Energy and Environment News

Energy and Environment News

July 22, 2015

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Energy Policy.  President Obama is scheduled to visit Africa to follow up on an ambitious $7 billion pledge made in 2013 to double electricity access in the sub-Saharan region over the next five years.  The program — called “Power Africa” — has made little progress since its announcement, underscoring the challenge of implementing comprehensive structural change in the face of civil conflict and competing interests.  NY Times

Oil.  The United Arab Emirates announced today that it will begin tying local fuel prices to the global market, beginning in August.  The UAE is the latest in a wave of other oil-producing countries to cut domestic fuel subsidies under pressure from collapsed prices for their crude-oil exports.  WSJ

Energy Policy.  The Wall Street Journal argues that one of the largest challenges for western companies eager to take advantage of the new nuclear agreement with Iran will be Iran’s Revolutionary Guard Corps — a branch of the Iranian military that has evolved into one of the country’s most powerful economic forces due to its control over a vast network of companies spanning multiple industries.  Western firms may need to carefully vet potential suppliers, distributors, and customers to ensure there is no link to the Guards, which the U.S. has accused of involvement in terrorism overseas and human-rights abuses. WSJ

Energy Outlook.  According to economic analysis released by Nuclear Matters, nuclear power provides $10 billion in federal tax revenues a year and contributes to direct and indirect employment.  Perhaps even more noteworthy, the report asserts that nuclear lowers wholesale and retail electricity prices by 10% and 6%, respectively.  Forbes

Energy and Environment News

Energy and Environment News

July 21, 2015

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Energy Policy.  Yesterday the U.N. Security Council unanimously endorsed the nuclear accord reached between Iran and six world powers.  The approved provisions — which will set in motion a years-long process to eventually lift international sanctions in exchange for stringent controls on Tehran’s nuclear program — will not come into effect for 90 days, allowing the U.S. Congress time to review the agreement.  WSJ

Climate Change.  According to the International Energy Agency’s latest assessment, global development of technologies that slow climate change is behind schedule, ahead of the summit meeting in Paris this December.  Even under more optimistic assessments, limiting the atmosphere’s warming to many scientists’ desired levels seems to be slipping out of reach given that deployment of renewable energy is progressing at a slower than projected rate.  NY Times

Oil.  Wall Street lenders are putting increasing pressure on oil companies to either raise more equity or complete a transaction to pay down their credit lines and free up extra cash.  Banks have been willing to keep the money flowing because drillers were previously able to pay off their credit lines by tapping fixed income markets; however, Bloomberg reports that the “appetite for that debt is dwindling,” as bonds have become more expensive and are laden with increasingly onerous terms.  Bloomberg

Energy Policy.  North Korea has ruled out talks for denuclearization, quashing hopes that the landmark accord with Tehran would inspire it to follow suit.  North Korea is currently developing nuclear weapons to fend off perceived U.S. threats; Beijing estimates that it had an arsenal of 20 nuclear warheads at the end of last year — exceeding U.S. estimates — and predicts that it could double the count by next year.  WSJ

Energy and Environment News

Energy and Environment News

July 20, 2015

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Energy Policy.  In efforts to allay fears of allies in the Middle East over the Iran nuclear deal, Obama administration officials are increasing the $3 billion U.S. military aid package to Israel and plan to accelerate plans for other Arab states in the Persian Gulf to develop integrated regional ballistic missile defense capability.   President Obama wants to assure that Israel doesn’t launch a military strike on Iranian nuclear sites, and is also concerned that the Israeli influence over Congress could sway its vote to approve or disapprove the final deal.  WSJ

Oil.  A report from Moody’s rating agency predicts that lifting sanctions on Iran will increase Iranian oil production, as well as put pressure on other hydrocarbon exporters to increase output as they seek to offset lower oil prices.   Further, the report predicts that Iran’s renewed access to finance could result in increasing support for proxy groups in Lebanon, Yemen, and Syria, which could escalate geopolitical risk in the region  FT

Climate Change.  China’s declared “war against pollution” is getting a boost from its slowing economy, as the government forces industries that are over capacity — like steel, cement, and glass making — to slim down.  Official air-pollution data released by China’s government show that levels of fine-particulate matter damaging to human health (or PM2.5) fell more than 15% in Beijing in the first half of 2015, compared with year-ago levels.  WSJ

Oil.  While lower oil prices initially sparked a sharp decline in drilling activity and subsequent drop in investment and jobs, economists predict that these losses are soon to be offset by the extra money being spent on American goods and services rather than foreign oil.  Federal Reserve data released last week show that the sharp downdraft in drilling activity eased in June, and layoff announcements in the energy sector have also been subdued — leading the Wall Street Journal to report that the drag from oil on the economy should diminish in the months ahead.  WSJ

Energy and Environment News

Energy and Environment News

July 17, 2015

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Energy Policy.  The Interior Department proposed a new rule yesterday that aims to protect streams by curbing pollution caused by mountaintop removal mining.  Obama administration officials assert that while the rule is unlikely to significantly deter this mining technique, it will require coal companies to partake in additional testing and cleanup efforts.  NY Times

Energy Policy.  Cass Sunstein of Bloomberg View discusses a recent report from the Interagency Working Group on the Social Cost of Carbon, which has been charged with placing a dollar value on the cost of one ton of carbon emissions in order to aid the the cost-benefit analysis of EPA regulations.  Cass notes that there are many uncertainties and points of disagreement in determining this figure, such as the scale of damage that should be considered, the best way to value future damages, and assumptions used in assessment models.  Bloomberg View

Energy Policy.  President Obama met today with Saudi Arabia’s foreign minister — the first visit with a key American ally from an Arab state since the Iran nuclear deal was reached on Tuesday.  Arab states have been deeply skeptical of Mr. Obama’s diplomatic outreach to Iran, and the White House is working to ease fears and follow through on commitments made earlier this year to provide them with new military and security guarantees.  WSJ

Oil.  John Kemp of Reuters notes that once Iran’s sanctions are lifted, the country may be able to reach production at pre-sanctions levels relatively quickly by reactivating idle wells and increasing the flow rates on existing ones.  Kemp asserts that Iran’s biggest challenge ahead will be marketing its crude without crashing prices, as its medium-density crude competes directly with similar grades from Saudi Arabia, Kuwait, and Iraq.  Reuters

Energy and Environment News

Energy and Environment News

July 16, 2015

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Oil.  Mexico is auctioning 14 exploration blocks in efforts to attract international energy giants and increase the country’s oil production by 40% over the next decade.  The move is symbolic, as Mexico has not allowed other foreign countries to compete or partner with its national oil company for nearly 80 years.  NY Times

Energy Policy.  In a 67-minute news conference at the White House yesterday, President Obama forcefully defended the Iran nuclear deal reached the day before and urged lawmakers — who have 60 days to review the agreement — not to force him to use his veto to save what will likely be his crowning foreign policy achievement.  Mr. Obama criticized the deal’s opponents, noting that none of them have presented a better option and that the alternative to resolving the issue of Iran obtaining a nuclear weapon diplomatically is using military force. WSJ

Oil.  Now that the array of U.S. and EU sanctions are lifted, the world’s largest energy groups are planning to return business to Iran — a country the Financial Times is calling the “oil and gas multibillion-dollar candy store.”   Iran is desperate to rehabilitate its domestic oil and gas industry, recently plagued by mismanagement, corruption, and under-investment.  FT