December 19, 2016 edition—Fed ups interest rates; Saddle West green-lighted; and Pemex offered three onshore fields.
Editorial Interlude
This will be the last Weekly Brief: North American Integration for 2016. The team is taking a well-earned break for the next few weeks, and will be back in action in January. With the New Year’s Day holiday falling on a Monday this year, the next Brief will hit your inbox first thing on January 9th.
Until then, we hope you have a relaxing holiday season filled with time with loved ones.
–the Weekly Brief: North American Integration team
Last Week in a Minute or Less
Renewables & Electricity. The U.S. Energy Department denies Trump’s request for climate names and billionaires invest US$1bn in clean energy technology.
Natural Gas & Liquid Fuels. Mexico’s natural gas and gasoline liberalization is finally here; Inter Pipeline acquired the Cold Lake pipeline system; and TransCanada gave the green light to Saddle West.
Oil & Gas Upstream. The CNH offered three of Pemex’s onshore fields; Trump will soon decide on Keystone XL; and Veresen was denied permits for the Jordan Cove LNG project.
Money & Power. The Federal Reserve raised interest rates; Trump nominated Secretaries of Energy and State secretary, and met Silicon Valley leaders over immigration.
Déjà vu all over again. Last week’s readers were particularly interested in Mexico and U.S. businessmen sharing data (English); Canada’s lag as top exporter to the U.S. (English); and U.S. distributed solar capacity (English).
Keeping Track of Trump
Trump named ExxonMobil CEO Tillerson as Secretary of State… President-elect Donald Trump is nominating Rex Tillerson as Secretary of State, despite complaints over his close relationship with Vladimir Putin (English). As with the head of the Environmental Protection Agency, the pick reinforces Trump’s goal to ease restrictions on oil and gas operations (English).
…and Rick Perry is named Energy Secretary. President-elect Donald Trump chose Texas Governor Rick Perry to serve as Secretary of Energy, an agency once he considered eliminating altogether (English). This nomination, like that of Rex Tillerson, is a nod to the GOP expecting a change in Obama’s green energy policies (English).
Trump wanted climate names, but DOE just said no. President-elect Donald Trump’s transition team asked for the names of the workers devoted to Obama’s climate agenda, but the U.S. Energy Department denied the request (English). Ernest Moniz, current Secretary of Energy, assured that both teams are cooperating, but not sharing “specific names”.
Trump will decide on Keystone XL ASAP. President-elect Donald Trump announced he will decide on the Keystone XL project soon after taking office and is expected to okay the Alberta-to-Texas pipeline (English). Trump will decide a year after Obama banned the oil pipeline project.
Macro Trends
As expected, the Fed raised interest rates. For the first time in 2016, the Federal Reserve raised by a quarter percentage point interest rates and forecasted quicker rate increases for 2017 (English). As a consequence, bond yields and the dollar rose, and financial and tech stocks gained.
Oil demand will outstrip supply in 2017. The International Energy Agency said global oil market will suffer a deficit during the first semester of 2017 with demand surpassing supply by 600,000 barrels per day (English). The outlook is based on the OPEC and non-OPEC producers’ agreement on cut (English).
The New Year will bring Mexico’s LP gas and gasoline liberalization. After January 1, LP gas prices will fluctuate and the Energy Regulatory Commission will create a webpage to post suppliers’ prices (Spanish). The liberalization of gasoline prices is expected to hit Mexico’s 2017 inflation with a 20.6% price increase (Spanish) (Spanish).
Inflation is a globally shared problem. The Federal Reserve’s decision was based on concerns over inflation, something that also worries China (English) (English). Banorte-Ixe analysts considers gasoline price liberalization, electrical tariffs, and the rise in minimum national wage will impact 2017 inflation (Spanish) (Spanish).
Cross-Border Flows
U.S. denies permits to Veresen’s Oregon Jordan Cove LNG project. The U.S. Federal Energy Regulatory Commission (FERC) declined Veresen’s application for re-hearing its CAN$5.3bn LNG project on the Oregon coastline (English). After FERC’s decision, the company may consider re-applying after Donald Trump and his administration take office in 2017.
U.S. and Mexico businessmen partnered to protect NAFTA. During the US-Mexico CEO Dialogue, business leaders agreed to work together to update the NAFTA and promote deeper trade ties (English) (Spanish). The U.S. Chamber of Commerce told corporate and government leaders from both countries it will work to preserve NAFTA.
Trump and tech firms discussed immigration policies. President-elect Trump met with Sillicon Valley leaders to discuss immigration policies that are crucial for the tech firms, as 51% of U.S. startups are founded by immigrants (English). Before the meeting, IBM announced plans to hire 25,000 employees and a US$1bn investment (English).
A cold front closed Mexican Gulf Coast petrochemical ports. A cold front with 70 kph winds closed every oil and petrochemical port – Altamira, Dos Bocas, Pajaritos, Tuxpan – but one – Cayo Arcas – along Mexico’s Gulf Coast (English). On the Pacific Coast, crude-loading Salina Cruz port was operating as usual.
Infrastructure & Investment
TransCanada gave Saddle West the green light. The Canadian company announced the addition of 29 km and five compressor units to the Nova Gas Transmission Ltd. System in Alberta with an investment of CAN$655m (English). TransCanada will apply for approval to the National Energy Board in Q32017 and will start operations in 2018 (English).
The CNH offers three Pemex onshore fields. The National Hydrocarbons Commission (CNH) released information about three of the state-owned company’s onshore fields (Spanish). Pemex announced its plan to look for partnerships with private companies to strengthen its profitability and exploit the Cárdenas, Mora and Ogarrio fields.
Inter Pipeline got in on the Cold Lake pipeline system. The Calgary-based company will acquire a 15% stake in Canadian Natural Resources’ Cold Lake pipeline for CAN$350m in cash and CAN$177.5m in stock (English). Inter Pipeline will also build a CAN$125m pipeline connection to the Kirby North project.
New NEB members appointed and a new Quebec bill passed. The Canadian federal government appointed three new members to the National Energy Board, putting the Energy East pipeline on track (English). Quebec approved bill 106 for the new energy plan that both implement clean energy and facilitates oil and gas exploration (English) (French).
Billionaires invest US$1 in clean energy. The Breakthrough Energy Coalition, including Bill Gates and Mark Zuckerberg among many others, plans to devote US$1bn in clean energy technologies (English). The goal is to reduce greenhouse-gas emissions, reduce energy prices, and counteract Trump’s nomination of General Scott Pruitt as the new Environmental Protection Agency.
Old School Social
Events in the world beyond your screen – go see and be seen!
The Mexico Infrastructure Projects Forum is January 18-19 in Monterrey, Nuevo Leon.
The Solar Summit: Mexico is January 27-28 at Intercontinental Presidente, Mexico City.
The 13th Annual State of the Energy Industry Forum is January 31 at the National Press Club
Ballroom, Washington D.C.
Lateral Thinking
LIGO may alter our understanding of physics and “relativity”. UCSB black-hole researchers said that the data of the Laser Interferometer Gravitational-Wave Observatory (LIGO) can allow scientist to explore “a new physical regime” (English). LIGO data contains “echoes” of the waves that contradict relativity’s predictions failing at a black hole’s edge.
Quote of the Week
“It is better to ask some of the questions than to know all the answers.”
-James Thurber (1894-1961), American cartoonist, author and journalist, published in The New Yorker (18 February 1939)
We hope you have a productive week. Please send any news, comments, or new physics theories
to NAIWeekly@energynarrative.com.
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