President Obama has long made cleaner energy a priority of his domestic agenda. Increasingly, it's playing out in his foreign policy.
The US will end financial support for new coal projects overseas, except in narrowly defined circumstances, the Department of Treasury announced Tuesday. The policy is an extension of the climate plan Mr. Obama introduced in June, and builds on the Treasury Department's previous efforts to curb global investment in coal by the World Bank and other development organizations.
It's aim is to address the global threat of rising emissions with global action, recognizing that the emissions reductions made in Western economies are more than offset by huge gains in the developing world.
Widespread poverty complicates such an effort, given that more than 1.3 billion people are without access to electricity. In many parts of the world, coal offers a cheap and reliable solution, but there's hope the developing world could "leapfrog" such carbon heavy fuels with solar, wind, and other renewable fuels.
"As developing economies embark on a journey towards a clean energy future, today's announcement marks an important step in helping them reach this goal," Treasury Under Secretary for International Affairs Lael Brainard said in a statement. "By encouraging the use of clean energy in multilateral development bank projects, we are furthering U.S. efforts to address the urgent challenges of climate change." ( Continue… )
National efforts to put a price on carbon in the United States largely petered out years ago, but the climate policy is gaining traction in a handful of states out west.
The governors of California, Washington, and Oregon, along with the premier of British Columbia in Canada, signed an agreement Monday to coordinate efforts to reduce carbon emissions in the region. Washington and Oregon will aim to implement their own pricing structures to mimic those already in place in California and British Columbia. The region, which already has the country's highest penetration of electric cars, also plans to expand use of alternative-fuel vehicles and continue deployment of high-speed rail across the region.
The agreement is a further blow to coal, which already faces a bleak future in the region, which has moved to clean energy is a big way. The idea is to further discourage the use of carbon-heavy fossil fuels by taxing them or requiring companies to purchase credits based on their emissions levels. Monday's plan outlines lofty goals for states whose combined gross domestic product is $2.8 trillion, the fifth-largest in the world. If successful, it could be a regional model replicable across other parts of the globe, but political and logistical obstacles remain and to implementing such policies, and questions over how effective they are.
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“This is not a revolution,” California Gov. Jerry Brown said at a news briefing in San Francisco, as reported by Bloomberg Businessweek. “You are witnessing an historic, small, but powerful step. It’s only the beginning. You watch. Next year and the year after that and the year after that, this will spread until finally we get a real handle and grasp on what is the world’s greatest existential challenge.” ( Continue… )
Libyan efforts to get its oil sector back to pre-war levels were stymied last weekend when protests disrupted operations in the west of the country. Work was halted at the El Sharara oilfield, which interrupted activity at the western port of Zawiya. That complicates an already fragile situation lingering in the east of the country. Meanwhile, U.S. supermajor Marathon tried, unsuccessfully, to pull out of the country amid the ongoing turmoil. Further west, however, sits Morocco, where Marathon's rivals are eagerly laying the groundwork for what could be a major oil and gas bonanza.
Companies operating in the once-mighty Libya are reviewing their commitments more than two years after former leader Moammar Gadhafi died after falling into rebel hands. Two short weeks ago, the bulls were running through the streets of Tripoli on word oil production in the war-torn country was on the rebound. Last week, however, the government moved to thwart Marathon's efforts to leave a country still wandering aimlessly through the post civil-war era. Mid-October enthusiasm ensued when oil production moved close to 700,000 barrels per day, though that was roughly half of its pre-civil war level.
Libya has struggled to deal with protesters demanding the centers of oil power move east to Benghazi, home of the revolution that ultimately brought an end to the Gadhafi era. That struggle started a new epoch where oil may be seen as one of Libya's key weaknesses. Now, demonstrations in the west of the country have halted production at oil fields and export terminals, pushing exports down to 250,000 bpd. The "institutional vacuum" in Libya prompted economists from the World Bank and the European Bank for Reconstruction and Development to warn the region was in serious economic trouble. (Related article: Clashes Along Oil-Rich Kenyan-Uganda Border) ( Continue… )
Six shale plays in the United States account for nearly all of the growth in domestic oil production in the country. That's the assessment from the Energy Department's inaugural drilling report. By next year, gains from shale plays in the country should help push domestic oil production above the 8 million barrel per day mark. In turn, that means the United States is relying less and less on foreign suppliers to meet its energy needs. U.S. Energy Secretary Ernest Moniz, however, said lauding those gains may be misguided in the drive for energy security.
The six premier shale basins in the United States – Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara and Permian – accounted for nearly 90 percent of the growth in U.S. oil production from 2011-12. All but the Marcellus shale are situated in the central United States. By November, projected oil production from those six areas reaches 3.7 million barrels of oil per day. The Eagle Ford and Permian basins are the bright spots. Together they account for more than half of the expected production.
International consulting firm PIRA Energy Group said Friday it expects the United States will pass Saudi Arabia in terms of projected production this year. The group said the surge in output from U.S. shale basins was responsible for much of that momentum. The Energy Information Administration, the U.S. Energy Department's analytical wing, said in its Oct. 8 short-term market report so-called tight oil formations are helping North America lead the way in terms of non-OPEC production. EIA said it expects total U.S. crude oil production to increase from the projected 7.5 million bpd in 2013 to 8.5 million bpd in 2014. Production from reserve areas in North Dakota and Texas are expected to account "for the bulk of forecast production growth over the next two years," the administration said. (Related article: How the 1973 Oil Embargo Still Affects US Energy Agenda Today) ( Continue… )
High supply and low demand are pushing US oil below the $100 mark after months of prices clinging to triple digits – and prices could fall further still.
Robust oil inventories are driving prices down, along with hopes that easing relations with Iran could bring additional oil onto the global market. Falling oil prices typically boost US economic growth as cheaper energy helps consumers and industry's bottom lines. And, despite the hit that the booming US oil industry will take, it's still true that cheaper oil is a net positive for US growth.
It would take a much bigger price plunge to derail the boom. That isn't likely to happen anytime soon, most analysts suggest.
"The oil market remains well-supplied as production in the US has increased to just shy of 7.9 million barrels per day, the highest level since 1989," Andrew Lipow, president of Lipow Oil Associates in Houston, says in a telephone interview. Mr. Lipow also cited "record production out of Saudi Arabia and the market anticipating that some progress might be made between Iran and United Nations on their nuclear program." ( Continue… )
U.S. President Barack Obama met Wednesday with Pakistani Prime Minister Sharif in the Oval Office. Their meeting followed on the heels of a damning report from Amnesty International questioning the legality of U.S. drone missile strikes on suspected terrorist targets inside Pakistan. Bilateral relations between Islamabad and Washington have been tepid at best since the terrorist attacks of Sept. 11, 2001. Pakistan, however, may be doing more in Washington than looking to allay national security concerns. Ahead of the meeting, Islamabad reportedly scrambled its legal officials to gauge the prospects for a natural gas pipeline long planned from Iran. Washington opposes the natural gas pipeline because of its economic potential for Tehran. But given Iran's recent diplomatic moxie, it may be two against one.
An early readout from Vice President Biden's office said Washington is committed to standing beside a "strong, democratic [and] prosperous Pakistan." Bilateral ties hit a low point in 2011 when the now notorious SEAL Team Six killed al-Qaida leader Osama bin Laden at his Pakistani compound without Islamabad's prior knowledge. Ties are complicated further by U.S. drone strikes inside Pakistani territory, which Amnesty International said Tuesday may be a violation of international law. (Related article: Iran-Oman Natural Gas Pipeline to Begin Operation in 18 Months)
Islamabad ahead of Wednesday's meeting in Washington said it was mulling various prospects to get the U.S. government's support for a natural gas pipeline from Iran. The Pakistani government in January backed an agreement where Iran would provide $500 million to support the pipeline's construction across the border. Pakistan is struggling to keep the lights on and sees the 310 billion cubic feet of gas slated from Iran each year as a panacea for its energy woes. Pakistani authorities argue that, since the pipeline would be overseen by organizations outside the government, U.S. sanctions wouldn't apply. Pakistani Prime Minister Sharif came to power early this year in part by promising to bring the Pakistani people in from the dark. The U.S. State Department, however, brushed off suggestions the project would actually get off the ground. If it does, it may trigger sanctions on Iran. ( Continue… )
Pirates kidnapped two US citizens from an oil supply vessel off the coast of Nigeria early Wednesday, officials told Reuters. The State Department and FBI were leading the American response to the incident, which resulted in the kidnapping of the ship's captain and chief engineer.
Piracy has long flourished off Africa's east coast, where lawlessness in Somalia has fueled attacks on large vessels carrying fuels and other goods. But the intervention of international naval forces is forcing pirates west, where a combination of looser security and increased oil production makes the region an appealing target.
“There has been a worrying trend in the kidnapping of crew from vessels well outside the territorial limits of coastal states in the Gulf of Guinea,” said Pottengal Mukundan, director of the International Maritime Bureau (IMB), an arm of the International Chamber of Commerce, said in a July statement announcing the organization's global piracy report.
"There continues to be significant under-reporting of attacks," Mr. Mukundan said. "This prevents meaningful response by the authorities and endangers other vessels sailing into the area unaware of the precise nature of the threat.” ( Continue… )
Is oil a blessing or a curse?
That question will ripple across many African nations in the coming decade as technology and geology converge to unlock billions of barrels of oil in underdeveloped countries where many live below the poverty line.
The prospect of oil and gas production fueling economic growth in Africa is matched only by the threat of the corruption, exploitation, and environmental devastation that often follow windfalls.
The downsides of mineral wealth extraction – be it diamonds, gold, or coal – have long been on display in Sierra Leone, South Africa, Ivory Coast, and elsewhere across the continent. In North Africa and parts of coastal West Africa, the extraction of oil is a decades-old industry, plagued by terrorism, theft, and greed.
But a new crop of countries – particularly in East Africa – are on the verge of a new boom in oil and natural gas production, many analysts project. There's hope that this time around, better governance, increased transparency, and innovative financial models can mitigate the ill effects of a "resource curse." It will not be easy. ( Continue… )
U.S. supermajor Chevron last week halted work on an exploration well in the Romanian town of Pungesti after protesters rallied in opposition of hydraulic fracturing. The company had only secured the rights to explore in three areas near the Black Sea earlier this year, just months after a fracking moratorium was lifted. Romania, like many of its neighbors in Eastern Europe, may have enough natural gas locked in shale deposits to meet domestic demand for more than 100 years. The European Union said it was mindful of the shale natural gas phenomenon in the United States but needs to remain committed to its long-term goals of a future less dependent on fossil fuels.
Chevron suspended plans to look for natural gas in eastern Romania last week. Romania, like many others in the region, is looking for a way to become more self-reliant in an energy sector dominated for years by Russian energy company Gazprom. (Related article: Saudi Arabia to Use Shale Gas for Domestic Power Generation)
A study of the shale natural gas potential outside the United States by the U.S. Energy Information Administration found Romania holds 51 trillion cubic feet of technically recoverable reserves. A moratorium on shale exploration ended in December though concerns over fracking may cloud the country's immediate natural gas future.
High-profile protests against Cuadrilla Resources earlier this year brought the European shale debate to the forefront of the discussion over Europe's energy future. Cuadrilla's Chief Executive Officer Francis Egan stressed there were understandable environmental concerns associated with fracking but said the benefits of shale exploration would soon become "crystal clear." ( Continue… )
At approximately 1:00AM Saturday morning, a train carrying crude oil and liquefied petroleum gas derailed and exploded outside of Gainford, Alberta, about 80 kilometres west of Edmonton. The 134-car freight train departed Edmonton earlier that evening, destined for Vancouver on the Canadian west coast. CN Rail Chief Operating Officer Jim Vena confirmed that 13 cars derailed, but that only three of those cars caught fire.
Thankfully, no one was injured but approximately 100 Gainford residents were evacuated from their homes as a precautionary measure. The heat from the train wreck was so intense that local firefighters made the decision to simply allow it to burn itself out, instead of attempting to extinguish the flames. This latest incident highlights the increasing frequency of these types of events. (Related article: Pipeline Companies Struggle Against Rising Competition from Rail)
Saturday’s accident is the third such CN derailment in the past month, occurring only two days after four CN rail cars carrying anhydrous ammonia derailed and forced residents of Sexsmith, Alberta to evacuate their homes. That accident followed another derailment on September 25, when 17 CN rail cars carrying petroleum and other chemicals came off the tracks in western Saskatchewan. ( Continue… )