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Energy Voices: Insights on the future of fuel and power

Monitor staff and guest contributors offer a mix of news, analysis, and commentary on energy and resource issues emerging across the globe.

An Iranian oil technician checks the oil separator facilities in Azadegan oil field, near Ahvaz, Iran. Oil exports account for about 80 percent of Iran's export earnings and about half of its government revenue, Graeber writes. (Vahid Salemi/AP/File)

Iran's new president unlikely to reverse tightening sanctions

By Daniel J. GraeberGuest blogger / 05.27.13

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… )

A service person works on sign at BP station in Vadnais Heights, Minn. New energy sources and the corresponding increase in supply will temper the upward trend, said Mark Thoma in an interview with OilPrice.com, but the trend will continue due in particular to growth in demand from developing economies. (Marlin Levison/The Star Tribune/AP/File)

Energy economics: What's next for gas prices?

By James StaffordGuest blogger / 05.25.13

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… )

Traffic piles up on Interstate 405 on the Westside of Los Angeles as commuters and vacationers hit the road. There are plenty of tips drivers can follow to save gas and save money this Memorial Day weekend. (Reed Saxon/AP/File)

Memorial Day travel: myth-busting tips to save gas

By Correspondent / 05.24.13

If you must schlepp through America's congested, construction-riddled roadways this Memorial Day weekend, you may as well save gas while you're at it.

Many Americans will take to the road this Memorial Day weekend. Although fuel prices are down in most of the nation compared with last summer, Americans will still spend more than $1.4 billion filling up during their Memorial Day travels, according to a new analysis by the Union of Concerned Scientists (UCS). In the Midwest, refinery outages and maintenance have pushed prices up as much as 68 cents in the past two weeks.

So how can you save money on gas?

"Automakers are churning out more models that are making it easier than ever for consumers to choose fuel efficiency, save money on gasoline, and reduce our oil use,” Josh Goldman, policy analyst for UCS’s Clean Vehicles program, said in a statement. “When Americans begin planning for their next Memorial Day adventure, they should remember that a great way to have more money to spend on ice cream and sunscreen is to use less gasoline by investing in a fuel-efficient vehicle.”  ( Continue… )

The Excelsior arrives at the Freeport LNG (Liquid Natural Gas) terminal in Houston. We are most likely to see more natural gas export approvals this year, and beyond, Alic writes, but it’s not going to be a sudden opening of the market. (Steve Campbell/Houston Chronicle/AP/File)

Energy secretary calls for review of US natural gas exports

By Jen AlicGuest blogger / 05.24.13

While the hints over the past weeks have favored expanded US natural gas exports, the confirmation of Energy Security Ernest Moniz has delayed a final decision on the process, with 19 export applications on hold for more in-depth review.

This has somewhat dampened the momentum following the Department of Energy’s (DOE) decision last Friday to conditionally approve a Texas LNG project.

Then on Tuesday, Moniz was officially sworn in and called for a further review of the proposals before making any final decisions. The review he’s waiting for concerns the potential impact expanded exports would have on domestic natural gas supplies and prices. The question Moniz poses is whether the existing impact study finished last year uses data that is too old.  That study, courtesy of the DOE, established that even in the event of higher domestic prices, natural gas exports would be economically beneficial to the country.  ( Continue… )

Pipelines run from the offshore docking station to four liquefied natural gas tanks at a facility in Cove Point, Md. The US Energy Department predicts domestic natural gas production should reach 70.1 billion cubic feet per day by next year. (Matt Houston/AP/File)

The race against time for liquefied natural gas

By Daniel J. GraeberGuest blogger / 05.23.13

MIT physicist Ernest Moniz became the new energy secretary this week after sailing through the nomination process relatively unscathed. His appointment comes at a time when U.S. energy production is creating ripple effects across the globe, threatening the position of gas leader Russia and oil giant Saudi Arabia alike. Despite substantial gains in U.S. oil and natural gas production, there are restrictions in place on how much of those reserves can reach foreign markets. Last week, the Energy Department gave the green light to a new project to ship liquefied natural gas overseas. In what's already sparking a furor in the industry, Moniz took a wait-and-see approach to more LNG exports. Given testimony by some observers, however, the LNG race is going to be a race against time.

A study commissioned last year by the U.S. Energy Department found, regardless of the market scenario, exporting LNG would lead to economic gain. In what's becoming a rare instance of bipartisan support, Senate leaders this week said they wanted to ensure the right policies were in place for more exports of LNG.

"The vast majority of independent analyses conducted over the past year have found that exports overwhelmingly benefitthe economy," ranking member Sen. Lisa Murkowski, R-Alaska, said. (Related article: US Energy Infrastructure Fails to Keep Pace with Boom)

"Done right, there ought to be a way to get the trade benefits to exporters and trading partners while maintaining the domestic, economic and energy security benefits to our country," committee chairman Sen. Ron Wyden, D-Ore., said.  ( Continue… )

Makani employees carry a Makani Airborne Wind Turbine for testing at Sherman Island, Calif. Google has acquired Makani Power, the company that makes the tethered, flying wing that generates power as it loops through the sky. (Paul Sakuma/AP/File)

Google kite? Tech giant buys 'flying windmill' firm Makani.

By Correspondent / 05.23.13

Google has set its sights on an unexpected target: a tethered, flying wing that generates power as it loops through the sky.

The tech industry giant has acquired Makani Power, a California-based developer of airborne wind power – essentially wind turbines without the pole.

Google has long shown interest in clean energy, but mostly as a cost-efficient, environmentally friendly way to power its own operations. Renewables make up 30 percent of its energy use, according to Google, and the company hopes to install enough solar panels and buy enough wind power to go completely carbon-free.

Now, Google X, the company's secretive research and development arm, is taking a vested interest in directly powering what could be a part of the clean-energy future.  ( Continue… )

A Tesla Motors car is shown in Fremont, Calif. The Tesla $465 million loan has been repaid nine years early, scoring points for the Department of Energy and its controversial clean-energy loan program. (Jeff Chiu/AP/File)

Tesla repays $465 million loan. Will Energy Department lend to more firms? (+video)

By Correspondent / 05.23.13

The Tesla $465 million loan may be a thing of the past, but the future of the controversial federal program that funded it is back in the spotlight.

Given the success of Tesla, will new Energy Secretary Ernest Moniz use the program's remaining funds to help other private companies? Or have the high-profile failures of other federally backed clean-energy ventures dampened the administration's enthusiasm for direct investments in the private sector?

By paying back its hefty federal loan nine years ahead of schedule, electric carmaker Tesla Motors certainly scores points for the Department of Energy (DOE). Tesla's string of recent highs has helped silence critics who pointed to the hundreds of millions of taxpayer dollars lost to Solyndra and other bankrupt companies. And the department's Loan Program Office points to a variety of quieter successes.

To date, the program's losses account for about 2 percent of the $34 billion loan portfolio, according to the Energy Department. That's less than 10 percent of the $10 billion Congress set aside to cover expected losses.

The news is well-timed for an agency turning over a new leaf. Just two days ago, Mr. Moniz was sworn in as the 13th secretary of the Department of Energy. The nuclear physicist has dropped few hints about what role the Loan Program Office will play during his tenure, but he praised the program in response to Tesla's repayment.  ( Continue… )

Coated steel pipe manufactured originally for the Keystone oil pipeline is stored in Little Rock, Ark. Fifty percent of Americans have never heard of the Keystone XL pipeline, according to a poll released Tuesday by Yale and George Mason universities. (Danny Johnston/AP/File)

Keystone XL: Hot topic in D.C. Ho-hum in rest of US.

By Correspondent / 05.22.13

(Editors note: A previous version of this story misstated the tally on Wednesday's vote in favor of the Northern Route Approval Act. The House voted 241 to 175, not 223 to 194.

The US House of Representatives voted 241 to 175 Wednesday in favor of the Keystone XL pipeline.

The vote is one of many symbolic gestures by the GOP-controlled House gestures in favor of a project that would transport oil from Canadian oil sands to Gulf refineries. If the Senate doesn't block the so-called Northern Route Approval Act, President Obama will almost certainly veto it. The point is to raise the profile of an issue that is frequently edged out by the headline of the day.

Half the country has never heard of the Keystone XL pipeline, a new poll shows. The White House would prefer not to talk about it, and the State Department isn't rushing its assessment. The Washington press corp has its hands full with testimonies on Benghazi, the IRS, Justice Department subpoenas, and crises ad infinitum.  

The pipeline has undergone five years of applications, articles, assessments, studies, comments, and debates. It has tested the patience of critics and supporters alike, as they try to sustain the public's attention.  ( Continue… )

A member of ExxonMobil's cleanup crew is reflected in water and oil in a drainage ditch in Mayflower, Ark., last month. Exxon said it was still looking into what caused a 22-foot gash to appear in the wall of its 65-year-old Pegasus oil pipeline. (Courtney Spradlin/Log Cabin Democrat/AP/File)

Are oil pipeline spills inevitable?

By Daniel J. GraeberGuest blogger / 05.22.13

Exxon Mobil hasn't asked federal regulatory authorities to restart the Pegasus oil pipeline, which burst open in a neighborhood in Mayflower, Ark.  In March, a 22-foot rupture in the pipeline spilled about 5,000 barrels of diluted Canadian crude oil into an area of marshland, though the company said it's been effectively cleaning the area with long-term remediation in mind. Policymakers on both sides of the Canadian crude oil debate have focused on issues ranging from emissions to economic stimulus. If pipelines like Keystone XL have any chance of approval, perhaps pipeline integrity should be the focal point of real policy debates.

Exxon said it was still looking into what caused a 22-foot gash to appear in the wall of its 65-year-old Pegasus oil pipeline. Arkansas Attorney General Dustin McDaniel said his office was pouring over 12,500 pages of information sent to his office by Exxon. Those documents were related to maintenance, inspection and safety of the 850-mile oil pipeline. Exxon, for its part, said it was combing over data taken from inside the pipeline itself in an effort to figure out what happened before the spill. That inspection, a spokesman said, could take at least another month.

Exxon already removed the damaged section and replaced it with new pipe. About a month after the Arkansas incident, about a barrel of oil leaked from the same pipeline about 200 miles north of Mayflower. The "wait and see" reaction to the Pegasus spill, and potentially the delay in the restart, may be part of Exxon's evaluation of the debate over the Keystone XL pipeline. Last week, a measure dubbed the Northern Route Approval Act passed through a Republican-led committee on its way to the full House. The bill would leave the fate of Keystone Xl in the hands of policymakers, who may have a vested interest in seeing that the project gets built. (Related article: Exxon Oil Spill in Arkansas, Keystone Spoiler?( Continue… )

Residents pass a destroyed car as they walk through a tornado-ravaged neighborhood Tuesday in Moore, Okla. Little damage to the state's expansive oil and gas network from Monday's Oklahoma tornado has been reported. (Charlie Riedel/AP)

Oklahoma tornado: Energy dodges a bullet

By Correspondent / 05.21.13

Monday's deadly Oklahoma tornado has left relatively intact one of the state's biggest and fastest-growing industries: energy.

A boom in US oil and gas production is underway with drilling rigs, storage tanks, and pipelines increasingly dotting the country's landscape. Some of the development is taking place in and around so-called "tornado alley," an unofficial swath of much of Oklahoma that spills over into surrounding states most prone to tornadoes. 

This may sound more worrying than it is. While hurricanes routinely disrupt offshore oil and gas production in the Gulf and elsewhere, inland, rigs, pipelines, and tanks are comparably unaffected by extreme weather – most of the time. 

"I don't see a tornado disrupting our mass oil and gas delivery methods," Otto Lynch, a civil engineer who serves on the American Society of Civil Engineers' committee on America’s infrastructure, said in a telephone interview. "[Pipelines] are typically underground. The substations around the routes are very small, low profile, and very rigid. Unless a tornado hit directly, I don’t see an issue from the mass delivery standpoint." ( Continue… )

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