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Energy and Environment News

November 6, 2015

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Energy Policy.  The Obama administration rejected the Keystone XL pipeline today, ending a seven-year politically charged review of the project.   President Obama announced that the decision was made based on the State Department’s assessment that the pipeline would not serve the national interest of the U.S., also noting that the project has occupied an overinflated role in political discourse in recent years, and is neither a “silver bullet” for the economy nor an “express lane” to climate disaster.  WSJ

Oil.  Banking regulators are warning that stresses created by the low oil price environment are contributing to elevated credit risk in the U.S. banking sector, despite a relatively strong economy.  The value of weak loans nationwide has increased 9.4 percent since last year, while the value of loans heading into dangerous territory was up 18.5 percent over the same period — a trend many federal agency officials are attributing to the troubled state of many oil and gas companies.  FT

Energy Policy.  Michael Bloomberg, former mayor of New York City, has announced plans to run political television ads against four state attorneys general who are suing the Obama administration over the EPA’s Clean Power Plan.  Mr. Bloomberg’s alleged goal with the campaign — which will air in Missouri, Florida, Michigan, and Wisconsin — is to explain the public-health impacts associated with power plants near major cities and the likely benefits that clean power would provide.  NY Times

Oil Outlook.  Several top U.S. shale companies released preliminary 2016 capital spending plans this week that suggest they will trim spending by double digit-figures next year, on top of the 30 – 40 percent cuts made over the past year.  Such cuts in investment would draw budgets down to a fraction of their levels during the height of the shale boom, but would likely leave production levels flat amid efficiency  and productivity gains.  Reuters

Energy and Environment News

November 4, 2015

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Energy Policy.  The White House announced that it plans to continue its review of the Keystone XL pipeline, despite TransCanada’s request for the review to be suspended.  The State Department is widely expected to reject the project, furthering the President’s legacy on environmental issues.  NY Times

Nuclear.  The U.S. Energy Information Administration reports that U.S. nuclear capacity will likely increase slightly through 2020, despite the scheduled closures of more than 2,000 megawatts (MW)of nuclear generating capacity.  Five new reactors under construction in the United States — all in the Southeast — could add as much as 5,000 MW of new capacity over the next five years. EIA

Oil Outlook.  According to an internal OPEC report on long-term strategy, the group forecasts that prices will remain under pressure through 2019 unless output among rival producers falls more quickly than expected.  The “confidential” report, which supports a view that OPEC is fighting — and winning — a market share battle, assumes that oil prices will eventually rise back to levels last seen before the price decline.  Reuters  so have everyone else do the work and you keep the market share? hmmm

Climate Change.  Nick Butler of the Financial Times discusses the mounting rhetoric surrounding climate change and corporate responsibility, particularly leading up to the UN conference on climate change in two weeks.  Butler asserts that a majority industry stakeholders have come to accept that climate change is real, and will probably begin to “define the future” of decarbonization themselves, rather than waiting for policymakers and campaigners to determine it for them.  FT

Energy and Environment News

November 3, 2015

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Energy Policy.  TransCanada, the company seeking to build the Keystone XL pipeline, requested that the Obama administration suspend its years-long review of the project, in what environmental activists are calling a bid to dodge a near-certain rejection.   It is unclear whether the administration will grant the request, thus punting the decision to the next administration, or continue the review, allowing President Obama to potentially reject the project altogether.  NY Times

Climate Change.  EPA announced yesterday that it has discovered emissions-cheating software in more Volkswagen and Audi cars than previously disclosed, and also in one of the carmaker’s high-end Porsche models.  The German carmaker has denied the claims, and has pledged to cooperate with EPA to “clarify the matter in its entirety.”  NY Times

Oil.  Amid a protracted period of low oil prices, OPEC is tightening spending by delaying new hires, reducing training sessions for staff, scaling back on travel, and not increasing its $2.4 million annual membership fee.   While many accuse OPEC of the current market situation due to their decision not to cut back on supplies last year, officials from Saudi Arabia reason that American production has caused a global glut so large that an OPEC cut would not have had a lasting impact on prices.  WSJ

Energy Policy.  Jim Krane writes in Forbes that President Obama looks increasingly likely to sign off on a House bill that would remove the decades-old ban on crude oil exports.   Using this position of leverage over the oil industry, he argues that the White House should replace the export ban with a ban on natural gas flaring — a move that would both support economic activity in the oil sector by raising the price of oil, while also creating an immediate environmental benefit.  Forbes

Energy and Environment News

November 2, 2015

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Oil & Gas.   Global oil prices have fallen much more quickly than gasoline prices, with the price for gasoline falling 28% from last year compared to a 50% decline in oil prices over the same period.  The trend is largely attributed to a sharp increase in refinery profit margins; while crude has accounted for 56% of the cost for a gallon of gasoline on average since 2000, it now accounts for just 46%. WSJ

LNG. The energy industry’s optimism for liquefied natural gas (LNG) appears to be waning due the prolonged slump in oil prices and slowing demand in key Asian markets.   While the LNG market is not currently oversupplied, new supplies are set to come online in coming months, causing analysts to predict a largely unavoidable decline in prices over the near term.  WSJ

Energy Policy.  Nick Butler of the Financial Times discusses the deep and widening divide between Republicans and Democrats on U.S. energy policy leading up to the next presidential election, particularly in light of the recent wave of high-profile environmental regulations issued under the Obama Administration. Butler notes that the new spotlight on energy policies creates conflict for major international energy companies in particular, which have direct interests tied to Republican policy positions but have also pledged strong support for carbon taxes in Europe.  FT

Climate Change.  More than 40 leading U.S. environmental and social justice groups demanded a federal investigation of one of the largest American oil producers on Friday, accusing the company of deceiving the American public about the risks of climate change to save profits — in much the same way that tobacco companies were found to hide the risks of smoking decades ago.   The investigation could be “politically touchy” given the fine line that the Obama administration has walked in recent years in pushing stronger climate policies, but still averting battles with oil companies by approving drilling leases and permits.   NY Times

Energy and Environment News

October 30, 2015

Top Stories

Energy Policy.  Forbes produced a graphic outlining where the highest-polling Democratic and Republican presidential hopefuls stand on various energy and infrastructure topics.  Not surprisingly, the top conservative candidates (i.e., Donald Trump, Dr. Ben Carson, Senator Marco Rubio, and Governor Jeb Bush) are largely in favor of approving the Keystone XL pipeline, allowing the practice of hydraulic fracturing, and lifting the decades-old ban on crude oil exports; meanwhile, the leading democratic contenders (i.e., Secretary of State Hillary Clinton and Senator Bernie Sanders) have taken the opposite stance on all three issues, and support existing and future rules promulgated by the EPA.  Forbes

Oil.  Two of the largest American oil companies reported plunging revenues during the third quarter of 2015, despite a boom in their refining and chemical businesses.   The results come as no surprise, given that oil prices have plummeted to under $50 a barrel from levels of more than $100 in the summer of 2014; natural gas prices have also slumped, but their drop has helped lower the cost in refining and chemical businesses that depend on the fuel for power and as a vital raw material. NY Times

Energy Policy.  While drilling in Egypt, an Italian energy company found what may be the largest natural gas field in the Mediterranean — a discovery that may have severe geopolitical repercussions.  The United States has been pushing Egypt to use energy diplomacy to improve relations between Israel and its Arab neighbors; officials fear that these efforts could be delayed if Egypt is distracted by the chance to become more energy-independent as a result of the discovery.  NY Times

Climate Change.  Secretary of State John Kerry met with Saudi Arabian King Salman and other top officials this week in order to review regional security issues.  The U.S. readout of these meetings announced that both sides also “pledged to work together in advance of the upcoming COP 21 climate conference in Paris,” while Saudi Arabia’s summary of the meetings mentioned no such pledge — an omission that could validate existing concerns that the kingdom is trying to sabotage talks aimed at reaching a global accord to fight climate change.   Forbesd.  WSJ