Stillwater Associates LLC Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™ Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries prepared by Stillwater Associates, LLC Irvine, California, USA August 9, 2018 1
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Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries
prepared by Stillwater Associates, LLC
Irvine, California, USA
1
August 9, 2018
1
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) – What Is It
and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice items5) Benchmarking Methodology 6) Summary
2
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Study Objectives
o Develop rationale and methodology to be used to benchmark the SSC&T cost to California refiners
3
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) –
What Is It and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice items5) Benchmarking Methodology 6) Summary
4
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Stationary Source Cap & Trade – What Is It?
1. Global Warming Solutions Act of 2006 (AB 32) addresses climate change with a variety of programs, including cleaner cars, renewable energy, energy efficiency, and Cap & Trade, designed to collectively reduce greenhouse gas (GHG) emissions to 1990 levels by 2020.
2. AB 398, passed in 2017, extends the Cap & Trade program to 2030 and pushes the emission reduction goal to 40% below 1990 levels.
3. Cap-and-Trade Program creates a “cap” on GHG emissions a business may produce
4. The Cap-and-Trade rule applies to large electric power plants, large industrial plants (like oil refineries), and fuel distributors
5
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Stationary Source Cap & Trade – How it Works
1. Each year the cap is lowered by approximately three percent (3%)
2. Industries in this program must either reduce their GHG emissions or buy a limited quantity of pollution permits, also called “allowances”
3. Participants are required to surrender one compliance instrument (allowances and offsets) for each metric ton of covered GHG emissions
4. Compliance instruments may be traded
5. Allowances can be bought through quarterly auctions managed by the California Air Resources Board (CARB)
6. CARB allocates “free” allowances to covered emitters on an annual basis as an offset to their total GHG exposure
6
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Stationary Source Cap & Trade – How it Works
The Cap & Trade program applies to only the most prevalent GHGs, called “covered emissions”:-- Carbon Dioxide (CO2)-- Methane (CH4)-- Nitrous Oxide (N2O)-- Sulfur Hexafluoride (SF6)-- Perfluocarbons (PFCs)-- Nitrogen Trifluoride (NF3)-- Other fluorinated GHGs
CARB measures emissions by the metric ton of carbon dioxide equivalent (MTCO2e). This means that the other covered gases, like methane and nitrous oxide, will be measured by how many metric tons of carbon dioxide are necessary to reproduce the climate effects of one metric ton of the other covered gas.
7
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Stationary Source Cap & Trade – 2016 Volume & Cost
Actual GHG Emissions, tons per year
100%
Allocated Allowances, tons per year
-80%
Net Emissions, tons per year
20%
Auction Price, $ per ton
Cost of StationaryCap & Trade
34,959,731
(28,040,923)
6,918,808
$15
$103,782,125
Note: emission data & allowances for facilities included in CARB’s allowances for “Petroleum Refining”
Allocated Allowances currently reduce refiner cost by $420 million
Sources: Stillwater analysis, CARB, OPIS
8
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) – What Is It
and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice items5) Benchmarking Methodology 6) Summary
9
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Current industry invoicing practices…
Mandatory items are passed through
Source: Stillwater analysis of March 2018 data
10
CARBOB Regular
CARBOB Premium
CARB Diesel
CA CAR Assessment 11.900 11.900 15.160CA LCFS Assessment 8.080 8.080 5.790CA Childhood Lead Assessment Fee 0.076 0.076 CA Gasoline AB32 Admin Fee 2017/18 0.171 0.171 CA ULSD AB32 Admin Fee 2017/18 0.203CA Prepaid Sales Tax 5.000 5.000 25.000Federal Oil Spill Tax 0.193 0.193 0.214Federal Excise Tax LUST 1.000 1.000 1.000CA Motor Vehicle Fuel Tax 41.700 41.700 CA Diesel Tax 36.000Federal Excise Tax -- 10% Gasohol 18.300 18.300 Federal Excise Tax -- Diesel 24.300
TOTAL TAXES & FEES 86.420 86.420 107.667
Rack Invoiced Taxes & Fees
cents per gallon
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) – What Is It
and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice
items5) Benchmarking Methodology 6) Summary
11
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
SSC&T should be treated like the other items
1. SSC&T costs are currently borne by refiners
2. SSC&T is an inherent environmental cost, like LCFS
3. Invoicing for SSC&T provides crucial transparency to consumers and regulatory bodies
12
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) – What Is It
and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice items5) Benchmarking Methodology 6) Summary
13
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – Highlights
1. Stationary cost is derived from the net cost of emissions for fuel refineries divided by total CARBOB gasoline and CARB diesel sales
2. Data is publicly available
3. Most recent full-year CARB data on fuel refinery emissions (excluding non-fuels manufacturing facilities) and announced free allocations determine number of allowances
4. “Mean” price for California Carbon Allowance Assessments as reported in the OPIS West Coast Spot Market Report, for Current Year Prompt
5. Total California gasoline and diesel sales over same time frame as allowances based on CARB data reported in its LCFS Reporting Tool (LRT)
6. Resulting cost in cents per gallon (CPG) would be used for both gasoline and diesel
14
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology
The NUMERATOR(Actual Emissions – Allowances)
X Correction Factor (CF) X OPIS Price
The DENOMINATORVolume
= Cost in CPG
15
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Numerator”
1. Actual annual covered emissions recognized by CARB for the fuel refineries reflects best estimate available
2. Actual emissions = Total Petroleum Refining and Hydrogen Production Sector emissions in metric tons (MT) for most recent year published by CARB. (See Appendix 1)
3. Refineries and other facilities are listed individually and tailored to match facilities included in Allowances
(Actual Emissions – Allowances) x CF x OPIS Price
16
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Numerator”
4. Freely allocated allowances = Total Petroleum Refining and Hydrogen Production Sector Total Allocation in MT, corrected by the Total True-up Value if appropriate (see Appendix 2)
5. While CARB groups facility-level allocation by North American Industry Classification System (NAICS) sector to prevent disclosure of confidential business information, including petroleum refineries, it is the most complete data available
6. Subtracting freely granted allowances yields total net emissions
(Actual Emissions – Allowances) x CF x OPIS Price
17
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Numerator”
7. The correction factor (CF) is used to exclude emissions & allowances included in the CARB grouping for “petroleum refining” but not associated with manufacturing of transportation fuels (such as calciners, asphalt plants, etc.)
(Actual Emissions – Allowances) x CF x OPIS Price
18
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Numerator”
Sources: Stillwater analysis, CARB data 19
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Numerator”
8. Alternatives for pricing include the most recent CARB auction price or the daily “mean” price for California Carbon Allowance Assessments as reported by OPIS in the West Coast Spot Market Report, for Current Year Prompt
9. The OPIS daily price has three advantages over Auction Price:i. It reflects daily changes priceii. It includes latest market informationiii. It will be favored by OPIS, who will be helpful
(Actual Emissions – Allowances) x CF x OPIS Price
As a result, we favor using the OPIS daily price 20
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – the “Denominator”
We considered a number of alternatives for the “volume”:
1. CARBOB gasoline and CARB diesel sold in the calendar year that emissions were generated from that reported in CARB’s Quarterly LRT data
2. Taxable sales of gasoline and diesel from California Board of Equalization data
3. Total gasoline and diesel production from California Energy Commission (CEC) Weekly Production data
4. Total gasoline, diesel, and jet fuel production from CEC Weekly Production data
Volume
21
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – Alternatives
We believe that the CARBOB gasoline + CARB diesel sales from CARB’s Quarterly LRT to be the best option
23
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking Methodology – Data Updates
1. Actual Emissions: Updated annually with following-year Q4 release https://ww2.arb.ca.gov/mrr-data
2. Allowances: Updated annually with beginning-of-year releasehttps://www.arb.ca.gov/cc/capandtrade/allowanceallocation/v2018allocation.pdf
3. Correction Factor: Updated annually based on Actual Emissions release4. OPIS Price: Updated daily5. Volume: Reported quarterly by the end of the following quarter and published the
last day of the month following the reporting deadline (i.e. 1Q18 is due by June 30 and published July 31). https://www.arb.ca.gov/fuels/lcfs/lrtqsummaries.htm
The data for our recommended components are updated with varying frequency
24
Source: California Air Resources Board
We recommend updating bi-annually with the release of the Actual Emissions and Allowance Allocations data, except for pricing
J F M A M J J A S O N D J F M A M J J A S O N DActual EmissionsAllowancesCorrection FactorOPIS PriceVolumes
reporting year firat year after reporting yearfirst year after reporting year
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Contents
1) Study Objectives2) Stationary Source Cap and Trade (SSC&T) – What Is It
and How Does it Work?3) Current industry invoicing practices4) SSC&T should be treated like other invoice items5) Benchmarking Methodology6) Summary
25
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
With CARB reducing Allowance Allocations, the 2018 cost has risen to 1.32 cpg of CARBOB and CARB diesel!
Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Summary (cont.)
1. SSC&T cost California refineries about $100 million per year through 2016. This number increases significantly with CARB’s planned phase-out of allowance allocations, which began in 2017
2. Sellers would allocate the benchmark cost to sales of CARBOB gasoline and CARB diesel
3. With publicly available data and common-sense methodology, the cost of SSC&T can be determined and established as a pass-through item
4. Treating SSC&T like other items on the invoice establishes transparency
27
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Stillwater Associates LLC
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries, July 19, 2018 ™
Benchmarking the Cost of Stationary Source Cap & Trade on California Refineries
Appendices1) Total GHG Emissions report example2) Freely Granted Allowances report example3) ARB Auction report example4) OPIS daily carbon report example5) LCFS Reporting Tool example6) CA BoE Taxable Gasoline Sales report example7) CA BoE Taxable Diesel Sales report example8) CEC Weekly Production report example
29
APPENDIX 1
Annual Summary of 2016 Greenhouse Gas Emissions Data Reported to the California Air Resources Board
Released November 6, 2017 This spreadsheet includes three tabs:
1) "Introduction" (this tab), provides an overview of the included data; 2) "Column Descriptions" provides a description of each data column provided in the GHG Data tab; and 3) "2016 GHG Data" provides a summary of annual emissions data reported under the California greenhouse gas mandatory reporting regulation.
The summary data shown were submitted to the California Air Resources Board to comply with the requirements of the Regulation for the Mandatory Reporting of Greenhouse Gas Emissions (MRR). The regulation is available here: http://www.arb.ca.gov/cc/reporting/ghg‐rep/regulation/mrr‐regulation.htm
MRR includes applicability, reporting requirements, estimation methods, and verification requirements. Because of regulation changes that became effective after January 1, 2012, reports for 2011 data and onward will have differences from the historical 2008‐2010 data because of changes in the reporting requirements.
A majority of the emissions data reports were subject to verification by ARB‐accredited third‐party verifiers. The outcome of the verification is displayed in the "2016 GHG Data" spreadsheet.
Listed facilities and entities can change from year to year due to shutdowns, startups, and changes in emissions that affect applicability under MRR. This affects both the number of facilities and emissions totals.
Product data is required to be reported for specific industrial sectors. Product data is not included in this report because it may include confidential business information that will not be publically released. However, the verification statement for the product data is included to indicate if the submitted product data were complete and accurate.
Data summarized in this spreadsheet are from facilities and entities subject to MRR and does not include all California GHG emissions sources, such as mobile sources. An overall statewide inventory of all GHG sources is available here: http://www.arb.ca.gov/cc/inventory/data/data.htm
The data displayed as "covered emissions" may not represent compliance obligations in the Cap‐and‐Trade Program.
Released November 6, 2017 Column TOTALS34,705,257 34,606,172 34,606,172
ARB ID Facility NameReportYear
Emitter CO2e from Non‐Biogenic
Sources and CH4 and N2O from Biogenic Fuels
Emitter CO2 from Biogenic Fuels
Fuel Supplier CO2e from Non‐Biogenic Fuels and CH4 and N2O from
Facility Reported GHG Data ARB Calculated Covered Emissions
California Air Resources BoardAnnual Summary of GHG Mandatory Reporting
See the "Introduction" tab and the "Column Descriptions" tab for important information
City State Zip CodeNorth American Industry Classification
System (NAICS) Code and Description
U.S.EPA/ARB
SubpartsIndustry Sector
El Segundo CA 90245 325120 ‐ Industrial Gas Manufacturing C,P Hydrogen PlantRodeo CA 94572 325120 ‐ Industrial Gas Manufacturing C,P Hydrogen PlantMartinez CA 94553 325120 ‐ Industrial Gas Manufacturing P Hydrogen PlantCarson CA 90810 325120 ‐ Industrial Gas Manufacturing C,P Hydrogen PlantSacramento CA 95826 325120 ‐ Industrial Gas Manufacturing P Hydrogen PlantWilmington CA 90744 325120 ‐ Industrial Gas Manufacturing C,P Hydrogen PlantOntario CA 91761 325120 ‐ Industrial Gas Manufacturing C,P Hydrogen PlantBakersfield CA 93308 324110 ‐ Petroleum Refineries C RefineryBakersfield CA 93308 324110 ‐ Petroleum Refineries C RefineryLong Beach CA 90805 324110 ‐ Petroleum Refineries C RefinerySanta Maria CA 93458 324110 ‐ Petroleum Refineries C,Y RefineryBakersfield CA 93307 324110 ‐ Petroleum Refineries C,Y RefinerySouth Gate CA 90280 324110 ‐ Petroleum Refineries C,Y RefineryParamount CA 90723 325199 ‐ All Other Basic Organic Chemical ManuC RefineryArroyo Grande CA 93420 324110 ‐ Petroleum Refineries C,Y RefineryBakersfield CA 93308 324110 ‐ Petroleum Refineries C,Y RefineryWilmington CA 90744 324110 ‐ Petroleum Refineries C,Y RefineryWilmington CA 90744 324110 ‐ Petroleum Refineries C,Y RefineryRodeo CA 94572 324110 ‐ Petroleum Refineries C,P,Y Refinery and Hydrogen PlantBakersfield CA 93308 324110 ‐ Petroleum Refineries C,P,Y Refinery and Hydrogen PlantMartinez CA 94553 324110 ‐ Petroleum Refineries C,P,Y Refinery and Hydrogen PlantEl Segundo CA 90245 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / CRichmond CA 94802 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / CCarson CA 90745 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / CWilmington CA 90744 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / C
Carson CA 90810 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / C
Martinez CA 94553 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / CTORRANCE CA 90504 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / C
Benicia CA 94510 324110 ‐ Petroleum Refineries C,P,PP,Y Refinery and Hydrogen Plant / C
Facility Physical Address Industry Classifications
APPENDIX 2
April 13, 2016
Vintage 2016 Allowance Allocation This document provides a summary of the vintage 2016 free allowance allocation under the Cap-and-Trade Program, aggregated both by allocation methodology and, within the industrial allocation category, by North American Industry Classification System (NAICS) sector. The methodologies for allowance allocation can be found in Cap-and-Trade Regulation sections 95852(j), 95852(k), 95870, 95890, 95891, 95893, 95894, and 95895. Details on allocation to electrical distribution utilities are not included in this document and are instead posted online at http://www.arb.ca.gov/cc/capandtrade/allowanceallocation/electricity-allocation-2013-updates.pdf. Because facility-level allocation could reveal confidential business information, the total allocation for each allocation methodology and allocation to each industrial sector with fewer than five companies are grouped together. For facilities with a limited exemption of emissions from the production of qualified thermal output and waste-to-energy facilities, allowance allocation is provided at the facility level. These facilities are allocated allowances equal to each facility’s 2014 covered emissions, which are already public data and therefore not confidential. Detailed information regarding allocation for industrial and other sectors may be found at the following links:
1. Allowance allocation web page 2. 2010 Cap-and-Trade Regulation
a. Initial Statement of Reasons: Appendix J—Allowance Allocation b. First 15-Day Modifications July 25, 2011: Appendix B—Development of Product Benchmarks for Allowance
Allocation c. Second 15-Day Modifications September 27, 2011: Appendix A—Refinery Allocation Methodology
3. 2013 Cap-and-Trade Regulation a. Initial Statement of Reasons (for information on allocation to universities and public services facilities,
natural gas suppliers, legacy contract generators, and public wholesale water agencies, as well as for the limited exemption of emissions from qualified thermal output and waste-to-energy facilities) and 45-Day Modifications September 4, 2013: Appendix C: Product-Based Benchmark Development
b. 15-Day Modifications March 21, 2014: Appendix A: Product-Based Benchmark Development
The “Total Allocation” numbers below reflect the sum of positive allowances distributed to eligible entities. This value does not include any negative allocation that will carry over into the next allocation distribution. For more information on negative allocation, see Cap-and-Trade Regulation section 95870(j). The “Total True-up Value” numbers below reflect the sum of positive true-up values. True-up value is a quantity of vintage 2016 allowances eligible to be used for compliance for budget year 2014 and subsequent years. Questions regarding allocation may be directed to David Allgood at (916) 445-8238 or [email protected].
Industrial Allocation Category Total NAICS Codes Facility Names Total
# Facilities
Petroleum Refining and
Hydrogen Production
Total Allocation: 28,040,923
Total True-up
Value: 658,790
• 324110 -- Petroleum Refineries • 324199 -- All Other Petroleum
and Coal Products Manufacturing
• 325120 -- Industrial Gas Manufacturing
• 100002 – Tesoro Los Angeles Refinery - Wilmington Calciner
• 100127 – Air Products Wilmington Hydrogen Plant
• 100138 – Chevron Products Company - El Segundo Refinery, 90245
• • 100904 – Linn Operating Inc • 100994 – Oxy - Thums Long Beach Company • 101187 – California Resources Elk Hills, LLC -
San Joaquin Valley Basin • 101231 – All American Oil and Gas Company • 101234 – Macpherson Oil Company • 101460 – TRC Cypress Group • 101674 – Pacific Coast Energy Company LP • 101703 – Crestwood West Coast, LLC • 103016 – Freeport-McMoRan Oil & Gas LLC -
Arroyo Grande Oil Production Facility • 104011 – Chevron AAPG 740 Coastal Basin • 104012 – Chevron AAPG 745 San Joaquin
Basin • 104013 – Chevron 17Z Gas Plant • 104014 – California Resources Elk Hills, LLC -
35R Gas Plant • 104016 – Aera Energy San Joaquin Basin • 104017 – Aera Energy Ventura Basin
35
Page 4 of 14
April 13, 2016
Industrial Allocation Category Total NAICS Codes Facility Names Total
# Facilities
Crude Petroleum and
Natural Gas Extraction
(Continued)
See Above See Above
• 104018 – Aera Energy Coastal Basins • 104019 – Aera Energy Belridge Gas Plant 32 • 104029 – California Resources Production
Corporation - Sacramento Valley Basin 730 • 104030 – California Resources Production
Corporation - San Joaquin Valley Basin 745 • 104033 – California Resources Production
Corporation - SCVGP Gas Plant • 104072 – Oxy - Tidelands Oil Production
Company - 760 Los Angeles Basin • 104075 – BreitBurn Operating LP - Los
Angeles Basin Facility • 104081 – Freeport-McMoRan Oil & Gas LLC -
SJV Basin Facility • 104090 – Signal Hill Petroleum Facilities • 104091 – Seneca San Joaquin Production
Facilities • 104094 – Berry Petroleum Company - San
Joaquin Basin • 104097 – Naftex Operating Company • 104215 – E&B Natural Resources - San
Joaquin Valley • 104426 –Holmes Western Oil Corporation • 104458 – ERG Operating Company, LLC. 750
Brawley • 101297 – MillerCoors • 101315 – Sensient Natural Ingredients LLC • 101473 – Anheuser-Busch LLC - Los Angeles
Brewery • 101519 – CP Kelco San Diego • 101575 – Foster Poultry Farms - Livingston
Complex, 95334 • 101693 – Wm. Bolthouse Farms, Inc. • 101736 – Paramount Farms International LLC • 104069 – Olam West Coast, Inc. - Firebaugh
13
Dairies
Total Allocation: 440,244
Total True-up
Value: 76,202
• 311513 -- Cheese Manufacturing
• 311514 -- Dry, Condensed, and Evaporated Dairy Product Manufacturing
• 100959 – California Dairies, Inc. Fresno • 101186 – Saputo Cheese USA Inc. - Paige • 101190 – California Dairies, Inc. Turlock • 101197 – California Dairies, Inc. Visalia • 101288 – Hilmar Cheese Company • 101465 – Land O' Lakes, Inc. • 101509 – California Dairies, Inc. Tipton • 101716 – Leprino Foods - Lemoore West
8
Page 8 of 14
April 13, 2016
Industrial Allocation Category Total NAICS Codes Facility Names Total
• 100259 – Eco Services - Dominguez • 100389 – Braun Medical Inc • 101451 – Genentech Inc South San Francisco • 101685 – Pixley Cogeneration Partners /
Calgren Renewable Fuels • 101733 – Dow Chemical Company - Pittsburg • 104006 – Agrium US Inc • 104048 – Pacific Ethanol Stockton, LLC • 104347 – Aemetis Advanced Fuels Keyes, Inc.
8
Page 10 of 14
April 13, 2016
Industrial Allocation Category Total NAICS Codes Facility Names Total
# Facilities
Miscellaneous Industrial Facilities
Total Allocation: 197,079
Total True-up
Value: 29,662
• 324121 – Asphalt Paving Mixture and Block Manufacturing
• 332510 -- Hardware Manufacturing
• 333611 -- Turbine and Turbine Generator Set Units Manufacturing
• 336111 -- Automobile Manufacturing
• 336411 -- Aircraft Manufacturing
• 336414 -- Guided Missile and Space Vehicle Manufacturing
• 488119 -- Other Airport Operations
• 488190 -- Other Support Activities for Air Transportation
• 101118 – Solar Turbines Incorporated - Kearny Mesa
• 101124 – United Airlines San Francisco Maintenance Center
• 101323 – Los Angeles International Airport (LAX)
• 101623 – Lockheed Martin Corporation - Sunnyvale
• 104206 – Prime Wheel Corporation • 104516 – Tesla Motors
6
Page 11 of 14
April 13, 2016
Universities and Public Service Facilities Total Allocation Total True-up Value Facility Names Total
# Facilities
931,855 0
• 100207 – Loma Linda University • 100235 – California State University, Channel Islands • 100273 – University of California, Santa Cruz, UCSC EH&S Office • 100305 – University of California, Davis • 100327 – California Institute of Technology (CalTech) • 100328 – Civic Center Cogen, LA County • 100997 – University of California, Los Angeles, UCLA • 101296 – University of California, Irvine • 101305 – University of California, San Diego, UCSD • 101399 – California State University, San Diego • 101416 – University of California, San Francisco • 104068 – UC Davis Medical Center • 104372 – University of California, Santa Barbara • 104514 – University of California, Berkeley
14
Natural Gas Allocation
Total Allocation Total True-up Value Facility Names Total # Entities
44,444,093 0
• 5002 – Southern California Gas Company • 5003 – Long Beach Gas & Oil Dept (LBGO) • 5008 – City of Vernon, Gas Municipal Utility Department • 5011 – City of Palo Alto - Gas Utility • 5013 – Southwest Gas Distribution Facilities • 104024 – Pacific Gas and Electric Company (PG&E) - Supplier of
Natural Gas • 104085 – San Diego Gas and Electric (SDG&E) - Local Distribution
7
Page 12 of 14
April 13, 2016
Legacy Contract Generators Total Allocation Total True-up Value Facility Names Total
# Facilities
761,895 77,230
• 100001 – ACE Cogeneration • 100130 – Sacramento Municipal Utility District (SMUD) , Carson Ice CG • 100150 – Corona Energy Partners, Ltd. • 100178 – Calpine - Gilroy Cogen, L.P., Gilroy Cogen_Peaker • 100236 – OLS Energy Chino • 100252 – Sacramento Municipal Utility District (SMUD) , SCA • 100338 – Calpine - Los Medanos Energy Center, LLC • 100878 – Wheelabrator Norwalk Energy Company, Inc. • 101263 – Crockett Cogeneration Project, LP • 101300 – Calpine - King City Cogen, LLC, King City Cogen_Peaker • 101701 – Air Liquide El Segundo Hydrogen Plant • 101740 – Panoche Energy Center, LLC
3 56,669 100064 – LACSD - Commerce Refuse To Energy 101,129 101264 – Covanta - Stanislaus, Inc
Page 13 of 14
April 13, 2016
Facilities with Limited Exemption of Emissions from the Production of Qualified Thermal Output Total Allocation
Facility Allocation
(all allowances have true-up value)
Facility Names Total # Facilities
225,523
30,316 100131 – California State University, San Jose
8
25,171 100263 – SRI International Cogen Project 13,155 101054 – Freeport-McMoRan Oil & Gas LLC - Gaviota Oil Heating Facility 18,651 101400 – Qualcomm, Inc. - Morehouse Facility 9,946 101487 – LACSD - Joint Water Pollution Control Plant 57,685 101607 – NRG Energy - San Francisco Thermal 35,123 101745 – Orange County Central Utility Facility 35,476 104364 – Houweling Nurseries
Public Wholesale Water Agencies
Total Allocation Total True-up Value Facility Names Total # Facilities
133,065 0 2046 – Metropolitan Water District of Southern California (MWD) 1
Total Allowance Allocation Total Allocation Total True-up
Value Total
# Entities1 55,751,545 4,216,528 Total industrial allocation 155 102,510,328 4,781,633 Total allocation on this spreadsheet 200 90,450,339 0 Total electricity distribution utility allocation2 54
192,960,667 4,781,633 TOTAL ALLOCATION 254
1 Total number of facilities/entities from each of the above categories will not add up to the “Total # Entities” under “Total Allowance Allocation” since an entity may receive allocation under multiple allocation categories. 2 For more information on allocation to the electrical distribution utilities, please see http://www.arb.ca.gov/cc/capandtrade/allowanceallocation/electricity-allocation-2013-updates.pdf
California Cap-and-Trade Program, Ontario Cap-and-Trade Program, and
Québec Cap-and-Trade System February 2018 Joint Auction #14
Summary Results Report
Background
The California Air Resources Board (CARB), Ontario Ministry of the Environment and Climate Change (MOECC), and Québec’s ministère du Développement durable, de l’Environnement et de la Lutte contre les changements climatiques (MDDELCC)1 held a joint auction of greenhouse gas (GHG) allowances on February 21, 2018. The auction included a Current Auction of 2016 and 2018 vintage allowances and an Advance Auction of 2021 vintage allowances. The information provided in this report is a balance between the need for program transparency and protection of information about individual qualified bidders’ market positions.
Prior to the certification of the auction, CARB, MOECC, and MDDELCC staff and the independent Market Monitor carefully evaluated the bids and determined that the auction process and procedures complied with the requirements of the California, Ontario, and Québec Cap-and-Trade Regulations (the Regulations). As provided below, the Market Monitor made the following determination:
The Market Monitor found that the auction was cleared consistent with the auction clearing rules in the Regulations and appropriate economic logic. The Market Monitor confirmed the clearing price and clearing quantities by qualified bidder for the Current Auction of 2016 and 2018 vintage allowances and for the Advance Auction of 2021 vintage allowances. The auction algorithm correctly applied the requirements of the Regulations covering the bid guarantee. The Market Monitor did not observe any breaches of security or communication protocols.
The Market Monitor recommends that CARB, MOECC, and MDDELCC approve the February Auction results.
Auction proceeds figures are not shown in this report because of the exchange rate process for determining final auction proceeds in a joint auction. Winning bids are submitted in one of two currencies – U.S. dollars (USD) or Canadian dollars (CAD). After receiving payment from the winning bidders, and using instructions from the linked jurisdictions (California, Ontario, and Québec), the Financial Services Administrator will exchange some amount of currency at then-prevailing market rates prior to transferring the auction proceeds to the jurisdictions.
The Financial Services Administrator will distribute auction proceeds to the jurisdictions after all qualified bidder payments are received. The jurisdictions will receive auction proceeds by March 20, 2018. As provided in the California Cap-and-Trade Regulation, 1 Ministry of Sustainable Development, Environment and the Fight against Climate Change.
sellers who consigned allowances in this auction will be paid the auction settlement price in USD for every consigned allowance sold. Information regarding jurisdiction-specific auction proceeds will be published after the auction is final.
California must receive auction proceeds only in USD. Ontario and Québec must receive auction proceeds only in CAD. Thus, the total amount of auction proceeds received by the jurisdictions from the sale of allowances may be higher or lower than the auction settlement price multiplied by allowances sold depending on the prevailing exchange rates in effect at the time of currency exchange prior to the distribution of auction proceeds. Each jurisdiction will separately post information on March 20, 2018, providing the final amount of proceeds transferred.
Auction Results
The first table below provides key data and information on the results of the auction. The second table provides qualified bid summary statistics from the auction. Please see Explanatory Notes after the list of qualified bidders for descriptions of all summary information.
Table 1: Auction Results for February 2018 Joint Auction #14
Current Auction Advance Auction
2016
Vintage 2018
Vintage Total Current 2021 Vintage
Total Allowances Available for Sale 14,894,520 83,321,400 98,215,920 12,427,950
Total Qualified Bids Divided by Total Allowances Available for Sale 1.21 0.69 Proportion of Allowances Purchased by Compliance Entities 92.1% 89.0% Herfindahl-Hirschman Index 436 436 1727
All Qualified Bid Summary Statistics are determined in USD including all bids submitted in USD and CAD. The CAD equivalent of the USD Qualified Bid Summary Statistics is based on the Auction Exchange Rate. USD statistics are converted into CAD in whole cents to be able to compare statistics on a common basis.
Table 2: Qualified Bid Summary Statistics for February 2018 Joint Auction #14
List of qualified bidders for the February 2018 Joint Auction #14
A qualified bidder is an entity that completed an auction application, submitted a bid guarantee2 that was accepted by the Financial Services Administrator, and was approved by CARB, MOECC, or MDDELCC to participate in the auction. Qualified bidders may or may not have participated in the auction.
CITSS Entity ID Entity Legal Name ON2306 1329606 Ontario Limited QC2101 1443635 Ontario Inc CA1185 Aera Energy LLC CA1019 Air Liquide Large Industries U.S. LP CA1561 AltaGas Power Holdings (U.S.) Inc. QC2096 ArcelorMittal Produits longs Canada s.e.n.c. QC1724 Bell-Gaz ltée CA1180 BNSF RAILWAY COMPANY CA1913 BP Products North America Inc. CA1463 California Power Holdings LLc ON2676 Canadian Pacific Railway Company QC2580 Chauffage Benwell Fuels Ltd. CA1075 Chevron U.S.A. Inc. CA1037 City of Anaheim, Public Utilities Department CA1732 City of Long Beach, Gas and Oil Department CA1443 City of Los Angeles, Department of Airports CA1166 City of Vernon, Vernon Public Utilities CA2050 CP Energy Marketing (US) Inc. ON2509 Econo Petroleum Inc. ON2414 Elbow River Marketing Ltd ON2176 Enbridge Gas Distribution Inc. ON2458 Énergie Valero Inc / Valero Energy Inc QC1384 Énergie Valero Inc. ON2329 EPCOR Natural Gas Limited Partnership ON2253 Federated Co-operatives Limited CA1260 Flyers Energy, LLC CA1234 Fresno Cogeneration Partners, LP QC1750 Gazifère Inc. QC1764 Gestion Énergie Québec Inc. ON2162 Goodyear Canada Inc
2 The term “bid guarantee” refers to “bid guarantee” as described in the California Regulation, “financial guarantee” as defined in the Québec Regulation, and “financial assurance” as described in the Ontario Regulation.
CITSS Entity ID Entity Legal Name QC1374 Graymont (QC) Inc. ON2330 Great Lakes Greenhouses Inc. ON2240 Greater Toronto Airports Authority ON2203 Greenergy Fuels Canada Inc. CA2113 Hartree Partners, LP ON2315 Husky Oil Operations Limited ON2288 Hydro One Networks Inc. QC1359 Hydro-Québec CA1807 Idemitsu Apollo ON2189 Imperial Oil CA1665 IPC (USA), Inc. ON2210 Ivaco Rolling Mills 2004 L.P. CA1727 Jaco Oil Company CA1141 Kern Oil & Refining Co, ON2356 Koch Supply & Trading, LP QC1901 La Coop Carbone QC1431 Lantic Inc. ON2504 Larry Penner Enterprises Inc. QC2501 Le Groupe Harnois Inc QC1770 Les Pétroles Irving Commercial s.e.n.c QC1730 Les Produits Pétroliers Norcan S.E.N.C CA1830 Luminus Energy Partners, LLC ON2439 MacEwen Petroleum Inc. CA1104 Macquarie Energy LLC CA2111 MAG ENERGY SOLUTIONS INC. ON2187 Markham District Energy Incorporated ON2457 McDougall Energy Inc. CA2645 Mercuria Energy America, Inc. CA1107 Midway Sunset Cogeneration Company CA1239 Morgan Stanley Capital Group Inc. QC2128 Mr. Gas Limitee CA1302 Naftex Operating Company ON2324 Nature Fresh Farms Inc. CA1672 NextEra Energy Marketing LLC QC2107 NGL Supply Co. Ltd. CA1191 Northern California Power Agency CA1138 NRG Power Marketing LLC ON2304 Ontario Power Generation Inc. ON2294 P38 Energy Inc.
CITSS Entity ID Entity Legal Name CA1046 Pacific Gas and Electric Company CA2046 Pacific Gas and Electric Company CA1034 PacifiCorp CA2106 PBF Energy Western Region LLC ON2345 Pembina Infrastructure and Logistics LP CA1410 PETRO DIAMOND INCORPORATED CA1279 Phillips 66 Company CA1595 Pixley Cogen Partners, LLC ON2190 Plains Midstream Canada ULC CA1505 Powerex Corp. ON2348 Primemax Energy Inc. QC2663 PROPANE PLUS INC QC1960 Révolution VSC LP CA1204 Rio Tinto Minerals Inc. CA1834 River City Petroleum CA1102 Royal Bank of Canada CA1163 Sacramento Municipal Utility District (SMUD) CA1085 San Diego Gas & Electric Company CA1760 San Diego Gas and Electric Company CA1011 San Joaquin Refining Company, Inc. QC2568 Sanimax LOM Inc. CA2175 Sempra Gas & Power Marketing, LLC CA1366 Seneca Resources Corporation CA2358 Sentinel Peak Resources California, LLC CA1251 Shell Energy North America (US), L.P. CA1757 Shiralian Enterprises CA1054 Signal Hill Petroleum, Inc. CA1031 Silicon Valley Power (SVP), City of Santa Clara CA1029 Southern California Edison Company CA1170 Southern California Gas Company CA1674 Southwest Gas Corporation CA1804 Stan Boyett & Son, Inc. CA1921 Statkraft US LLC ON2313 Sun Gro Farms Inc. ON2151 Suncor Energy Products Partnership QC1873 Superior Gas Liquids Partnership ON2267 Superior Plus LP QC1486 TEMBEC CA1165 Tesoro Refining & Marketing Company LLC
CITSS Entity ID Entity Legal Name ON2299 The Corporation of the City of Kingston ON2381 The Corporation of the City of Kitchener CA1888 The Soco Group, Inc ON2220 TransCanada PipeLines Limited CA1216 Turlock Irrigation District ON2165 Union Gas Limited CA1419 Union Pacific Railroad Company CA1635 Valero Marketing and Supply Company CA1135 Vitol Inc. ON2514 W. O. Stinson & Son Limited CA1229 Walnut Creek Energy, LLC CA2056 Wild Goose Storage, LLC
Total Allowances Available for Sale: Total allowances available, by vintage, for purchase in the Current Auction, including allowances consigned by consigning entities and allowances offered for sale by the State of California, the Province of Ontario, and the Province of Québec.
Total Allowances Sold at Auction: Total allowances purchased, by vintage, in the Current Auction in metric tons.
Total Qualified Bids Divided by Total Allowances Available for Sale:
Total number of allowances (all vintages) included in all the qualified bids for the Current Auction allowances (regardless of bid price) divided by the total number of Current Auction allowances available in the auction.
Proportion of Allowances Purchased by Compliance Entities:
The total number of Current Auction allowances (by vintage) purchased in the Current Auction by Compliance Entities divided by the total number of Current Auction allowances sold in the Current Auction. A Compliance Entity is a Covered Entity or Opt-in Covered Entity as defined in California’s Cap-and-Trade Regulation, a Capped Participant as defined in Ontario’s Cap-and-Trade Regulation, or an Emitter as defined in Québec’s Cap-and-Trade Regulation.
Herfindahl–Hirschman Index (HHI): The HHI is a measure of the concentration of allowances purchased by winning bidders relative to the total sale of Current Auction allowances (regardless of vintage) in the auction. The percentage of allowances purchased by each winning bidder is squared and then summed across all winning bidders. The HHI can range up to 10,000, representing 100% of the current vintage allowances purchased by a single bidder (i.e.,100x100=10,000).
Qualified Bid Price Summary Statistics: Statistics are calculated from all the qualified bids for the Current Auction allowances (regardless of bid price). All price statistics are shown in USD and CAD.
Qualified Bids: The bids that remain after a qualified bidder’s submitted bids have been evaluated and reduced to meet all bidding limitations.
Auction Reserve Price: The minimum acceptable auction bid price for Current Auction allowances shown in both USD and CAD per metric ton.
Settlement Price: The Current Auction allowance price that resulted from the auction, in USD and CAD per metric ton.
Maximum Price: Highest qualified bid price.
Minimum Price: Lowest qualified bid price.
Mean Price: Average qualified bid price calculated as the sum of the qualified bid prices times the bid allowances at each qualified bid price divided by the sum of all qualified bid allowances.
Median Price: The price per metric ton calculated so that 50% of the qualified bid prices fall above and 50% fall below the median bid price.
Median Allowance Price: The price per metric ton calculated so that 50% of the qualified bid allowances fall above and 50% fall below the median allowance price.
Auction Exchange Rate (USD to CAD FX Rate):
The exchange rate in effect for the joint auction that is set the business day prior to the joint auction as the most recently available daily average exchange rate for USD and CAD as published by the Bank of Canada the day before the joint auction.
The statistics presented in the report for the Advance Auction are computed in the same manner as the statistics computed for the Current Auction. No allowances are consigned by consigning entities to the Advance Auction.
APPENDIX 4
June 21, 2018
West Coast 30-Day Average Snapshot
Los Angeles CARBOB-R Basis (cts/gal)
Los Angeles CARB No. 2 Basis (cts/gal)
(Continued on Page 3)
Los Angeles Jet-Pipe LAX Basis (cts/gal)
SUBSCRIBER NOTICE: As part of our ongoing commitment to ensure our spot market assessments remain relevant, accurate and comprehensive, OPIS is declaring a two-week open-comment period on all of its spot-pricing methodologies. From Monday, June 18 to the close of business Friday, June 29, please direct comments about our spot methodologies to Energy- [email protected]. To review OPIS' existing methodology for its various products and reports, please visit www.opisnet.com/about/methodology.aspx. OPIS' editorial and management team will examine each comment and evaluate whether the feedback ought to result in an alteration, enhancement or clarification of our methodology. Although comments are welcome any time of the year, we will repeat our open-comment period every three months.
PNW GASOLINE RALLIES ON TALK OF PIPELINE DELAY6/21/2018- Oil prices moved in a somewhat chaotic tandem with headlines today and it was the OPEC rhetoric that dictated most of the action. Brent crude was driven sharply lower this afternoon when it was clear that all members of OPEC and the Russians had substantial differences to settle. A small bounce was seen after-hours across the complex but it was far from convincing. WTI was most influenced by a report this morning that talked of a larger- than-expected draw at Cushing that theoretically will show up in next week's EIA report. Very high refinery runs confirm the possibility of summer crude draws that might tighten U.S. markets even as production continues to ramp higher. August WTI managed to settle just 17cts/bbl below the Wednesday close at $65.54/bbl and it managed to tack on 30cts to this price in late afternoon action. Brent traded for under $73/bbl as NYMEX WTI settled, but it managed to rebound to $73.13/bbl as this column was going to press. Tomorrow may be an extraordinary day, given the wide range of options that OPEC, Russia and other producing delegates will have in Vienna. As NYMEX futures closed today, for
New York Mercantile Exchange at SettlementWTI Crude Oil ($/bbl)
Full price display on page 2. Note: **L.A. Jet Fuel is JET-PipeLAX, Bay Area Jet Fuel is JET-Pipe, PNW CARBOB-R is Suboctane-Reg (FOB Seattle), PNW CARBOB-P is Sub-octane-Pre (FOB Seattle).
-- -- -- --5.500 -1.000
27.000 -1.000-- -- -- ---- -- -- --
Mean Change3.125 1.1253.125 1.125-5.500 -1.00016.000 -1.0001.000 -1.000
16.000 -1.0000.750 0.7500.750 0.690
L.A. 3-2-1 Crack Spread*Price ($/bbl) Change
12.72 0.79*Crack is based on midpoints for L.A. CARBOB Gasoline, CARB and ANS
LA vs. SF CARBOB Differential Spread (cts/gal) LA vs. SF CARB Diesel Differential Spread (cts/gal)
Product Timing LowCARBOB-R 5.99 RVP JUL 203.10CARBOB-R 5.99 RVP AUG 201.71CARBOB-R 5.99 RVP SEP 200.51CARB No. 2 AUG 210.62JET-PipeLAX JUL 207.42JET-PipeLAX AUG 206.87
Mean Change203.225 -1.395202.210 -1.770201.010 -2.250211.120 -2.450207.920 -3.650207.370 -3.670
High203.35202.71201.51211.62208.42207.87
Low3.504.00
14.002.750.00-1.00
High3.755.00
15.003.751.000.00
Mean Change3.625 0.1254.500 0.000
14.500 0.0003.250 0.7500.500 0.000-0.500 0.000
Los Angeles Physical Forward Curve Prices Physical Prices Basis Differentials
*NOTE: L.A gasoline prices are WEST LINE, and S.F. gasoline prices are NORTH LINE-ZERO LINE. Las Vegas gasoline is represented by L.A. regular sub-octane and premium sub-octane. AZRBOB is the year around gasoline product for Arizona. Pacific Northwest gasoline and No.2 oil prices are FOB Portland Olympic Pipeline; PNW Jet Fuel is FOB Seattle Barge. CARB RFG-R and CARB RFG-P in L.A. and S.F. is not a fungible pipeline product, but a reflection of the value of blending CARBOB with 10% ethanol. Ethanol quotes on page 4 are for ethanol delivered rail car to West Coast locations.
OPIS West Coast Prompt Spot Pipeline Prices and Basis Differentials (cts/gal)
Product Timing LowULS NO. 2 JUL 210.42CARB No. 2 JUL 210.42JET-PipeLAX JUN 207.51Sub-Oct Reg 9.0 RVP JUN 194.73Sub-Oct Pre 9.0 RVP JUN 216.23AZRBOB-R 5.7 RVP JUN 205.73AZRBOB-P 5.7 RVP JUN 227.23CARBOB-R 5.99 RVP JUN 201.23CARBOB-P 5.99 RVP JUN 216.23CARB-RFG Reg JUN 197.71CARB-RFG Pre JUN 211.21
Product Timing LowULS NO. 2 JUN 209.51CARB No. 2 JUN 209.51JET-Pipe JUN 207.51Sub-Oct Reg 7.8 RVP JUN 200.73Sub-Oct Pre 7.8 RVP JUN 226.73CARBOB-R 5.99 RVP JUN 204.23CARBOB-P 5.99 RVP JUN 230.23CARB-RFG Reg JUN 200.41CARB-RFG Pre JUN 223.81
Product Timing LowULS NO. 2 PMT JUN 229.01JET-Pipe PMT JUN 211.51B5 PMT JUN 233.01Sub-Oct Reg 7.8 RVP PMT JUN 211.23Sub-Oct Pre 7.8 RVP PMT JUN 245.73Sub-Oct Reg 9.0 (Seattle) PMT JUN 211.23Sub-Oct Pre 9.0 (Seattle) PMT JUN 245.73
example, there were some comments from the Iranian oil minister that cast doubt on a cohesive OPEC+ agreement. Diesel was a big loser during the formal session with July ULSD futures dropping 3.7cts/gal and settling at $2.0701/gal. August diesel settled 3.65cts/gal lower at $2.0742/gal. Both contracts rose about 0.75-0.8cts/gal in the 4 p.m. to 4:30 p.m. time frame. July RBOB settled at $2.0123/gal, losing 1.12cts/gal while August fell 1.52cts/gal to $1.996/gal. July added 0.46cts/gal after-hours, putting it at $2.0169/gal. Ethanol remained a very cheap component of finished motor fuel, with prices at some Midwestern hubs remaining shy of $1.40/gal. RINs had a robust recovery in the morning but fell back below 30cts in the afternoon for the 2018 vintage D6 category. --Tom Kloza, [email protected]
CARB GASOLINE STOCKS DIP TO 2018 LOW AT CALIF. REFINERIES: CEC Supplies of CARB gasoline at California refineries slid to a six-month low last week, according to a fresh round of data released this week by the California Energy Commission (CEC). For the week ending June 15, CARB RFG stocks dropped back 4.9%, to 6.301 million bbl, their lowest mark since mid-December, and third consecutive weekly drop. Year on year, however, supplies still maintained a healthy 21.8% lead above the same week in 2017. Regionally, stocks remained well above their five-year average in Northern California, while coming in around the midpoint of their five-year high-low band in Southern California. In terms of production, CARB gasoline output at Golden State refineries dropped below 1 million b/d for the first time in four weeks, off 5.2% to 972,000 b/d last week, although that was up 2.5% on the year. Gasoline blending component tallies fell as well, off just shy of 1% to 5.859 million bbl. Unlike CARB RFG, however, levels came in at 5.5% below where they were last year. Conventional gasoline supplies were tugged lower last week, down 15.1%, to 1.302 million bbl. Production levels shed 4%, to 149,000 b/d. Meantime, CARB distillate supplies were on the path downward with gasoline, dropping 11% last week to 2.269 million bbl, which was off 0.7% on the year, as output retreated 13.2%, to 244,000 b/d. Stocks of EPA and renewable diesel fell back 13.8%, to 1.134 million bbl, but that was still up a solid 27.8% year on year. Production was up 6.6%, to 109,000 b/d. Bucking the downward trend seen for supplies across the rest of the slate, stocks of jet fuel at California refineries jumped 13.9% last week, to 3.615 million bbl, a six-week high and some 21% above last year. Jet fuel production was up as well, adding on 15.2%, to 344,000 b/d. Notably, yesterday's Energy Information Administration report showed robust jet fuel imports into the West Coast/PADD5 region last week, with incoming cargoes up 31,000 b/d, to 147,000 b/d, their third-highest rate of 2018 and more than double the rate that was seen the year prior. --Kylee West, [email protected]
CHEVRON REPORTS FLARING AT RICHMOND REFINERY Chevron's 257,200-b/d Richmond, Calif., refinery was flaring yesterday afternoon, according to a filing with the California Emergency Management Agency (CalEMA). Flaring was ongoing at the time of the filing, around 3:45 p.m.
PT, the notification said, and had the potential to result in the release of sulfur dioxide emissions beyond the reportable quantity. No evacuations were necessary and the "facility continues to operate as normal," the filing noted. A Chevron spokesperson directed OPIS to a post on the company's Facebook page, which said that the flaring was due to "an upset at a processing unit," but did not specify the unit in question. The Richmond refinery provides fuel for 20% of cars on Northern California roads, and some 60% of planes at major airports in the Bay Area use jet fuel made there. --Kylee West, [email protected]
WEST COAST REFINED PRODUCTS LOGIC: L.A. CARBOB-R 5.99 RVP: June prompt was assessed at NYMEX July RBOB contract plus 1ct/gal, based on trades from Merc level to plus 2cts/gal. L.A. CARB No. 2: July prompt was assessed at the NYMEX August ULSD contract plus 3.125cts/gal, based on bids at plus 3cts/gal and offers at plus 3.25cts/gal. L.A. ULS No. 2: July prompt was assessed at the NYMEX August ULSD contract plus 3.125cts/gal, considering a flat relationship to L.A. CARB No. 2. L.A. JET-Pipe LAX: June prompt was assessed the NYMEX July ULSD contract plus 75pts/gal, based on trades from plus 50pts/gal to plus 1ct/gal. S.F. CARBOB-R 5.99 RVP: June prompt was assessed at the NYMEX July RBOB contract plus 3.5cts/gal, unchanged on the day, based on bids at Merc level and offers at plus 5cts/gal. S.F. CARB No. 2: June prompt was assessed at the NYMEX July ULSD contract plus 3cts/gal, unchanged on the day, with no bids or offers heard. PNW SUB-OCT Reg 7.8 RVP: June prompt was assessed at the NYMEX July RBOB contract plus 11.5cts/gal, based on trades from plus 10cts/gal and plus 13cts/gal. PNW ULS No. 2: June prompt was assessed at the NYMEX July ULSD contract at plus 22.5cts/gal, based on bids at plus 15cts/gal and offers at plus 23cts/gal.
WEST COAST REFINED PRODUCTS ANALYSIS: Pacific Northwest gasoline cash differentials leapt higher in Thursday's session, bolstered by talk of a shipping delay on the
OPIS Ethanol Prices (cts/gal)Market TimingLA CI 79.90 PROMPTLA CI 79.90 ANYSF CI 79.90 PROMPTSF CI 79.90 ANYOregon CI 69.89 PROMPTWashington Eth. PROMPTPhoenix Eth. PROMPT
region's Olympic Pipeline, although the pipeline's operator said operations were normal. Trades for prompt June sub-octane were confirmed from 10cts/gal over the July RBOB futures contract this morning to plus 13cts/gal this afternoon, placing mean cash differentials up 3cts/gal from yesterday. That jump was enough to overturn futures losses, and outright prices ramped up 1.88cts/gal to $2.1273/gal on the day. "Olympic Pipeline delayed a day and a half, I heard," said one trader about the fundamentals behind stronger trading in the Pacific Northwest gasoline spot market. A spokesperson for BP, which operates the Olympic Pipeline system told OPIS that the pipeline was running and operating at normal rates, however. In California, despite the latest rounds of West Coast supply data from the California Energy Commission (CEC) and Energy Information Administration (EIA) showing a downturn in regional gasoline supplies last week, NYMEX premiums for Los Angeles CARBOB were pushed lower Thursday. June L.A. CARBOB traded today at parity to the July RBOB futures contract up to plus 2cts/gal, , with mean cash differentials down 1ct/gal from where they changed hands yesterday. Sources pointed out that although both the CEC and EIA showed regional gasoline supplies lower week on week in their latest reports, they also both continued to show stockpiles at ample annual surpluses, which traders appeared the be focusing on. Southern California refineries are also fairly healthy, with no upsets reported in recent weeks and planned seasonal maintenance having wrapped up, putting downward pressure on spot trading levels. In terms of outright prices, June L.A. CARBOB saw even steeper losses thanks to wilting futures, down 2.12cts/gal to $2.0223/gal by day's end. In the Bay Area, June San Francisco CARBOB was bid at "flat" to the July RBOB futures contract, and offered at plus 5cts/gal, leaving cash differentials at a 3.5ct/gal Merc premium, where they left off Wednesday. Cash prices followed futures 1.12cts/gal lower, to $2.0473/gal. June Los Angeles jet fuel was traded from 50pts/gal to 1ct/gal over the July ULSD futures contract, 75pts/gal stronger than yesterday's mean. Cash prices were still pulled lower by fading paper trade, off 2.95cts/gal, to $2.0776/gal. While Pacific Northwest ULSD for prompt June delivery didn't see any confirmed trades, cash differentials were pegged a penny lower, at 22.50cts/gal over the July ULSD futures contract based on bids at plus 15cts/gal and offers at plus 23cts/gal. Cash prices lost 4.70cts/gal to $2.2951/gal, but were still representing the most expensive ULSD in the country by a nearly 20ct/gal margin. Los Angeles CARB diesel rolled to July as prompt timing overnight, and today bids for prompt barrels were heard at 3cts/gal above August ULSD futures, with offers at plus 3.25cts/gal. That put cash differentials at plus 3.125cts/gal, 1.125ct/gal stronger than where June material left the board yesterday. Cash prices still unwound 2.165cts/gal, to $2.1055/gal. June San Francisco CARB diesel, which saw offers drop off precipitously in the final half-hour of yesterday's session, had a quiet session Thursday. With offers at plus 5.50cts/gal and no bids seen, diffs were steady at a 3ct/gal premium to the July Merc, as prices shadowed futures 3.70cts/gal lower, to just over $2.10/gal. --Kylee West, [email protected]
Legend
L.A. CARBOB-R
L.A. CARB No. 2
Basket of Racks
Retail Average
Today's Spot-to-Rack-to-Retail Snapshot
Change-0.012-0.004-0.021
Gasoline ($/gal) PriceBasket of Racks 2.332Retail Average 3.679L.A. CARBOB-R 2.022
Change-0.018-0.006-0.022
Diesel ($/gal) PriceBasket of Racks 2.356Retail Average 3.945L.A. CARB No. 2 2.105
Editors confirm and record deals done for gasoline and distillate products with a minimum pipeline size of 10,000 bbl in California and 5,000 bbl in the Pacific Northwest. As the majority of the market is done on an EFP basis, we follow deals as basis discounts or premiums to the New York Mercantile Exchange. We consider fixed-price deals only if they fall within the full-day differential range based off the NYMEX at settlement. Fixed price deals in California spot markets are converted to an EFP when reported and confirmed and then reapplied to the NYMEX settlement price. OPIS does publish "prompt" ranges, which are trades that reflect "any month / buyers option" transactions. "Buyers option" gives the buyer the choice of taking delivery in any of the four cycles in throughout the month. In Los Angeles, OPIS identifies the prompt Kinder Morgan cycle for timing clarity but ranges are buyer option/any month lifting. OPIS works with the Kinder Morgan Pipeline to determine the timing of the various cycles throughout the month. Typically, each month has four pumping cycles. In cases where it is close to the end of the months trading cycle, OPIS reserves the right to roll coverage forward to the more liquid month. For the Los Angeles market, OPIS follows the Kinder Morgan West Line, and in the Bay area the OPIS assessment is for the Kinder Morgan Zero Line. In the Pacific Northwest, prices are FOB Portland - Olympic Pipeline and jet fuel is FOB Seattle barge. For complete methodology, visit http://www.opisnet.com/about/methodology.aspx
U.S. West Coast Price Discovery Methodology
ANY QUESTIONS ABOUT THIS REPORT, CALL LISA STREET AT 832-679-7225. COVERAGE FOR WEEK OF 6/18: 6/18-6/19: LISA STREET; 6/20-6/22: KYLEE WEST
Global Head - Energy Analysis:Tom Kloza 732.730.2558 ICE IM: tkloza [email protected]
Above figures reported are net of BOE audit assessments, refunds, amended/late returns and State Controllers Office refunds. (1) Fiscal year reports year ending in column year. Example, FY09/10 is reported in the column for 2010. (2) The March 2010 figures include 12.1 million gallons in refunds.
(3) The May 2012 figures include 27.9 million gallons in audit assessments and amended returns.
(4) The August 2017 figures include 62.3 million gallons in refunds.
The December 2017 figures include 62.5 million gallons in audit assessments.
Net Taxable Gasoline Gallons (Including Aviation Gasoline)
APPENDIX 7
PERIOD 2009(2) 2010(3) 2011(4) 2012 2013 JANUARY 197,283,143 188,705,030 191,265,324 181,003,409 196,055,634 FEBRUARY 181,765,826 195,563,666 176,452,952 184,093,977 184,893,748 MARCH 240,173,563 234,903,120 218,708,007 231,409,056 240,932,088 APRIL MAY
219,920,756 209,471,285
204,318,970 205,110,704
210,355,533 213,094,669
197,559,932 228,146,495
208,511,279 232,587,197
JUNE 223,555,180 251,256,188 243,344,006 250,024,610 254,803,659 JULY 215,772,974 219,318,120 223,447,912 217,801,078 220,516,843 AUGUST 193,949,828 205,138,797 227,911,450 223,131,870 239,921,789 SEPTEMBER 244,412,169 244,810,944 261,926,745 237,216,063 255,249,242 OCTOBER 224,450,417 215,881,238 226,187,671 234,650,829 238,359,920 NOVEMBER 197,664,779 207,283,073 196,225,303 191,711,268 209,293,623 DECEMBER 231,720,029 218,365,238 233,614,553 226,797,044 259,180,630
TOTAL 2,580,139,949 2,590,655,088 2,622,534,125 2,603,545,631 2,740,305,652 (1) Fiscal Year 2,587,827,874 2,564,017,901 2,641,551,113 2,649,091,757
PERIOD 2014(5) 2015(6) 2016(7) 2017(8) 2018 JANUARY 201,991,138 197,537,337 217,753,398 211,288,592 209,459,967 FEBRUARY 187,594,207 193,779,164 212,731,245 208,211,775 201,325,805 MARCH 231,193,811 263,113,370 267,381,356 300,872,658 APRIL MAY JUNE
214,171,368 231,099,276 253,209,845
220,397,637 220,949,857 257,066,137
248,059,116 216,937,963 273,005,811
238,088,542 252,965,840 309,004,483
JULY 242,734,702 240,176,558 251,724,789 250,097,283 AUGUST 239,718,243 246,344,768 269,281,410 270,761,991
SEPTEMBER 264,722,388 270,451,396 292,758,016 288,959,723 OCTOBER 246,623,042 246,699,175 254,148,157 269,839,821 NOVEMBER 209,521,386 218,883,579 234,619,758 219,193,257 DECEMBER 253,600,951 249,260,828 266,869,607 304,524,782
(1) Fiscal Year 2,741,781,692 2,809,764,214 2,907,685,193 3,089,833,627 2,014,162,629
TAXABLE DIESEL GALLONS 10 YEAR REPORT NET OF REFUNDS
Notes: Above figures reported net of BOE audit assessments, refunds and amended/late returns. (1) Fiscal year reports year ending in column year. Example, FY 09/10 is reported in the column for 2010. (2) The June 2009 figures include 18.4 million gallons in refunds.
The July 2009 figures include 9.6 million gallons in refunds.
The August 2009 figures include a 19.3 million gallon non-recurring credit. (3) The February 2010 figures include 11.3 million gallons in billed assessments.
The March 2010 figures include 8.7 million gallons in refunds.
The May 2010 figures include 13.2 million gallons in refunds. (4) The March 2011 figures include 19.5 million gallons in refunds. (5) The March 2014 figures include 17.1 million gallons in refunds. (6) The March 2015 figures include a decrease of 11.7 million gallons in refunds, and an increase
of 23.9 million gallons reported by suppliers. (7) The August 2016 figures include an increase of 23.9 million gallons reported by suppliers.
The September 2016 figures include an increase of 21.3 million gallons reported by IFTA Fuel program.
The November 2016 figures include an increase of 17.2 million gallons reported by suppliers.
The December 2016 figures include an increase of 32.7 million gallons reported by IFTA Fuel program. (8) The March 2017 figures include an increase of 28.5 million and 4.3 million gallons reported by suppliers and IFTA Fuel program respectively.
The May 2017 figures include an increase of 31.1 million reported by suppliers and a decrease in refunds of 5.4 million gallons.
The June 2017 figures include an increase of 21. million and 7.7 million gallons reported by suppliers and IFTA Fuel program respectively.
The October 2017 figures include an increase of 18.1 million and 2.6 million gallons reported by suppliers and IFTA Fuel program respectively.
The December 2017 figures include an increase of 28 million and 42.3 million gallons reported by suppliers and IFTA Fuel program respectively
y.
APPENDIX 8
WEEKLY REFINERY PRODUCTION AND STOCKS LEVELSWEEKLY FUELS WATCH REPORTAll Quantities in (000s of Barrels)