Energy and Environment News

Energy and Environment News

March 16, 2015

Top Stories

Oil.  The Wall Street Journal reports that many independent shale oil producers are adopting a strategy in which they drill wells but hold off on hydraulic fracturing — allowing them to “store” oil in the ground that they can quickly tap once prices become more favorable.  Industry analysts warn that once prices begin to recover, this strategy could lead to excess supply and thereby place a cap on the level to which oil prices can increase for some time.  WSJ

Energy Outlook.  In an opinion piece in the Wall Street Journal, British MP Matt Ridley addresses and counters three key arguments used by the environmental movement to advocate against the use of fossil fuels: (1) fossil fuels will soon be depleted; (2) renewable sources of energy will soon price fossil fuels out of the marketplace; and (3) the climate costs of fossil fuel consumption outweigh their benefits.  Ridley offers both historic and scientific evidence against each point, and suggests that the path forward should be guided by ongoing research into energy efficiency improvements, carbon capture technologies, and new energy innovations.  WSJ

Oil.  Christopher Helman of Forbes attributes the growing lack of U.S. oil storage not only to excessive fracking by American oil companies, but also to Canada, whose shippers are holding crude in American tanks and are waiting to ship it to the Gulf six months from now when prices are higher.  Analysts worry that U.S. storage could hit “tank tops” by as early as April — with too much oil and not enough places to store it, this could in turn cause the price of crude to plummet as low as the $20/barrel range.  Forbes

Energy and Environment News Brief

Energy and Environment News Brief

March 13, 2015

Top Stories

Energy Policy.  An EIA study on federal subsidies to the energy industry finds that the total value of direct federal subsidies and financial interventions decreased by 23% between 2010 and 2013.  While federal support increased for renewable energy sources and technologies related to energy production over this period, this was outweighed by reductions in federal support for home efficiency improvements and fossil fuels.  EIA

Climate Change.  According to the International Energy Agency (EIA), global emissions of carbon dioxide did not rise in 2014, marking the first time in 40 years that the level of carbon dioxide emissions remained flat without the presence of an economic crisis.  Some speculate that the primary reason for this halt in emissions are shifts in energy consumption in China — a nation that has recently experienced reductions in the use of coal, increases in the use of solar, wind, and hydropower, and reduced growth in electricity consumption.  FT

Oil.  Baker Hughes reported today that the total number of U.S oil rigs fell to the lowest level since November of 2009, marking a significant retrenchment from U.S. oil producers in the wake of the oil price collapse.  Despite these drilling cutbacks, U.S. oil production has continued to grow, with the EIA estimating that oil production in 2015 will reach 9.35 million — the highest since 1972.  Bloomberg

Energy and Environment News

Energy and Environment News

March 12, 2015

Top Stories

Oil.  U.S. oil prices fell to a six-week low today amid rising inventories, growing global oil output, and lackluster demand.  Furthermore, the price difference between Brent Crude — the global benchmark price — and the U.S. Benchmark has widened in recent days as growing U.S. inventories continue to place downward pressure on domestic prices and political disruption threatens supply abroad.  WSJ

Natural Gas.  While natural gas prices rebounded from losses to trade today, they are likely to fall in the near future as traders anticipate slowing demand brought about by oncoming warmer weather.  Temperatures have turned into spring-like conditions across most of the country, which will likely bring an end to the peak demand season for natural gas as a heating fuel.  WSJ

Energy Outlook.  According to an analysis from the U.S. Department of Energy, cost reductions and technology improvements will reduce the price of wind power to below that of natural gas power over the next ten years  — even without the subsidies that are currently in place.  The agency also estimated that power prices will decline by 2.2 percent if wind energy increases to 35% of all U.S. electricity supplies by 2050 — and that $400 billion worth of associated benefits could be reaped by this reduction in greenhouse gasses.  Bloomberg

Energy and Environment News

Energy and Environment News

March 11, 2015

Top Stories

Energy Policy.  California and Quebec announced the completion of the second joint auction for carbon dioxide allowances as part of a cap-and-trade system in place between the two subnational markets. In the second auction — which included allowances for the transportation sector, including wholesale gasoline suppliers — all current vintage allowances were sold at just 1% above the first auction’s settlement price.  EIA

Solar.  According to new research from the Solar Energy Industries Association and GTM, total demand for U.S. solar power increased 30 percent in 2014, with residential installations alone surpassing 1 gigawatt for the first time in history.  This residential market has remained the fastest growing segment for solar power — gaining at least 50% in each of the past three years — establishing a trend attributed mostly to the falling price of panels and increased awareness among homeowners of the repercussions of climate change.  Bloomberg

Oil.  Falling oil prices are preventing Iraq from making critical investments needed to continue producing oil while also funding its efforts to fight Islamic State extremists.  While oil production has remarkably expanded in Iraq in recent years and provided much needed funding to “smooth-over” other challenges, falling revenues due to the oil-price decline threaten the country’s ability to weather internal and external threats to its stability. WSJ

Energy and Environment News

Energy and Environment News

March 10, 2015

Top Stories

Energy Policy.  Mexican Energy Minister Pedro Joaquin Coldwell announced that there have been modifications to the financial terms and scope of the first round of oil block auctions in the Gulf of Mexico in an attempt to keep the auctions competitive amid low global prices.  These adjustments are largely consistent with international practices, such as the elimination of fixed monetary investment requirements in favor of fixed internationally recognized work “units”.  WSJ

Oil.  The U.S. Energy Information Administration (EIA) increased its forecast for 2015 U.S. oil production due to an increase in baseline expectations from last quarter and an increase in production from the Gulf of Mexico, which is more resistant to price swings due to long-term investment requirements. However, the agency decreased its 2016 domestic production forecast, reasoning that the global drop in oil prices will likely have a significant impact on production from the U.S. shale formations next year. EIA, Reuters

Nuclear.  China’s top economic-planning agency recently approved construction of two new nuclear reactors for the first time in more than two years, indicating new momentum after delays due mostly to safety concerns. China is now the world’s biggest nuclear growth market, with projected power-demand growth offering favorable economic conditions for nuclear investments despite the availability of cheap natural gas.  WSJ

Solar.  A new report from Wood Mackenzie, a leading consulting firm that specializes in energy markets, predicts that solar power will be fully competitive with traditional sources of energy within 5 years in 19 states.  Nick Butler of the Financial Times discusses the technological innovations on which this forecast depends — specifically the collapse of solar module prices and improved modular efficiency — and asserts that such continued progress would likely be quick to globalize and would greatly transform the “status quo” of the energy sector.  FT

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