March 27, 2017 edition— Renewables meet old-school finance; Keystone okayed; and California rehydrates.
Last Week in a Minute or Less
Renewables & Electricity. Renewables can learn finance from oil and gas and hydro generation will increase in California.
Natural Gas & Liquid Fuels. US biomass diesel imports are up and exports drained US propane inventories.
Oil & Gas Upstream. The Keystone XL pipeline was approved for construction; oil companies are unaffected by energy regulation; and US crude inventories went up.
Money & Power. A carbon tax is not on Trump’s mind; US and Mexico share manufacturing production; and the US is expected to follow WTO rules.
Déjà vu all over again. Last week’s readers were particularly interested in Trump’s reconsideration of US fuel economy rules (English); California’s Wholesale Distributed Energy Aggregation (English); and Trump’s defense of his wiretap claim (English).
Keeping Track of Trump
The State Department approved the Keystone pipeline. The US State Department approved the permit to continue building of the Keystone XL oil pipeline (English) (Spanish). The approval comes right before the end of the 60-day period included in Trump’s executive order for the Keystone and Dakota Access pipelines’ construction (English).
Trump is “not considering” a carbon tax. A White House official announced that the Trump Administration is not considering a carbon tax (English). The response followed a meeting with Republican elder statesmen proposing a US$49 per ton tax on carbon emissions to face climate change.
Trump continues easing Obama’s energy regulation. Officials canceled meetings with nonprofit and industry groups connected to the Extractive Industries Transparency Initiative (EITI) due to its cost (English). The Department of Energy delayed five efficiency rules including test procedures for compressors and heat pumps and energy conservation standards (English).
The FBI denied Trump’s wiretap claim and the White House backs Trump. FBI director James Comey assured there is “no information” to back President Donald Trump’s claim that Obama wiretapped him (English). The White House press secretary Sean Spicer assured there was “interesting news” yet to be known about the Trump’s accusation (English).
Energy Policy
Trump is working on a new coal mining plan. President Donald Trump announced he is planning “new executive actions” to save coal mining and creates jobs for miners (English). Trump made the announcement in a rally in Louisville, Kentucky and did not provide further details.
Nuclear energy is being rekindled. The 2018 budget plan includes US$120m for nuclear waste programs including a fresh start for Yucca Mountain and a plan to make US nuclear plants last longer (English). The project in Nevada has been postponed for years by local opposition and lawsuits.
Oil companies unaffected by energy rules targeted by Trump. According to a Reuters review, while President Donald Trump said that an end of environmental regulations will propel oil energy, 13 out of 15 big US oil and gas companies reported that the Obama’s regulations did not impact their operations (English).
Hydro generation set to swell in 2017. High precipitations, snowpack levels, and cooler temperatures in California indicate increases in hydroelectric generation later in 2017 (English). The drought at the state is at its lowest level for the first time since 2011, although 8% of the state is in a moderate drought.
Boundary Issues
Exports drained US propane inventories. US propane inventories were reduced by 59 million barrels from October 2016 until early March 2017, despite cooler temperatures this winter (English). US propane exports grew thanks to demand from the petrochemical sector in Asia and seasonal heating demand.
US bio-diesel imports are on the rise. US imports of biomass diesel, including biodiesel and renewable diesel, grew by 916 million gallons, a record increase of 65% in 2016 (English). While 64% of US biodiesel imports came from Argentina, 14% was imported from Canada.
The NAFTA renegotiation continues with strains. The Economy Minister assured that country-specific rules of origin within NAFTA will not be accepted (English). Under the current trilateral trade agreement, the rules of origin can ensure that products meet regional content requirements to be tariff-free, but no national content is required.
The Wilson Center explores US and Mexico’s economic ties. The Wilson Center analyzed the economic coordination between Mexico and the US finding a shared manufacturing production system crisscrossing the border (English). Besides US$136bn in intermediate goods consumed by Mexican industries, 4.9 million US jobs depend on Mexico’s trade.
EU and German officials expect the US to follow WTO rules. The European Commission and Germany expect the US administration will follow international rules and obligations, especially under the World Trade Organization (English). The warning comes after President Donald Trump proposed a border tax on imports to support his America first policy.
International Affairs
Tillerson will miss NATO’s gathering. US Secretary of State Rex Tillerson will not attend the 28 NATO allies’ meeting on April 5-6 in order to be present at the visit of Chinese President Xi Jinping (English) (Spanish) (French). The head of NATO proposed a date change to avoid the scheduling conflict (English).
The laptop ban may hurt Middle East business. The UK and the US have banned electronics bigger than cellphones on flights from certain Middle Eastern and north African countries, and the European Union is evaluating said restrictions (English). Middle Eastern airlines could suffer a drop in business travelers due to the restrictions (English).
Macro Trends
The death of Trump’s healthcare bill may bring the tax reform to the spotlight. The delay in voting on the new healthcare bill made Wall Street decline with S&P 500 Index falling to the lowest level of the session (English). The failure to pass the health act brought hope for the expected tax cuts (English).
A bump up in US crude inventories brings oil prices down. US crude oil inventories increase by 4.95 million to 533.1 million barrels (English) (English). Crude oil prices dropped to near US$48 per barrel for WTI and US$51 per barrel for Brent crude after on the latest crude oil inventories was announced (English).
Can financing tricks from oil help renewables? The Center on Global Energy Policy studied if the oil industry’s experience in raising capital f could be transferred to the solar and wind power industries (English). To meet the 2 degree C global warming target, investment in solar and wind power needs to double, reaching roughly US$500bn.
Yellen avoids comment on monetary policy. Federal Reserve Chair Janet Yellen mentioned neither monetary policy nor the economic outlook in a childhood education conference in Washington (English). Despite the market’s euphoria, the Federal Reserve is cautious on Trump’s plan to propel the US economy (English).
Lateral Thinking
The dinosaur family tree may be turned upside down. University of Cambridge researchers proposed two modified categories of dinosaurs to replace the two long accepted by paleontologists (English). According to the study, therapods, including T-Rex, and sauropods, such as the diplodocus, should not be classified together.
Quote of the Week
“The Government of the absolute majority instead of the Government of the people is but the Government of the strongest interests; and when not efficiently checked, it is the most tyrannical and oppressive that can be devised.”
-John C. Calhoun (1782-1850), politician and Vice-President of the United States
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