Energy and Environmental News

Energy and Environmental News

November 12, 2015

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Energy Policy.  Presidential hopeful Hillary Clinton unveiled a $30 billion plan today that would help to revitalize communities dependent on coal production as the nation shifts toward cleaner energy sources.  The plan would set aside federal funds to build up infrastructure, expand broadband access, and give tax breaks for new investment in coal dependent communities, and also fund research and development for carbon capture and storage technologies.  WSJ

Natural Gas.  Analysts have expressed concern about oversupply in the U.S. natural gas market, as production levels reach new records while gas prices continue to decline.  U.S. natural gas production has increased by nearly 45 percent between October 2008 and October 2015, despite a price slump of nearly 30 percent and a near 40 percent drop in the number of rigs drilled exclusively for gas.  Reuters

Climate Change.  Paul Barrett of Bloomberg Businessweek argues that recent U.S. headlines surrounding energy policy and climate change — namely the rejection of the Keystone XL pipeline and investigation into Exxon Mobbil’s statements on climate change — amount to “posturing” and “symbolism” compared with real world solutions that are likely to reduce emissions.   Barrett substantiates his claim with evidence that oil companies outside of the United States are remarkably embracing carbon pricing as a measure that would render technologies such as carbon capture and storage (CCS) economical, while the Keystone and Exxon examples merely “cheer environmentalists”. Bloomberg

Energy and Environment News

Energy and Environment News

November 11, 2015

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Energy Policy.  The U.S. Department of Transportation denied appeals against its new crude-by-rail rules last week, which will require expensive new brakes and tougher tank-car standards for all trains carrying hazardous flammable materials.  The challenges may still be appealed in court; in addition, separate legal challenges against the rules have been filed in federal appeals courts earlier this year.  WSJ

Energy Outlook.  Bloomberg writes that the energy market will likely shift in 2016 as coal and nuclear energy continue to be “phased out” and natural gas and renewables become increasingly competitive inputs for electricity generation.   Amid these changes upsetting the electric power industry,  oil is expect to remain the key source of fuel for cars, ships, and planes, unless the rise of electric vehicles is able to merge the transportation sector with the electric power sector. Bloomberg

Oil.  Clyde Russell of Reuters writes that fuel oil price forecasts seem overvalued in light of recent predictions of continued declines in Asian demand.   Russell asserts that fuel oil prices will likely fall further relative to crude oil in order to stimulate demand in China, which has been steadily declining for almost 10 months.  Reuters

Energy Policy.  Greg Ip of the Wall Street Journal writes that President Obama missed a “golden opportunity” to demonstrate leadership through science and economics by dismissing the Keystone XL pipeline last week.  Ip argues that the President’s broader environmental objectives would have been better served through a pragmatic (rather than symbolic) approach to the issue, such as tying the pipeline’s approval to a market-based carbon offset requirement.    WSJ

Energy and Environment News

Energy and Environment News

November 10, 2015

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Oil Outlook.  The U.S. Energy Information Administration forecasts that U.S. shale production will fall by 118,000 barrels per day (bpd) in December, marking the longest monthly decline on record and the eighth consecutive month of falling output.  Production from the Eagle Ford shale play in South Texas is expected to see the greatest decline of 78,000 bpd, followed by a 27,000 bpd decline in output from the Bakken region of North Dakota.  Reuters

Climate Change.  After the President denied approval for the Keystone XL pipeline, the environmental movement has set new targets with respect to its national policy agenda.  One of the movement’s most ardent spokesmen, Bill McKibben of Middlebury College, reports that issues including fossil-fuel leases, coal mines, fracking, obstacles to solar power, fossil-fuel exports, fossil-fuel subsidies, and shipping oil by rail and by other pipelines will compete for the new “spotlight” role among environmental activists.  Bloomberg

Energy Policy.  Regulators in the United States and Canada have expanded efforts to conduct on-the-road emissions tests amid rising concerns about the prevalence of “cheating” throughout the automotive industry.  The new testing approach most likely to be adopted will significantly differ from old methods where vehicles are tested in a highly controlled lab setting, but stops shy of “on-the-road testing” due to concerns about the accuracy and precision of such tests.  NY Times

Climate Change.  Cass Sunstein of Bloomberg View writes about the broader implications surrounding the investigation into Exxon Mobil’s public statements on climate change, particularly with regard to its responsibility to “maximize shareholder value”.  Sunstein asserts that while it is perfectly legal for a corporation to argue against climate-related policies on behalf of their own interests, making “false statements” that contradict the clear views of a corporation’s own researchers contradicts the shareholder value principle, damaging the company’s public reputation and therefore its economic prospects.  Bloomberg

Energy and Environment News

Energy and Environment News

November 9, 2015

Top Stories

Oil Outlook.  The U.S. Energy Information Administration forecasts that U.S. shale production will fall by 118,000 barrels per day (bpd) in December, marking the longest monthly decline on record and the eighth consecutive month of falling output.  Production from the Eagle Ford shale play in South Texas is expected to see the greatest decline of 78,000 bpd, followed by a 27,000 bpd decline in output from the Bakken region of North Dakota.  Reuters

Climate Change.  After the President denied approval for the Keystone XL pipeline, the environmental movement has set new targets with respect to its national policy agenda.  One of the movement’s most ardent spokesmen, Bill McKibben of Middlebury College, reports that issues including fossil-fuel leases, coal mines, fracking, obstacles to solar power, fossil-fuel exports, fossil-fuel subsidies, and shipping oil by rail and by other pipelines will compete for the new “spotlight” role among environmental activists.  Bloomberg

Energy Policy.  Regulators in the United States and Canada have expanded efforts to conduct on-the-road emissions tests amid rising concerns about the prevalence of “cheating” throughout the automotive industry.  The new testing approach most likely to be adopted will significantly differ from old methods where vehicles are tested in a highly controlled lab setting, but stops shy of “on-the-road testing” due to concerns about the accuracy and precision of such tests.  NY Times

Climate Change.  Cass Sunstein of Bloomberg View writes about the broader implications surrounding the investigation into Exxon Mobil’s public statements on climate change, particularly with regard to its responsibility to “maximize shareholder value”.  Sunstein asserts that while it is perfectly legal for a corporation to argue against climate-related policies on behalf of their own interests, making “false statements” that contradict the clear views of a corporation’s own researchers contradicts the shareholder value principle, damaging the company’s public reputation and therefore its economic prospects.  Bloomberg

Energy and Environment News

Energy and Environment News

November 6, 2015

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Energy Policy.  The Obama administration rejected the Keystone XL pipeline today, ending a seven-year politically charged review of the project.   President Obama announced that the decision was made based on the State Department’s assessment that the pipeline would not serve the national interest of the U.S., also noting that the project has occupied an overinflated role in political discourse in recent years, and is neither a “silver bullet” for the economy nor an “express lane” to climate disaster.  WSJ

Oil.  Banking regulators are warning that stresses created by the low oil price environment are contributing to elevated credit risk in the U.S. banking sector, despite a relatively strong economy.  The value of weak loans nationwide has increased 9.4 percent since last year, while the value of loans heading into dangerous territory was up 18.5 percent over the same period — a trend many federal agency officials are attributing to the troubled state of many oil and gas companies.  FT

Energy Policy.  Michael Bloomberg, former mayor of New York City, has announced plans to run political television ads against four state attorneys general who are suing the Obama administration over the EPA’s Clean Power Plan.  Mr. Bloomberg’s alleged goal with the campaign — which will air in Missouri, Florida, Michigan, and Wisconsin — is to explain the public-health impacts associated with power plants near major cities and the likely benefits that clean power would provide.  NY Times

Oil Outlook.  Several top U.S. shale companies released preliminary 2016 capital spending plans this week that suggest they will trim spending by double digit-figures next year, on top of the 30 – 40 percent cuts made over the past year.  Such cuts in investment would draw budgets down to a fraction of their levels during the height of the shale boom, but would likely leave production levels flat amid efficiency  and productivity gains.  Reuters