Publications

Energy and Environment News

September 23, 2015

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Energy Policy.  After months of silence, democratic presidential hopeful Hillary Clinton announced her position on the long-disputed Keystone XL pipeline yesterday, asserting that she opposes the project and sees it as an interference to the United States’ ability to make progress in combatting climate change.   Keystone is a difficult issue for Clinton, given that it faces opposition from environmentalists but support from influential labor leaders who expect it would create construction jobs.  WSJ

Climate Change.  A group of nine major international companies is expected to join a global coalition of firms aiming to convert all operations to renewable energy.  This marks the latest in a wave of corporate commitments responding to concerns over global warming. NY Times

Energy Outlook.  The Wall Street Journal reports that gasoline is today’s cheap and abundant energy source, as the fuel’s national retail price sits one-third lower than year-ago levels.  While the unofficial driving season has ended and planned maintenance at many U.S. refineries may reverse prior inventory gains, gasoline prices are expected to fall below $2 a gallon in many parts of the United States over the next month.  WSJ

Energy Policy. Ed Crooks of the Financial Times argues that lifting the ban on U.S. crude oil exports will do little to raise the price or the output of U.S. crude, citing a recent Energy Information Administration analysis which found that export restrictions do little to distort the market, largely due to capacity limitations among U.S. refineries.  Oil companies have criticized the EIA analysis, pointing out that EIA’s reference case production estimates are too low and asserting that the report does not factor in the potential impacts of refinery shutdowns for planned maintenance and unplanned outages.  FT

Energy and Environment News

September 22, 2015

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Energy Policy.  Senate Democratic leaders unveiled a measure today to demonstrate new party unity on energy and climate change, timed with the visits of Pope Francis and Chinese President Xi Jinping this week.  The measure would specifically call for nationwide greenhouse gas emission reductions of 2 percent each year through 2025 — a cut even larger than the target set by the Obama administration, and unlikely to pass in a GOP-controlled Congress.  NY Times

Oil.  The Financial Times reports that cost-cutting has become a top priority across the energy industry amid collapsing crude prices.  According to energy consultancy Wood Mackenzie, $1.5 trillion of future spending is “uneconomic” with oil at less than $50 a barrel; as such, industry operators are attempting to drive down the cost of new projects by 20 – 30 percent using every money-saving measure available, including using “sniffer dogs” to pinpoint gas leaks and cutting the time taken to issue “permits to work.”   FT

Energy Outlook.  A Wall Street Journal survey of 13 investment banks reveals that analysts are predicting sub-$60/barrel crude prices through the next year as the market continues to struggle to emerge from the global supply glut.  “Lower for longer” has become the new crude mantra for investors as well, who project that excess global production, particularly from OPEC, will limit any material price improvements until the second half of 2016.   WSJ

Climate Change.  Michael Lynch of Forbes criticizes Pope Francis’s view that “unfettered capitalism” has created greenhouse gas emissions.  On the contrary, he argues that “insufficient” capitalism is retarding what could be a major source of greenhouse gas reduction, particularly in China and India where freeing the private sector from government interference would probably allow for increased generation of cheap power from natural gas fired power plants and displace coal.  Forbes

Energy and Environment News

September 21, 2015

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Natural Gas.  Russian gas giant Gazprom has proposed to settle the antitrust case brought against it by the European Commission.  Such a settlement would allow Gazprom to avoid nearly $8 billion in fines, but would require the company to adhere to legally binding constraints that address all of the Commission’s concerns regarding anti-competitive behavior and malicious pricing efforts. FT

Energy Policy.  As part of the Obama Administration’s crackdown on vehicle emissions, the U.S. Environmental Protection Agency accused automaker Volkswagen AG of deliberately tampering with its engines to circumvent government emissions tests.  If true, the allegation would place the automaker in violation of two provisions of the Clean Air Act, potentially costing it more than $18 billion in financial penalties. WSJ

Energy Policy.  World leaders will meet at the United Nations in New York this week to discuss global efforts to curb greenhouse gas emissions and continue negotiations leading up to an international conference on climate change in Paris later this year.  Debate was stimulated by a new report from the Organization for Economic Cooperation and Development, which finds that $167 billion worldwide went to subsidies and other measures supporting the oil, natural gas, and coal industries last year, compared to a much smaller figure for renewable energy.  Bloomberg

Climate Change.  Cass R. Sunstein of Bloomberg View notes that Pope Francis presents an impressive but “occasionally awkward” argument on climate change, combining environmentalism with concern for the poor, skepticism about economics, and hostility to corporate profits.  Sunstein argues that economics should not be treated with skepticism, as the field offers an efficient way to address environmental problems such as climate change while minimizing adverse effects on growth — which in turn have important implications for alleviating poverty and improving employment prospects.  Bloomberg View

Energy and Environment News

September 18, 2015

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Energy Policy.  Now that its allotted 60-day review period has ended, Congress has run out of time to block the Iran nuclear deal and the Obama administration has begun moving assertively to put the accord into effect.  The White House has appointed an official to oversee the deal’s implementation and to start the process of lifting economic sanctions against Tehran.  WSJ

Energy Outlook.  Michael Lynch of Forbes comments on the Neo-Malthusian theory that growing environmental concerns and the commodity supercycle increase the likelihood of military conflict due to a combination of resource scarcity and environmental degradation.  He asserts that there is “a huge fallacy behind all this,” as military action is neither necessary for acquiring resources, nor the most cost-effective approach for doing so; he believes that trade, rather than conflict, should be encouraged for governments wishing to acquire raw materials.  Forbes

Oil.  According to Baker Hughes, the U.S. oil rig count fell by 8 to 644 in the latest reporting week — the third-straight decline after six consecutive weeks of increases.  The number of U.S. oil-drilling rigs has fallen sharply since oil prices started plummeting last year; despite recent modest increases, there are still roughly 50% fewer working rigs compared to last October.  WSJ

Climate Change.  As the global climate talks in Paris approach, European Union member countries are now required to renew their targets for reducing greenhouse-gas emissions every five years.  The mandate comes as leaders grow increasingly concerned that national commitments to cut emissions will not be sufficient to prevent global temperatures from rising more than 2-degrees Celsius above pre-industrial levels (a level agreed by world powers in 2010).  WSJ

Energy and Environment News

September 17, 2015

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Oil.  Reuters reports that the U.S. oil market is gradually adjusting to the new reality of much lower oil prices, with domestic oil production in a slow decline and demand picking up.  Declining U.S. production has helped to put a “floor” beneath U.S. domestic crude prices, which are beginning to rise somewhat relative to the international marker, Brent.  Reuters

Coal.  According to the U.S. Energy Information Administration, China’s energy-based consumption of coal has begun to slow after nearly a decade of rapid growth.  The deceleration in coal use is attributed to a variety of factors — including China’s broad economic deceleration, industry restructuring, and new energy and environmental policies — that reduce coal consumption while also driving more centralized and cleaner uses of coal. EIA

Oil Outlook.   OPEC’s mid-term strategy report, which has yet to be formally released, predicts that oil prices will rise by no more than $5 a barrel per year over the next five years, reaching $80 by 2020 and stabilizing at around $90 a barrel thereafter.   Over the long term, the report forecasts that OPEC will likely regain its 40 percent market share sometime during the decade between 2030 and 2040. Reuters

Climate Change.  Bloomberg View’s editorial board writes that California’s new landmark bill to reduce carbon emissions demonstrates the pitfalls of policy that relies too heavily on regulation, rather than the market.  The Board argues that a simpler, better way to reduce greenhouse gas emissions would be to impose a carbon price on every ton released into the atmosphere — allowing for minimal government intervention, and helping businesses and consumers better understand the costs associated with various tradeoffs.  Bloomberg View