Publications

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

Top Stories

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

Top Stories

Oil.  The price of U.S. crude oil increased today, rising 0.7% or 35 cents on the barrel.  Nevertheless, analysts caution that prices could fall again before oil makes a sustained rally, given that there are few signs of slowing production.  WSJ

Climate Change.  Motivated by worrisome statistics concerning pollution levels in China, an independent film company released a viral documentary online over the weekend concerning the history, causes, and impacts of the country’s severe smog.  Response to the documentary was overwhelmingly positive (it boost share prices of at least a dozen “environmentally friendly” companies), as the film promoted the idea that environmental protection and economic development are not in conflict; rather than burden innovation, environmental protection can be a facilitator by increasing competition, creating jobs, and lifting the economy.  Forbes

Energy Policy.  James Conca asserts in Forbes that the United States has immense refining capacity — so much that Canada depends on the Keystone XL Pipeline to get its crude oil to U.S. refineries along the Gulf Coast because no other country can refine so much so cheaply.  That being said, Conca argues that the unaddressed problem related to Keystone is refinery sustainability.  Existing refineries have been running at or near full capacity and new refineries are unlikely to be built, meaning other oil currently being refined would be displaced by new Canadian crude delivered through the Keystone XL, which could ultimately raise gasoline prices in the U.S.  Forbes

Top Stories

Energy Policy.  Federal regulators announced yesterday that they intend to tighten the guidelines automakers use to determine the vehicle fuel efficiency advertised to consumers.  Automakers failing to adhere to the new guidelines could face an audit and other penalties from the Environmental Protection Agency, similar to penalties imposed on automakers that have overstated their fuel economy ratings over the last several years.  NY Times

Oil.  Members of OPEC are discussing holding an emergency meeting if the price of crude oil continues to slide — a sign of growing alarm over the impact that lower prices may have on their economies.  The meeting may not happen given that its de facto leader, Saudi Arabia, is unlikely to participate; nevertheless, this increased concern comes three months after the cartel’s decision to maintain production in order to defend market share.  FT

Energy Policy.  In a new report, some of the top business leaders posit that the U.S. government spends far too little money on energy research, putting the long-term goals of reducing carbon emissions and alleviating energy poverty at risk.  This group of leaders —  known as the American Energy Innovation Council — includes Microsoft co-founder Bill Gates and the General Electric chief Jeffrey R. Immelt, both of whom urge Congress and the White House to make expanded research in this field a strategic national priority.  NY Times

Oil.  According to industry operators, spending on oil and gas projects in the North Sea is projected to plunge by a third this year — marking the fastest rate at which cash has drained from the region since the 1970s.  Rising costs, heavy taxes, and a near-50 percent slide in crude prices are expected to stunt investment in new and existing fields; without this critical infrastructure, North Sea hubs will disappear, effectively sterilizing areas of the basin and leaving oil and gas in the ground.  FT

Top Stories

Energy Policy.  President Obama is expected to formally reject a Republican attempt to force construction of the Keystone XL pipeline this week, opening what experts are deeming a new period of his administration — one in which he will use the veto to protect his past legislative record, acting alone in the face of overwhelming political opposition.  Many Republicans view the veto as a demonstration of arrogance, and argue that more could be accomplished if the President signs bills rather than voting against legislation that congressional Democrats dislike.  NY Times

Oil.  As gasoline prices continue to fall, Americans are purchasing less-fuel-efficient vehicles and covering more mileage; according to the Commerce Department, 53% of vehicle purchases in the U.S. over the past 6 months were light trucks or sport-utility vehicles — the highest share in a decade — and the Transportation Department estimates that Americans drove more than 3 trillion miles in the 12 months through November — the most since mid-2008.  While this change in consumer behavior could eventually cause gasoline and oil prices to tick up in a “demand response”, the effect in the short-term will likely be small.  WSJ

Natural Gas.  Amid expectations that recent frigid temperatures in the eastern U.S. have boosted demand, natural gas futures rose today by 1.2%. About half of U.S. households use natural gas as their primary heating fuel, and cold weather can cause price spikes as utilities and other buyers compete for supplies; however, until now, prices have remained subdued because of robust production and moderate temperatures.  WSJ

Oil.  Nick Butler asserts in the FT that the next few months could be a critical period in the history of the North Sea — a province that could see a significant proportion of its activity brought to an end prematurely after 50 years of producing billions of barrels of oil and gas.  He argues that this is not inevitable; the industry could be kept in business primarily through a tax reduction that he views should not be seen as a subsidy, but rather as an investment in the future.  FT