rosetta Resources Inc. will officially be a wholly owned subsidiary of Noble Energy Inc. by close of business July 20, according to a news statement from Noble.
The acquisition introduces Noble into the highly coveted Eagle Ford Shale and the Permian Basin with more than 50,000 net acres in each. Noble expects more than 15 percent annual production growth for an average of more than 100,000 barrels of oil equivalent per day in 2018.
This article appeared the same day as the following article appeared, also from Rigzone:
Energy producers are abandoning the search for oil and natural gas close to shore in the U.S. Gulf of Mexico as drilling budgets shrink and exploration migrates to land-based shale fields. The number of permits for new wells in seas less than 500 feet (152 meters) deep plunged 74 percent to nine during the first six months of this year from a year earlier
A bit more:
It’s a different story in the deep waters of the Gulf, where exploration is proceeding apace with 2014, undaunted by the rout in crude prices. During the first six months of this year, 31 permits were approved for new wells, unchanged from a year earlier.
The BSEE defines anything beyond 500 feet as deep water. That differs from much of the industry, which regards 1,000 feet as the cutoff point.

The Oasis Lawlar Wells In North Tobacco Garden -- July 20, 2015


July 12, 2018: upgraded graphic --

July 12 2018: IPs and production data updated; see below.

December 10, 2017: look at the bump in production for an old Lawler well:
  • 20460, 1,195, Oasis, Lawlar 26-35H, 26 stages, 2.1 million lbs, t9/11; cum 408K 12/20; back on-line 9/17; off-line for most of 2017; huge bump in 9/17 and 10/17; according to FracFocus this well has not been refacked --

December 10, 2017: updated; it looks like all the Lawlar wells that were SI/NC are now back on confidential. Production data has been updated below.

September 23, 2017: Lawlar wells back on conf; IPs not reported but production is being reported:

31645, 548, t8/17; cum 252K 12/20:

DateOil RunsMCF Sold

31644, 1,126, t8/17; cum 274K 12/20:

DateOil RunsMCF Sold

31643, 960, t8/17; cum 191K 12/20:

DateOil RunsMCF Sold

31642, 1,368, t10/17; cum 319K 12/20:

DateOil RunsMCF Sold

31640, 1,042, t8/17; cum 346K 12/20:

DateOil RunsMCF Sold

31634, 1,058, t7/17; cum 309K 12/20:

DateOil RunsMCF Sold

31633, 2,078, t7/17; cum 210K 12/20:

ateOil RunsMCF Sold

31632, 1,762, t7/17; cum 258K 12/20:

DateOil RunsMCF Sold

31631, 52,083, t7/17; cum 307K 12/20:

DateOil RunsMCF Sold

31630, 1,497, t7/17; cum 244K 12/20:

DateOil RunsMCF Sold

31629, 548, t7/17; cum 438K 12/20:

DateOil RunsMCF Sold

July 19, 2016: in the July 18, 2016, daily activity report, Oasis renewed eleven (11) Lawlar N permits in North Tobacco Garden, all with permit numbers 316XX.

Two screen shots of the area. The first screenshot is of the general area; the second screen shot zooms in a bit:

Original Post
These are the Lawlar wells in section 23-151-99. There are multiple operators and multiple locations with Lawlar wells.

The Oasis Lawlar wells in section 23-151-99, North Tobacco Garden (in 4/17, several of the wells on SI/NC status went to conf status):
  • 20459, AB/IA/1,443, Oasis, Lawlar 23-14H, t9/11; cum 216K 6/18; off-line for most of 2017; off-line, again as of 3/18; remains off-line 11/18; remains off line 10/19;
  • 20460, 1,195, Oasis, Lawlar 26-35H, 26 stages, 2.1 million lbs, t9/11; cum 408K 12/20; back on-line 9/17; off-line for most of 2017; huge bump in 9/17 and 10/17; according to FracFocus this well has not been refacked; full production data at this post;
  • 31629, 2,208, Oasis, Lawlar N 5199 41-23 2B, N Tobacco Garden, t7/17; cum 438K 12/20;
  • 31630, 1,497, Oasis, Lawlar N 5199 41-23 3T, N Tobacco Garden, t7/17; cum 244K 12/20;
  • 31631, 2,083, Oasis, Lawlar N 5199 42-23 4B, N Tobacco Garden, t7/17; cum 295K 10/19;
  • 31632, 1,762, Oasis, Lawlar N 5199 42-23 5T, N Tobacco Garden, t7/17; cum 244K 10/19;
  • 31633, 2,078, Oasis, Lawlar N 5199 42-23 6B, N Tobacco Garden, t7/17; cum 292K 10/19;
  • 31634, 1,058, Oasis, Lawlar N 5199 42-23 7T, N Tobacco Garden, t7/17; cum 285K 10/19;
  • 31640, 1,042, Oasis, Lawlar N 5199 43-23 8T, N Tobacco Garden, t8/17; cum 333K 10/19;
  • 31642, 1,368, Oasis, Lawlar N 5199 43-23 9B, N Tobacco Garden, t10/17; cum 290K 10/19;
  • 31643, 960, Oasis, Lawlar N 5199 44-23 10T, N Tobacco Garden, t8/17; cum 183K 10/19;
  • 31644, 1,126, Oasis, Lawlar N 5199 44-23 11BX, N Tobacco Garden, t8/17; cum 355K 10/19;
  • 31645, 548, Oasis, Lawlar N 5199 44-23 12TX,  N Tobacco Garden, t8/17; cum 236K 10/19;

Canadian National Railway Easily Beats Expectations -- July 20, 2015; New Post-Boom Low For Active Rigs In North Dakota; Ten (10) New Permits

First, before we get to the Bakken, Canadian National Railway posts than expected results:
Canadian National Railway Co. on Monday reported a better-than-expected second-quarter profit and reaffirmed its full-year earnings outlook, despite a Canadian economic slowdown.
The Montreal railroad operator earned 886 million Canadian dollars ($682 million), or C$1.10 a share, up from C$847 million, or C$1.03, a year earlier. Adjusted earnings came in at C$1.15 a share, handily beating analyst expectations for earnings of C$1.05 a share.
Revenue was C$3.125 billion, coming in very slightly ahead of year-earlier levels and analyst expectations.
Now, back to the Bakken:

Active rigs:

Active Rigs70195207184134

Wells coming off confidential list Tuesday:
  • 26772, SI/NC, Zavanna, Double Down 24-13 2H, East Fork, no production data,
  • 27671, 1,062, Hess, EN-Leo E-154-94-2423H-7, Alkali Creek, t5/15; cum 7K 5/15; after 6 days;
  • 28184, drl, XTO, Nelson Federal 21X-5A, Antelope, no production data,
  • 28315, 354, EOG, Parshall 39-1608H, Parshall, t1/15; cum 71K 5/15; choked back
  • 28671, 565, EOG, Parshall 83-2827H, Parshall, t1/15; cum 50K 5/15; choked back, no doubt
  • 28801, drl/NC, CLR, Alpha 4-14H1, Camp, no production data,
  • 28809, A, Fidelity, Henry 1-12H, Zenith, no test date; cum 37K 5/15;
  • 29395, 122, Denbury, CHSU 11-36SH 15, Cedar Hills, t4/15; cum 7K 5/15;
  • 30009, drl/NC, MRO, CK USA 31-6H, Murphy Creek, no production data,
  • 30455, SI/NC, Statoil, Panzer 22-23 7TFH, Alger, no production data,
Ten (10) new permits --
  • Operators: BR (3), Oasis (3), SM Energy (2), Hess (2)
  • Fields: Elidah (McKenzie), Missouri Ridge (Williams), West Ambrose (Divide), Hawkeye (McKenzie)
  • Comments:
One permit was canceled: a Whiting P Thomas well in Williams County, 2HA, #28911

13 MW Solar Farm For Camp Lejeune, North Carolina -- July 20, 2015

It took three different google searches to find an article that actually had the estimated cost of this project:
Duke Energy, the nation’s largest electric power holding company, is working with the Navy to build a 13-megawatt solar facility at Marine Corps Base Camp Lejeune in eastern North Carolina, the company’s first solar project at a military installation.
I wonder why?
The project is expected to cost between $25 million and $30 million, and will use monocrystalline solar panels supplied by SolarWorld Americas. GE’s Power Conversion business will supply its Brilliance two-stage Ultra tracking inverters.
$30 million / 13 MW = $2.3 million / MW. 

It will require back up by conventional power plants, but it will make everyone feel better to see those panels "working" every day the sun is shining.

The $2.3 million / MW is right in line with last year's quote:
From an August 25, 2014, post, this is 30-second sound bite for "cost of renewable megawatt":
  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW

The EPA Chief Said This, Not Me -- July 20, 2015; One One-Hundredth Of A Degree! You Have Got To Be Kidding --- And Yes, Arctic Ice Increased In 2013

When it rains, it pours. First, we have the reminder that NOAA fudged the temperature data all these years. Then we hear from the EPA itself that all the Obama global warming regulations will, at best, reduce global temperature by one-one hundredth of a degree.

Now we find out that the extent of Arctic ice actually increased in 2013 rather than decreased as we were previously led to believe. Everyone agrees. Arctic ice decreased in 2013 because we now have the Washington Post spin that we can't rely on data from one year to even let us question anthropogenic global warming. Here's the story:
One of the most obvious effects of global climate change is that it’s causing ice to melt all over the world, especially at the planet’s frozen poles. Ice losses have been observed for years now in glaciers and ice sheets, as well as in Arctic sea ice — the ice that floats on top of the ocean. In a confusing twist, though, new research published Monday is showing that there was a large increase in Arctic sea ice in 2013, rather than a decrease.
The study, published Monday in the journal Nature Geoscience, examines observations of sea ice volume between 2010 and 2014, derived from measurements taken by the European Space Agency’s CryoSat-2 satellite. These observations indicate that there was an unexpected increase in Arctic sea ice between 2012 and 2013, when sea ice volume increased by a whopping 41 percent — a result that “was really quite surprising,” says Rachel Tilling, a doctoral student at the University College London and lead author of the study.

The sudden increase meant that, overall, there was 33 percent more ice in 2013 and 25 percent more in 2014 compared to the average amount of sea ice that was present between 2010 and 2012. The researchers attribute the surprising increase to unusually cool conditions in 2013, which caused there to be 5 percent fewer “melting days” — warm days in the summer during which sea ice is actually melting — that year. (There are a certain number of days each summer, when temperatures are highest, that cause sea ice to melt — at least some of the ice then refreezes in the winter when temperatures start to cool back down again.)
Here's the spin:
The key thing to remember here is that conditions in 2013 were very unusual compared to the overall trend the Arctic has seen the last few decades. In fact, the authors point out that the cool conditions and fewer melting days observed in 2013 were more typical of conditions observed during the late 1990s. This means what happened in 2013 was an anomaly — an effect that is significantly different than the conditions that are usually observed. When looking at graphs that show changes in Arctic sea ice over the course of the last few decades, there’s still a definite downward trend.
Yes, very unusual: 21 years of no evidence of a warming trend.
One One-Hundredth Of A Degree Because ... Hey, It Makes Us Feel Better


EPA Chief Admits Obama Regs Have No Measurable Climate Impact: ‘One one-hundredth of a degree?’ EPA Chief McCarthy defends regs as ‘enormously beneficial’--
CHAIRMAN LAMAR SMITH: “On the Clean Power Plan, former Obama Administration Assistant Secretary Charles McConnell said at best it will reduce global temperature by only one one-hundredth of a degree Celsius. At the same time it’s going to increase the cost of electricity. That’s going to hurt the lowest income Americans the most. How do you justify such an expensive, burdensome, onerous rule that’s really not going to do much good and isn’t this all pain and no gain.
ADMINISTRATOR GINA MCCARTHY: “No sir, I don’t agree with you. If you look at the RIA we did, the Regulatory Impact Analysis you would see it’s enormously beneficial.
CHAIRMAN SMITH: “Do you consider one one-hundredth of a degree to be enormously beneficial?
ADMINISTRATOR MCCARTHY: “The value of this rule is not measured in that way. It is measured in showing strong domestic action which can actually trigger global action to address what’s a necessary action to protect…” [Translation: It makes us feel good.]

CHAIRMAN SMITH: “Do you disagree with my one one-hundredth of a degree figure? Do you disagree with the one one-hundredth of a degree?”
ADMINISTRATOR MCCARTHY: “I’m not disagreeing that this action in and of itself will not make all the difference we need to address climate action, but what I’m saying is that if we don’t take action domestically we will never get started and we’ll never…”
CHAIRMAN SMITH: “But if you are looking at the results, the results can’t justify the cost and the burden that you’re imposing on the American people in my judgement.”
And yet Congress won't act.

By the way, remember those popsicle sticks I planted in the beach back in 2007 with millimeter markings to measure the rise in sea level. When I was in southern California this past month I went out to check on the sticks. Based on those readings, I can say that there has been no evidence of any sea level rise on Cabrillo Beach, San Pedro, south Los Angeles. For now, the huge dikes that are being proposed to protect the bullet train from the flooding ocean waters are not yet needed.

HAL Beats Estimates; "Beats" Estimates? Smashes Through Estimates! -- July 20, 2015, Part III

HAL beats estimates:
Halliburton Co, the world's No.2 oilfield services provider, reported a better-than-expected quarterly profit as costs cuts helped offset the impact of a steep drop in drilling activity.
The company also said it was "fully committed" to completing its takeover of smaller rival Baker Hughes Inc, after the U.S. Department of Justice extended its review of the deal.
Halliburton's shares rose 3 percent to $41.25 in premarket trading on Monday. The Halliburton-Baker Hughes deal is facing stiff regulatory scrutiny because the companies have overlapping businesses in the United States, Asia and Europe.
Halliburton has put up three drilling businesses for sale to alleviate regulatory concerns and said on Monday it was "pleased with the prices and level of interest" it had received.
44 cents vs 29 cents expected.

This is not an investment site. 'Nuf said.

Two Dots To Connect

The Fed directs eight (8) largest banks to hold extra capital. The headline is a bit misleading:
JPMorgan is the only one that doesn't already meet the requirements. It currently falls about $12.5 billion short, according to Fed officials.
However, why is the Fed worried at this moment about failures and bailouts?

Commodity prices plunge to their lowest since 2002. This make borrowing that much more difficult for these oil companies just as the Fed is getting ready to raise rates anyway. Huge challenge for oil and gas companies. 

Renewable Energy Fees Proposed By MDU -- July 20, 2015

Back on July 16, 20215, I posted this short note, a link sent to me by a reader:
MDU to impose fee on customers who install solar/wind with intent to sell electricity back to utility.
Now, an update:
BILLINGS, Mont. (AP) — A proposed fee for some Montana-Dakota Utilities customers who use their own wind or solar power has drawn opposition from renewable energy backers who say the company is trying to stifle small-scale electricity generation.
The Public Service Commission said the fee is unprecedented for customers who use "net-metering," which allows homeowners or businesses to sell excess power they generate back to the grid in exchange for credit on their bills.
It's built into a 21-percent rate increase that's proposed for about 26,000 eastern Montana customers. The Bismarck, North Dakota-based utility says it needs additional revenue to cover its increasing costs, including $400 million in pollution controls at coal plants in Montana and South Dakota.
The fee would apply to only a few current customers, according to the company, but critics said its impact would grow as more people seek to lower their electricity bills with investments in small-scale renewables.
MDU customer Jean Dahlman, whose family ranches near Forsyth, said she's considering solar power to offset a rate increase that would cost her and her husband about $29 a month, or $343 a year.
Say what you want, regardless of what side of the fence you stand, that $400 million for pollution controls at coal plants in Montana and South Dakota got my attention.

That 21-percent utility rate increase is very similar to the health care premium increases expected in 2016 under ObamaCare. I'm starting to see a trend. 

With regard to the $29/month, I would have to see more data. Might the current monthly bill for an "average" Montana ranch be about $350? I don't know. But my monthly electric bill for a one-room apartment in Texas runs about $100 in the summer.

It seems to me there must be some cost to tracking, billing, and managing the grid connected with net-metering. Even an overdraft (a "bounced check") fee now runs about $25. 

How Much Fresh Water Are Some Operators Using To Frack A Bakken Well? -- July 20, 2015

Data point from Triangle:

Fractured with:
  • 26,532 bbls Slick Rock
  • 35,636 bbls #22 Rock Solid
  • 1,132 bbls brine
  • 8,134 bbls #25 Rock Solid
  • 2,903 bbls #23 Rock Solid
  • 3,774 bbls SlickRock flush, 
  • 67 bbls 15% HCL
  • 708 bbls 7.5% HCL
  • 677 bbls fresh water
  • 115,307 lbs 40/70 white sand,
  • 3,652,259 lbs 20/40 ceramic proppant 
USGS data points are linked here:
  • Marcellus Shale, Pennsylvania, 4.5 million gallons (Risser, 2012, USGS Public Lecture, "Shale gas, Hydraulic Fracturing, and Induced Earthquakes")
  • Wattenburg Sandstone, Colorado, 2.7 million gallons (Goodwin and others, 2012, Oil and Gas Journal)
  • Barnett Shale, Texas, 2.8 million gallons (Nicot and Scanlon, 2012, Environmental Science and Technology)
  • Eagle Ford Shale, Texas, 4.3 million gallons (Nicot and Scanlon, 2012, Environmental Science and Technology)
  • Haynesville Shale, Texas, 5.7 million gallons (Nicot and Scanlon, 2012, Environmental Science and Technology)
  • Bakken Formation, North Dakota, 1.5 million gallons (S. Haines, 2012, USGS personal communication)
  • Horn River Shale, British Columbia, Canada, 15.8 million gallons (Horn River Basin Producers Group, 2010).
That comparison between Texas and North Dakota is quite interesting, considering the issue of water in Texas, and then the number of active rigs in Texas (400) vs North Dakota (75). 

Granularity On Some Of The Wells Coming Off Confidential List -- July 20, 2015

A Gusher?

25363, 2,247, Whiting, Smokey 4-15-22-13H, Pembroke, 30 stages, 3.5 million lbs, t5/15; cum 14K 5/15 -- after 8 days. By extrapolation, 4 x 8 = 32; 4 x 13,555 = 54,220 bbls in 30 days.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Choked Way Back

28818, 605, Triangle, Simpson 151-102-5-8-2H, Elk, t2/15; cum 50K 5/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Fractured with:
  • 26,532 bbls Slick Rock
  • 35,636 bbls #22 Rock Solid
  • 1,132 bbls brine
  • 8,134 bbls #25 Rock Solid
  • 2,903 bbls #23 Rock Solid
  • 3,774 bbls SlickRock flush, 
  • 67 bbls 15% HCL
  • 708 bbls 7.5% HCL
  • 677 bbls fresh water
  • 115,307 lbs 40/70 white sand,
  • 3,652,259 lbs 20/40 ceramic proppant 
Erratic Production

28497, 457, Whiting, P Thomas 154-98-16-33-28-1H3, Three Forks B130 stages, 4.0 million lbs, Truax, t2/15; cum 22K 5/15; 

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Another Nice Well

28499, 1,441, Whiting, P Thomas 154-98-16-33-28-1H, 39 stages, 5.3 million lbs sand and ceramic, Truax, t1/15, cum 68K 5/15; 

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Monday, July 20, 2015, Part II -- A Little Bit Of Everything

Diesel glut in the United Kingdom. Diesel now less expensive than gasoline in England, as supermarkets cut prices.
The price of diesel has fallen below petrol at some supermarkets for the first time in more than a decade, after the big chains announced price cuts.
Supermarket Morrisons cut the price of diesel by up to 2p per litre, and Tesco, Asda and Sainsbury's followed the move with their own price cuts.
The last time diesel was cheaper than petrol was 2001.
"This is a milestone in motoring and many younger drivers won't remember the last time that diesel prices were lower than unleaded."

Oman exports to China surge:
Oman exported more crude oil in June than it produced after trading giant ChinaOil picked up an unprecedented 49 cargoes during the Platts Dubai Market on Close assessment process in April.

China, which has been the biggest buyer of Oman crude in recent years, accounted for 90% of the country's overall crude exports in June, up more than 12% from May, according to data released by Oman's oil and gas ministry over the weekend.

Oman exported 912,015 b/d of crude oil in June -- up 11.28% from May -- even as its production was only 888,636 b/d, according to government data.

I just mentioned VLCC the other day

VLCC rates surge:
For owners of the supertankers capable of hauling more than 2m barrels of crude around the world, the crash in oil prices has been good for business.
After suffering five years of flatlining rates and shrinking profits, operators of Very Large Crude Carriers (VLCCs) are enjoying strong trading conditions for the first time since the financial crisis, when a glut of tankers came on the market just as demand collapsed.
Since the turn of the year, the cost of hiring a VLCC has jumped more than 50 per cent, with the rate for shipping oil from Saudi Arabia to Japan — the benchmark supertanker route — rising to almost $90,000 a day, a seven-year seasonal high.
China Going Nuclear

China will soon be #3 in nuclear energy production:China will soon surpass South Korea, Russia, and Japan in nuclear generating capacity. From nuclear energy:
  • US: 100 GW 
  • France: 60 GW
  • China: 20 GW today; 45 GW in 2020; it looks like China goes over 40 GW in 2017
  • Japan: 40 GW
  • Russia: 20 GW
  • South Korea: 20 GW
There are more than a few story lines there.

Kemp Says This Is Must-Read Article On Iran

The New Yorker.

My thoughts after reading that article, some predictions and probabilities:
  • 100% likelihood:  Iran will be the superpower in the Mideast within 5 years. Saudi Arabia has a lot to fear. Israel has a lot to fear but will do just fine. Saudi is in Iran's crosshairs in the short term; Israel can wait. How worried is Saudi about this deal? Saudi prince ready to strike Iran unilaterally.
  • 75% likelihood: Iraq will, at best be "Baghdad" five years from now. 
  • 30% probability:  ISIS with its capital in northern Syria (al-Raqqa) will move its capital to one of the major mideast cities within five years, either Beirut, Damascus, or Baghdad. 
  • 90% likelihood: Turkey will negotiate with ISIS. 
  • 100% likelihood: Kurdistan will have its hands full fighting off ISIS. 
The big question is whether Iran "annexes" Syria, and in so doing what it's relationship with ISIS will be. It's very possible Iran might be the only country that can "defeat" ISIS.

I think the wildcard is ISIS. Without ISIS this would be a slam-dunk for Iran.
How's Spieth Doing?

Wow, talk about a great tournament. Jordan Spieth is one back from the lead. No less than five golfers are tied for the lead; four more are one back, including Jordan Spieth, and even Sergio Garcia is tied with Spieth. Three more are two back. That takes us through the top ten. A nice round number for a leaderboard. Too bad it's Monday, and not Sunday. It's starting to rain and the weather will determine the winner. Anthony Wall, one back, is on the back nine and will finish well before the others. If the weather is a factor, he might just pull it off.

Later, 10:31: Anthony Wall let it slip away; near the end is 5 back; two at 15 under; five at 14 under including Jordan Spieth.

Later, 10:48: Spieth drops back another stroke. It's all about the weather now. Golfers battling the rain. The weather would have to get pretty severe for officials to delay this tournament again. These players have a tight schedule. This gets them off schedule. Maybe it was a "lucky" break for Tiger to miss the cut. Which reminds me, how is "Lefty" doing - tied at 23.

Later, 12:52 p.m. Central time: Spieth ends up tied for 2nd, among the top four. Top two, Zach Johnson and Marc Leishman will go to a play-off.

Later, 13:59 p.m. Central time: Zach Johnson won.

Income Inequality

Apparently growing in the US. See comment comparing Sweden and US.

2.5 million illegals have entered the US under President Obama; 400,000 yearly.

Could there be a connection?

The question is not whether income inequality is increasing or decreasing, the question is whether it matters? See graph at this link (you will have to scroll down a long way to find the graph at the link; find "gini" for the graph at the link.

Active Rigs In North Dakota Hits New Post-Boom Low -- 71

Active rigs:

Active Rigs71195207184134

Gasoline Demand Update

This is really, really cool. Look at my post of July 16, 2015 -- the graph. Today, RBN Energy provides a really nice post on this subject: New Demand Brings Gasoline Back to Life. (archived)
Only a few short years ago the double punch of fuel efficiency and ethanol mandates had put U.S. gasoline demand on the ropes. But in the past year demand has jumped by 0.5 MMb/d (per data from the Energy Information Administration - EIA). This surge in demand – presumably driven by cheaper prices – has kept refineries running full pelt this summer. Today we discuss the fall and rise of gasoline demand. U.S. gasoline is a complex product that refiners blend to meet local quality and regulatory specifications using a number of components from what is known as the gasoline blending pool.
We’ll start this post with a recap of previous blogs on the various moving parts in the gasoline business that you can refer back to. We covered refinery processes to produce gasoline in our “Complex Refining 101 Part I and Part II” series. We covered the Reid Vapor Pressure (RVP) quality characteristic of gasoline in “Regulatory Gas Pressure Party”. RVP levels are mandated by the Environmental Protection Agency (EPA) and apply during the summer driving season. We’ve covered the production and use of the complex blending components called alkylate - that (among other qualities) helps refiners meet lower RVP mandates during summer months - and reformate . We covered the opposite quality of butane blended into gasoline during the winter months that increases RVP. 
We have also covered the Renewable Fuels Standard (RFS) that requires refiners to blend ethanol into gasoline. We’ll talk more about ethanol in a minute. Then there are the regulations that mandate how much sulfur is allowed in gasoline.
Aside from the various components and regulatory mandates of gasoline we have posted numerous blogs on the refining industry in general – covering for example the Gulf Coast gasoline and diesel export boom and recent booming refinery margins. Most recently we started a series on the refined product distribution system. In this post we look at the recent turnaround in U.S. demand for gasoline – previously considered a market in perpetual decline.