Energy and Environment News

Energy and Environment News

July 30, 2015

Top Stories

Oil.  The Wall Street Journal reports that some smaller oil-and-gas companies are weathering the oil price plummet surprisingly well compared with big oil companies.  While larger firms are notoriously resilient to price volatility due to their large cash flows and easy access to credit, some smaller shale drillers are able to more quickly increase production, own some of the best oil and gas fields, and have proven better at extracting fuel at a lower cost.  WSJ

Energy Outlook.  Various reports from the U.S. Energy Information Administration have given conflicting estimates of U.S. oil production, leaving analysts and investors at a loss as to both the direction and duration of the oil price decline.   While the two series stem from different sources of underlying data — weekly series are based on a forecasting model and EIA’s monthly reports are based on reported output — discrepancies have remained relatively consistent with historical patterns. WSJ

Energy Policy.  Mexico has delayed auctioning off deepwater oil assets until September, following a failed attempt two weeks ago to open its oil sector to private investors.  The energy ministry is also planning to revisit corporate guarantee rules that the oil industry had viewed as being too onerous, and will now allow companies to make a second bid if their initial offer fails to meet a government-set minimum.  Financial Times

Climate Change.  Andrew Revkin of the New York Times voices concern about public reviews of scientific papers, particularly in light of a highly criticized study recently released on a pre-publication forum that predicts drastic climate change events.  Revkin asserts that while peer review is essential to progress in the scientific community, the “rapid-fire” publication of unsettled findings, particularly in highly visible outlets, undermines scientific credibility and detracts from the undisputed basics of climate change science.  NY Times

Energy and Environment News

Energy and Environment News

July 29, 2015

Top Stories

Energy Policy.  The Environmental Protection Agency (EPA) has slightly revised its proposal requiring drastic cuts in greenhouse-gas pollution from power plants.  Under this revised proposal, states will have an additional two years to begin phasing in pollution cuts and the agency will offer credits and other incentives to encourage a swifter shift to renewable energy.WP

Natural Gas.  The Energy Information Administration reports that industrial natural gas consumption has grown steadily since 2009, mostly because somewhat low natural gas prices have supported the use of natural gas as a feedstock for bulk chemical production. The trend is expected to continue over the short term, particularly as several new projects in the Gulf Coast region are scheduled to come online by 2018.  EIA

Energy Outlook.  Nick Butler of the Financial Times reviews the energy implications of China’s recent economic downturn in light of its role as the main driving force behind rising global demand over the last ten years.  He writes that several years of low growth in China will likely lead to (1) an extension of the existing surplus of supply over demand, (2) cancelled or postponed Chinese projects related to liquefied natural gas and nuclear energy, and (3) postponed international energy projects that rely on Chinese capital.  FT

Energy Policy.  Alastair Gale of the Wall Street Journal explains the fundamental differences between North Korea and Iran that make its nuclear arsenal non-negotiable.  Unlike Iran, North Korea is a nuclear state both in name and reality, already possessing an array of bombs and a commitment to increase its arsenal alongside economic growth; further, while Iran could be lured into negotiations by the prospect of lifted sanctions, western nations have little leverage over North Korea — a country cut off from international trade and normal diplomatic interaction.  WSJ

Energy & Environment News

Energy & Environment News

July 28, 2015

Top Stories

Climate Change.   A recent study finds a significantly higher likelihood of compound flooding events in major cities along the east and west coasts of the United States.  Compound flooding events — which occur with simultaneous heavy rainfall and a high storm surge — are thought to be linked with general global warming trends, and have more than doubled in the past 80 years.  Bloomberg

Nuclear.  The Wall Street Journal reports that the modular method of constructing nuclear reactors — a process designed to make the  construction swifter and cheaper — has run into costly delays that have called its viability into question.   Delays of three years or more have caused project costs to soar; coupled with the U.S. shale renaissance and downturn in global crude prices, nuclear power has become a less attractive investment option for the power industry. WSJ

Climate Change.  Michael Lynch asserts in Forbes that although the energy plan released by presidential hopeful Hillary Clinton has become a rallying point of her campaign and part of the political debate, it will never move the policy debate forward.  He argues that her renewable energy goals are more aspirational than practical, particularly as they ignore costs and falsely assume that mandates can force progress. Forbes

Energy Policy.  Jack Karsten and Darrell West of the Brookings Institute reviews the Obama administration’s announcement for a new initiative to increase solar access for Americans of all income levels.  The initiative will focus on shared solar projects that are designed to allow a larger demographic to utilize power generated by solar energy.  Brookings

Energy and Environment News

Energy and Environment News

July 27, 2015

Top Stories

Oil.   Several large U.S. energy companies have disclosed plans for additional layoffs, asset sales, and financial maneuvers in efforts to cope with the recent and sudden drop in U.S. crude oil prices to under $50 a barrel.  While the initial rounds of layoffs earlier this year were concentrated in blue-collar jobs such as fracking crews and roughnecks on drilling sites, job cuts ahead will likely extend to highly skilled workers, such as engineers and scientists.  WSJ

Energy Policy.  Reuters reviews a recent proposal to sell “excess stocks” from the government’s Strategic Petroleum Reserve (SPR) as a way to offset a shortfall in funding to the Highway Trust Fund.  While some members of the Senate are vehemently opposed to the idea on grounds that the stockpile is critical for U.S. energy security, others argue that recent developments — like the U.S. shale revolution — have reduced the amount of stockpiles needed in the SPR.   Reuters

Oil.  According to a recent report by consultancy Wood Mackenzie, nearly $200 billion of oil and gas majors’ capital expenditure cuts were among investments in deep water basins.  The analysts identified 45 major project deferrals worldwide — which affect as much as 10.6 billion barrels of oil resources.  Reuters

Climate Change.  Democratic presidential hopeful Hillary Clinton unveiled her most detailed proposal on climate change to date, calling for a “path towards deep decarbonization by 2050” and “enough clean renewable energy to power every home in America” by 2027.  In addition, Clinton released a video yesterday criticizing many of the current Republican candidates for denying climate change, despite “the settled science.”  Politico

Energy and Environment News

Energy and Environment News

July 24, 2015

Top Stories

Oil.  The Wall Street Journal reports that the U.S. oil market has entered a bear market as prices edge downward under the strong dollar, concerns about global demand, and continued signs of oversupply in the global crude market.   Concerns about global demand have been reinforced by weak manufacturing data from China, which is the world’s second-largest consumer of oil. WSJ

Oil.  Mexico’s lone oil operator Pemex has reported that an explosion at one of its offshore platforms last spring affected nearly 1.5 million barrels of production — much less than the 4.2 million figure released by the Energy Ministry.  The disparity has caused many investors to question Pemex’s transparency, particularly in light of its aspirations to attract nearly $33 billion in investments to boost output in the future.  Bloomberg

Energy Policy.  The Indian government has pronounced the Iran nuclear accord the “best deal available,” as it could open up economic and strategic opportunities for the country.  According to Tanvi Madan of Brookings, India hopes to benefit directly and indirectly from the chance to (1) import Iranian oil, (2) use Iran as a crucial transit route to Afghanistan and Central Asia, and (3) strengthen its relationship with the U.S. after years of strained relations. Brookings

Wind.  Construction began this week on the nation’s first commercial-scale offshore wind farm located off the coast of Rhode Island.  Although the project is only modest in scope, supporters are hoping to prove that offshore wind is a viable technology in the United States, lending credibility to other more ambitious proposals.  NY Times