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All things considered, blaming Zaluzhny – perhaps by claiming that he should have verified alleged intelligence about the IL-76’s cargo before shooting it down in order to make this seem like an unfortunate accident – is the most politically convenient option at Zelensky and his US patron’s disposal. It could shift the blame from them to him and facilitate Zaluzhny’s replacement with the much more politically reliable Budanov without much resistance from the armed forces or civil society.

Kiev shot down a Russian Il-76 military transport plane carrying 65 Ukrainian POWs as it was flying over the border region of Belgorod on Wednesday. Patriot missiles were reportedly used during the attack, which was carried out with the aid of American instructors. The regime was informed of the flight ahead of time and was aware that it was carrying its detained troops. The planned swap has now been called off and questions are swirling about why Kiev would kill its own POWs.

CNN ridiculously suggested that it might have been a case of friendly fire by drawing attention to a prior air alert and drone interception an hour before the incident, while some Ukrainian sources circulated the conspiracy theory that the plane was allegedly carrying only S-300 air defense missiles onboard. The first narrative is meant to smear the reputation of the Russian Armed Forces while the second is a “face-saving” deflection from Kiev’s culpability for what happened.

A more realistic interpretation is that American proxy war tactics are shifting as the conflict began to wind down late last year after Kiev was pushed back on the defensive following its failed counteroffensive. That theory also has its faults, however, since five Russian military aircraft were reportedly shot down by Patriot missiles over the border region of Bryansk last May so there isn’t anything new this time except that 65 Ukrainian POWs were killed after Kiev knew they were on board.

The specifics of this incident therefore lead to suspicion that these detained troops were deliberately targeted by those American-advised Ukrainian air defense controllers who were operating the Patriot air defense systems on Wednesday for the reasons that will now be explained. The backdrop to what happened was that Russia’s foreign spy agency predicted an impending bureaucratic reshuffle on Monday a day before a former Pentagon official reported on rumors that Zelensky might oust Zaluzhny.

Stephen Bryen, who served as staff director of the Near East Subcommittee of the US Senate Foreign Relations Committee and as deputy undersecretary of defense for policy and is currently a senior fellow at the Center for Security Policy and Yorktown Institute, published the article on his Substack. According to him, the Ukrainian leader wants to replace the Commander-in-Chief with military intelligence head Budanov, and he’s planning to do so by blaming Zaluzhny for recent battlefield losses near Avdeevka.

Zelensky’s top rival commands immense respect among the armed forces and civil society, the first of which are growing so angry with their leadership’s military plans that there was even a whiff of mutiny in the New York Times’ report last month about the Kyrnki debacle. Aware of how much Ukraine’s already fragile military-political dynamics had been destabilized by the failed counteroffensive, an expert from the influential Atlantic Council called on Zelensky to form a “government of national unity” a month ago.

Adrian Karatnycky’s demand was made through his article for Politico and sold as the best way to preemptively avert potentially forthcoming protests with the innuendo being that it could also neutralize any possibly impending plans for a military coup that could occur independently of those protests. The dilemma that Zelensky found himself in is that complying with Karatnycky’s proposal could signal weakness and lead to the end of his political career while removing Zaluzhny could lead to a mutiny.

Delaying any action also has its detriments too since grassroots and military pressure could reach uncontrollable proportions in the coming future, further worsening the strategic situation that he found himself in. Russia’s foreign spy agency didn’t mention any military reshuffle plans in their statement earlier this week, however, which might be because they were unaware of them or wagered that it’s better not to comment since doing so could influence the process in ways adverse to their interests.

In any case, the sequence of events from mid-December up until Wednesday’s IL-76 incident – especially the aforementioned statement that preceded Bryen’s report about Zelensky’s plans to replace Zaluzhny with the much more politically reliable Budanov by a single day – suggested deepening intrigue in Kiev. After what just happened following Kiev’s downing of a plane full of Ukrainian POWs by American-advised air defense operators, the public pretext has now been created for replacing him if he wants to.

That’s not to say that Zelensky will certainly do so since any such a move is fraught with the very real risk of blowback due to how popular Zaluzhny is among the armed forces and civil society, but both categories of his supporters might only put up mild resistance if he’s blamed for this incident. It’s not implausible that Zelensky will either directly blame him or do so via media surrogates since he himself wants to eschew responsibility and he definitely doesn’t want anyone pointing fingers at America.

All things considered, blaming Zaluzhny – perhaps by claiming that he should have verified alleged intelligence about the IL-76’s cargo before shooting it down in order to make this seem like an unfortunate accident – is the most politically convenient option at Zelensky and his US patron’s disposal. It could shift the blame from them to him and facilitate Zaluzhny’s replacement with Budanov without much resistance from the armed forces or civil society.

As for why the US might want him to go, it could be that he’s deemed more amendable to the peace talks that America’s leading liberal-globalist policymaking faction is still reluctant to relaunch, in which case they could fear that a possible coup would stop their proxy war plans and doom Biden’s re-election. They might of course also calculate that the risk of a coup, which could possibly be preceded by large-scale protests across the country in his support, would spike with his removal and thus call it off.

Whatever ultimately ends up happening, it’s important for observers not to extend credence to CNN and Ukraine’s conspiracy theories about Russia accidentally shooting down its own plane and it supposedly only carrying S-300s respectively, since Kiev definitely knew that there were POWs on board. It therefore remains to be seen why its American-advised air defense operators still shot it down, but more clarity is expected as time passes and the military and/or political consequences of this incident become known.

Source: Korybko.substack.com

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This week, Congress took a step toward passing a carbon tax—an inflationary, regressive tax on all products that would lower economic growth; make all Americans worse off; and disproportionately harm poor people, farmers, and small businesses. Politicians have rightly rejected carbon taxes in the past and should continue to do so.

On Jan. 18, the Senate Environment and Public Works Committee voted to send a proposed law to the full Senate that would require the federal government to conduct a study calculating the carbon emissions of a broad range of different products made in America and other countries. These include construction materials, plastics, and fertilizers—all vital to small businesses and corporations that power the economy.

This study is the first step to imposing a carbon tax on these products. The bill, sponsored by Sens. Kevin Cramer, R-N.D., and Chris Coons, D-Del., is titled the Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency (PROVE IT) Act.

The bill’s proponents say they are responding to carbon taxes in Europe, which will be implemented in 2024. The European Union, which has 21 countries with a carbon tax, is preparing laws to tax imports based on greenhouse gases emitted in their production. This border tax proposal is meant to prevent companies from shifting production outside the EU to avoid carbon taxes.

The complexity of this proposed European legislation, and the pushback from emerging economies, is one reason that it is unwise for America to follow. Europe’s current carbon taxes do not cover carbon emissions from all products. On average, the carbon tax covers 38% of total national carbon emissions, ranging from a high of 81% in Liechtenstein with a rate of $131 per ton to a low of 2% in Spain with a rate of $16 per ton.

In taxing carbon dioxide, Congress would end up reducing energy use while, according to carbon tax proponents, raising revenue that might permit a reduction of income tax rates to compensate.

The U.S. Treasury estimated in 2017 that a carbon tax of $49 per ton, rising at 2% a year, would raise $2.2 trillion over 10 years. Such a carbon tax would raise taxes on gasoline by 44 cents per gallon, on natural gas by about $2.60 per thousand cubic feet, on oil by $21.50 per barrel, and on coal by $62 to $126 per ton, depending on its carbon content.

The carbon tax is a favorite of individual economists across the political spectrum for restructuring the tax system. Proponents include Tuft University’s Gilbert Metcalf, American Enterprise Institute scholar Alex Brill, and Donald Marron and Eric Toder of the Tax Policy Center. The Climate Leadership Council, which cleverly refers to the carbon tax as “carbon dividends,” has as its founding members former Federal Reserve Chairman Ben Bernanke, Harvard professors Larry Summers and Greg Mankiw, and Treasury Secretary Janet Yellen (listed on the website as inactive due to her current position).

But a carbon tax has four major disadvantages—it is inflationary and regressive, it causes regional disparities, it is complex, and it drives production offshore. America is stronger without it.

Inflationary and Regressive. One major problem with the carbon tax is that it would raise prices, because all products contain carbon. Inflation is running at almost 4% and has reduced Americans’ real incomes. Since low-income people spend more on energy as a percent of their income than high-income people, a switch to a carbon tax would have to be accompanied by income transfers to low-income groups—i.e., some type of subsidy paid for by taxpayers.

Proponents suggest that offsets, paid for by carbon tax revenues, can be returned to taxpayers through lower income taxes, perhaps with the proceeds going chiefly to poor people who are disproportionately hurt by what is in essence an energy consumption tax.

However, Congress rarely cuts one tax by as much as it raises another tax, so Americans will end up paying more in taxes. Further, many poor people are not required to file tax returns, and they would have to do so in order to be identified and compensated. That means extra work for them and for the Internal Revenue Service.

Regional Disparities. Another problem is that carbon-intensive sectors, such as coal, heavy manufacturing, and agriculture, would be the biggest losers under the new tax. This means higher prices for food and gasoline for everyone, especially in rural areas, as well as companies announcing that they are moving offshore. Farmers in Germany, France, the Netherlands, and Belgium are rioting against the new climate provisions.

Complexity. A carbon tax is complex to set up, as can be seen from the PROVE IT Act. The bill selects which products are analyzed and then open to be taxed. Practically all products have some carbon in the content or in the manufacturing process or both, even food and clothing. That is why European carbon taxes range from 2%  to 81% of carbon emissions.

Proponents of the tax suggest putting tariffs on imports in proportion to their carbon content so that American companies will not be at a disadvantage. But the precise quantities are complex to calculate, and tariffs might be illegal under World Trade Organization regulations.

Greater Offshore Production Increases Global Emissions. Carbon taxes raise the prices of domestic energy-intensive goods compared to imports from countries without carbon taxes. If American goods were taxed, Americans would prefer to buy cheaper, untaxed imports, and American firms would relocate abroad to avoid the tax or lose business to foreign companies.

This potential relocation reduces the goal of the tax, namely to lower global emissions and global temperatures. It also potentially sends millions of jobs overseas.

With production going abroad to countries with less stringent environmental regulations, global emissions might well rise rather than decline. Without a carbon tax, U.S. carbon emissions declined by 1,000 million metric tons over the past 16 years due to the substitution of natural gas for coal. Other countries do not have America’s inexpensive natural gas and rely more on coal. Therefore, companies relocating overseas would rely on dirtier, coal-produced energy.

A carbon tax would hurt the poor and raise domestic prices relative to the prices of many imports. It would be another add-on levy, with exemptions for political friends and punishments for enemies. The PROVE IT Act is a first step toward the tax, and Congress would be wise to reject the bill.

Source: Dailysignal.com

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Nuclear power generation is likely to break records in 2025 as more countries invest in reactors to fuel the shift to a low-carbon global economy, while renewable energy is likely to overtake coal as a power source early next year, data has shown.

China, India, Korea and Europe are likely to have new reactors come on stream, while several in Japan are also forecast to return to generation, and French output should increase, according to a report on the state of global electricity markets published by the International Energy Agency (IEA) on Wednesday.

Electricity demand is also expected to increase around the world, fuelled largely by the move to a low-carbon economy. Electric vehicles and heat pumps, as well as many low-carbon industrial processes, require electricity rather than oil and gas.

Continuing rapid growth in renewable energy supply means these additional demands are likely to be covered in full by generation from wind, solar and other clean energy sources. Renewables will make up roughly a third of total electricity generation globally by early next year.

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The FSRU-based LNG import facility in the Dutch port of Eemshaven, owned by Gasunie and Vopak, has received 82 shipments since its launch in September 2022, mostly from the United States.

Operated by EemsEnergyTerminal, the LNG hub consists of two chartered floating storage and regasification units – the 170,000-cbm FSRU Energos Igloo, owned by Energos Infrastucture, and the 26,000-cbm barge-based FSRU Eemshaven LNG, owned by Exmar.

The terminal has a capacity of 8 billion cubic meters and supplies natural gas to capacity holders UK-based Shell, Czech utility CEZ, and France’s Engie.

Shell booked 4 bcm per year of the capacity, CEZ reserved 3 bcm per year, and Engie booked the rest.

In September 2022, the Eemshaven terminal received its first LNG cargo from the US onboard the Shell-chartered 173,000-cbm Murex LNG carrier.

The terminal started delivering regasified LNG to the Dutch grid in a record time during the same month, but the facility did not deliver gas to the grid during two periods since the launch due to maintenance and the unavailability of the heat connection.

Dutch gas grid operator Gasunie said in March last year it completed all the planned work at the terminal and signed a deal in April with compatriot storage firm Vopak to sell 50 percent of the LNG hub. The partners completed the deal in December.

A Gasunie spokeswoman told LNG Prime on Tuesday that the Eemshaven LNG terminal has received 12 cargoes in 2022, 68 LNG cargoes in 2023, and 2 cargoes this year up to date.

Each LNG carrier delivers an average quantity of around 160,000 cbm of LNG, but this does not mean that this quantity is actually brought in every time, she said.

The Eemshaven facility is the first FSRU-based terminal in the Netherlands and the second LNG import terminal in the country after Gate.

The Gate LNG import terminal in the port of Rotterdam, also operated by Gasunie and Vopak, handled record 328 vessels last year. Gate unloaded 169 LNG cargoes last year, and most of this shipments came from the US as well.

Gasunie previously said that EemsEnergyTerminal’s ambition is to be able to handle 9 Bcm of natural gas before the end of 2023, and then to grow to 10 Bcm.

The terminal operator said it aims to achieve this by ‘technical optimization’ of the existing installations, including debottlenecking.

“The process has now been optimized to the extent that we can technically achieve the 9 Bcm. It is up to the market to realize these quantities,” the spokeswoman said.

“We are currently still investigating the technical possibilities for 10 Bcm,” she said.

In addition, EemsEnergyTerminal plans to start maintenance activities at the LNG hub, starting this Sunday.

The spokeswoman said that “major maintenance” is expected to begin on January 27 and last until until February 7.

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Crude oil production in the United States reached a record high in August 2023, led primarily by more production in Texas. In 2023, most of the crude oil produced in Texas was relatively dense for the state.

API gravity measures the density of crude oil and other petroleum products relative to water. Crude oil with a higher API gravity is lighter, or less dense. Crude oil production in the Lower 48 states—a region that does not include Alaska—is primarily light crude oil, and heavy crude oil is primarily imported to meet U.S. refining demand. Alaska production, which is about 3% of U.S. production, tends to be medium density.

API gravity can differ significantly by production area. Oil produced in Texas—the top crude oil-producing state for more than a decade—has a relatively broad distribution of API gravities. In June 2023, production of crude oil with an API gravity between 30.1–40.0 degrees reached 2.58 million barrels per day (b/d), surpassing the production of crude oil with a gravity between 40.1–50 degrees for the first time. Texas accounted for 57% of the total production of crude oil with an API gravity between 30.1 and 40.0 degrees in the Lower 48 states.

New Mexico and North Dakota—the second- and third-highest crude oil-producing states—also recorded large increases in crude oil production with an API gravity between 30.1 and 40.0 degrees in the first 10 months of 2023, albeit from a smaller base than Texas. Still, the crude oil produced in North Dakota’s Bakken formation tends to be relatively light; about 82% of North Dakota oil production has an API gravity between 40.1 and 50.0 degrees. The crude oil produced in California and in the Federal Offshore Gulf of Mexico tends to be heavier, with a lower API gravity.

Overall in the Lower 48 states, 19% more crude oil with an API gravity between 30.1 and 40.0 degrees was produced in the first 10 months of 2023 than during the same period in 2022. In September 2023, Lower 48 crude oil production in this API gravity range established a new record of 4.75 million b/d.

Lower 48 crude oil production with an API gravity from 40.1 to 50.0 degrees grew 6.3% in the first 10 months of 2023 compared with the same period in 2022, rising to 5.9 million b/d. Crude oil in this API gravity range accounted for the largest share of Lower 48 production.

The increase in crude oil production with an API gravity between 30.1 and 50.0 degrees in these parts of the United States is the result of several factors, including higher crude oil sale prices, improved drilling technology, and increased access to refineries and consumer markets because of increased availability of transportation via pipelines.

Principal contributor: Merek Roman

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Energy News Beat

Russia’s reliance on four, mainly Asian, countries to import its coal has increased since some countries implemented sanctions against Russia after it invaded Ukraine, according to Global Trade Tracker data. This trade shift corresponds with increased coal exports from the United States to Europe and EU sanctions that went into full effect in August 2022. The United States, Japan, Australia, and other countries issued sanctions during this same time period after Russia’s full-scale invasion.

China, South Korea, Turkiye, and India are currently the top importers of coal from Russia. These countries received over 80% of Russia’s coal exports from August 2022 to July 2023, compared with 47% from August 2021 to July 2022. Coal imported by European countries from Russia decreased 57% between these two periods. Imports into Eurasia, which includes Ukraine, stopped almost entirely. Imports received by all regions other than Asia declined, while global coal imports from Russia remained relatively flat, at nearly 233 million short tons (MMst).

China and South Korea are historically the top two importers of coal from Russia. China imported 104 MMst from August 2022 to July 2023, a 73% increase from the preceding 12 months, and South Korea imported 34 MMst, a 44% increase. Prior to sanctions, Germany, an EU member, and Japan were the third- and fourth-largest importers of coal from Russia. Both countries banned imports from Russia in 2022. In their place, Turkiye increased its imports of Russia’s coal by 120% to 30 MMst, and India increased imports by 159% to 29 MMst over the same period.

All four of these primary importers—China, South Korea, Turkiye, and India—continued to collectively receive over 80% of Russia’s coal exports each month after August 2023. Limited eastbound rail infrastructure from the Kuzbass region in Western Siberia, where coal production is centered, leads to congestion, delays, and longer turnaround times. Russia’s largest coal transshipment port, Vostochny, is located on the Pacific coast and maintains a competitive advantage for exporting to North Asia and China, but increased exports have caused railway and seaport bottlenecks. As a result, India has sought out northern shipping routes from Russia, and more broadly, total seaborne shipments of coal increased nearly 18% year over year in the first part of 2023.

Principal contributor: Gavin Clark

Russia’s reliance on four, mainly Asian, countries to import its coal has increased since some countries implemented sanctions against Russia after it invaded Ukraine, according to Global Trade Tracker data. This trade shift corresponds with increased coal exports from the United States to Europe and EU sanctions that went into full effect in August 2022. The United States, Japan, Australia, and other countries issued sanctions during this same time period after Russia’s full-scale invasion.

China, South Korea, Turkiye, and India are currently the top importers of coal from Russia. These countries received over 80% of Russia’s coal exports from August 2022 to July 2023, compared with 47% from August 2021 to July 2022. Coal imported by European countries from Russia decreased 57% between these two periods. Imports into Eurasia, which includes Ukraine, stopped almost entirely. Imports received by all regions other than Asia declined, while global coal imports from Russia remained relatively flat, at nearly 233 million short tons (MMst).

China and South Korea are historically the top two importers of coal from Russia. China imported 104 MMst from August 2022 to July 2023, a 73% increase from the preceding 12 months, and South Korea imported 34 MMst, a 44% increase. Prior to sanctions, Germany, an EU member, and Japan were the third- and fourth-largest importers of coal from Russia. Both countries banned imports from Russia in 2022. In their place, Turkiye increased its imports of Russia’s coal by 120% to 30 MMst, and India increased imports by 159% to 29 MMst over the same period.

All four of these primary importers—China, South Korea, Turkiye, and India—continued to collectively receive over 80% of Russia’s coal exports each month after August 2023. Limited eastbound rail infrastructure from the Kuzbass region in Western Siberia, where coal production is centered, leads to congestion, delays, and longer turnaround times. Russia’s largest coal transshipment port, Vostochny, is located on the Pacific coast and maintains a competitive advantage for exporting to North Asia and China, but increased exports have caused railway and seaport bottlenecks. As a result, India has sought out northern shipping routes from Russia, and more broadly, total seaborne shipments of coal increased nearly 18% year over year in the first part of 2023.

Principal contributor: Gavin Clark

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We expect average wholesale electricity prices for 2024 in most areas of the country to be close to or slightly lower than in 2023 because of relatively stable generation fuel costs. However, periods of high demand or power market supply constraints could lead to temporary spikes in wholesale prices.

Electricity prices in U.S. wholesale markets are determined by a number of factors, but the natural gas price is the most important driver because it is often the highest-cost (marginal) fuel dispatched for power generation and many U.S. wholesale electricity markets set prices at the marginal cost. Natural gas-fired generation is the largest source of U.S. electricity. We expect the natural gas price for U.S. electricity generation to average $2.91 per million British thermal units (MMBtu) in 2024 in our January Short-Term Energy Outlook. The price averaged $3.29/MMBtu in 2023. Lower natural gas prices should keep average wholesale power prices in most regions less than or close to last year.

The highest U.S. natural gas prices in 2023 were in the Pacific states of California, Oregon, and Washington where the price of natural gas charged to power generators averaged $6.96/MMBtu through October. As a consequence, the Pacific Northwest had the highest U.S. wholesale electricity prices as well, averaging $82 per megawatthour (MWh) last year. We expect fuel costs to remain somewhat elevated in the Pacific Northwest, and we forecast the region’s wholesale power prices to average $67/MWh in 2024.

We expect U.S. electricity prices this year will be relatively similar to 2023 in many of the wholesale markets operating in the Eastern Interconnection, where forecast 2024 wholesale prices outside of the Northeast generally range between $30/MWh and $40/MWh. The wholesale markets in the Northeast, specifically New York and New England, generally have some of the highest wholesale prices in the nation after the Pacific Northwest. We expect the Northeast wholesale prices to increase in 2024, averaging $48/MWh in New York (up 26%) and $60/MWh in New England (up 45%).

U.S. wholesale power prices are typically calculated on an hourly or daily basis and are designed to reflect market conditions at a specific time. Market stresses, such as extremely high temperatures or temporary supply constraints, can lead to spikes in wholesale prices. For example, wholesale prices in the ERCOT market (which covers most of Texas) exceeded $2,500/MWh during a handful of hours in August 2023, which resulted in ERCOT’s monthly price averaging $355/MWh. Prices also spiked temporarily in the western wholesale markets during summer 2023.

Principal contributor: Tyler Hodge

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Energy News Beat

In our latest Short-Term Energy Outlook, we forecast that wind and solar energy will lead growth in U.S. power generation for the next two years. As a result of new solar projects coming on line this year, we forecast that U.S. solar power generation will grow 75% from 163 billion kilowatthours (kWh) in 2023 to 286 billion kWh in 2025. We expect that wind power generation will grow 11% from 430 billion kWh in 2023 to 476 billion kWh in 2025.

In 2023, the U.S. electric power sector produced 4,017 billion kilowatthours (kWh) of electric power. Renewable sources—wind, solar, hydro, biomass, and geothermal—accounted for 22% of generation, or 874 billion kWh, last year. Annual renewable power generation surpassed nuclear generation for the first time in 2021 and coal generation for the first time in 2022.

In contrast to growing generation from renewables, we forecast that coal power generation will decline 18% from 665 billion kWh in 2023 to 548 billion kWh in 2025. We forecast natural gas will continue to be the largest source of U.S. electricity generation, with about 1,700 billion kWh of annual generation in 2024 and 2025, similar to last year. We expect nuclear power generation will stay relatively flat, rising from 776 billion kWh in 2023 to 797 billion kWh in 2025.

New installations of generating capacity support the increase in our renewable generation forecast. Wind and solar developers often bring their projects on line at the end of the calendar year. So, the new capacity tends to affect generation growth trends for the following year. Solar is the fastest-growing renewable source because of the larger capacity additions and favorable tax credits policies. Planned solar projects increase solar capacity operated by the electric power sector 38% from 95 gigawatts (GW) at the end of 2023 to 131 GW by the end of 2024. We expect wind capacity to stay relatively flat at 156 GW by the end of 2024, compared with 149 GW in December 2023.

Principal contributor: Katherine Antonio

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Energy News Beat

In our January Short-Term Energy Outlook (STEO), we expect average U.S. retail gasoline prices to decrease in 2024 because of increased inventories related to increased refinery capacity. In 2025, we expect slightly reduced gasoline consumption to further decrease prices. We expect similar supply-side factors to lower retail diesel prices in 2024 and 2025, although U.S. diesel consumption will likely exceed 2023 in both 2024 and 2025.

Source: EIA

We expect crude oil prices in 2024 to be similar to those in 2023. As a result, our lower gasoline and diesel price outlooks next year reflect narrowing crack spreads, the difference between the wholesale prices of gasoline and diesel compared with crude oil. Crack spreads reflect the price of refining, and a lower crack spread indicates lower refining cost. Our lower forecast crack spread for gasoline is driven by our expectation of increasing availability of supply even as consumption is reduced.

In 2023, additional refinery capacity came online, raising U.S. operable refinery capacity from 18.06 million barrels per day (b/d) in January 2023 to 18.31 million b/d in December 2023. We expect the availability of the new refinery capacity will ease price pressure on petroleum products in 2024. In 2025, we expect lower crude oil prices, which will also reduce gasoline and diesel prices.

New international production from refineries in the Middle East, particularly Kuwait, have also increased the pool of gasoline and diesel on world markets. Increasing global refined products supply will contribute to easing international price pressure on both fuels. We expect gasoline consumption to remain relatively flat in 2024 and to decrease only slightly in 2025, by less than 1%. In both years, we expect slowing but consistent economic growth. Flat or decreasing gasoline consumption despite economic growth is relatively uncommon. Since 1990, gasoline consumption has declined amid positive economic growth in only two years (2010 and 2012).

Although we expect more diesel production and less strain on U.S. and global inventories to reduce diesel prices in 2024 and 2025, we also expect annual U.S. average diesel consumption to grow modestly, by 1.3%, or about 50,000 b/d, in 2024 supported by continuing economic growth.

Our forecast for gasoline and diesel prices is subject to significant uncertainty, including any factors that might affect crude oil prices and pass through to retail fuel prices. In addition, prices could be higher if more unplanned refinery shutdowns, further disruptions to international trade flows, or new logistical bottlenecks that hinder the movement of fuels between regions occur. By early 2025, we currently expect LyondellBasell’s Houston refinery in Texas will close and Phillips 66’s Rodeo refinery in California will complete its ongoing conversion to renewable diesel production, although the timing of both may vary based on market conditions and the schedules of the owners.

Principal contributor: Kevin Hack

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Energy News Beat

A unit of French energy giant TotalEnergies has recently completed the 100th LNG bunkering operation with its chartered vessel, Gas Vitality, in Marseille.

The 135 meters long 18,600-cbm LNG bunkering vessel, owned by Japan’s MOL, completed the milestone operation on January 1, 2024 in the Port of Marseille-Fos, according to V.Group, which manages the vessel via its unit V.Ships France.

The bunkering involved a transfer of 8,000 cbm of LNG to MSC’s containership with a capacity of 15,000 TEU, MSC Freya, it said.

Concurrently, the 2023-built MSC Freya performed cargo handling operations.

VesselsValue data shows that EPS is the owner of MSC Freya while MSC charters the ship.

Chinese shipbuilder Hudong-Zhonghua has held a naming ceremony for Gas Vitaly in October 2021 and the vessel arrived in France in December the same year.

It is the first LNG bunkering vessel to be based in France.

Gas Vitality has similar specifications as its sister ship, Gas Agility, which works for TotalEnergies from the Dutch port of Rotterdam.

Since November 2020, TotalEnergies Marine Fuels has completed more than 200 LNG bunkering operations with the two vessels, it said in October last year.

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