Energy and Environmental News

Energy and Environmental News

November 4, 2014

Top Stories

Oil.  Yesterday the benchmark American oil price fell below the $80-a-barrel threshold after Saudi Arabia cut its selling price for the American market.  While sustained low oil prices could eventually impact investments in domestic drilling, most analysts do not predict a disruption in domestic oil production unless the benchmark drops to $70 a barrel and remains there for several months.  NY Times

Oil.  The Wall Street Journal reports that sliding oil prices are threatening risky and expensive oil production projects around the world, many of which were launched for Asian customers.  Meanwhile, Saudi Arabia and other low-cost producers of oil in the Middle East may benefit from low oil prices in the long term if U.S. shale production slows and low prices discourage further development of alternative fuels.  WSJ

Keystone XL.  Cost estimates for the Keystone XL project have increased by 48% to $8 billion due to delays in receiving U.S. approval.  The pipeline has been pending approval since 2008 — the U.S. State Department has delayed the official ruling while a Nebraska court decides if a state regulator needs to review the line’s route across Nebraska.  Bloomberg

Oil.  An op-ed in the Financial Times describes the global oil market as entering a “periodic game of chicken” as U.S. oil producers rapidly increase production and members of OPEC refuse to cut output in order to maintain market share.  While weaker oil prices will be a net benefit for the world economy, the article suggests that oil market volatility may lead to political turmoil — potentially destabilizing some of the west’s allies in the Middle East and making its adversaries desperate and erratic.  FT

Energy and Environment News

Energy and Environment News

November 3, 2014

Top Stories

Oil. The Wall Street Journal reports that big oil companies are shelving expansion plans and cutting operations with tight profit margins as the cost of extracting oil and gas increases.  Additionally, the Journal notes that major oil companies initially “missed out” on growth opportunities related to shale because individual investments were not large enough to impact big oil’s profit or reserves.  WSJ

Climate Change.  The fourth and final volume of the climate assessment performed by the Intergovernmental Panel on Climate Change (IPCC) reported that carbon emissions may need to drop to zero by the end of the century to keep global temperature rises below levels many consider dangerous.  The IPCC also indicated that the costs associated with needed mitigation actions — such as shifting energy systems towards renewable sources and improving energy efficiency — would lower economic growth by 0.06% annually.  IPCC, WSJ

Climate Change.  Op-Ed by Andrew C. Revkin details the release of the IPCC’s final synthesis report and asserts that the synthesis largely echoes earlier reports on climate change mitigation options.  Revkin argues that the report fails to acknowledge the lack of investment in energy science worldwide — which he asserts is crucial for the grand energy transition needed to mitigate against catastrophic damage.   NY Times

 

Energy and Environment News Brief

Energy and Environment News Brief

October 31, 2014

Top Stories

Oil.  Energy Department officials reported that the international price of crude oil is the most important determining factor in U.S. gas prices.  While the report does not expressly mention the ban on crude oil exports, this finding supports the argument that repealing the ban would help to lower gas prices.  EIA

Energy Policy.  Ukraine and Russia reached an agreement yesterday that will resume deliveries of natural gas from Russia to Ukraine and prevent shortages over the winter.  Experts speculate that the deal was reached largely due to pressure from European Union leaders who feared for the security of natural gas supplies that are shipped through Ukraine to EU member countries.  NY Times

Energy Outlook.  Mexico’s Supreme Court rejected requests for a referendum on recent changes to Mexican energy laws that opened the country’s oil and gas industry to private sector investment.  The court’s decision removes another point of uncertainty as private companies prepare to bid on oil blocks in auctions next year.  WSJ

Op-Ed of the Day

Oil.  Luay Al-Khatteeb of the Brookings Institute argues that the U.S. should lift its ban on crude oil exports in support of free market capitalism and economic efficiency.  Furthermore, he asserts that the current model of imperfect competition and short-term self-interest undervalues the worldwide economic and geopolitical benefits of falling oil prices.  Brookings

Quote of the Week

“We don’t see really fundamental changes in the supply side or the demand side … unfortunately everyone is panicking.  The press is panicking, consumers are panicking.  We really should think and see how this will develop.”

— Abdalla El-Badri, OPEC’s Secretary-General, in a briefing event with Bloomberg about OPEC’s position regarding the downward movement of oil prices. (10.30.14)

Energy and Environment News Brief

Energy and Environment News Brief

October 30, 2014

Top Stories

Oil.  Industry experts report that oil prices would need to fall at least another $20 per barrel to curtail the U.S. energy boom, as many companies have been able to cut costs by producing oil more efficiently.  The real “losers” in a lower price environment will be smaller companies with high debt levels, as well as companies drilling in areas without much history of oil production where drilling costs are high.  WSJ

Energy Policy.  A group of free-market economists launched a campaign today to convince policymakers to dismantle the crude oil export ban.  The group created a website featuring papers, studies, and analysis that predict selling crude overseas would “lift its domestic price while lowering gasoline costs” — both bolstering the U.S. economy and improving relations with foreign countries.  Fuel Fix

Energy Security.  Defense Secretary Chuck Hagel urged policymakers to take climate change more seriously due to the many security issues it creates, including the effect of rising oceans at U.S. bases.  Hagel also suggested that because the Pentagon is taken more seriously, “its work on climate change would likely be received well”.   The Hill

Op-Ed of the Day

Oil.  Isaac Arnsdorf of Bloomberg News suggests that Saudi Arabia’s move to cut prices for its biggest customers was the “tipping point” for recent fast-falling oil prices, and that the recent plunge does not accurately reflect the balance between oil supply and demand.  Bloomberg

Fact of the Week

Energy Outlook.  Extreme cold weather in the first half of this year contributed to an increase in both total energy use and CO2 emissions compared with the same period in 2013.  CO2 emissions increased by 2.7% during the first six months of 2014 compared with the first six months of 2013 — simulations suggest that emissions would have increased just 0.4% under more typical weather conditions.  EIA

Energy and Environment News Brief

Energy and Environment News Brief

October 29, 2014

Top Stories

EPA.  In a 60-page “notice of data availability” released Tuesday, the EPA identified concerns raised by states, utilities, and environmentalists during the comment period for the Clean Power Plan.  The EPA noted that it is focusing on issues related to boosting natural gas fired power, how to best credit states that develop renewable power, and the method for calculating the 2012 “baseline” from which states will be required to reduce carbon emissions. Politico

Oil.  The Wall Street Journal’s Nicole Friedman states that energy consultants and the U.S. government did not foresee the sharp slide in oil prices because of two key faulty assumptions — they dismissed the possibility of discord within the Organization of Petroleum Exporting Countries (OPEC) and the possibility that violence in some oil-producing nations would not interfere with soaring production.  Additionally, she notes that experts underestimated the weak demand in China and the Eurozone.  WSJ

Op-Ed of the Day

Energy Policy.  An editorial by the New York Times Editorial Board argues that the European Union’s recently agreed-upon climate goal is an important step forward in the months leading up to the United Nations Climate Summit meeting in Paris — but that it lacks a clear plan to strengthen key features of the EU’s existing climate policies.  For example, the authors argue that the energy policies of EU countries must be better coordinated in order improve opportunities to curb emissions, pointing out that last week’s agreement contained no clear plans to that effect.  NY Times

Report of the Week

Energy Security.  A recent study by Cap Gemini SA warns that the risk of blackouts in Europe this winter is rising due to the region’s economic slump and greater reliance on renewable energy sources.  This warning is based on the report’s finding that a growing share of renewable energy sources are pushing conventional sources offline, which in turn reduces the ability of the electricity system to meet peak demand during specific conditions such as cold, dark, and windless days.   Bloomberg

 

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