The Weekly Brief: US Global Impact

April 10, 2017 edition— Trump meets Xi; EERE thinned; and producing coal like it’s 1978.





Last Week in a Minute or Less



Renewables & Electricity. EERE will be trimmed; 17 states defy Trump on climate change; and US energy production is down.


Natural Gas & Liquid Fuels. Natural gas storage fell; crude inventories are up; and US gas export projects are making headway.


Oil & Gas Upstream. OPEC cuts may affect Canada and help Mexico.


Money & Power. Trump met with Xi; Wall Street CEOs have some doubts over the US economy; and Fed officials worry over stock valuations.


Keeping Track of Trump


Trump finished the “war on coal”, but energy companies aren’t so sure. President Donald Trump declared the end of the US “war on coal” by signing an executive order, but 32 utilities surveyed remained “unconvinced”. Power generating companies believe coal demand will continue dropping despite Trump’s orders (English).


Trump has the EERE in sight. The Trump administration is considering a half-billion-dollar cut at the Office of Energy Efficiency and Renewable Energy, 25% of its budget (English).  The agency has helped boost electric vehicle batteries, LED lighting, and rooftop solar panels.


Wall Street CEOs doubt Trump’s agenda and the US economy. Larry Fink and Jamie Dimon, influential Wall Street CEOs, are concerned over whether the Trump administration will get Congressional approval of its agenda and think “something is wrong” (English). Doubts surround the US economy which is slowing down.


17 states challenged Trump on climate change. Led by New York state, the coalition filed a legal challenge against President Donald Trump’s orders to end climate change regulations (English). The coalition asked the court to ignore EPA’s request to delay court proceedings to avoid wasting resources.



Energy Policy


Natural gas storage volumes fell. According to the Energy Information Administration, US natural gas in storage fell 43 Bcf to 2.049 Tcf (English). The withdrawal corresponds with the end of demand season.


US crude inventories are up again. The US Energy Information Administration announced a 900,000-bbl increase in US crude inventories, reaching 534 million bbl (English). Distillate fuel and propane-propylene inventories fell 2.5 million bbl and 1.5 million bbl, but remained in the middle of the average range for this time of the year.


Pruitt is looking to postpone RMP. EPA’s head Scott Pruitt is pushing to further delay the Risk Management Program (RMP) Amendments in order to have more time to reconsider the amendments referring to accidental chemical releases (English). The amendments will go into effect on February 19, 2019, comments are due by May 19, 2017.


US Interior Department is fighting energy royalty rule amendments. The US Department of the Interior is looking to repeal the Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform Rule (English). The goal is to provide certainty and clarity to the regulated communities requiring lawful, procedures.



Boundary Issues


Canadian syncrude disruption may help Mexico. Canada’s crude exports to the US have been reduced as Syncrude moved up maintenance on its production facility (English) (Spanish). Mexico can have a shot at the slice of the market left by Canada with its similar Maya grade, attractive to US Gulf Coast refiners.


US gas export projects got new start dates. Postponed US gas export projects will start commercial operations soon, after securing regulatory approvals (English). In 2020, SeaOne Gulfport, Texas LNG Brownsville, and Venture Global Calcasieu Pass will be operating and Gulf LNG Liquefaction and Freeport-McMoRan by 2022.


What comes next after the US withdrawal from the TPP. Bilateral trade deals between the US and Asian countries are expected to follow the withdrawal from the TPP (English). The 15 Pacific Rim nations that met in Chile will work on a consensus to favor free trade in the region (English).


Videgaray will meet Tillerson and Kelly. Mexico’s foreign minister Luis Videgaray will meet US Secretary of State Rex Tillerson and Secretary of Homeland Security John Kelly at the Organization of American States (OAS) (English) (Spanish). The goal of the meetings will be to further the bilateral agenda between Mexico and the United States.



International Affairs


Trump condemned the chemical attack in Syria. President Donald Trump accused President bashar al-Assad of crossing “many, many lines” with a chemical attack on civilians, killing 70 people (English). In response, Trump fired 59 cruise missiles at the air base suspected to be the source of the attack (English).


Trump and Xi finally met… President Donald Trump and President Xi Jinping met at Mar-a-Lago resort, Florida. After inviting Trump to visit China, Xi Jinping urged cooperation between the two nations on trade and investment (English).


…and North Korea was in everyone’s minds. During the week, President Donald Trump assured that the US can manage North Korea’s threat unilaterally (English). After the visit, the US navy deployed a strike group near the Korean peninsula and, according to State Secretary Rex Tillerson,  China agreed with the Trump administration’s action (English).



Macro Trends


US energy production fell in 2016. The US produced  84.1 quadrillion Btu last year, falling by 4% compared to 2015 levels, the first drop since 2009 (English). The decline was led by coal production which fell by 18% to its lowest level since 1978.


The dollar edged higher thanks to Xi Jinping’s visit. Although investors remained cautious before the first encounter between President Donald Trump and Xi Jinping, the dollar edged higher with a 0.17% rise in the dollar index (English). The concern among the investors is a confrontation between Trump and Xi over trade.


Crude oil prices dropped again due to oversupply concerns. Light sweet crude oil contract fell on the New York market to US$50/bbl and Brent settled at US$53/bbl (English). Libya restarted production at its Sahara field and Qatar will begin exploring the development of a giant natural gas field.


Fed members worried over stock valuations. Certain Federal Reserve officials consider equity prices are too high considering standard valuation measures (English). The S&P 500 has increased 13 percent since May 2015—when  Janet Yellen warned equity valuations were high.



Lateral Thinking


A new giant telescope for either Hawaii or Spain. TMT International Observatory said that Mauna Kea is the preferred location for the US$1.4bn telescope, but Native Hawaiians oppose the construction on mountain they consider sacred (English). If Hawaii doesn’t work out, the second option is Spain’s Canary Islands.



Quote of the Week


“Life is too deep for words, so don’t try to describe it, just live it.”


-C. S. Lewis (1898-1963), British academic, novelist, and poet.



We hope you have a productive week. Please send any news, comments, or great spots to stare at the stars to


Tell your friends and colleagues about the Weekly Brief! They can sign up for a free one-month trial here.