Number Of Active Rigs In The Bakken Jumps Ten Percent -- June 28, 2021

Talk about a huge coincident. Earlier (two days ago, yesterday, I forget) I posted a note about "blue hydrogen" and North Dakota. 

Now, this morning, this popped up on twitter: Saudi Aramco bets on blue hydrogen exports ramping up from 2030. Link here. 

Saudi Aramco outlined plans to invest in blue hydrogen as the world shifts away from dirtier forms of energy, but said it will take at least until the end of this decade before a global market for the fuel is developed.

“We’re going to have a large share” of the market for blue hydrogen, Aramco’s chief technology officer, Ahmad Al-Khowaiter, said in an interview on Sunday in Dhahran, eastern Saudi Arabia, where the company’s based. “The scale up isn’t going to happen before 2030. We’re not going to see large volumes of blue ammonia before then.”

Hydrogen is seen as crucial to slowing climate change since it emits no harmful greenhouse gases when burned. The blue form of the fuel is made from natural gas, with the carbon emissions generated in the conversion process being captured. The hydrogen is sometimes converted again into ammonia to allow it to be transported more easily between continents.

The state energy firm may end up spending roughly $1 billion on capturing carbon for every 1 million tons of blue ammonia produced, Khowaiter said. That would exclude the expense of producing the gas, he said.

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Back to the Bakken

Active rigs:

$73.02	6/28/2021	06/28/2020	06/28/2019	06/28/2018	06/28/2017
Active Rigs	22	9	61	66	58

No wells coming off the confidential list. 

RBN energy: why everyone is talking about renewable diesel, part 5. 

Renewable diesel is a popular topic in the transportation fuel space, and for good reason. For one, RD provides a lower-carbon, renewable-based alternative to petroleum-based diesel; for another, it’s a chemical twin of and therefore a “drop-in” replacement for ultra-low sulfur diesel. But, most of all, there are the large financial incentives provided by California’s Low Carbon Fuel Standard, the U.S. Renewable Fuel Standard, the U.S. Biodiesel Tax Credit, and other programs, which can make RD production highly profitable. Driven by these factors, there’s a lot of renewable diesel production capacity under construction or on the drawing board: everything from greenfield projects to expansions of existing RD refineries to conversions of old-school refineries so they can make RD. Today, we put the spotlight on RD and discuss how it differs from biodiesel, how it’s produced, and the new RD capacity coming online in North America.

Our blog series on low carbon fuel policies in the U.S. and Canada has garnered a lot of attention. There’s no doubt about it, energy folks want to learn all they can about alternative fuels, including the impact that low carbon fuel standard (LCFS) programs could have on refined products markets. To quickly recap what we’ve said so far, in Part 1 we provided an overview of various policies that have been adopted to reduced greenhouse gas (GHG) emissions from the transportation sector, such as fuel economy standards, renewable blending requirements, zero emission vehicle mandates, and LCFS programs in locations such as California, Oregon, British Columbia, and Canada generally via its Clean Fuel Standard.

In Part 2, we focused on California’s LCFS, which was implemented in January 2011 and which grew out of a number of earlier efforts there to improve air quality and, more recently, reduce GHG emissions. The LCFS assigns a carbon intensity (CI) target value for petroleum-based gasoline and diesel fuels, as well as their substitutes, such as ethanol, biodiesel, and renewable diesel. (CI is an assessment of the GHG emissions associated with producing, distributing, and consuming a fuel, and is measured in grams of carbon dioxide equivalent per megajoule, or gCO₂e/MJ.) The LCFS then sets maximum CI limits on finished gasoline and diesel fuel consumed in California each year on a gradually declining scale to meet the 2030 goal of a 20% reduction in the carbon intensity of motor fuels consumed in the state.

​In Part 3, we turned our attention to ethanol, the use of which in gasoline has been prevalent for many years. Ethanol is a biofuel that is found in nearly 98% of the gasoline purchased at retail stations in the U.S., in most cases accounting for 10% of the gasoline at the pump. This high-octane biofuel has grown in popularity around the world, particularly over the last 20 years, due to regulations that require or incentivize its use. As governments continue to evaluate regulations to control GHG emissions, ethanol has been overshadowed by some other biofuels lately, but it is expected to continue to play an important role as a pathway for meeting low-carbon mandates. Last time, in Part 4, we looked at biodiesel. We noted that while the incentives for producing biodiesel are substantial, there are two big catches with the fuel: a limited supply of feedstocks and properties limiting how much can be blended with petroleum-based diesel.

And that’s a perfect segue to renewable diesel, which has no such “blend wall” — and which has been receiving a lot of press the past couple of years, including in the RBN blogosphere. In Playin’ by the Rules in December 2019, we covered some of the basics behind RD and noted that at the time about 2.9 billion gallons per year (gal/yr) of RD production capacity was either in operation or under development in the U.S. and Canada. Today, the amount of operating and planned RD capacity is 7.2 billion gal/yr, or 2.5 times where we stood a year and a half ago. Last July, in Green Grow the (Refineries), we zeroed in on HollyFrontier’s plan to shut down its petroleum-based Cheyenne, WY, refinery and convert it into an RD facility. Here we are in the summer of 2021 and the excitement around RD has not waned — if anything, the momentum toward low carbon transportation fuels in general, and RD in particular, has accelerated.

Renewable diesel, like biodiesel, is a biomass-based fuel that can be burned in diesel engines or used as home heating oil. However, there are unique aspects of RD that have given it an edge over biodiesel as a substitute for petroleum-based ultra-low sulfur diesel (ULSD. Renewable diesel meets or exceeds the fuel specifications of ULSD, thus is considered a “drop-in” replacement, whereas biodiesel (from FAME, or fatty acid methyl ester) is typically limited to blends of 5% (a diesel/biodiesel blend known as B5) to 20% (a.k.a. B20). In fact, unlike biodiesel, which has poor cold-flow properties and risk of contaminants, RD generally has a higher cetane value (an octane-like measurement of diesel and diesel alternatives) than ULSD, promotes more complete combustion and higher engine efficiency, and has comparable or better cold-flow properties than petroleum-based diesel. 

Much more at the link.