Energy and Environment News

Energy and Environment News

November 14, 2014

Top Stories

Keystone.  The House voted to approve the Keystone XL pipeline today and the Senate is expected to vote on an identical measure as early as Tuesday.  While the White House has not yet issued an official veto threat on the bill, President Obama recently indicated that he wouldn’t support a bill that bypasses the approval process of the U.S. State Department.  WSJ

Oil & Natural Gas.  The North Dakota Industrial Commission will begin requiring Bakken Shale well operators to strip gases from crudes with high vapor pressures prior to rail transport in response to growing concerns about the volatility of Bakken crude.  The rules are expected to significantly increase costs for the industry in North Dakota, but not enough to make Bakken oil uncompetitive.  WSJ

Energy Outlook.  Meghan O’Sullivan of Bloomberg View writes that this week’s China-Russia gas deal was given much more attention than was merited by the agreement’s details.  O’Sullivan argues that because the new deal is not binding and lacks formal agreement on key elements such as price,  it is more of a political statement than an indication of future geopolitical leverage between Russia and China.  Bloomberg View

 

 

U.S. Economic News

U.S. Economic News

U.S. Economic Indicators

Retail sales increased 0.3% in October, rebounding from the 0.3% drop observed in September.  So-called core sales, which exclude autos, gasoline, building materials, and food services, jumped 0.6%, while auto sales were up 0.5%.  Census Bureau report,  WSJ

The Reuters/University of Michigan’s preliminary reading of its November consumer sentiment index rose by a greater-than-expected 2.5 percent to 89.4, a seven-year high.  The increase was driven by robust gains in the current economic conditions and consumer expectations components of the index — which exceeded not only the median forecast of 61 economists polled by Reuters but also the highest estimate of 89.0.  Reuters

U.S. News

GDP in the Eurozone increased by 0.2% in Q3 (up 0.8% Y/Y), suggesting that while the currency union has managed to stave off economic contraction, serious hurdles to growth remain.  Both Germany and France recorded positive growth, while Italy’s economy contracted; meanwhile, October CPI for the Eurozone zone ticked up 0.1% on the month.  FT

The latest WSJ survey of economic forecasters finds that economists are lowering their estimates for U.S. inflation rates, as the consensus forecast for inflation for 2014 dropped to 1.6%, down from 2.1% recorded in September.  The forecasters also expect that the Fed will begin to raise interest rates in mid-2015 and — by a three-to-one ratio — believe that waiting too long to raise rates poses a greater threat than raising them too early.  WSJ

According to the latest “JOLTS” report, the number of hires and the number of people voluntarily quitting their jobs both climbed to six-year highs in September.  58% of people leaving their jobs did so voluntarily, up from 37% during the depths of the recession — a strong indication that workers are growing increasingly confident in the economy.  WSJ

Energy and Environment News

Energy and Environment News

November 13, 2014

Top Stories

Energy Outlook.  After the recently announced climate pact between the U.S. and China, officials from the U.S.’ largest coal-burning utilities warn of blackouts and rising power bills if not given more time to cut greenhouse-gas emissions under the EPA’s proposed Clean Power Plan.  The EPA will receive public and industry comment about the rule until December 1st, although some think concessions will be tougher to achieve after the U.S.-China pact announcement.  Bloomberg 

Natural Gas.  Several natural gas and Canadian officials are calling volatility testing of crude oil into question as U.S. regulators move to set new crude-by-rail shipping rules amid safety concerns about shipments of Bakken crude.  Many oil companies and industry officials in North Dakota insist that Bakken crude is no more volatile than crude oil from other parts of the country — these new methodological concerns suggest that their studies have been underestimating Bakken oil volatility.  WSJ

LNG. The recent plunge in crude oil prices will likely have three big effects in the liquefied natural gas (LNG) market: it will (1) lower LNG costs to consumers; (2) prolong Asia’s disputed oil-based pricing system; and (3) raise questions about costly planned LNG projects in Australia and U.S.  FT

Climate Change.  The Wall Street Journal asserts that the U.S.-China carbon pact earlier this week will merely maintain the status quo in China while harming economic growth in the United States.  In the pact,  which is non-binding and lacks many specific details, China’s Supreme Leader Xi Jinping says China “intends to achieve the peaking of CO2 emissions around 2030” — a claim that the Journal suggests would have happened anyway.  WSJ

 

Energy and Environment News

Energy and Environment News

November 12, 2014

Top Stories

Climate Change. On the sidelines of the APEC conference Wednesday, President Obama and Chinese President Xi Jinping unexpectedly announced a joint plan to reduce or limit carbon dioxide emissions.  China stated plans to slow the rise of carbon dioxide emissions so that they peak around 2030, while the U.S. announced plans to lower emissions by up to 28% in 2025, relative to 2005 levels.  NY Times

Oil. Driven by lower Saudi crude output, OPEC oil production fell sharply in October, narrowing the gap between its actual and target production.  Despite this drop of about 69,900 barrels a day, oil prices continued to slide on Wednesday, suggesting that market participants were not interpreting the output fall as a shift in OPEC policy.  WSJ

Oil & Natural Gas. In a forecast released today, the International Energy Agency estimates that investment in U.S. shale oilfields will decrease by 10% in 2015 if oil prices stay near $80 per barrel. The agency’s forecast, however, conflicts with arguments from other industry experts who believe that U.S. shale producers can remain profitable at even lower oil prices.  FT

Energy and Environment News

Energy and Environment News

November 11, 2014

Top Stories

Energy Outlook. Despite recent increases in borrowing costs, the slump in oil prices has caused several energy companies to pay off their existing debt or seek refinancing through U.S. debt capital markets.   Some investors have expressed concern that additional drops in oil prices will trigger a wave of debt restructurings among highly indebted companies; others suggest that this is an opportunity to profit by buying back energy bonds at a discount.  FT

Natural Gas.  A second natural gas supply agreement between Russia and China has increased pressure on many planned natural gas projects in the U.S., Canada, and Australia amid increased competition, rising costs, and the potential for lower prices.  Because the new deal increases the possibility of a glut in global energy markets in early 2020, companies seeking approval for future liquefied natural gas plants are likely to be delayed.  Bloomberg

EPA.  Bob Sussman, former Senior Policy Counsel to the EPA Administrator, discusses an EPA notice issued on October 28th addressing areas of vulnerability in the Clean Power Plan.  Sussman suggests that in the final ruling, the EPA is likely to relax the rule’s interim goals but may actually increase overall emissions-reductions targets for 2030.  Brookings

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