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Climate Change.  Pope Francis has aligned himself with mainstream scientific thought regarding climate change, warning about the dangers of “the ecological crisis” and calling for action to address global warming in the new papal encyclical on the environment.  Experts from the Pennsylvania State University note that the scientific evidence cited by the Church is correct for the most part —  at least to the degree possible in a religious document meant for such a broad audience.  NY Times

Energy Policy.  According to officials, Greece is expected to sign a preliminary agreement tomorrow that will allow Russia to extend a gas pipeline through its territory.  According to a chief executive from Russian state-controlled oil producer Gazprom, this creation of additional transport infrastructure will connect gas fields in northern Russia and markets in Europe, facilitating increased security and reliability of deliveries.  WSJ

EPA.  EPA defended its controversial renewable fuels program at a Senate subcommittee hearing today, addressing criticisms related to years-long delays of quotas and allegations that the agency recently set “unattainable targets” for the amount of corn-based ethanol and other biofuels that must be blended in the nation’s motor fuel supply over the next two years.  EPA acknowledged that quota delays created uncertainty within the ethanol market, but argued that the new standards are necessary to ensure the future growth of the renewable fuels industry.  Reuters

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Energy Outlook.  Market observers note that there has been strong demand growth for refined fuels such as gasoline and diesel, which is helping to rebalance the global market for oil.   Reuters analyst John Kemp argues that this has largely been driven by economic expansion and employment gains — and that the sharp drop in prices has accelerated the trend for gasoline consumption, but not diesel consumption, which is more tied to general business activity.  Reuters

Oil Outlook.  Reuters reports that today’s rally in U.S. crude prices to $65 could trigger a wave of selling from Canadian oil producers eager to protect themselves against a second price slump.  Canadian producers have so far been reluctant to adopt the strategy — commonly known as “hedging” — due to fears of missing out on profits in the event that prices suddenly recover to higher levels.  Reuters

Oil.  Groups once profiting from private-equity funds in North American shale are now looking for assets elsewhere, primarily in regions hurt by the year-long plummet in oil prices, such as the North Sea. These groups’ previous success in North America has stoked demand from investors, such as pension funds, endowments, and insurance companies — accordingly, private equity-backed deals in oil and gas outside North America more than doubled in value in 2014 to $11.4 billion.  WSJ

Energy Policy.  Benjamin Zycher asserts in The Hill that the intellectual and policy justifications for the ban on exports of U.S. crude oil are just as flawed now as they were when the ban was enacted in 1975.  He argues that a repeal of the ban would have a number of positive impacts: (1) it would modestly increase domestic prices; (2) it would strengthen the U.S. dollar; and (3) it would put downward pressure on product (i.e., gasoline and diesel fuel) prices.  The Hill

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Natural Gas.  Recent government and private-sector forecasts suggest that monthly natural gas production will flatten and possibly begin to decline in 2015.  While industry analysts expect that the downshift in natural gas production will be more widespread and long-lasting than in previous slumps, others point to factors such as cheaper contracts with service providers that could keep output growing despite lower prices.  WSJ

Climate Policy.   The Bloomberg View Editorial Board reviews a recently introduced Carbon Tax bill sponsored by Senators Sheldon Whitehouse (D – RI) and Brian Schatz (D – HI) that would impose a $45 tax on almost every ton of carbon emitted in the U.S. The Board argues that while the bill is unlikely to succeed, it presents an important and effective alternative to the Obama Administration’s regulatory approach to cutting carbon emissions.  Bloomberg View

Oil Outlook.  As OPEC continues to produce oil well above its quota and U.S. production estimates continue to rise, industry analysts are pushing back predictions for when the global market for crude oil will come into balance. Analysts estimate that the global oversupply of crude oil is rising at a rate of nearly two million barrels per day despite signs of elevated demand and industry cutbacks on infrastructure tied to crude oil production. WSJ

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Energy Security.  At a conference sponsored by the U.S. Energy Information Administration, U.S. Energy Secretary Ernest Moniz said that the U.S. should be able to tap its Strategic Petroleum Reserve in the case of global oil price shocks and asserted that the reserve not be limited to easing U.S. supply emergencies.  Moniz asserted that the ability to put crude from the reserve into the domestic market would provide the U.S. with “the most valuable protections” from oil market disruptions, particularly in light of price shocks that have increased with rising turmoil in the Middle East.  Bloomberg

Oil.  Reuters reports that Iran has been storing as much as 40 million barrels of oil on supertankers at sea in efforts to prepare for a “sales drive”, should a nuclear deal with the West become finalized. Industry analysts note that the country will likely sell the oil at any price in order to reclaim market share and more quickly squeeze out high-cost producers. Reuters

Climate Change.  Nick Butler of the Financial Times discusses the viability of carbon capture and storage (CCS) given broad consensus that the process will account for up to one-fifth of the net reduction of carbon needed by 2050 to keep global warming at two degrees Celsius or less.  Butler asserts that in order for CCS to operate at the global scale required for these emissions reductions, it must become cheaper, faster, more broadly used across industries.  FT

LNG.  As prices of liquefied natural gas (LNG) have fallen to record lows in Asia this year, industry analysts note that global balances of LNG supplies have quickly caught up with demand — shifting market supplies toward areas in which the excess supplies can be absorbed.  North America is set to add more supplies to the LNG market later this year with increased gas exports, further adding to competition within the LNG market.  WSJ

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Energy Policy.   The Wall Street Journal reports on the unintended speculative market for EPA credits under the renewable fuel program, a federal policy that awards credits to refiners and importers for mixing ethanol into gasoline.  Refineries that don’t blend ethanol are required to buy credits in order to meet quotas specified under the regulation — and many claim that the speculative market has made them “captive buyers in an artificial commodities market.”  WSJ

Oil.  Oil market data providers have acknowledged that the physical market for oil may be better balanced than data suggest, as production is likely lower than initially reported while demand is likely stronger.  New developments in drilling technology and behavior have made the market more adaptable to low prices, while statistical techniques tend to assume producers behave in more of a “business as usual” manner.  WSJ

Energy Policy.  Jude Clemente of Forbes asserts that New York’s statewide ban on hydraulic fracturing is unsustainable given that the state has a natural gas-dominant economy and tremendous untapped oil and gas resources.  Clemente argues that this is a national concern given that demand for natural gas is growing faster than all other major fuels — and New York uses 15% of the U.S. supply but accounts for just 1% of total population.  Forbes

Energy Outlook.  Industry analysts report that there has been a “perceptible shift” from stable term contracts for oil to spot purchases, or short-term deals, particularly among Asian refiners.   Specifically, refiners — who now have little concern that prices will suddenly surge — are seeking to boost profits by purchasing more in the spot market than under long-term contracts where prices are generally higher.  Bloomberg