The Weekly Brief: US Global Impact

April 24, 2017 edition— NAFTA in doubt; clean energy sans regulation; and natural gas on the rise.






Last Week in a Minute or Less



Renewables & Electricity. Perry pledges clean energy with less regulation.


Natural Gas & Liquid Fuels. Natural gas will be the largest US power source in the summer; retail gasoline prices are up; and natural gas was the biggest generation capacity in 2016.


Oil & Gas Upstream. US crude production fell less than expected and OPEC relies on further production cuts.


Money & Power. Trump threatened NAFTA, will review H-1B visas, and will leave Yellen alone.


Déjà vu all over again. Last week’s readers were particularly interested in the possible electrical vehicles’ market crash (English); the surge in new US pipelines (English); and Trump’s “pleasant surprises” on NAFTA (English).



Keeping Track of Trump


Energy companies are working to change Trump’s mind on the Paris Accords… Oil and coal producers and policy advisers are lobbying to keep the United States in the Paris climate agreement (English) (English). Cheniere Energy, Exxon Mobil, Shell, BP, and certain members of the administration have backed the Paris pact.


…and Trump did so on Yellen. During the election campaign, President Donald Trump had accused Janet Yellen of supporting Obama’s agenda and he “would most likely replace her.” In a recent interview Trump, assured that he liked her (English). The Fed is expected to raise interest rates twice more in 2017 (English).


Trump puts visas under review. President Donald Trump signed an executive order on the H-1B visa program as a warning to technology firms and outsourcing companies which bring high-skilled foreign workers (English). Although vague, the order’s goal will be to modify or replace the lottery system for visas with a merit-based system.


GOP focus on tax break may threaten tax overhaul. House Republicans are pushing to eliminate a trillion-dollar tax break which benefits rich people in Democratic states (English). In doing so, President Donald Trump may have a harder time winning bipartisan support for a tax reform.



Energy Policy


Perry promises clean energy with less regulation. US Energy Secretary Rick Perry pledged there will be no quandary between the environment and the economy, and clean energy will be kept without “harmful regulations” (English). Perry made the statement at the inauguration of the NRG Energy and JX Nippon Oil & Gas’s Petra Nova project.


US FERC may be exempted from budget cuts. According to Washington insiders, the Federal Energy Regulatory Commission will not be affected by the personnel cuts directed to agencies to reduce the budget (English). FERC receives its operational costs from annual charges and fees paid by the industries that the agency regulates.


Natural gas, the largest US power source in the summer… The EIA forecasts that natural gas will continue exceeding any other fuel, although its share will be lower this summer – an average of 34% against 37% in the summer of 2016- (English). Natural gas generation peaks in the hot months to meet air conditioning demand.


…and natural gas generators, the largest in US generation capacity. Last year natural gas accounted for 42% of total US capacity and 34% of the year’s electricity generation (English). Combined-cycle units accounted for 54% of the 449GW of natural-gas-fired capacity, while combustion turbine represented 28% and steam turbines, 17%.



Boundary Issues


Trump threatens NAFTA again… President Donald Trump reiterated his idea of dumping NAFTA altogether if major changes are not negotiated (Spanish). Mexico’s Economy Minister said that the lack of a US Trade Representative is delaying the NAFTA renegotiation (English).


…and Canadian dairy is an issue. Rival exporters from Asia and Europe have challenged Canada’s protection of its dairy sector before the WTO before, but Canada has continued its system of protective tariffs (English). Trump pledged to protect American dairy farmers from Canada’s trade practices (English).


Japan will lead TPP after the US withdrawal. Tokyo plans to activate the TPP agreement without the US (English). Japan’s goal would be to ensure the massive trade deal between the 11 remaining members goes forward at a meeting in Canada early in May and in Vietnam later next month.


US energy imports and exports will balance soon. EIA forecasts a balance between imports and exports by 2030 for the first time since the 1950s (English). Changes in supply (with the growth in oil and natural gas production) and demand (with a moderate demand growth) is expected.



International Affairs


North Korea and the US exchange threats… US Vice President Mike Pence warned North Korea not to question President Donald Trump’s resolution, taking the strikes in Syria and Afghanistan as examples (English). North Korea answered with a warning directed to the US over a “super-mighty preemptive strike” (English).


…while reassuring allies on trade. Vice President Mike Pence put South Korea and Japan at ease, securing US support managing North Korea. Pence assured that a trade agreement between South Korea and the US is under review, as well as a direct dialogue between the US president and Japan’s Prime Minister (English).


Tillerson warns Iran over bringing back sanctions. US State Secretary Rex Tillerson said that Iran complied with the nuclear deal requirements, but its support for terrorism may bring back sanctions on its oil sector (English) (German) (Spanish) (French). Iran’s oil exports doubled to 2.2 million barrels daily since sanctions were lifted.


A Russian think tank wanted to sway the US election. A Russian think tank close to Vladimir Putin designed a plan to help Donald Trump win the US presidential election, according to former and current US officials (English). Other media doubts the Russian Institute for Strategic Studies influenced in the Kremlin (English).



Macro Trends


Retail gasoline prices are on the rise for the summer holidays. Drivers during summer holidays will pay 2.46 dollars per gallon, 23 cents more than last summer because of higher forecast crude prices (English). Nonetheless, the prices remain lower than the previous five-year average.


Goldman Sachs dropped and brought Wall Street down. Goldman Sachs Group suffered a 4.7% drop in quarterly trading revenue and the S&P 500 fell for the fourth time in five sessions consequently (English). The geopolitical tensions added to the investors’ caution.


US production sows doubts on oil prices. Oil prices fell after reports that US crude stockpiles were reduced less than expected and gasoline stocks grew (English). OPEC members Saudi Arabia and Kuwait pointed to an almost certain extension of the oil output cut beyond June.


OPEC relies on non-OPEC producers to manage the market. OPEC hopes non-member oil producers will cut production to stabilize the oil market, and said an extension will be decided on May 25 (English). Although it took longer than expected, OPEC remains optimistic that oil prices will recover as a result of the agreement (Spanish).



Lateral Thinking


East Antarctica’s core may be getting softer. Researchers have found that the Totten glacier shrank and grew in the past and can be reduced in the future. If climate change affects its ice sheet – ten times bigger than West Antarctica’s – sea levels could rise by several meters (English).



Quote of the Week


“If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be.”


-Thomas Jefferson (1743-1826), Founding Father and the third US president from 1801 to 1809


We hope you have a productive week. Please send any news, comments, or new studies on ice sheets to


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