Energy and Environment News

Energy and Environment News

January 14, 2015

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Energy Policy.  Auto companies are pressuring U.S. regulators to change forthcoming standards requiring them to significantly improve the fuel economy of their vehicles by 2025.  While regulators aim to maintain fuel efficiency improvements despite recent volatility in oil prices, auto manufacturers are concerned that the current low price of gas will stifle consumer demand for higher fuel economy vehicles.  WSJ

Energy Policy. 
White House officials announced plans to impose new regulations that will reduce the oil and gas industry’s methane emissions to 65% of 2012 levels by 2025.  The oil and gas industry has pushed back against the proposed regulations, arguing that they are “redundant, costly and unnecessary” amid existing industry efforts.  NY Times

Energy Outlook. 
George Perry of the Brookings Institute discusses the current oil-market slump, including underlying factors and the likely path forward.  He argues that the global oil market will remain chaotic for “some time” in light of OPEC’s refusal to support the world price by cutting production — and notes that cuts in U.S. shale oil production are likely to contribute disproportionately to the eventual reduction in global supply.  Brookings

Oil.  Two of the largest oil-producing companies have announced significant cost-cutting plans for 2015 after a brutal recent slide in crude prices.  These plans include the postponement or abandonment of major billion-dollar projects such as construction of one of the world’s largest petrochemical plants.  FT

Energy and Environment News

Energy and Environment News

January 13, 2015

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Energy Outlook. The Energy Information Agency’s Short-Term Energy Outlook forecasts slower growth in domestic oil production in 2016, reflecting the long-term impact of weak oil prices.  The agency projects Brent crude oil prices to remain weak this year at an average of $58 per barrel, but raised its expectations for 2015 global demand growth.  EIA

Energy Policy.  The Keystone XL Senate floor debate in coming weeks will likely serve as a “showcase”  for energy and environmental issues including climate change science, the role humans play in the course of climate change, and the 42-year-old ban on crude oil exports. Republicans and Democrats remain split on most issues, while there is some bipartisan agreement on measures such as energy efficiency in buildings.  NY Times

Energy Outlook.  As international crude oil prices approach fresh 6-year lows, China — the world’s largest oil importer — imported a record level of crude oil in December in attempts to fill its strategic and commercial reserves. Amrita Sen, a chief oil analyst at Energy Apsects, warned that China’s oil product demand will likely slow as Chinese consumption becomes more efficient and less oil intensive and the pace of new refinery production slows.  FT

Energy and Environment News

Energy and Environment News

January 12, 2015

Top Stories

Oil.  Four critical U.S. crude oil refineries — accounting for more than one-fifth of the total refining capacity of the East Coast and Midwest regions — were closed by fire and cold weather over the weekend. Industry analysts predict that these refinery incidents may provide a “boost” to the slumping oil products market, although the overall impact will likely be muted due to growing inventories.  Reuters

Nuclear.  Nick Butler of the Financial Times notes that 2015 is likely to be a “critical year” for the nuclear industry, as Japan begins phasing-in its nuclear reactors and countries around the world decide whether or not to commit to new nuclear plants.  Many forthcoming projects are at risk of being delayed or canceled due to financing concerns and a lack of independent appraisals of new technologies.  FT

Energy Policy.  Brookings’ Planet Policy blog reviews a recent paper which estimates the employment effects of a nitrogen oxide cap-and-trade program for electric utilities and large manufacturers. The author, Mark Curtis, found that the cap-and-trade program did lead to a substantial reduction in emissions, but that employment in the manufacturing sector dropped by 1.3 percent as a result of the program.  Brookings

Energy and Environment News

Energy and Environment News

January 9, 2015

Top Stories

Keystone XL.  The Keystone XL Pipeline cleared two key legal hurdles today as a Nebraska state court ruled in favor of the project and the House of Representatives passed legislation to approve it. The Senate will begin debates next week — but the White House has indicated that even after the Nebraska ruling, it remains opposed to the Keystone bill. WSJ

Natural Gas.  A new study finds that recent Ohio earthquakes were partially caused by hydraulic fracturing — more commonly known as fracking.  The fracking process built up subterranean pressures that repeatedly caused slippage in an existing fault near the wells. A representative for Ohio’s Department of Natural Resources said that the wells “remained in production but that further fracking has been banned”.  NY Times

Oil.  According to analysts at Wood Mackenzie, a corporate research firm, 1.6% of the world’s oil supply — approximately 1.5 million barrels-per-day — would be cash-negative at crude prices of $40 a barrel.  Additionally, the firm noted that oil producers would be more likely to store oil than shutdown production at this price.  Reuters

Renewable Energy.  Despite the recent slump in oil prices, investment in wind, solar, biofuels, and other low-carbon energy technologies increased by 16% in 2014, the first growth since 2011.  The surge in new funding was due to trends including China’s recent commitment to renewables, offshore wind project commitments that were years in the making, and electric car investments made prior to the oil-price decline.  Bloomberg

Energy and Environment News

Energy and Environment News

January 8, 2015

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Energy Finance.  Investors in high-yield debt issued by riskier oil and gas companies are in danger as borrowers seek “second lien” loans secured against their assets. Moodys — a leading credit-rating agency — found that many energy bonds include provisions with weaker investor protections, allowing the companies to take on additional debt and leave unsecured bondholders vulnerable to losses in the case of default.  FT

Oil.  U.S. oil producers are beginning to cut back on the number of drilling rigs as oil prices continue to decline — an early indication that the oil industry is in the early stages of a downturn. Despite these reductions, large-scale layoffs are not yet expected as producers will likely need to continue drilling existing rigs to retain leases or keep revenues up.  NY Times

EPA.  Senior EPA climate change official Janet McCabe said that states who do not submit customized plans under the new Clean Power Plan will be forced to comply with a federal “model rule” to cut their carbon emissions. McCabe indicated that the model rule was created due to an expectation that some states will refuse to submit plans. NY Times

Energy Policy.  Mexican state-owned oil producer Pemex has submitted a request to the U.S. Department of Commerce to import light crude oil. The company said that the proposal would reduce transportation costs and improve refining margins at Mexico’s refineries, while also maximizing the refining potential at U.S. refineries best equipped to handle heavy crude from places like Mexico and Venezuela.   WSJ