April 3, 2017 edition— NAFTA tweaks; OPEC’s continuing cuts; and Florida’s solar challenge.
Last Week in a Minute or Less
Renewables & Electricity. Trump signed climate policies’ demise; Florida is falling behind on solar; and California faces up Trump on car pollution.
Natural Gas & Liquid Fuels. LPG production up as well as its West Coast exports and 2016 US crude oil exports expanded to new regions.
Oil & Gas Upstream. OPEC considers maintaining oil production cuts.
Money & Power. New rate hikes are being considered; inflation under control; and NAFTA will include “limited changes”.
Déjà vu all over again. Last week’s readers were particularly interested in White House’s defense of Trump’s wiretap claim (English).
Keeping Track of Trump
Trump signed the death sentence of Obama’s climate policies… Trump signed an executive order to undo Obama’s climate change regulations, including the Clean Power Plan (English) (German) (French). The goal of the order is to create jobs and provide “confidence” in the administration’s commitment to the coal industry.
…while US and foreign representatives condemn the move. The California governor, 75 US mayors, and EU representatives regret Trump’s order eliminating the limits on the amount of greenhouse gases that power plants can emit (English) (English) (English). Jerry Brown and other governors are organizing to fulfill U.S. obligations under the Paris climate accord.
Trump’s efforts to support coal may be in vain. President Trump increased access to federal lands with coal reserves, but the coal miners involved have enough coal on their existing leases to last 17 years (English). Coal leader Robert Murray warned that Trump can’t bring back all the mining jobs lost to technology (English).
After no healthcare vote, Trump turns to tax reform. The White House will now focus on changing the US tax code, setting August as a target date (English). President Donald Trump promised during the campaign to cut taxes and the administration is expected to work with Congress to reach a consensus swiftly.
Energy Policy
California defies Trump on car pollution. California approved 2022-2025 vehicle pollution rules for the state mandating zero-emission sales over the period (English). The US Environmental Protection Agency announced the previous week a review of the 2022-2025 emissions target after President Donald Trump met with auto makers.
Nuclear power plants’ demise will hit small towns. Closing down the 61 US nuclear power plants could affect the small towns where they created jobs and infrastructure (English). Some US nuclear power plants are being closed ahead of schedule due to the high cost of repairs.
LPG production is up everywhere but the West Coast. US production of propane and butanes increased in all regions but the West Coast, reaching 2.1 million barrels per day in 2016 (English). While West Coast production has fallen steadily since 2010, exports of LPG from the region grew by 5,000 b/d in 2016.
The Sunshine state is behind in solar. Although it is the third highest state in rooftop solar potential, Florida is 12th in installed capacity, producing only 1% of its power from solar (English). In New York, state tax breaks have helped solar, dropping the costs and increasing solar capacity by 800% in five years.
Boundary Issues
The Trump Administration will just add little tweaks to NAFTA. According to the Wall Street Journal, the Trump administration will look for “limited changes” to NAFTA (English). Changes include allowing the three countries to reinstate tariffs when facing serious threats of a flood of imports.
…and Mexico will walk away if NAFTA is not a win-win. According to Foreign Relations Minister Luis Videgaray, Mexico will let NAFTA die if it is not a win for every participant (English). Peña Nieto’s administration set limits to what can be accepted in the agreement, including peso stabilization mechanisms.
2016 US crude oil exports travelled the world. US crude oil exports grew 55,000 b/d over 2015 levels and expanded to 26 different countries in 2016, compared with 10 destination countries in 2015 (English). Although Canada remained the top importer, the Netherlands, Curacao, China, and Italy ranked high.
All eyes set on the WTO after Brexit. China, Russia, and the US are interested in knowing how the World Trade Organization will manage Britain’s agricultural tariff system and preferential trade schemes for poorer countries after Brexit (English). The US has an above-average success rate with the organization’s rulings (English).
International Affairs
Trump’s son-in-law met Russian bank executives. The US Senate committee investigating Russia’s interference in the election wants to interview Jared Kushner, White House advisor and Trump’s son-in-law. Kushner met with the Russian ambassador in December and with executives from the Russian state development bank Vnesheconombank (English).
Trump will take part in the G20 summit. US President Donald Trump will attend a G20 summit on July 7-8, in Hamburg, Germany (English). The announcement was made after President Trump spoke with German Chancellor Angela Merkel to confirm his attendance and to congratulate her on the Saarland election.
Brexit may be good news for US and UK trade. Nigel Farage assured that the United States and the United Kingdom could reach a trade deal by the end of this year (English). The announcement was made after the British government triggered Article 50 to leave the European Union.
Almost 40 countries, including the US, skipped a chat about banning nuclear weapons. The US, Britain, and France are among almost 40 other countries that did not attend a discussion of a nuclear weapons ban treaty at the UN. The absentee countries prefer to commit to the Non-Proliferation Treaty, doubting that countries like North Korea would comply (English).
Macro Trends
Fed’s Evans sees inflation under control… Chicago Fed President Charles Evans assured that inflation is below the 2 percent target and long-term inflation expectations follow that lead (English). Evans does not expect inflation to reach the 2% objective until 2019.
…but still supports new rate hikes. Evans, a long-time supporter of low interest rates, backs most of his colleagues which defend one or two more rate hikes this year (English). His support is based on the US jobless rate dropping to 4.7% and stable inflation below the central bank’s target.
OPEC considers continuing oil production cuts. OPEC and non-OPEC members may extend the oil output reduction for another six months to year-end (English) (Spanish). OPEC compliance with the cuts increased in March and crude prices rose by 2% following rumors the agreement would be extended (Spanish) (English).
Wall Street ponders Trump’s agenda. The failure of Trump’s healthcare legislation raised doubts about the rest of his agenda, including tax reform and infrastructure spending (English). Some analysts believe the end of the healthcare bill will ease action on desired legislation such as the tax reform.
Lateral Thinking
Space missions may bring extraterrestrial threats. To avoid repeating the mistakes of the movie Life, the sample-return missions planned by NASA will be subject to scrutiny to avoid any life from infecting Earth species (English). Biologist worry over their lack of knowledge of species surviving extreme environments even in our planet.
Quote of the Week
“However well-equipped our language, it can never be forearmed against all possible cases that may arise and call for description: fact is richer than diction.”
-J. L. Austin (1911-1960), British language philosopher
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