The Weekly Brief: US Global Impact

March 20, 2017 edition— Solar doubled; coal exports down, ethanol up; and a glance at the American First Energy Plan.






Last Week in a Minute or Less


Renewables & Electricity. All sights on California’s Wholesale Distributed Energy Aggregation and the US solar market doubled in 2016.


Natural Gas & Liquid Fuels. US ethanol exports go up and the America First Energy Plan includes an interest on US shale and gas


Oil & Gas Upstream. US crude oil inventories decrease and oil executives look at Trump’s policies with optimism.


Money & Power. The Fed rose interest rates and Trump is not looking for trade wars and will meet with China’s Xi Jinping.


Déjà vu all over again. Last week’s readers were particularly interested in the suspension of fast processing H-1B visas (English) and Trump’s plans to kill fuel-economy standards (English).



Keeping Track of Trump


Trump reopened US fuel economy standards. US President Trump announced the reopening of US fuel economy standards for 2022-2025, restoring “the originally scheduled mid-term review” (English). The rules for corporate average fuel economy and gas emissions transformed cars engine specifications and promoted hybrid and electric vehicles.


Oil executives offered their opinion on Trump. At the CERAWeek conference, oil and gas executives expressed their optimism about Donald Trump’s policies and are excited to hear his plans for energy regulation and trade (English). The White House is expected to continue reducing the past administration’s regulation (English).


Even after Republicans rejection, Trump stands by wiretap claim. President Donald Trump is maintaining his assertion on the previous administration’s wiretapping Trump Tower during the campaign (English). Democrat and Republican leaders from the Senate Intelligence Committee issued a bipartisan statement assuring there are “no indications” for Trump’s claim (English) (Spanish).


A look on the America First Energy Plan. Although only limited details are known, the America First Energy Plan includes an end on “unnecessary policies” to increase wages, a push for US shale, gas, and coal, and an end of OPEC dependence (English). The plan includes deregulation, but not a word on renewables.



Energy Policy


Trump cuts EPA’s budget to the bone. While the military won big, the budget for the Environmental Protection Agency (EPA) was cut by 31% (English) (Spanish). Republican Congressmen complained over the proposed cuts to diplomacy and popular domestic programs which help people with heating bills (English).


Pruitt delayed the risk management plan rule. The US Environmental Protection Agency Head, Scott Pruitt, signed a delay of the chemical plant risk management rule for 90 days, until June 17 (English). The American Petroleum Institute, American Fuel & Petrochemical Manufacturers, and other business groups asked Congress to use the CRA to kill the rule.


New applicants are ready to rock California’s Wholesale Distributed Energy Aggregation. Several companies applied to become providers of distributed energy resources under the Wholesale Distributed Energy Aggregation (English). Although it is a year away from going live, the new program may face the challenge to get approval from the utilities.


US crude oil inventories dropped. According to the US Energy Information Administration (EIA), US crude oil stockpiles fell 200,000 bbl after 10 weeks of continuous growth (English). After a 9-week routine of increases, US crude inventories are at 528.2 million bbl, above the upper limit of the range.



Boundary Issues


Pacific Rim countries have moved on. More than 12 Pacific Rim countries, including China, met in Chile to negotiate after the US abandoned the TPP (English). The Pacific Alliance Partners showed support for Mexico in the binational negotiation with the US and worry over the effect of “the Trump-Mexico theme” (English).


Mexico and US trade officials met. Economy Minister Ildefonso Guajardo and US Commerce Secretary Wilbur Ross met to discuss the bilateral agenda in Washington D.C. (English). While considering how to respond to US tax and tariff proposals, Finance Minister Meade affirmed Mexico has less room to negotiate fiscal reforms than the US (English).


Canada’s National Resources Minister says Canada and US energy trade is solid. The Canadian Natural Resources Minister assured that trade between Canada and the US will remain robust and “highly integrated” (English). The US trade with Canada totaled US$662.7bn in 2017, 65% of Canada’s international trade.


US coal exports and imports dropped in 2016… While the US maintained its position as net coal exporter with 60.3 million short tons sent in 2016, US imports dropped to 9.8MMst (English). Ten countries received 80% of the coal exported by the US, including Brazil, China, and Morocco.


…and US ethanol exports boost to the second-highest level registered. The United States increased by 26% its export level of ethanol in 2016 with more than 1 billion gallons (English). US ethanol exports to Brazil surpassed Canada’s receiving 267 million gallons in 2016, while China imported 179 million gallons.



International Affairs


Merkel met Xi and Trump will host him in April… The German Chancellor met the Chinese President to discuss and work together with free trade and open markets (German). US President Donald Trump plans to meet Xi Jinping in a two-day summit at Trump’s Mar-a-Lago resort on April 6-7 (English).


…and Merkel and Trump finally met. The German Chancellor Angela Merkel and the US President Donald Trump discussed NATO support, trade policies, and immigration (English) (English). On Saturday, Trump said on Twitter that Germany “owes vast sums of money to NATO & the United States”, a claim rejected by the German Defense Minister (English).


Mnuchin assures no trade wars will be launched. US Treasure Secretary Steven Mnuchin said the Trump administration is not looking to start trade wars (English). Premier Li Keqiang assured China is a champion of globalization and free trade, looking to avoid such wars (English).


…but clean energy can be a problem. The US has innovated on clean energy by investing with loan programs from the Department of Energy, but some analysts have noticed a shift in the origin of patents (English). China is betting on renewables and being accused of unfairly subsidizing its solar panels.



Macro Trends


The Fed raised interest rates to 1%… The US Federal Reserve jumped the base rate to 1% from 0.75%, the second rate rise in three months (English). The health shown by US economy allowed for the push on rates with higher consumer prices and an increase in the housing market index.


…but higher interest rates have a dark side. The Federal Reserve increase on interest rates could put an end on the monetary stimulus across Asia (English). Concerns surround inflation, the formation of asset bubbles, and the economy dependence on rising debt backing spending (English).


Oil prices fell thanks to US production. Fears about US oversupply made crude oil prices dropped sharply (English) (Spanish). The US Energy Information Administration increased its US output forecasts for 2017 and 2018.


The Fed deal took a hit on the dollar. The dollar fell to a five-week low against foreign currencies, after the US Federal Reserve announced the interest rate raise (English). The dollar dropped to a two-week low versus the yen and a five-week against the euro.


US solar market shined brighter in 2016. The US solar market doubled in 2016 and added more generation capacity than any other source of energy (English). In the next five years, the US solar market is expected to triple forgetting a slight dip in 2017.



Lateral Thinking


When denying climate change consider mammals shrink with higher Earth temperatures. By analyzing fossil teeth found in Wyoming, researchers found that when temperatures spiked 54 million years ago mammals shrank (English). Scientist warned that mammals – people not included – could shrink under climate warming.



Quote of the Week


“Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are even incapable of forming such opinions.”


-Albert Einstein (1879-1955), Nobel prize winner physicist




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