Energy and Environment News

Energy and Environment News

March 18, 2015

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Energy Policy.  According to U.S. Interior Secretary Sally Jewell, the White House will focus on tightening standards for companies extracting oil, gas, and coal on taxpayer-owned land during the Obama administration’s final 22 months.  The Interior Department — which manages leases for approximately one-fourth of U.S. oil, gas, and coal projects — is expected to announce its proposed rules as early as this week.  WP

Oil.  Upon reports of record high crude-oil supplies in the U.S., the West Texas Intermediate crude oil price benchmark fell to new six year lows this week while the global benchmark, Brent crude, remained relatively stable.  While some industry experts expect the “WTI-Brent spread” — or the price difference between the two benchmarks — to widen due to growing U.S. stockpiles, other analysts predict that it will narrow as Brent prices fall due to higher output from Iraq and lower demand during spring refinery maintenance.  WSJ

Oil & Gas.   The Financial Times notes that U.S. shale production has fared modestly better than analysts’ expectations due to producers’ ability to cut costs and increase productivity. These cost cuts and productivity gains are largely due to: (1) increased pressure on suppliers of drilling rigs, hydraulic fracturing, and other services, (2) focused spending on companies’ most productive rigs, and (3) improved techniques, such as “assembly line” drilling models.  FT

Energy and Environment News

Energy and Environment News

March 16, 2015

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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

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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

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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

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