Russia-Ukraine gas talks fail, IS and oil, Obama’s global climate plan [Recharge]

Failed Russia-Ukraine-EU gas talks last week raise the specter of a cold, dark winter in Ukraine; the Islamic State's oil-fueled spread is bolstering similar aspirations among Boko Haram in Nigeria; President Obama looks to sidestep Congress in global climate change efforts. Catch up on the week in global energy with Recharge.  

David W Cerny/Reuters
Valves and pipelines are seen at a gas compressor station on the Slovakia-Ukraine border in Velke Kapusany Tuesday. Ukraine has threatened to block transit of Russian gas, and continued regional violence complicate a longterm solution to the Ukraine-Russia gas crisis.

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Pressure: Failed Russia-Ukraine-EU gas talks Friday raise the specter of a cold, dark winter in Ukraine and elsewhere. Russia says it will ensure gas flows onward to Europe, and there's hope Brussels can secure an interim deal. But Ukraine has threatened to block transit of Russian gas, and continued regional violence complicate a longterm solution.

Caliphates: The IS threat shows little sign of waning, with seized oil assets fueling the group's violent vision of a unified Islamic state. Its rapid spread has only bolstered similar aspirations among Boko Haram, which covets Nigeria's oil wealth. Booming US production has largely offset these threats so far, but a major supply disruption in Iraq and/or Nigeria would send shocks through the market.

Executive power: President Obama has found some success circumventing Congress in his domestic climate agenda. Now, the president is looking to extend that strategy overseas. With international climate talks approaching, there's new evidence that his brand of clean-power policy saves more than it costs.

In the pipeline

  • Tuesday, Sept. 2 to Friday, Sept. 5: TALLINN, ESTONIA and NEWPORT, WALES – President Obama meets with Baltic leaders before heading to the NATO summit in Wales. Latvia, Estonia, and Lithuania get all their natural gas from Russia, so pressure will be on Obama to expand US LNG export capacity as a gesture of support for US allies.
  • Wednesday, Sept. 3 to Thursday, Sept. 4: NAIROBI, KENYA – The East African Power Industry Convention convenes officials from a region aiming to generate eight times more power in the next 25 years. Kenya and Mozambique in particular have drawn attention recently, both for oil and gas development, and abundant renewable potential.
  • Friday, Sept. 5: LINCOLN, NEB. – The Nebraska Supreme Court hears oral arguments in a dispute over the Keystone XL pipeline's proposed route through the state. The Obama administration has delayed a decision on pipeline approval until after the Nebraska appeal is decided.

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Drill deeper

Scottish independence: Debate over North Sea oil reserves [BBC]
On Sept. 18, Scotland will vote on independence from the UK, with energy playing a key role in the debate. North Sea oil reserves would help fund an independent Scotland – but supplies have already dwindled, and the region's oil and gas faces an uncertain future in years to come.

America’s coal heartland is in economic freefall — but only the most desperate are fleeing [Washington Post]
“Coal is what’s made our country the best on God’s green earth,” a mining association representative says during a session to retrain miners for other careers. “You’ve got homes, mortgages, bills, and the industry you’ve worked in all this time is gone. But life, it’s changing. Those who can adapt can be successful."

Losing Ground [ProPublica and The Lens]
Every 48 minutes, a piece of Louisiana the size of a football field slips underwater. Oil and gas drilling and dredging contributes to the cause, and is dangerously exposed to the effects – the region is home to half of the country’s oil refineries, and pipelines that serve 90 percent of the nation’s offshore energy production.

Energy sources

  • IEA: "[P]olicy and market risks [are] ... raising concerns over how fast renewables can scale up to meet long-term deployment objectives. Just when renewables are becoming a cost-competitive option in an increasing number of cases, policy uncertainty is rising in some key OECD markets."
  • EIA: "... Mexico's production could stabilize at 2.9 MMbbl/d through 2020 and then rise to 3.7 MMbbl/d by 2040—about 75% higher than in last year's outlook."
  • US District Judge Gray Miller via WSJ: "Kurdistan's unauthorized export of oil over land—and later overseas—may violate Iraqi law, but it doesn't violate U.S. maritime law."


– The Lens and ProPublica

From Ukraine gas wars to solar innovation to climate change, Recharge delivers global energy's big ideas to your inbox each weekend. Subscribe for free.

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