Publications

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Oil.  The Wall Street Journal reports that the cost to produce a barrel of oil has fallen dramatically around the world due to a combination of technical advances that have made shale production permanently cheaper and cyclical factors that are unsustainable for many producers moving forward.  The cost of oilfield services is a key component of these cyclical factors, and will likely be a determinant of which major producers succumb to market forces most quickly in coming months.   WSJ

Solar.  Small upstarts that sell solar panels directly to customers are proving to be stiff competition for large solar leasing companies and are expected to shave more than 20% from large companies’ 2014 market share next year.  Industry analysts note that solar leasing is losing market share due to the rise of viable alternative payment options and falling prices for panels, which make purchasing the systems outright more economical for consumers.  WSJ

Oil Outlook.   The Energy Information Administration reports that China’s exports of diesel have continued to skyrocket in 2016, bolstered by reduced domestic demand for diesel and reforms to China’s refining sector that have increased refinery utilization and production rates.   While China was a driver of diesel demand growth over the past few decades, its emergence as a net exporter is increasing global oversupply in the market for diesel fuel.  EIA

Energy Policy.  Coral Davenport of the New York Times argues that Donald Trump’s promise to aggressively expand American oil and gas production is incoherent in that it ignores a key fundamental force: the lackluster global economy.  Davenport cites leading energy experts who call Trump’s claims into question, particularly his vow that an expansion of oil and gas production would increase employment, economic growth, and federal revenue.  NY Times

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Energy Policy.  State officials from New York are being investigated about their inquiry into Exxon Mobil’s climate research, led by House Representative Lamar Smith (R-TX) and supported  by 13 other House members.  The Congressman issued a letter to New York attorney general Eric Schneiderman on Wednesday demanding all communications between Schneiderman’s office and climate change activist organizations since 2012,  escalating a political debate about the principles of free speech, government overreach, and policymakers’ collaboration with activist organizations.   NY Times

Climate Change.  The New York Times reviews presidential contender Donald Trump’s views on climate change, noting that he has expressed very little about climate and energy policy beyond what he posts on Twitter.  Political analysts speculate that Mr. Trump’s position will fall to the left of the Republican party’s stance in an attempt to align with voters that are increasingly in agreement that climate change is occurring.  NY Times

Energy Outlook.  John Dizard of the Financial Times writes that 2016 will bring a “remake” of the 2001 California energy crisis, which will be caused by a physical shortage of natural gas delivered to local generators due to the shutdown of a leaky gas storage facility just north of Los Angeles.  Dizard quotes a coalition of gas, generation, and transmission owners and operators who predict a total of 14 days of power outages this summer, with a possibility for more.  FT

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Oil Outlook.  Shale companies that have “survived” the oil-price collapse are beginning to lay the groundwork for future growth, albeit slower and steadier than growth experienced during the United States’ energy boom.  Active drillers have gotten notably better at pinpointing the optimal location for drilling and improved rig logistics, enhancing both rig productivity and efficiency in ways that are likely to persist as prices continue to recover.  WSJ

Climate Policy.  The Energy Information Administration reports that the trajectory of future carbon emissions from the power sector will depend on the fate of the Clean Power Plan.  Specifically, if the Clean Power Plan does not come into effect, EIA projects that power-sector emissions will be 7% higher in 2022 and 25% higher in 2030 and beyond.  EIA

Climate Change.  According to a new study published in the Global Change Biology journal, greenhouse gas emissions from agricultural production must fall by a billion tons per year by 2030 in order to limit global warming to 2 degrees Celsius by the end of the century.   The study finds that current regulations targeting agricultural emissions will fall up to 5 percent short of what’s needed, and advocates for “massive investment, information sharing and technical support to enable [the] global-scale transition” required for agricultural efficiency gains.  WP

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Energy Policy.   The U.S. Court of Appeals for the D.C. Circuit announced that it will try the closely watched Clean Power Plan case by a full panel of active circuit judges, postponing the hearing until September 27^th.   The move marks a recognition of the political sensitivity of the case, and will notably exclude some of the most conservative judges who have senior status with the court.  WP

Oil.  According to the Wall Street Journal,  most large oil companies have continued to pay their executives based on the volume of crude that they find and extract, rather than shifting toward a profit-based incentive structure as many long-term investors had hoped.   Analysts note that this pay structure may help explain why U.S. companies were slower than expected to cut production as global oil prices sank.  WSJ

LNG.   Energy consultancy Wood Mackenzie predicts that the global natural gas glut will take years to subside, forecasting as much as 70 million metric tons of LNG to be uncontracted by 2021.  In response to the supply glut, global energy companies have invested heavily in liquefaction facilities to enable gas to be exported by sea,  while also seeking to boost demand by introducing LNG as a transport fuel for both trucks and vessels.  WSJ

Climate Change.   The Energy Information Administration reports that global energy-related carbon dioxide emissions are expected to rise by 30% between 2012 and 2040 — growth that will be driven by rising energy use in countries outside of the OECD.  While absolute energy-related CO2 emissions are projected to increase, the carbon intensity of energy (i.e., on a per-unit basis) is expected to continue declining throughout the projection period.   EIA

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Solar.  Robert Rapier argues in Forbes that solar power will become one of the world’s most important sources of energy, although it may be a long time before solar power rivals the consumption of oil in the global energy market.  Rapier cites several key drivers behind solar’s continued growth, including gains in energy conversion efficiency and falling costs for solar PV that make it increasingly competitive in many markets.  Forbes

Energy Outlook.  In its latest monthly report, OPEC predicts that shrinking U.S. output and massive cuts to investment in new projects will reduce the global oil glut in 2016.  The cartel expects that falling production by non-OPEC countries will help rebalance a global crude market that has seen prices fall by more than half since 2014.  WSJ

Oil.  Despite an oil price rally to $45 per barrel, U.S. energy firm bankruptcies have accelerated in the past month and several companies remain on the verge of default.  Some analysts see the fortunes of oil companies reversing at $50 per barrel, although a sustained price increase to $60 or $65 may be necessary for a turnaround in sector profitability.  Bloomberg