After rebel forces swept into Libya’s capital, Tripoli, the country may be able to start to ramp oil production and exports again, which many analysts hope will bring down oil prices.
Libya claims Africa’s largest proven oil reserves, and was producing about 1.6 million barrels a day when the production suddenly dropped to near zero in February. Many analysts said it will take two to three years for Libya’s oil production to recover to previous levels, and by year’s end they may only be producing a quarter to a third as much as before.
Even before rebels had taken over Moammar Gadhafi’s compound, oil companies were preparing to return to the country, which they left months before.
So far, though, the price has been up and down, in part because of anticipation of the outcome of a summit this week, which may result in a new round of quantitative easing, which would likely drive down the value of the dollar.
Trading Leaks
To try to understand how much speculators are driving oil prices, the Commodity Futures Trading Commission has been looking into “excessive speculation.” Earlier this year, five traders were charged with making $50 million off speculation.
Sen. Bernie Sanders, a long-time critic of oil speculation, became frustrated with the pace of investigations and leaked the records of many trades.
Unconventional Contention
While dozens were in jail in Washington, D.C., after protests to oppose the construction of another pipeline carrying tar sands products from Canada to the U.S., a New York Times editorial argued against the pipeline because of high greenhouse gas emissions from tar sands operations. Canadian officials, meanwhile, stepped up lobbying on its behalf.
Producing natural gas from shale deposits using hydraulic fracturing has also been under scrutiny for its greenhouse gas emissions, and now a new study argues Marcellus Shale natural gas has slightly higher emissions than conventional natural gas, but fewer emissions than coal.
West Virginia issued emergency rules to regulate horizontal drilling, which the governor hoped was a first step to more permanent regulations for this drilling.
Dark Days in America, Brighter Elsewhere
With budget woes, spending cuts, and more spending cuts scheduled to be made over the coming years, it appears renewable energy in the U.S. is entering “dark days,” reported GreenBiz.
But renewables are gaining increasing traction elsewhere. In Brazil, in a large power auction, wind emerged as the cheapest source of electricity, beating out natural gas and hydroelectric power. The contracts could lead to the construction of 1.9 gigawatts of new wind farms.
Japan is expected to pass a renewable energy bill that would introduce a feed-in tariff to make renewables more attractive, and set down in law the government’s target of cutting greenhouse gas emissions 25 percent (compared with 1990 levels) by 2020. To cope with the Fukushima disaster, though, Japan has boosted its use of fossil fuels in the short term.
Germany’s national rail company, which is the country’s biggest electricity consumer, is also moving toward renewables, planning to quit fossil fuels by 2050.
The Billionth Car
The future is bright for electric cars, according to a forecast from Pike Research, which said worldwide sales are likely to grow to 5.2 million by 2017, more than 50 times this year’s estimated sales.
However, even then electric cars would make up a tiny fraction of all cars, with more than one billion on the road as of 2010, a new study said. About half of the recent growth in cars has been in China, which has higher efficiency standards than the U.S., but the country is showing little interest in hybrids and electric cars.
Scientists Scrutinized
Scientists working on climate change have been under scrutiny, with a polar bear researcher being suspended from his job for the U.S. government.
Another researcher came under fire after the “Climategate” leak of e-mails. He was cleared earlier this year in an investigation by his university, and now has been cleared in a second investigation by the National Science Foundation.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.
Texas has suffered through the worst drought and one of the worst heat waves on record, pushing electricity use to a record high in an attempt to cope.
Texas is the state with the largest installed wind capacity, and recently installed wind farms came through to boost the state’s electricity generation just in time. However, even this jump was not enough to meet demand, and four mothballed natural-gas plants will be fired back up. Thermostats that power companies can automatically adjust also helped ease demand.
The state suffered through blackouts earlier this year, and the mere threat of more outages recently has boosted home energy audits and efficiency measures, as well as calls for more renewable energy.
Texas may also beat Massachusetts to the punch, installing America’s first offshore wind farm before the long-delayed (but finally approved) Cape Wind project. The 600-turbine, 3-gigawatt project may have its first turbine up and spinning by year’s end.
Shortages Boost Fossil Fuels
China also had to ration electricity earlier this year, and is facing a power crunch over the next few years as it struggles to keep up with fast-growing demand.
To meet the demand, China’s coal use is soaring, and the country became a net importer of coal in 2009. In July, the country’s coal imports broke a new record, possibly driven by worries of outages, and by the government’s decision to allow power companies to charge more.
Earlier this month, it was reported that China is planning to create a national cap on energy use as part of a plan to limit greenhouse gas emissions.
China is not the only one boosting coal imports. The U.K. is buying increasing amounts of coal from the U.S., and the European Union’s demand for coal may increase.
Likewise, Japan has coped with a drop-off in nuclear power mainly by using more liquefied natural gas, but was able to boost its total electricity generation higher than last year, before the Fukushima disaster.
The increased cost of energy in Japan, said some experts, risks pushing the country into a third “lost decade” of economic stagnation.
Making Fracking Friendlier
The push to produce more natural gas through fracking needs further examination to reduce any environmental risks it could be causing in the U.S., according to a task force organized by U.S. Secretary of Energy Steven Chu. Companies are failing to follow best practices, and the explosive growth of fracking has left regulators behind, the task force said, prompting the need for stronger regulations. However, the panel made few specific recommendations of how to improve the situation, focusing mainly on collecting more data on the effects of fracking and sharing the data publicly.
While there are state regulations on fracking practices, the U.S. Environmental Protection Agency proposed earlier this month its first air pollution standards aimed at cutting smog and greenhouse gas emissions from these wells.
Renewables’ Attraction
While many economies are struggling, large investors are finding renewable energy looks more favorable, with insurance giants such as Allianz and Munich Re putting billions into wind and solar and big banks funding large installations.
The world’s biggest solar power plant, to be built in California, will use photovoltaics rather than concentrated solar, its developer announced, because of the drop in solar panel prices.
Although U.S. residential solar power has not grown as quickly as in some other countries, such as Germany, do-it-yourself kits and innovative installations are making the investment more attractive.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.
The stock market took a beating this week, after the rating agency Standard & Poor’s downgraded U.S. bonds—but clean tech stocks have been falling even faster than the market as a whole.
Shares in clean energy companies have been hit by a “triple whammy”—producing too much capacity for the demand, problems with government debt, and broader risk aversion among investors. As a part of this, clean energy venture capital funding has dropped 44 percent when compared with last year.
Analysts from the global bank HSBC said wind energy stocks are undervalued and their prices could fall more as debt crises in both the United States and European Union stand to cut wind subsidies further. There are more than seven gigawatts of wind projects under construction now—but few planned beyond 2013 because of uncertainty about policies.
Solar stocks were down after many companies reported dismal second-quarter results, as prices on panels fell—but not as fast as the costs of producing them—and as their margins shrank. First Solar, the biggest solar panel manufacturer outside of China, boosted production but suffered a large drop in profits—and their share price. Suntech, the biggest manufacturer, also saw its stock fall, hitting a one-year low.
But some analysts say renewables stocks are bottoming out, and are set to rise again.
Adjusting to No Nukes
Germany decided to phase out nuclear power within 10 years and rely more heavily on renewables, and the country’s utilities are scrambling to adjust. E.ON, the world’s biggest utility in terms of sales, suffered its first-ever quarterly loss and is laying off 11,000 workers as it aims to boost its spending on renewables.
Another utility, RWE, is also selling off assets to cope with poor performance—but is planning to stick with its renewables investments.
Making the Military Green
The U.S. military is the single biggest user of oil in the world, and has been warned by analysts its dependence is a security threat. Now the U.S. Army has formed a new renewables office that may spend $7 billion over the next decade on renewable and alternative energy power.
Although the military has a target of using 25 percent renewable energy by 2025, many installations lack the expertise to move forward quickly enough, said the U.S. Department of Defense, and the new office aims to fill that gap.
Meanwhile, units within the mega-corporations Boeing and Siemens have teamed up to pursue military contracts for smart-grid technologies, which the military could develop and bring down the costs, helping them reach the market later.
Risky Business
With oil prices high and political uncertainty in many oil-exporting countries, the U.S. faces near-record energy security risks, according to a new U.S. Chamber of Commerce report. In 2010, their energy risk index is as high, as in the late 1970s and early 1980s, and near the record high of 2008. The Chamber predicts the risk level will remain high for another 25 years.
With gloomy economic prospects, the International Energy Agency (IEA), the U.S. Energy Information Administration, and the Organization of Petroleum Exporting Countries all agreed oil demand later this year is likely to be less than they had thought.
With Saudi Arabia boosting its production to the highest level in 30 years, oil prices have fallen a bit in recent weeks, but this is largely because of weak economies, the IEA said.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.