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Oil under siege in Libya, Iraq [Recharge] (+video)

Oil fields caught in the crossfire in Libya and Iraq; A coal mine tragedy in Ukraine; Shifting winds in US energy policy. Catch up on global energy with Recharge.

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    At least seven United Nations Security Council members, including Britain, France and the United States, delayed approval on Monday of a request by Libya to import weapons, tanks, jets and helicopters to take on Islamic State militants.
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Recharge is a weekly e-mail digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.

Force majeure“Theft, looting, sabotage, and destruction” rendered 11 Libyan oil fields nonoperational Wednesday, according to the country’s national oil company. Africa’s largest oil reserves are caught in the crossfire as a branch of the Islamic State further destabilizes an already chaotic post-Qaddafi Libya. Meanwhile in Iraq,IS has reportedly set fire to oil fields as Iraqi troops attempt to retake Tikrit. These growing threats to major producers counteract an oversupplied oil market otherwise destined for another price dip.

Zasyadko: Wednesday’s explosion at the Zasyadko coal mine in eastern Ukraine doesn’t appear to be directly linked to fighting in the region, but it’s clear the conflict has taken its toll on the region’s coal industry – a vital fuel source in a country grasping for some kind of energy security. The tragedy overshadowed slight progress in averting a shut-off of Russian natural gas supplies this week. The real challenge will come as Kiev, Moscow, and Brussels sit down to negotiate what happens after the current, temporary gas deal expires at the end of this month.

111(d): In Washington, a new Republican-led Congress put on a full-court press this week against the Obama administration’s plans for a leaner, cleaner energy sector. In a slew of hearings on Capitol Hill, GOP lawmakers took aim at the EPA’s Clean Power Plan, saying the ambitious carbon rules threaten jobs and grid reliability. Obama’s energy policy has generally favored renewables growth and emissions reductions over recent years. Now, Republicans and some Democrats are looking to place the booming oil and gas sector at the center of the country’s energy future.

In the pipeline

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Drill deeper

The EU's other 'Union': Can energy unite Europe?
[The German Marshall Fund via The Christian Science Monitor]
“For the Energy Union to work, Brussels needs to quickly convince member states to support a durable European solution to their energy challenges, even if it means putting up with the bureaucracy inherent to EU decision-making,” writes Kristine Berzina of The German Marshall Fund. “Framing the Energy Union in terms of ‘true solidarity and trust’ is not enough. Brussels needs to show concrete benefits.”

Why $100 Oil Won't Be Coming Back for a Long Time [Bloomberg]
It was supposed to be shale’s weakness: Wells produce a quick burst of oil after drilling, followed by a drop off in output. But in a low price environment that weakness has become a strength, and analysts say the “nimble” nature of low-investment, quick-return shale makes it the swing producer. Oil prices could stay low – between $50 and $75 a barrel – for several years, analysts say, and shale will be the force that pushes prices down when they rise.

Japan’s Growth in Solar Power Falters as Utilities Balk
[The New York Times]
Post-Fukushima, Japan turned away from nuclear and looked to the sun for clean power. But electric utilities there are skeptical they can manage the glut of solar power Japanese entrepreneurs hope to put on the grid. The country’s quest for a new clean energy source might hinge on how committed Prime Minister Shinzo Abe is to making solar competitive with the fossil fuels, which have picked up the slack for Japan’s 50 closed reactors.

Energy sources

  • Chinese Prime Minister Li Keqiang via Reuters: "We will strive for zero-growth in the consumption of coal in key areas of the country ... Environmental pollution is a blight on people's quality of life and a trouble that weighs on their hearts."
  • UK Energy Minister Matthew Hancock: "Together with Mexico’s energy ambitions and the UK’s wealth of experience and expertise, now more than ever there are unparalleled opportunities for partnership across business and education."
  • European Commission: "The EU and its Member States are committed to a binding target of an at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990, to be fulfilled jointly ..."

Unplug

Government investment in energy RD&D as percent of GDP, 2013
(from AEIC’s “Restoring American Energy Innovation Leadership”)

The AEIC of the Bipartisan Policy Center

Recharge is a weekly email digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.

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