Energy & Environment News

Energy & Environment News

March 9, 2015

Top Stories

Oil.  New, sturdier railroad tanker cars designed to prevent crude from escaping have been largely unsuccessful in four recent high-profile oil-train derailments.  While tanker-car improvements have been the leading safety measure endorsed by the industry, these events highlight significant risks posed by factors such as crude volatility and train length.  The Transportation Department proposed new rules for tank cars carrying crude late last year, and recommendations from the White House are expected in May.  WSJ

Energy Policy.  An op-ed in the Financial Times holds that U.S. oil export restrictions are exacerbating problems faced by U.S. oil producers by awarding “undeserved rents” to refiners and undermining the credibility of U.S. support for free trade.  Additionally, the article notes that the oil export ban creates a supply glut within the United States that widens the price between what producers would receive in the U.S. and what they would receive on the world market.  FT

Renewables.  The EIA’s latest Electric Power Monthly report shows that electricity generated from solar and wind power grew much faster than fossil-fuel generated electricity last year, with solar power more than doubling and wind growing faster than all other sources.  While renewables comprise the smallest portion of all U.S. electricity sources, industry analysts predict that they are likely to continue growing into 2015 as additional wind capacity comes online and the price of solar panels continues to decline.  EIA, WP

Energy and Environment News

Energy and Environment News

March 6, 2015

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Oil.  EIA data indicates that U.S. crude oil supplies stand at the highest level in more than 90 years, nearing 70% of the nation’s storage capacity.  Unless additional storage capacity is created amid the supply glut, analysts fear that prices will plunge further as producers discount oil to buyers with room to store it.  WSJ

Nuclear.  Four of the five nuclear power plants under construction are experiencing multiyear delays and cost overruns, largely due to difficulty obtaining large equipment modules needed to build critical components of the nuclear reactors.  The four projects use a new construction method where large structural sections of each nuclear reactor are built in a central facility and then relocated to plant sites for final assembly —  the method has the potential to greatly reduce the delays and cost overruns, but has proved more difficult than expected. WSJ

Oil.  Gasoline prices are rising five times as quickly as crude oil prices due largely to refinery shutdowns and subsiding panic in oil markets.  Government data indicates that refineries are operating at the lowest rate in six weeks, while production of gasoline fuel has slowed as plants shut down for seasonal maintenance.  Bloomberg

Energy and Environment News

Energy and Environment News

March 5, 2015

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Energy Outlook.  In a joint press conference with Saudi Arabia’s foreign minister, U.S. Secretary of State John Kerry asserted that an agreement with a Iran would reduce the chance of a nuclear arms race and increase prospects of peace in the Middle East.  Nevertheless, Sunni monarchies of the Gulf have expressed concern that this agreement could allow Shiite militias in Iran to retain technologies needed to develop dangerous nuclear weapons in the future.  WSJ

Oil.  U.S. oil prices fell today after an announcement that the European Central Bank would start buying government bonds in an effort to boost economic growth.  This will effectively strengthen the dollar further, which will in effect make oil — which is traded in dollars — more expensive to buyers using foreign currencies.  WSJ

Natural Gas.  According to preliminary estimates published by the Energy Information Administration, the U.S produced a record 25.7 trillion cubic feet of natural gas last year, marking continued growth in output despite depressed gas prices and a sharp drop in rigs.  John Kemp of Reuters notes that while continued growth in the natural gas industry is largely a by-product of the oil boom, oil producers will not be able to rely on natural gas sales to improve the financial performance of their wells.  Reuters

Energy Policy.  In an op-ed article published yesterday, Senator Mitch McConnell (R – KY) urged governors to fight regulation proposed by the EPA to slash greenhouse gas emissions from coal-fired power plants.  The regulations will be finalized this summer and could could lead to the closing of hundreds of coal plants. NY Times

Energy and Environment News

Energy and Environment News

March 4, 2015

Top Stories

Oil.   The International Energy Agency reports that the total utilization of crude oil storage capacity has increased to 60% — well above expectations — compared with 48% at this same time last year.  Industry analysts attribute the inventory buildup to the 0.8 percentage point decline in refinery utilization rates brought about by seasonal maintenance closings.  EIA,  WSJ

Energy Outlook.  Nick Butler of the Financial Times argues that a shifting balance of power in the Middle East will have profound implications for both the global energy business and investments in the region.  In particular, Butler notes that favorable geopolitical conditions in Kurdistan may lead the state to begin selling its own oil through Turkish pipelines — a development that would greatly benefit oil majors that have invested there.  FT

Energy Outlook.  One of the world’s leading companies in nuclear technology announced today that it would implement a major cost-cutting plan in 2015 to bring its finances in order, which could include cutting projects around the world ranging from producing and recycling nuclear fuel to designing and building reactors.  The impetus behind these cuts is lingering low demand due to the 2011 nuclear disaster in Japan; moving forward, the France-based company plans to focus only on its “core nuclear business” — particularly in China, the world’s fastest growing market for nuclear energy.  NY Times

Energy and Environment News

Energy and Environment News

March 3, 2015

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Energy Policy.  U.S. Secretary of State John Kerry and Iranian Foreign Minister Javad Zarif advanced a deal today that would require Iran to accept major restrictions on its nuclear activities in exchange for the West to lift tight international sanctions.  This meeting follows 10 years of negotiations between Iran and six major powers — the U.S., U.K., France, Germany, Russia, and China — which will hopefully culminate in a broad framework by the end of the month and a final, fully-detailed comprehensive agreement by June 30.  WSJ

Climate Change.  A report from the European Environment Agency finds that the European Union will not meet its ambitious 2050 targets for greenhouse gas reductions with the policies currently in place.  In order to remain on track to meet these goals, the European Union would need to enact difficult and costly measures to reduce emissions from transportation and agriculture — measures that are likely to generate political pressure and could hurt the economy. NY Times

Energy Outlook.  The first bidding round for Mexican oil and gas exploration garnered interest from 42 companies despite sustained low oil prices.  While shallow-water fields available in “Round One” will cost less than $20 per barrel to develop, industry officials warn that Mexico must offer competitive terms and attractive assets in order to secure previously projected levels of investment.  FT

Energy.  Ken Silverstein argues in Forbes that despite significant technological advances such as rooftop solar panels and micro-grids that allow consumers to generate their own electricity, the centralized delivery system run by utilities will remain intact for the foreseeable future.  He predicts that utilities will work to maintain their revenues and market position by modernizing and expanding their infrastructure and networks while investing in onsite generation.  Forbes