Energy and Environment News

Energy and Environment News

April 19, 2016

Top Stories

Climate Change.  Bloomberg reports that many scientists have come to view the Paris Climate Agreement as “too little, too late” in terms of mitigating the effects of global climate change —  particularly in light of new evidence which suggests that global warming is poised to hit “geological hyper-speed” in coming decades.   While the agreement to be signed this week is viewed as a significant geopolitical milestone, experts agree that scientific uncertainties underlying the timing and scale of the agreement must be critically reevaluated moving forward.  Bloomberg

Oil Outlook.  Supply disruptions in Nigeria, Iraq, and Kuwait have begun to overshadow the collapse of the Doha talks, buoying prices to new highs this year as underlying supply-and-demand conditions improve. Industry analysts note that the world’s glut of crude oil may be coming into balance, particularly given that much of the spare capacity that was flooding the market at the end of last year is now gone.  WSJ

Climate Change.  Eduardo Porter of the New York Times argues that liberals too have biases that impair the United States’ ability to combat climate change, ranging from fear of genetically modified organisms to mistrust of technologies that displace workers.  Porter cites nuclear power as an important example of this disparity, as most liberals oppose using nuclear despite its track record of generating electricity at an enormous scale with very little greenhouse gas emissions.  NY Times

Energy and Environment News

Energy and Environment News

April 18, 2016

Top Stories

Oil Outlook.  Large oil producers failed to reach a production freeze agreement at their Doha meeting over the weekend, stalling on Saudi Arabia’s demand that the agreement hinge on Iran’s full participation.  The group of producers was also divided over whether any deal would be considered strong enough to convince energy markets of its ability to rein in production and bolster prices.  WSJ

Oil.  The Mexican government has vowed to support state oil company Pemex with nearly $4.2 billion in capital and pension restructuring to help the firm pay suppliers and contractors that are owed money from last year.  The capital injection will help the company take care of its immediate debts, but analysts note that Pemex faces structural issues ahead as it tries to reverse its output declines while improving its operational efficiency in the low price environment. WSJ

Climate Change.  A coalition of nations from Europe, North Africa, and the South Pacific is lobbying the United Nations to consider emissions reduction commitments targeting maritime shipping and commercial aviation.  The aviation and shipping industries are each responsible for around 2% of global human-produced carbon dioxide emissions around the world, but were excluded from the Paris climate treaty in an effort to keep the text concise and improve the odds of reaching an agreement.   NY Times

Energy Outlook.  Nick Butler of the Financial Times posits that China may transform the world’s energy market by becoming an energy exporter — counter to widespread expectations that the country will increasingly require energy imports to fuel its rapid growth and transition toward a consumption-based economy.  Butler notes that the country appears poised for an energy boom and has emerged as a global leader in grid technologies that promise to deliver low-cost electricity; moreover, China has focused its policy on various “imperatives” that promise to increase its energy self-sufficiency.  FT

Energy and Environment News

Energy and Environment News

April 15, 2016

Top Stories

Energy Policy.   The Obama administration released the final set of regulations for offshore oil and gas drilling safety yesterday, nearly six years after the BP rig explosion that killed 11 employees and released millions of barrels of oil into the Gulf of Mexico.  The regulations tighten safety requirements on industry-standard devices for underwater drilling equipment and well-control operations, while also adding tougher standards for the design of undersea wells and real-time monitoring systems for subsea drilling and spill containment.  NY Times

Oil Outlook.  Helen Thomas of the Wall Street Journal asserts that the sharp oil price recovery is unlikely to continue in 2016, even if Saudi Arabia, Russia, and other large oil-producing nations agree to a production freeze at their Doha meeting this weekend.  Thomas notes that while talk of the freeze has sparked bullish bets among investors, producers around the world continue to pump at near record rates and other market fundamentals remain too weak to sustain the recent rally.  WSJ

Energy Outlook.  The Center for International Environmental Law released decades-old documents from the energy industry this week which suggest that the industry has been aware of climate change for more than 50 years.   According to the Center’s website, the documents show that the industry organized early-on against the regulation of air pollution and worked to “use science and public skepticism to prevent environmental regulations they deemed hasty, costly, and unnecessary,”  intensifying pressures on Exxon and other energy industry stakeholders in the ongoing investigation about Exxon’s statements regarding climate change.  NY Times

Coal.  The New York Times reports that abandoned coal mines pose a costly threat to taxpayers and consumers for years to come as coal companies are increasingly unable to cover the cost of cleanups.   The Times explains that while mining companies are supposed to purchase insurance to pay for clean-ups, many companies arranged special deals with Congress where they “self-bonded” insurance policies and promised to finance cleanups themselves in the future; while the arrangements made sense when the coal industry was healthy and financially secure, the recent sweep of bankruptcies exposes the risks inherent to such self-bonding policies.  NY Times

Energy and Environment News

Energy and Environment News

April 12, 2016

Top Stories

Oil Outlook.  As the oil price ticked up another notch to $43 a barrel, high-profile figures related to the oil industry are remarking that the market has finally reached its “floor”.   Company executives and the heads of large trading houses have come out in favor of the theory, though most caution that the future benchmark will center around $60 or $70 a barrel, rather than $100 a barrel as seen in mid-2014.  FT

Water.  According to new statistics reported by the Chinese media on Monday, over 80% of water from underground wells across the nation’s heavily populated plains region is unfit for drinking and bathing due to contamination from industry and farming.  Chinese citizens have expressed notable alarm to the news, particularly due to increasing sensitivities to pollution-related health threats after years of intense focus on air pollution.  NY Times

Oil.  Nick Butler of the Financial Times asserts that activists’ demands that cultural institutions terminate oil company sponsorships are misguided and counterproductive.  Butler argues that cultural institutions are sure to be the “losers” in such a scenario, and that the calls ignore the fact that the global climate debate has moved toward “a more detailed analysis of technology and regulatory policy.”  FT

Energy and Environment News

Energy and Environment News

April 8, 2016

Top Stories

Oil Outlook.  Reuters reports that U.S. shale drillers are beginning to experience a credit squeeze as banks start to make more drastic cuts to the credit available to ailing energy companies.  According to data compiled by Reuters, more than a dozen companies have had their loans cut by roughly a fifth of available credit ($3.5 billion), which will further pressure companies in the shale industry to sell assets, trim their workforce, and cut drilling and capital spending.  Reuters

LNG.  A backlog of expensive long-term projects in the LNG market that were sanctioned during prior periods of high prices are beginning to come online, adding to global LNG supplies at a faster rate than demand growth.  Liquefaction capacity is expected to grow by about 42 million tons a year in 2016, which will boost global supplies by 14%; in contrast, the two largest consumers of LNG reduced imports of the fuel by 4 million tons in 2015 due to slowing economic growth, mild weather conditions, and increased use of alternative fuels.  Bloomberg

Oil Outlook.   Oil prices were buoyed above the $40 per barrel threshold today as officials from OPEC, Russia, and other oil-producing countries signaled a willingness to cooperate over a production freeze at their meeting next weekend.   Analysts predict that the proposed freeze would have little impact on the supply glut over the short term, though OPEC countries hope such a move would be sufficient to bolster prices until growing demand catches up with supply over the next six to 12 months.  NY Times

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