Energy Policy Research Foundation, Inc. (EPRINC)

Thank you for coming, Diana Furchtgott-Roth!

Thank you for coming to the book event discussion with Jack Spencer!

Thank you Kirk Sorensen! Look forward to your talk on Wednesday!

Mozambique LNG and the Role of the U.S. Export-Import Bank ExIm Bank Rationale and U.S. Legislative Action The U.S. Export-Import Bank's (ExIm Bank) purpose is to facilitate the export of U.S. goods and services. Recognizing China's expanding regional African economic influence and seeking ways to counter this, the U.S. passed three key legislative initiatives to strengthen ExIm Bank activities: ? BUILD Act (Better Utilization of Investments Leading to Development) of 2018 creating the U.S. International Development Finance Corporation (DFC) to support infrastructure projects and to compete with Chinese-led consortiums where the latter has a strong presence; ? CTEP (China and Transformational Exports Program) established in 2019 commissioned to counter Chinese export subsidies and financing; ? MMIA (Make More in America) authorized in 2022 aiming to provide financing for export-oriented U.S. domestic industries. The Resource Large natural gas reserves located 27 miles off Mozambique's northern coast were first identified in 2012 in an area known as the Rovuma Basin. The Basin is divided into two sections, Area 1 and Area 4, each holding 75 and 85 trillion cubic feet, respectively. Initial efforts to develop Area 1's resources were begun by Anadarko Petroleum. Phase 1 of the project (MZ LNG) is seeking to develop a 1.7 BCF/d (13.1 MTPA - million metric tons per annum) onshore LNG export facility located on Mozambique's Afungi peninsula. The total cost for completion of the facility is projected to be over $20 billion. MZ LNG also has two planned expansions (Phase 2 and 3). All combined, they would enlarge the project to 5.3 BCF/d (40 MTPA). Following Occidental's acquisition of Anadarko in 2019, Anadarko's Mozambique interest was sold. MZ LNG is currently owned by a consortium led by TotalEnergies (26.5%) and Mitsui (20%) with the balance held by two Mozambique (25%) and three Indian (28.5%) interests. MZ LNG's development has been impaired by two forces: militant activities not far from the onshore portion of the project leading to force majeure delays, and delays in the approval of financing. Following numerous analyses, ExIm is set to provide $4.7 billion for MZ LNG, the largest single source of financing, followed by Japan's JBIC (Japan Bank for International Cooperation) with $3 billion and NEXI (Nippon Export and Investment Insurance) at $2 billion. ExIm's disbursement, key for the project's commencement, is subject to final approval of its five-person board, something which was never completed during President Biden's Administration. For more information on this chart, please contact Max Pyziur ([email protected]). This?slide deck is available on the?EPRINC Website: https://lnkd.in/dyJctZT #energy #energypolicy #naturalgas #oilandgas #Mozambique #LNG

EPRINC Book Event with Jack Spencer, Author of Nuclear Revolution: Powering the Next Generation | March 5, 2025 RSVP: https://lnkd.in/epQvTYue Please join Energy Policy Research at our offices at 25 Massachusetts Ave NW (conference center on the ground floor) for a discussion with Jack Spencer on his new book, Nuclear Revolution: Powering the Next Generation! Author Jack Spencer, Heritage Foundation's Senior Research Fellow for Energy and Environmental Policy, draws on his extensive experience advising national policymakers—including testimony before the Blue Ribbon Commission on America's Nuclear Future and Congress—to chart a clear path forward for nuclear energy in America. The book reveals how nuclear power, once an economically competitive energy source, became increasingly costly due to regulatory burden—and how targeted policy reforms can restore its affordability while maintaining safety. Through detailed analysis, Spencer demonstrates how free enterprise can drive innovation in the nuclear sector more effectively than government management. A light lunch will be served after the event, and a limited number of signed books will be available free of charge! RSVP: https://lnkd.in/epQvTYue

North American Natural Gas Platform: Natural Gas Pipeline Flows, Jan-Nov 2024 · The US shares an extensive natural gas pipeline network with its neighbors, which addresses mismatches between distant locations of supply and demand within the country. Such an integrated system makes natural gas transportation highly efficient and cost-effective, creating synergies for all three countries. · The US meets natural gas demand in the Midwest, Mountain and Pacific Northwest regions with competitively priced Canadian gas, while exporting excess supply from Gulf Coast plays to Mexico via pipeline and to European and Asian buyers as liquefied natural gas (LNG). · According to EIA data from January to November 2024, the Lower-48 states exported on average 9.1 billion cubic feet per day (bcfd) of natural gas via pipeline, mostly to Mexico, while importing 8.7 bcfd from Canada. During this period, the US had net LNG exports of 11.5 bcfd, 98% of which were shipped from terminals in Louisiana, Texas, and Maryland. · The high level of infrastructure connectivity also provides the US with a critical layer of energy security, resilience, and protection against price hikes through increased supply diversification. Any barriers—such as tariffs—to these gas flows within the North American platform, therefore, may not only reduce efficiency but also pose energy security risks to the US. For more information on this chart, please contact Batt Odgerel ([email protected]) This?slide deck is available on the?EPRINC Website: https://lnkd.in/dyJctZT #energy #energypolicy #oil #crudeoil #gas #naturalgas #canada #mexico #tarriffs

The Cost Impact of President Trump's Tariffs on U.S. Crude Oil Imports From Canada and Mexico: A First Assessment On February 1, 2025, President Donald Trump issued a set of three Executive Orders (EOs) applying tariffs to all imported goods from Canada, Mexico, and China. They were scheduled to go into effect on February 4, 2025, lasting indefinitely until a time when the president would decide to remove them. Additional tariffs depending would be levied on the nature of retaliatory actions. The key rationale across all three EOs is to take punitive action against the flow of illegal drugs and their components from Mexico, Canada, and China. Rather than immediately engage in a tariff war, Canada and Mexico made provisional adjustments in border controls. In response, President Trump’s administration postponed enacting tariffs on Canada and Mexico for thirty days pending other developments. The tariffs were pegged at a rate of 25% on the value of imported goods from Mexico and Canada, and 10% from China. The key exception was that tariffs on imports of Canadian "energy and energy resources" will be 10%. At 4 million barrels per day (MBD) and 0.5 MBD, respectively, Canada and Mexico have risen in recent years to account for approximately 70% of total U.S. crude oil imports (6.5 MBD). Other U.S. crude oil imports from countries such Saudi Arabia and Nigeria have declined accordingly. Canadian imports are generally priced at a discount of $14 per barrel against the U.S. benchmark price of West Texas Intermediate (WTI) while the discount on Mexican imports is approximately $5. Using these metrics, the total implied annual value of Canadian and Mexican imports was $104 billion in 2024 ($92 billion for Canada; $12 billion for Mexico). This is about 12% of the entire trade ($900 billion) with Canada and Mexico. Of total U.S. crude oil consumption, Canadian and Mexican imports account for almost 30%. Applying the stated tariff rates in President Trump's EOs, the implied annual increase to the cost of Canadian and Mexican imports would be an additional $10.4 billion, or 2.9%. Since crude oil costs are passed on to product prices, this would imply, in the aggregate, an increase of 9 cents per gallon using the current U.S. national average of $3 for regular gasoline. Crude quality matters: while the U.S. produces a considerable amount of crude oil, U.S. refiners have been reliant for a long time on the types of medium and heavy sour (sulfuric) crudes available from Canada and Mexico because they can run their refineries more profitably. Alternative sources that can only partially replace Canadian and Mexican resources would be from Venezuela (currently limited due to sanctions), Kuwait, and Saudi Arabia. For more information on this chart, please contact Max Pyziur ([email protected]). This?slide deck is available on the?EPRINC Website: https://lnkd.in/dyJctZT #energy #energypolicy #tariffs #canada #mexico #trump

Crude Oil and Product Movements: The North American Production Platform On February 1, 2025, President Donald Trump issued a set of three Executive Orders (EOs) applying tariffs to all imported goods from Canada, Mexico, and China. They were set to go into effect on Tuesday, February 4, 2025. However, on Monday, the tariffs on Canadian and Mexican goods were postponed for a month pending deliberations. The key rationale across all three EOs is to take punitive action against the flow of illegal drugs and their components from Mexico, Canada, and China. The tariffs are pegged at a rate of 25% on the value of imported goods from Mexico and Canada, and 10% from China. The key exception is that tariffs on imports of Canadian "energy and energy resources" will be 10%. At 2,800 thousand barrels per day (TBD) from Canada into the U.S. Midwest and 780 TBD from Mexico into the U.S. Gulf Coast, the quality of these crude oils is critical for refinery fleets in these regions to work efficiently and be sustained commercially (blue arrows in the map). Conversely, the bulk of the distillate (diesel) and propane produced in the U.S that is in excess of domestic needs, is shipped primarily to Canada and Mexico, (780 TBD and 1,080 TBD, respectively, part of the green arrows in the map) and are integral to those markets. Other U.S. regions, such as the Northwest and the Atlantic Coast are also beneficiaries of the synergies gained from the crude oil and products that are produced and traded across North America. "If there is no resolution to the issues, the proposed tariffs on Canadian and Mexican oil and refined products will be counter-productive," said Batt Odgerel, EPRINC's Director for Energy Transition Research. "It will cause prices to rise and will undermine energy security in all three countries." For more information on this chart, please contact Batt Odgerel ([email protected]), Lou Pugliaresi ([email protected]), or Max Pyziur ([email protected]). This?slide deck is available on the?EPRINC Website: https://lnkd.in/dyJctZT #energy #energypolicy #crudeoil #oilandgas #tariffs #mexico #canada #oilrefineries

Tariffs on Canadian and Mexican oil and gas are likely to be?counter-productive and undermine our energy security. The North American oil and gas production platform is an instrument of national power and wealth creation that can deliver affordable, reliable, and secure energy that sustains our national economy. The United States is the world’s largest oil and gas producer and a net exporter of both petroleum (crude oil and refined products) and natural gas to the world market. This North American production platform operates at a high level of efficiency across a large continental land mass. ?The integrated production platform solves a wide range of complex technical and cost challenges starting with the exploration and production of oil and gas, its distribution to processing facilities and export markets, and the production of transportation fuels to American consumers and a wide range of essential products, including fertilizers, pharmaceuticals, and plastics. U.S. refiners have advanced technologies to process heavier crudes, freeing some lighter US crude production for more valuable foreign markets. This is the benefit of an open trading system in oil and gas. ?Both natural gas and refined products routinely move through cross-border pipelines in Canada and Mexico and waterborne supplies move in and out of U.S. ports. U.S. natural gas is now making its way to West Coast Mexican ports for exports as LNG. ?Efficient operation of this production platform has placed the United States in a unique position, not only to deliver affordable energy to U.S. consumers, but also to provide a secure energy lifeline to our allies. The production platform ?can become much more efficient in Canada, Mexico and the U.S. This is where the focus should be and part of an effort to remove the tariffs. ?We can lower costs to consumers across North America through ?standardized fuel specifications, accelerated pipeline construction, and expanded opportunities for oil and gas production in the U.S., Canada and Mexico.

U.S. Gasoline Sales, Vehicle Miles Traveled, And Motor Vehicle Fuel Efficiency Revisited In the U.S., gasoline is the dominant fuel for light-duty motor vehicles (LDVs). LDVs are primarily used for commuting, shopping and other personal errands, and leisure travel. Currently, the number of motor vehicles in the U.S. is estimated at 283 million, having risen from 226 million in 2000 (an implied annual rate of almost 1%). Of the 283 million, 270 are LDVs primarily fueled by gasoline (n.b. there are approximately 2.7 million electric-powered registered vehicles, less than 1% of total). In 2000, the U.S. consumed 8.5 million barrels per day (MBD) of gasoline, or almost 130 billion gallons per year (BGY); by 2022, consumption rose to 8.95 MBD (137 BGY), an annualized increase of 0.25%. Despite minimal long-term growth in U.S. gasoline consumption, mobility increased as measured by vehicle miles travelled (VMTs) from 2,700 billion VMTs in 2000 to 3,210 in 2022, an annualized rate of almost 1%. This implies an efficiency gain from 21 miles per gallon (MPGs) in 2000 to 24 MPG in 2024. A distinct portion of efficiency gains are attributable to the U.S. Corporate Average Fuel Economy (CAFE) standards. The CAFE standards are one of the programs enacted through the 1975 Energy Policy and Conservation Act, legislation that was passed in reaction to the 1973 Arab Oil Embargo. As with most things, as utilization of the resource input becomes more efficient, the use of an application increases. This is variously described as the Jevons Paradox, the Rebound Effect, and the consumption of efficiency. With improved MPGs, VMTs increase. It is important to note that some deterioration in both VMT growth and gasoline consumption took place following the 2008 financial crisis. In addition, there was a huge downward spike due to the COVID pandemic in 2020. Nevertheless, mobility demand recovered, surpassing previous levels. For more information on this chart, please contact Max Pyziur ([email protected]). This?slide deck is available on the?EPRINC Website: https://lnkd.in/dyJctZT #energy #energypolicy #gasoline #fuels #cafestandards #cars #gas #gasprices