How secure is global oil? [Recharge]

US oil abundance helps to counteract vulnerabilities in the Middle East; the Obama Administration opens up a second front in environmental policy; North America reimagines energy trade. Catch up on global energy with the Monitor's Recharge.

Charlie Riedel/AP/File
A pumping unit draws oil from the ground near Greensburg, Kan.

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

Outages: Strong US oil output belies a shakier outlook abroad for the world’s most important energy source. The advance of IS has yet to disrupt any significant flows of crude – indeed, Iraq output could even rise in weeks to come. But the jihadist group displayed scorched-earth tactics in its retreat from the Baiji refinery this week, a strategy it may very well replicate with other infrastructure in the region. Meanwhile, Saudi Arabia's conflict with Houthi rebels in Yemen poses risks to critical centers of crude production and transit.

Air & waterWith this week’s amendment to the Clean Water Act, the EPA opens up a second front of debate over how it defines deceptively simple concepts like “water,” “air,” and “pollutants.” The clarified water rule will likely impact agriculture and other industry more than it will oil and gas, but the move sends a broader message: the Obama administration isn’t shying away from pursuing environmental goals, despite strong opposition in Congress and elsewhere. That’s the case with the Clean Power Plan, without which the nation will likely fall short of its targeted contribution to global climate efforts.

Amigos: North American energy trade is largely a petroleum-based affair, but with Mexico opening up its energy industry to outside investment, there’s room for expanded collaboration between the so-called “Three Amigos.” At a conference in Mexico this week, energy ministers from the three countries expressed a desire to go beyond oil and explore strategies for collaborating on low-carbon power grid integration, natural gas pipelines, and climate mitigation. “[T]he most consequential part for further energy integration may very well be electricity,” US Energy Secretary Ernest Moniz told Bloomberg.

In the pipeline

Like this article?

Subscribe to Recharge, the Monitor's weekend digest of global energy news.
Click here for a sample.

Drill deeper

Big compromises needed to meet carbon-emissions goal [Nature]
“The big picture is clear: on the basis of pledges made so far, the global average temperature is projected to rise by around 3 °C above pre-industrial levels by 2100,” writes Jeff Tollefson. Scientists are grading the strength of each country’s pledge, with one analysis rating China, the EU, and US as ‘medium.’ Canada? ‘inadequate.’

Extreme City [The New Yorker]
Luanda hopes to become the Dubai of Africa, but it has a long way to go. Angola’s capital is a city whose oil wealth is only equaled by its inequality and its outrageous cost of living: Foreigners working in the oil industry shell out $105 for a single melon and $17 for a pint of Häagen-Dazs ice cream, while most Angolans live on less than $2 a day. But now, without oil prices at $100 or above, the country has been forced to slash budgets and rethink an oil-driven economy.

Oil’s secret transit [The Philadelphia Inquirer]
The US oil boom has made Philadelphia refineries a major destination for crude oil traveling by rail. But with little public information on where those oil trains are headed, what they’re carrying, or what could happen in a derailment scenario, many in the city are worried about the 150 million gallons of flammable crude that roll into the city every week.

Energy sources

  • Council on Foreign Relations: "The sharp decline in oil prices beginning in July 2014 offers a window of opportunity to roll back entrenched [fuel] subsidy schemes, since lower energy prices should make it easier to adjust domestic tariffs to something closer to market prices. Notably, countries such as India, Indonesia, Egypt, Kuwait, Oman, and Bahrain have recently taken steps to start unwinding some subsidies. "
  • The Oxford Martin School at the University of Oxford: "It is necessary to limit cumulative emissions of CO2 to stabilise climate and hence limit the risk of dangerous anthropogenic interference in the climate system in the long term. But reducing [short-lived climate pollutants] may well be a more cost-effective way to limit the rate of climate change over the coming decades to ensure that ecosystems, food production and the economy can adapt, which also has a role in avoiding dangerous climate change."
  • Stockholm Environment Institute: "[T]he climate implications of increased natural gas supply are far from straightforward. While building out new infrastructure for the supply and use of natural gas can support climate goals by avoiding the “lock-in” of new coal power plants, it also poses risks, for example, of “locking-out” other, lower-emission alternatives. Achieving one while avoiding the other will require careful policy design."


“Yemen Conflict Threatens to Add Entrenched Risk Premium and Price Volatility to Global Oil Market”

– Securing America's Future Energy

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

of stories this month > Get unlimited stories
You've read  of  free articles. Subscribe to continue.

Unlimited digital access $11/month.

Get unlimited Monitor journalism.