Energy and Environment News

Energy and Environment News

October 15, 2015

Top Stories

Oil Outlook.  Lenders on Wall Street have quietly relaxed borrowing conditions in their contracts with struggling energy sector borrowers over the past year to avoid market volatility and the embarrassment of defaulted loans.  This behavior could start to change, however, as bankers accept that sub-$50 oil prices might be the new norm; the Financial Times predicts that lenders will become less willing to provide credit to the energy sector, which could open a void for large non-bank lenders to provide funds to cash-starved energy groups.  FT

Energy Policy.  The Supreme Court heard arguments on a consequential case today concerning the federal government’s authority to regulate energy markets.  The primary legal question at stake is whether the Federal Energy Regulatory Commission overstepped its boundaries by encouraging electricity users like schools, hospitals, and shopping centers to reduce consumption at peak times in exchange for price breaks — an approach that lowers costs for consumers but can cut into the profits of companies that own power plants.  NY Times

Renewable Energy.  According to a new report from the International Energy Agency, renewable energy accounted for more than 45 percent of all new electricity generation capacity worldwide in 2014 and is expected to supply more than half of all new capacity over the next five years.  While much of the growth is in hydro power, other sources such as wind and solar have seen significant price reductions and improved public policy support, which is expected to promote their growth over the near term.  IEA, FT

Energy Policy.  Tim Boersma of the Brookings Institute argues that Europe’s experiences with integrating local natural gas markets and enhancing energy cooperation between member states has efficiently enhanced the region’s energy security.  He also asserts that the EU’s experience speaks to the need for additional incentives for gas infrastructure investments, as well as expanded regulatory power that spans national jurisdictions. Brookings

Energy and Environment News

Energy and Environment News

October 14, 2015

Top Stories

Climate Change.  Eduardo Porter writes in the New York Times that the current Republican position on climate change is vastly different than that held by the party a decade ago, due mainly to the financial influence of fossil fuel interests and anti-government sentiment of the Tea Party.  He believes that a “Republican-compatible strategy” to address climate change exists — specifically citing a price on carbon emissions — as “street-level” Republicans become less likely to deny climate science, and Republican governors start taking action to avoid more federal intervention. NY Times

Energy Outlook.  The most populated states in New England are looking to take advantage of Canadian dams and rivers to supply their electricity — a move that would help cut greenhouse-gas emissions and keep notoriously high energy prices in the region at bay.   While Canada has plenty of energy to supply from hydroelectric dams, transporting that power to New England may prove difficult, as various power-line proposals have garnered criticism from New England residents. WSJ

Oil Outlook.  John Kemp of Reuters writes that there is a lack of accountability among oil market forecasters, as the accuracy of predictions is never properly tracked and measured after they are made.  Kemp argues that because these forecasts drive decisions affecting billions of dollars of investment,  forecasts should be subject to rigorous analysis, verification, and accountability.  Reuters

Climate Change.  Michael Lynch writes in Forbes that proposals dealing with climate change differ from more “effective” policy solutions in that they attempt to solve the problem by attacking the Industry, rather than addressing consumers.  Lynch asserts that policies designed to send price signals — such as the importance of fuel efficiency — are far more likely to be successful in achieving climate change goals than ordering companies to meet aggressive efficiency targets that create significant stress among producers and are ultimately relaxed by lawmakers.  Forbes

Energy & Environment News

Energy & Environment News

October 13, 2015

Top Stories

Oil Outlook.   The International Energy Agency’s monthly oil market report forecasts that world oil consumption will rise by 1.2 million barrels per day (bpd) in 2016, approximately 200,000 barrels a day less than previously estimated and down from an increase of 1.8 million bpd in 2015.  The anticipated slowdown in demand growth, along with the expected entrance of Iranian oil on the world market, means that the market will likely remain oversupplied throughout next year.  WSJ

Oil.  The New York Times reports that the oil sands boom has “dried up in Alberta” given the high cost of projects and sustained low global oil prices.  Declining profitability of the oil sands has led to the loss of nearly 35,000 jobs in the energy industry across the region, and shifted the political landscape as residents question the long-term economic viability of the oil projects.  NY Times

Renewable Energy. Depressed oil prices and fears of a spike in interest rates have dampened interest in renewable energy investments, most visibly in “yieldcos”, or new financing mechanisms used by renewable energy corporations to inexpensively raise capital from contracted electricity fees of owned and operated power plants.  Executives maintain that although operational shifts are needed to ensure the profitability of the industry, its long-term prospects remain strong.  NY Times

Oil Outlook.  Leonid Bershidsky of Bloomberg View writes that the U.S. shale industry will likely “survive” next year, but that sustained low oil prices will likely bring much more drastic cutbacks in 2017.  Bershidsky supports his prediction with a recent analysis by consultancy Wood Mackenzie, which forecasts that impacts from shrinking investment in the industry will peak in 2017.  Bloomberg View

Energy and Environment News

Energy and Environment News

October 9, 2015

Top Stories

Energy Policy.  The House voted today to lift the 40-year-old ban on oil exports — a top congressional priority for Industry players this year. The measure’s prospects in the Senate are less certain, however, largely due to opposition from President Obama, who has threatened to veto the bill on the grounds that Congress should instead be focusing on efforts to support the U.S. transition to a low-carbon economy.  WSJ

Energy Outlook.  The Energy Information Administration reports that increased regulations and refining requirements for residual fuel oil (RFO) have significantly lowered expectations for future global demand.  RFO is used in many sectors including marine transportation, power generation, and various industrial processes and is normally priced below other liquid fuels, but is expected to be gradually replaced with lighter, cleaner products.  EIA

Energy Policy.  While the EPA is in the public spotlight more often, research from the American Action Forum reveals that the Energy Department (DOE) has released new regulations to reduce greenhouse gases at a record pace.   The DOE finished more than 25 major rules since 2007 that imposed more than $8 billion in annual costs — a figure that does not even include the 11 new rules DOE hopes to polish off by the end of next year.   WSJ

Energy and Environment News

Energy and Environment News

October 8, 2015

Top Stories

Energy Policy.  California Governor Jerry Brown signed a law yesterday that will require the state to generate half of its energy from renewable sources by 2030, up from the current goal of 33% by 2020.   A provision requiring the state to reduce its petroleum usage by 50 percent was struck from the final bill following significant opposition from the oil industry. NY Times

Energy Outlook.  The U.S. Energy Information Administration reports that the share of all U.S. electricity generated from natural gas surpassed the share from coal for the second time ever in July.  Moreover, compared with one year ago, coal-fired generation fell while natural gas-fired generation rose in every region of the country.  EIA

Climate Change.  Chief executives from leading oil companies in the United States and Europe have laid out contrasting strategies to reduce fossil fuel emissions, illustrating a lack of consensus within the industry surrounding approaches to climate change policy.  While executives from the United States assert that innovation, free markets, and competition are the best tools to curb emissions, their European counterparts have called for governments to intervene in order to bring about the emissions reductions needed.  WSJ

Energy Policy.  The New York Times reports that there is considerable momentum developing around the effort to repeal the 40-year-old crude oil export ban.  The Times attributes the recent progress to an intense lobbying effort on behalf of the oil industry, which has a considerable stake in eliminating the ban amid the steep decline in oil prices.  NY Times

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