Energy and Environment News

Energy and Environment News

May 11, 2016

Top Stories

Oil.  Bank advisers say that the recent oil price rally is doing little to improve the prospects of overextended borrowers in the energy sector.  Banks are in the middle of their twice-annual process of resetting borrowing limits for energy customers, and are cutting facilities by 20 to 25 percent — an even deeper contraction than the 15 to 20 percent cuts in the second half of 2015.  FT

Oil. Saudi Arabia’s state-owned oil company is likely to increase its production to meet rising global demand this year, particularly in the U.S. and India.  To increase production, the company is beginning an expansion that includes a partial IPO and new refining capabilities.  WSJ

Climate Change.  Global warming is suspected as the cause of a growing number of forest fires in the Northern Hemisphere, such as the fire that nearly destroyed Fort McMurray in Alberta last week.  Experts say that these intense fires demand a new strategy by governments to manage forests and protect nearby communities — especially given that more frequent and severe fires could accelerate the pace of climate change.  NY Times

Energy and Environment News

Energy and Environment News

May 9, 2016

Top Stories

Oil Outlook.  Saudi Arabia’s longtime oil minister Ali al Naimi was ousted on Saturday as part of a broad overhaul to implement the deputy crown prince’s “Vision 2030” agenda.  The plan aims to reduce the economy’s reliance on oil revenues by reorienting much of the economy towards the private sector, including increased development of industrial clusters that leverage the country’s competitive advantage as an energy producer.  FT

Energy Policy.  Justin Gillis writes in the New York Times that New York may be “pulling ahead” of California as the frontrunner of the green economy.   Under Governor Andrew Cuomo, the state is beginning to implement a plan coined “Reforming the Energy Vision” that will draw on market forces to reform utilities’ production and transmission of electricity, as well as the way it is consumed.  While details about the policy have yet to be released, analysts expect that New York will change how utilities are paid in order to give them a “profit motive” to bring new innovations to the electric grid.  NY Times

Oil.  Nick Butler of the Financial Times writes about the influence of oil price speculation on the global oil market, noting that it has historically amplified shifts in oil prices that are rooted in only modest changes in the “real” global economy.  Butler explains that because speculative trade typically amounts to at least 10 times the volume of physical trade on a given day, the practice can send false price signals that cause real and significant damages within the market — deterring investment and curtailing future supplies.  FT

Energy and Environment News

Energy and Environment News

May 3, 2016

Top Stories

Oil.  The Financial Times reports that China’s independent refineries, also known as “teapots,” are becoming more assertive in the global oil market, importing greater quantities of crude and doing so more directly with a reduced reliance on western commodity houses.  The growing dominance of these teapot refineries —  which represent approximately one-third of China’s total oil refining capacity — is widely thought to be increasing China’s influence on world oil markets.  FT

Energy Policy.  According to data from the Energy Information Administration, almost every state that is suing to block the Clean Power Plan has shifted away from coal, even though the federal rule has yet to come into effect.  Energy policy experts note that this trend is unlikely to impact states’ legal opposition to the policy, however, as most states oppose the EPA’s influence over their energy markets, rather than the direct requirements of the regulation itself.  WP

Climate Change.  The New York Times reports that researchers are increasingly trying to find ways to recycle carbon dioxide into a new type of fuel, turning the pollutant into a renewable resource.  Scientists believe that the benefits from such a discovery would be substantial, to the extent that some organizations have created incentives and prizes for research teams that develop relevant technologies.  NY Times

Energy and Environment News

Energy and Environment News

May 2, 2016

Top Stories

Energy Outlook.  According to a recent Fed survey, most domestic and foreign banks have tightened standards on loans to oil and gas companies.   While loans to these firms account for less than 5% of industrial and commercial loans among domestic banks, most surveyed expected that delinquency and charge-off rates on loans to this sector will worsen over the course of 2016. WSJ

Fracking.  The Colorado Supreme Court ruled today that the state’s municipalities cannot outlaw hydraulic fracturing, and charged that previous measures seeking to halt the technique are “invalid and unenforceable.”   The ruling marks a victory for industry stakeholders, who have championed the decision as “[protecting] private property rights, which are a main driver for the energy renaissance in this country.”  WSJ

Oil Outlook.   U.S. Secretary of Energy Ernest Moniz announced that he expects global oil supply and demand to rebalance within one year, but notes that “we are still unbalanced” with a “very very large inventory of oil.”  Moniz also noted that U.S. oil output is predicted to decline by 600,000 barrels per day this year compared with last year as producers continue to respond to low crude prices.  Reuters

Energy Policy. Time Boersma and Michael E. O’Hanlon of the Brookings Institute write that Europe’s energy policy has been a “success story” not only for the region’s economic and energy resilience, but also for NATO’s handling of the security threats posed by Russia’s stronghold over Europe’s natural gas supply.   The authors assert that the notion that Europe is dependent on Russian natural gas is “a relic from the past,” and give credit to the EU’s strong regulatory framework which holds commercial entities like Gazprom to its rules.  Brookings

Energy and Environment News

Energy and Environment News

April 29, 2016

Top Stories

Oil Outlook.  The Baker Hughes U.S. oil rig count declined by 11 to 332 last week, furthering a trend of declines that began shortly after oil prices began to plunge.  Since peaking at 1,609 rigs in October of 2014, the rig count has declined by 73%.  WSJ

Climate Policy.  The benchmark European Union carbon allowance price jumped 22% in April, marking its biggest jump in more than two years.  The surge — which follows a 40% decline earlier this year —  is attributable to a rise in energy prices and uncertainty over new rules that aim to curb an oversupply of allowances in the market.   Bloomberg

Oil.  The United States’ largest two oil companies have taken a considerable hit due to record-low oil and natural prices and weakening refining profit margins, with one company posting its smallest profit for any quarter since 1999 and another reporting first-quarter losses of $725 million.  While neither company is at risk of going out of business, the results underscore the difficulties faced by the entire industry, which has seen 62 bankruptcies over the past year and layoffs for nearly 120,000 American workers.  NY Times

Energy Outlook.  Eric Roston of Bloomberg writes that the pace of technological change in the electric car industry is accelerating, but that the climate impact of the new vehicles will be limited by the progress of climate-friendly improvements to the power grid.  Roston explains that because electric cars currently get their power from electricity that is generated primarily from fossil fuels, the deployment of clean electricity will be critical to curbing climate pollution moving forward.  Bloomberg

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