Energy and Environment News

Energy and Environment News

January 28, 2015

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Energy Policy.  The National Transportation Safety Board issued more than 24 safety recommendations yesterday, reporting that there are “systemic weaknesses” in the way natural gas providers maintain the largest pipelines in their networks.  The agency said that since tighter rules were issued at the federal level in 2003, state-regulated pipelines have experienced a 27% higher incident rate than federally regulated pipelines.  NY Times

Natural Gas. After rising briefly in November, natural gas prices dropped to their lowest levels since September 2012 in recent weeks. Amid growth in production and increasing inventories, the Energy Information Administration has projected that prices will remain low for most of 2015 and 2016. EIA

Oil.  Bloomberg Business notes that as the world’s largest oil producers prepare to release their annual earnings reports in the coming weeks, investors will mine the fourth-quarter data for signs indicating the duration of the current slump and the health of industry corporations. Company cash flows are extremely sensitive to price fluctuations; however, analysts predict that companies will likely protect stock dividends rather than investing in new oil fields or repurchasing shares until the market recovers.  Bloomberg

Energy and Environment News

Energy and Environment News

January 27, 2015

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Energy Policy.  The Obama administration is set to open new areas of federally owned waters to oil and natural gas drilling, including areas along the Atlantic Coast.  Although it is expected to come under scrutiny in light of recent low oil prices and the President’s aggressive climate-change agenda, the Interior Department will likely propose a plan in coming days to identify which leases the federal government will offer from 2017 to 2022.  WSJ

Energy Policy.  The Senate — unable to amass the 60 votes needed to end debate on the Keystone XL pipeline  — rejected a procedural motion yesterday to advance the Keystone XL pipeline bill.  The Senate is expected to continue working on the bill this week — and more amendment votes are expected before a final passage early next week, at the earliest.  WSJ

Natural Gas.  In the most comprehensive study of hydraulic fracturing ever conducted, the Pennsylvania Department of Environmental Protection found that there is little potential harm for workers or the public from radiation exposure due to fracking for oil or gas.  Given that Pennsylvania has some of the most radioactive source rocks in the country, these study results likely apply to all fracking and drilling activities across the U.S.  Forbes

Oil.  Michael Patton asserts that low oil prices could send the economy into recession, as the reversal of the oil boom and strengthening U.S. dollar may render U.S. exporters less competitive in the global marketplace.  He argues that any benefits of lower oil prices to U.S. consumers will be offset by the stronger dollar, loss of jobs in the U.S. oil industry, and slowing global economy.  Forbes

Energy and Environment News

Energy and Environment News

January 26, 2015

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Energy Policy.  The U.S. and E.U. are considering additional sanctions against Russia after a missile attack in Ukraine was connected to pro-Russian separatists.  Possible sanctions include a ban on technology exports related to the natural gas industry, measures against Russia’s oil sector, and/or the freezing out of additional companies from Western financial markets.  WSJ

Oil.  OPEC Secretary-general Abdalla El-Badri commented that oil prices may have reached a floor and could move higher very soon, noting also that prices as high as $200 a barrel are possible if oil producers do not invest in new supply.  Analysts confirm that future supply shortages are a concern, but counter that $200 per barrel prices are unlikely because shale drillers will probably resume production quickly once the price approaches $100.   Reuters, Bloomberg

Nuclear.  President Obama and Indian Prime Minister Narendra Modi reportedly made “tangible progress” on issues including civil nuclear trade and climate change during a summit between the two leaders this weekend. The leaders addressed a stalled 2008 U.S.-India nuclear deal and reached an agreement that clears up liability issues that have been deterring U.S. commercial investment in Indian nuclear projects.  WSJ

Clean Energy.  Devashree Saha and Mark Muro of the Brookings Institute argue that falling oil prices will have a limited impact on the clean energy industry because (1) oil and renewable energy do not directly compete with each other and (2) the costs associated with technology-based sources like wind and solar energy tend to decline over time.  The authors further argue that the oil price crash demonstrates the value of clean energy sources through a comparison with the volatile petroleum market.  Brookings

Energy and Environment News

Energy and Environment News

January 23, 2015

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Oil.  North American oil and gas production is falling much more sharply in response to low international oil prices than production in the rest of the world.  By contrast, the Middle East and Asia appear to be the most resilient markets;  data show a drop of just one oil rig in Saudi Arabia from October to December 2014, while the number of rigs in the US declined by 15% over the same time period.  FT

Oil.  The Wall Street Journal predicts that the death of King Abdullah will not affect Saudi Arabia’s ongoing commitment to drive down oil prices and maintain its major share of the global market.  Amidst considerable unrest and uncertainty in the Middle East, Saudi Arabia is expected to continue protecting itself by exploiting its biggest advantages: vast oil reserves and low-cost crude production.  WSJ

Climate Change.  A recent infographic compares the air quality — measured by small airborne pollutant particles (PM2.5) — of the ten most polluted cities in China and in the United States.   Bakersfield, California has the worst air quality in the United States with a PM2.5 level of 18.2, while  Xingtai in China ranks the worst with a PM2.5 level of 155.2. This stark difference can be primarily attributed to China’s use of coal-fired power plants to fuel its economic growth.  Forbes

Energy and Environment News

Energy and Environment News

January 22, 2015

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Climate Change.  The Senate voted yesterday on three nonbinding amendments addressing the scientific consensus of climate change, and rejected the most politically contentious amendment stating that climate change is real and that human activity significantly contributes to it.  While the amendments have no chance of becoming law in light of a veto threat from President Obama, the votes nevertheless contributed to a strategy by Democrats to put Republicans on record about an issue that divides the party.  WSJ

Oil.  Anna Mikulska and Jim Krane warn against making long-term energy-related decisions based on recent falling oil prices, which are likely a short-term phenomenon.  They cite three specific examples where consumers and policymakers appear to be reacting to low oil prices: (1) recent spikes in low fuel-economy, large-model car sales (2) proposed legislation involving a hike in gasoline prices; and (3) popular sentiments that Keystone XL pipeline is no longer necessary.  Forbes

Climate Change.  Given that the Obama administration is expected to make its final emissions-cutting targets for the power industry this summer, two charitable groups – the Bloomberg Philanthropies and the Heising-Simons Foundation – are donating $48 million over the next three years to help states reduce emissions from electricity production.  The money will likely provide technical assistance, including economic forecasting and legal analysis, to roughly twelve states that have demonstrated interest in ambitious clean-energy plans.  NY Times