Energy and Environment News

Energy and Environment News

August 10, 2015

Top Stories

Energy Policy.  Industry and Congressional leaders are pushing to lift the U.S. oil-export ban as early as September — a move that would have been unthinkable not long ago given that the U.S. has banned crude exports since the shock of the 1973 Arab oil embargo.   The Wall Street Journal predicts that the change in policy will not cause much of an economic stir, given that oil prices are hovering below $50 a barrel and the U.S. is already exporting more than a half-million barrels a day to Canada, the biggest exemption under the ban.  WSJ

Energy Outlook.  The Russian economy is in a dangerous situation amid the sustained fall in energy prices, as energy is the largest single sector in the Russian economy, energy exports account for roughly 70% of Russian trade, and oil and gas revenues account for roughly half of the government’s official budget.  Nick Butler of the Financial Times writes that the downward energy cycle could take years to play out — and suggests that economic discontent will likely give way to the kind of political instability that has pushed the country into past wars.  FT

Energy Policy.  Iranian critics of the nuclear deal reached in July are becoming increasingly vocal, underscoring the sharp divide within the country over how it should move forward.  While Iranian youth and a broad section of the business class support strengthening ties with Western countries by opening the Iranian economy to foreign investment and products, others are skeptical that a path toward liberalization is incongruent with Iran’s strategic interests.  WSJ

Energy Outlook.  The Adaptive Energy Technology Development (AETD) program — a follow-up to the successful Adaptive Versatile Engine Technology (ADVENT) program — is currently developing the first ever “adaptive engine” for military jets that will optimize both speed and fuel efficiency, unlike current designs that emphasize one at the expense of the other.   While the technology is costly, it could result in 25 percent lower fuel consumption. Brookings

Energy and Environment News

Energy and Environment News

August 7, 2015

Top Stories

Oil Outlook.   The Wall Street Journal notes that American energy producers have found it difficult to scale back production levels despite cutbacks on spending and idle drilling rigs.  Industry analysts say that U.S. firms need to cut output by at least 500,000 barrels per day to curtail oversupply on the market, but companies remain incentivized to make up for lost revenues by increasing production in the short term.  WSJ

Coal.  James Stewart of the New York Times writes that market forces — rather than a political “war on coal” — will be the coal industry’s downfall moving forward.  Specifically, Stewart argues that coal majors are being driven to bankruptcy because of collapsing prices and heavy debt loads while cleaner, more efficient alternatives such as natural gas take up market share.  NY Times

Energy Outlook.  After nearly two decades of actively seeking investments in foreign energy projects, Chinese state oil firms have begun to focus on managing current assets and cutting costs, rather than seeking new acquisitions.  Analysts note that this shift tracks with a general pattern of highly cyclical Chinese investment behavior, which suggests that Chinese investors will resume seeking foreign energy projects again as soon as 2017.  Reuters

Energy Policy.  Philip Wallach of the Brookings Institute discusses the legal challenges likely to be made against the EPA’s Clean Power Plan.  He notes that while EPA appears to be on firmer legal ground due to several notable changes made between the draft and final rules, challenges regarding EPA’s legal authority to regulate power plants represent the greatest threat to the rule’s legal viability.  Brookings

Energy and Environment News

Energy and Environment News

August 6, 2015

Top Stories

Energy Policy.  Phillip Wallach of the Brookings Institute reviews the state-by-state standards established in the final EPA Clean Power Plan rule relative to the standards proposed one year ago.  He finds that in general, states that have already taken actions to improve their carbon efficiency were given less stringent standards than originally proposed, while states that have done less toward reducing carbon emissions were given more ambitious targets.  Brookings

Climate Change.  The U.S. Energy Information Administration (EIA) reports that monthly carbon dioxide emissions from the power sector reached a 27-month low this past April.  EIA explains that much of this improvement is due to an increase in the share of electricity generated from natural gas plants, which are approximately 25% to 30% more efficient than coal plants.  EIA

Oil.  Reuters reports that the combination of low crude oil prices and strong demand for gasoline has created “near-perfect conditions” for U.S. oil refineries geared toward maximizing gasoline production.   The volume of crude processed by U.S. refineries stands at 1.5 million barrels per day (bpd) above the 10-year seasonal average, while high rates of consumption have kept stocks slightly below historical levels — which has kept refiners’ margins relatively high.  Reuters

Energy and Environment News

Energy and Environment News

August 5, 2015

Top Stories

Oil.  The possibility of crude oil remaining below $50 a barrel for the foreseeable future is heightening pressure on the world’s biggest oil firms to find new ways to reduce costs.  While companies are cutting costs by focusing on lower-cost projects with higher returns, improved efficiency, increased standardization, and cuts to exploration spending, analysts warn that the industry still needs to “shake out” many energy companies in the bottom tier before prices will begin a more sustained rise.  WSJ

Energy Policy.  Stefan Nicola of Bloomberg Business writes that Germany’s “Energiewende” — or its transformation from an energy system reliant on fossil fuels and nuclear power toward renewables — provides many worthwhile lessons for the Obama administration’s clean power goals.  Specifically, Germany’s experiences reinforce the importance of (1) containing runaway electricity costs, (2) modernizing the power grid before an increase in blackout risks, (3) building public support, and (4) preparing for unwanted side-effects, like adverse effects on some companies.  Bloomberg

Oil Outlook.  Demand for oil will likely hit a seasonal lull in coming weeks as auto drivers take fewer summer road-trips, consumers use less air-conditioning, and refineries begin maintenance in preparation for winter months.  Coupled with continued oversupply of crude on the global market, oil prices will likely remain in the low $30s and $40s for the near-term outlook.  FT

Climate Change.  Brookings scholars review the effects of two similarly ambitious pollution control policies on the composition of the energy sector and economic outcomes. The authors find that a tradable performance standard — akin to the EPA’s Clean Power Plan — and a carbon tax would both have a small negative effect on GDP, but that a carbon tax would be slightly more efficient .  Brookings

Energy and Environment News

Energy and Environment News

August 4, 2015

Top Stories

Energy Policy.  Analysts expect that the EPA’s newest rule slashing carbon-dioxide emissions from power plants will have an uneven impact on the energy industry, boosting the outlook for some regions and companies while hurting others.  Specifically, the regulation is expected to place the most burden on companies that produce coal and electric generators; meanwhile, earnings are expected to increase for companies that own nuclear-power plants and modern natural-gas generators, which emit far less greenhouse gases than coal-fired plants.  WSJ

Climate Change.  According to a recent report sponsored by the Environmental Defense Fund, devices used to measure the amount of methane that is leaked from industrial sources may be drastically underestimating the actual volume of leaked emissions, which could skew official methane inventory estimates and create safety issues at industrial sites.  The device in question — known as the “Bacharach Hi Flow Sampler” — has been previously approved by the EPA and is required for monitoring natural gas facilities around the world. NY Times

Energy Outlook.  According to the IMF, Russia’s economy could contract by as much as 9% if Western sanctions stemming from last year’s conflict in Crimea remain in place over the medium term.  The IMF noted that while Moscow’s financial and economic authorities responded appropriately to the sanctions and simultaneous drop in energy prices, the recovery of Russia’s oil-dependent economy could be slower than the Kremlin initially forecasted.  WSJ

Energy Policy.  Cass. R. Sunstein of Bloomberg View discusses the benefits of the Obama administration’s new Clean Power Plan, noting that these benefits far outweigh the estimated costs. Specifically, he highlights that the rules are expected save between $12 billion and $32 billion per year through the prevention of more than 2,000 premature deaths and other health-related improvements, while also reducing carbon emissions by 400 million tons — which has been monetized at approximately $20 billion.  Bloomberg

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