In April, the Advanced Energy Economy Institute (AEEI) released the synthesis of a survey of executives in the advanced energy sector conducted by PA Consulting to suggest priorities for U.S. energy policy.
The report, Accelerating Advanced Energy in America, outlined business challenges and policy challenges thwarting the growth of the advanced energy sector, in order to identify policy improvements that could overcome these challenges.
The most significant business challenges identified were: financing of emerging technologies, scaling technologies from development to commercialization, declining electricity prices (primarily owing to the natural gas boom), and recruiting a qualified and skilled workforce.
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The most significant policy challenges identified were: regulatory/policy uncertainty, “static definitions” of technologies qualifying for support, inadequate R&D support, and politicization of advanced energy. ( Continue… )
An Oft-Used Energy Slogan
Last week, Real Clear Politics and API hosted an energy summit in Washington, DC entitled, “Fueling America’s Future”. It was intended to provide a quick overview of most of the key technologies and issues associated with an all-of-the-above energy strategy for the United States. Going through the highlights of the webcast gives me an opportunity to introduce my point of view to a new audience at Energy Trends Insider. I’d sum that up as “All of the Above”, with asterisks for the proportions and situations that make sense.
This slogan, at least in the manner in which it has been espoused by politicians in both parties, has attracted fair criticism for being overly bland and safe. I suspect that critique reflects a general sense that our energy mix has always been composed of all of the above, or all of the technologies that were sufficiently proven and economic to contribute at scale at any point in time. However, as both our technology options and choice criteria expand, our understanding of the evolving energy mix is hampered by metrics and assumptions that are overdue to be revisited.
The summit’s first panel examined the technologies of the mix, in a “lightning-round” format of five minutes apiece. The panel covered oil, natural gas, coal, nuclear and renewables, led by wind power. ( Continue… )
One of the world's most successful investors is making his next big bet in a fitting place: Las Vegas.
Warren Buffett's Berkshire Hathaway announced late Wednesday it will pay $5.6 billion to acquire NV Energy – the company that keeps the lights on in the casino capital and other parts of the state. Nevada's largest utility will join MidAmerican Energy Holdings, Berkshire's energy subsidiary, in the largest acquisition of a US power company since last July when Duke Energy bought Progress Energy for $17.8 billion.
It's a relatively safe investment. Because of their monopoly on the local market, utilities typically promise steady growth. Mr. Buffett himself quipped at a meeting of US state regulators in 2006 that utilities aren't a way to get rich, but a way to "stay rich."
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Renewables are a big part of the acquisition. NV Energy will contribute 1 gigawatt in wind, solar, and geothermal to MidAmerican, which is a big investor in government-financed solar plants and is currently working to meet Nevada's requirement that utilities derive at least 25 percent of their energy from renewables. That's good news for a state short on oil and gas, but with big potential for wind, solar, and geothermal. ( Continue… )
A former member of President Obama's energy and environment team is headed to Silicon Valley.
As part of its effort to position itself as a clean-energy leader, Apple is hiring former EPA administrator Lisa Jackson as its vice president for environmental initiatives. Apple CEO Tim Cook announced the high-profile hire Tuesday at a technology conference in Rancho Palos Verdes, Calif.
“Apple has shown how innovation can drive real progress by removing toxics from its products, incorporating renewable energy in its data center plans, and continually raising the bar for energy efficiency in the electronics industry,” Ms. Jackson told Politico in an e-mail. “I look forward to helping support and promote these efforts, as well as leading new ones in the future aimed at protecting the environment.”
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Google, Facebook, and other high-tech firms have made similar efforts to 'green' their operations, largely in response to criticism of energy-draining data centers and the use of toxic substances in consumer electronics. ( Continue… )
Exxon Mobil Corp. (NYSE: XOM) is cutting its losses on algae biofuels after investing over $100 million only to find that it couldn’t achieve commercial viability.
Earlier this week, Exxon announced that while it wasn’t throwing in the towel, it would be forced to restructure its algae research with partner California-based Synthetic Genomics Inc (SGI).
When the two launched their algae-derived biofuels program in 2009, Exxon planned to invest around $600 million with the goal of developing algae fuels within 10 years. (Related article: Investment Boost for Next Generation Biodiesel Project)
But it’s been more complicated than expected, and after $100 million down the drain, it has become clear that much more research—and at least another decade and half—are needed. ( Continue… )
The operator of a California nuclear plant is under fire from a US senator for allegedly misrepresenting the nature of an equipment upgrade that resulted in a small radioactive leak at the plant last year.
It's another blow to Southern California Edison (SCE), which has worked to reopen the closed San Onofre Nuclear Generating Station for over a year. The fallout has cost the company more than $553 million and drawn attacks from environmentalists who say the plant is inherently unsafe.
On Tuesday, Sen. Barbara Boxer (D) of California released a private company letter she says is evidence of the company intentionally misleading regulators in order to avoid an extensive safety review of upgrades to San Onofre. She has called on the Justice Department to investigate.
"Given this new information, it is clear to me that in order for this nuclear plant to even be considered for a restart in the future all investigations must be completed and a full license amendment and public hearing process must be required," Ms. Boxer said in a statement Tuesday. "This is simply a common sense approach." ( Continue… )
Canadian Natural Resources Minister Joe Oliver said natural resources are the cornerstone of the federal and provincial economies. The U.S. economy, on the road to modest recovery, remains central to a Canadian oil market that relies heavily on exports. Oliver said at an investment conference in Quebec that the natural resources sector represents about 20 percent of the gross domestic product. The Canadian economy has suffered, however, because there aren't many new conduits to get oil exports to foreign markets. The potential to reach Asian could provide a relief valve for the Canadian economy, while the option still exists to ship oil through the United States for exports. With opposition mounting along the borders, however, Canada's export-driven economy may become landlocked.
"Our natural resources are one of the cornerstones of the economic development of Quebec and Canada," Oliver said. (Related article: US Energy Infrastructure Fails to Keep Pace with Boom)
Oliver said the natural resources sector accounts for about 1.6 million Canadian jobs and represents about one-fifth of the GDP. Canada is in the top tier in terms of oil production. Nearly all of its oil exists in so-called oil sands and the federal government now controls enough of that type of crude to put Canada behind Saudi Arabia and Venezuela globally. Most of the economy is structured around oil exports and almost all of those exports are directed toward U.S. refineries. Oliver said that could change, however, given growing demands from the Chinese and Indian economies, which could represent a new opportunity for Canada. ( Continue… )
The German and Chinese heads of state called for a truce Sunday on a festering trade row over solar panels.
China is accused of flooding Europe with underpriced photovoltaics that undermine its domestic manufacturers – a problem German Chancellor Angela Merkel says can be resolved with a negotiated settlement instead of punitive tariffs.
The dynamic is playing out elsewhere in the world as China asserts itself as a global leader in photovoltaic manufacturing. The United States, the European Union, and other nations have grappled with how to capitalize on the benefits of cheap Chinese solar panels while still protecting the interests of domestic manufacturers.
Companies in mainland China and Taiwan made up 61 percent of global solar photovoltaics production in 2011, up from 50 percent in 2010, according to Ren21, a Paris-based renewable energy policy firm. Europe’s share of the market dropped to 14 percent in 2011 while the US made up only 4 percent.
The boom in China's solar production has led to a dramatic drop in the price of photovoltaics – helping to boost growth in solar installation in many parts of the world. The US saw solar installations grow by 76 percent in 2012, according to the Solar Energy Industries Association, a Washington-based trade association.
Not everybody is happy with the price drop. In 2011, several major US solar manufacturers filed a trade complaint, accusing the Chinese government of subsidizing Chinese manufacturers to "dump" cheap solar panels into the US market. A year later the US imposed tariffs of some 24 to 36 percent on most Chinese solar panels. ( Continue… )
Asian economies this year have relied less on Iranian oil to meet their energy demands. India's economy slowed down considerably in part because of tighter credit conditions and poor consumer sentiment. For China, its first-quarter gross domestic product was lower than expected. That means less oil demand from some of Iran's largest existing consumers. In June, Iranian voters head to their polling stations to pick a president to replace Mahmoud Ahmadinejad, ineligible to compete because of term limits. The Iranian economy has been a central issue to the campaign so far as inflation and unemployment rates hover in the double digits. With the sanctions noose tightening, however, it's unlikely that any in the pool of candidates for 2013 have a chance to turn things around.
Indian imports of Iranian crude oil declined in April more than 30 percent from their March levels. With sanctions pressure mounting on Iran, the Indian government has instead turned to Latin American oil giant Venezuela, as well as Iraq and Oman, for more crude. India's economic growth has slowed down, but a series of government initiatives announced in September suggest its economy could rebound by next year. First-quarter GDP in China, meanwhile, was worse than expected, leading to speculation of a lower global oil demand for 2013. Chinese crude oil imports from Iran declined more than 4 percent in April from the previous year. Nevertheless, China is expected to witness "substantially better" economic growth in 2013. (Related Article: Assad is Back, and Syrian Peace Will Be on His Terms)
The 12-member Guardian Council announced last week that eight of the more than 650 registered candidates are qualified to have their names on the June 14 ballot. During Ahmadinejad's tenure, the value of the Iranian currency, the rial, dropped by 80 percent in the last two years and oil exports have declined 50 percent in the last year. Last week, the U.S. House Foreign Affairs Committee passed a resolution that would tighten economic sanctions on Iran even further by focusing on oil exports. China and India are among the Iranian oil consumers looking for waivers from U.S. sanctions by cutting their import levels. If passed, the House measure would require a further reduction of 1 million barrels per day to qualify for an exemption. No oil revenue for Iran means no money to cause problems, said Committee Chairman Rep. Ed Royce, R-Calif. ( Continue… )
If you want an objective view of energy, ask an economist, who can tell you what to expect to pay at the pump in the coming years, and why, as well as what to expect from medium- and long-term economic growth and what the real drivers will be. These are questions that are crucial to a pending decision by the US government over natural gas exports, and while we know where big oil stands versus its manufacturing rivals—it’s the economist who can set things straight.
Mark Thoma is a macroeconomist and time-series econometrician at the University of Oregon. His research focuses on how monetary policy affects the economy, and he has also worked on political business cycle models. Mark is currently a fellow at The Century Foundation, a columnist at The Fiscal Times, an analyst at CBS MoneyWatch, and he blogs daily at Economist’s View.
In an exclusive interview with Oilprice.com, Thoma discusses:
• What we can expect from gas prices this summer and beyond
• Why clean energy won’t see an dramatic investment rival, for now
• How political feasibility, not economic feasibility, drives the ethanol mandate
• Why the ethanol mandate might eventually be nixed
• How we weigh the free market against government intervention
• Why there is little momentum for a US-wide carbon market
• What we learned from the global financial crisis
• Why our best hope for strong economic growth is in exports
Interview by James Stafford of Oilprice.com
James Stafford: What every regular consumer wants to know is why the price of gas at the pump continues to rise in the midst of a much-lauded oil and gas boom? ( Continue… )