Cheap oil's ripple effect; Russia's pipeline politics; Obama's methane rules [Recharge]

Low oil prices threaten to ripple across sectors beyond energy; Russia issues Europe another pipeline ultimatum; President Obama cracks down on methane. Catch up on global energy with Recharge!

Hasan Jamali/AP/File
Men work on an oil pump during a sandstorm in the desert oil fields of Sakhir, Bahrain.

Recharge is a weekly email digest of energy news and analysis written by Monitor reporters.

Ripple effect: Rising oil production propped up the global economy’s tepid recovery; a slowdown in that production threatens to reverse the trend. Each week brings news of slashed jobs and consolidation in oil or associated sectors – Halliburton, Baker Hughes, US Steel, Schlumberger, BP, ConocoPhillips. That impact will go beyond just energy and manufacturing, most notably into the financial sector. Global and regional banks underwrote the energy boom, and now many face strong headwinds if it goes bust.

Dividing lines: Just as fighting intensifies again in Ukraine, so too do the pipeline politics around it. Moscow signaled last week that it would eventually drop Ukraine as a gas transit country in favor of a new pipeline through Turkey. The move issues Europe a familiar ultimatum – either connect with an alternative route around Ukraine, or get your gas from someone else. To some extent, it looks like Europe is going with the latter.

CH4: Rather than temper climate action in the face of a newly Republican-led Congress, President Obama is expanding it. The White House’s new methane rules are modest, but they represent an expansion of greenhouse gas limits beyond those on CO2 and the coal industry. Obama has his eye on US-China emissions targets, the Paris climate talks, and his own legacy. With the midterms over, he has little to lose by rankling industry. There should be more where this came from.

In the pipeline

  • Tuesday, Jan. 20: WASHINGTON and THE INTERNET – President Obama delivers the State of the Union address. Energy is sure to play a major role, as Obama seeks to meet climate goals ahead of the Paris talks. Meanwhile in Congress, the GOP-led Senate debates a bill to pass Keystone XL (which Obama will veto) and accompanying amendments that read like a list of top energy issues – from lifting the oil exports ban to bolstering energy efficiency.
  • Wednesday, Jan. 21: NEW YORK and THE INTERNET – Columbia University’s Center on Global Energy Policy launches a report titled “Navigating the U.S. Oil Export Debate” (already available online). Thomas E. Donilon, former National Security Advisor, will deliver keynote remarks on energy geopolitics and national security.

Drill deeper

India builds solar plants atop canals to save land, water [Reuters]
Putting solar panels over canals doesn’t just save land – it also prevents scarce water resources from evaporating in the sun. Increased solar innovation in India’s western state of Gujarat comes ahead of Obama’s visit to the country later this month, when Indian Prime Minister Modi is expected to call for US investment in clean technology.

Chevy Could Beat Tesla to Building the First Mainstream Electric Car
[Wired]
The race is on for the mass-market electric car. Chevy has a $30,000 EV with a 200-mile range in the works, and it could beat Tesla’s long-anticipated Model 3 to market. Chevy’s Bolt could be out as soon as 2017, but hitting a 200-mile range will require a better, cheaper battery than anything currently on the market.

Cuba Is Hoping To Replace Venezuelan Oil With American Tourists
[FiveThirtyEight]
Venezuela’s oil subsidy is the Cuban state’s single largest source of revenue. It’s worth a billion dollars more than the $2.6 billion the country reportedly earns from tourism annually,” writes Francisco Toro. “Even without any cut in the volumes sent, the value of Venezuela’s in-kind aid to Cuba has already fallen by almost half in the last six months.”

Energy sources

  • IEA via CNBC: "How low the market's floor will be is anybody's guess. But the selloff is having an impact. A price recovery – barring any major disruption – may not be imminent, but signs are mounting that the tide will turn."
  • The Solar Foundation via EENews: "[T]he United States now employs more people installing solar systems (97,031) than it does mining coal (93,185)."
  • NOAA: "The globally averaged temperature over land and ocean surfaces for 2014 was the highest among all years since record keeping began in 1880."
    [To put that in perspective ...]

Unplug

Recharge is a weekly email digest of energy news and analysis written by Monitor reporters.

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