The Weekly Brief: US Global Impact

May 8, 2017 edition— US wind flies high; US crude inventories down; and US growth can rise by 3%.






Last Week in a Minute or Less



Renewables & Electricity. Simmons was named the head of EERE; US wind industry multiplied its generation capacity; and wind turbines generate 8% of US power.


Natural Gas & Liquid Fuels. Senators push legislation to require federal oil and gas pipeline approval.


Oil & Gas Upstream. US crude oil inventories dropped.


Money & Power. US growth can reach 3% according to Mnuchin; the Trump administration will review WTO; and TPP may be reincarnated.



Keeping Track of Trump


Congress saves EPA’s budget from Trump’s cuts. Instead of receiving a budget cut of US$247m, Congress reduced EPA’s budget by US$81m with no staff reductions (English). The agency’s advanced research program received a US$15m rise instead of sliding its budget by half under Trump’s spending plan.


Trump can benefit from ending the Energy Star program. President Donald Trump’s properties have received low Energy Star ratings, with Manhattan’s old Mayfair Hotel rated as 1 in a 1 to 100 scale (English). The Trump administration proposed cutting all funding to the Energy Star Program.


Even without a shutdown, the House passed the healthcare bill. With a 217-213 vote, Republicans repealed parts of Obamacare to replace it with a new healthcare plan, sending it to the Senate (English). After struggling to pass legislation, Trump tweeted that the country needs “a good shutdown” to “fix mess” (English).


Trump chose Simmons to direct the EERE. Daniel Simmons, a conservative scholar opposed to renewable energy policies, was appointed to lead the Office of Energy Efficiency and Renewable Energy (English). The goal of the EERE is to promote the development of renewable and energy-efficient technologies (English).


Senate energy leaders will keep fighting for policy reforms. US Senate energy leaders from the Energy and Natural Resources Committee will continue pushing the energy bill they proposed in 2016 (English). The bill is backed by 85 cosponsors and 70 Senate members, being a bipartisan effort.



Energy Policy


US wind industry flies high… The US wind industry multiplied by four the capacity installed in the first quarter – 2,000MW – compared to the same period last year (English). Additionally, the American Wind Energy Association (AWEA) said 11,952MW are in advanced development and 9,025MW of wind projects are under construction.


…and wind turbines generate 8% of the US capacity. Wind generators produced 8% of the operating electric capacity in the US in 2016, above any other renewable technology (English). California, Iowa, Kansas, Oklahoma, and Texas concentrates more than half of US wind capacity.


Senators fight to end US fossil fuel use by 2050. Sens. Jeff Merkley, Bernie Sanders, and Edward J. Markey introduced an act to encourage the transition away from fossil fuels by 2050 at the local and state level (English). The act will require zero carbon emissions vehicles and federal approval of oil and gas pipelines.


US industrial sectors lowered its carbon intensity use. The industrial sector produced only 44 kilograms CO2 per million British thermal units in emissions, the least amount of CO2 per unit of primary energy consumed in 2016 (English). The electric power sector produced 48 kg CO2/MMBtu in 2016.



Boundary Issues


TPP 11 met in Toronto “secretly”. The 11 countries that signed the TPP agreement and did not withdraw met at Toronto to discuss the “potential next steps” for the TPP (English). Japan is trying to secure the rules proposed on trade and tariffs in an agreement after the US withdrawal.


The Trump Administration will review WTO. President Donald Trump signed an executive order to review US trade agreements, including the ones covered by the World Trade Organization (WTO) (English) (English). During the campaign, Trump threatened to withdraw from the WTO and in March his administration considered ignoring unfair WTO rulings.


Ross suggested TPP as a guide for NAFTA renegotiation. Commerce Secretary Wilbur Ross believes parts of the TPP could lay the foundation for NAFTA renegotiations (English). The goal would be to develop two bilateral agreements, one with Canada and another with Mexico (Spanish).


The US trade deficit shrank. The US trade deficit improved by 0.1% to US$43.7bn in March due to declines in imports and exports (English). In March, exports to Mexico and Canada increased by 15.8% and 17.9%, respectively, while imports of goods and services dropped by 0.7%.



International Affairs


China is trying to calm the waters between North Korea and the US. China asked the US and North Korea to remain calm and stop provoking each other (English). US State Secretary Rex Tillerson urged Southeast Asian foreign ministers to stop funding North Korea’s missile and nuclear programs (English).


Donald Trump committed to an Israel-Palestinian peace deal. President Donald Trump assured the Palestinian leader Mahmaud Abbas the US will help Israel and Palestinians to reach peace (English) (Spanish). Trump will travel to Saudi Arabia and Israel this month for his first foreign trip to strengthen traditional regional alliances (English).


Tillerson explained the “America First” foreign policy. US State Secretary Rex Tillerson explained to his staff how the “America First” agenda will be applied to foreign policy. Tillerson will regain the balance “lost” in previous decades by focusing on promoting economic activity and trade with emerging economies (English).


US wants Mexico to support Trump’s plan for Central American migrants. John Kelly, Homeland Security Secretary, is designing a plan to reduce migration from Central America to the US with a US$750m initiative (English). The Trump administration will press Mexico to stop migrants from Guatemala, El Salvador, and Honduras.


Trump made peace with Australia’s Turnbull. President Donald Trump had his first meeting in person with Australia’s Prime Minister Malcolm Turnbull and assured that they “get along great” (English). The meeting followed a tense phone call exchanged between the two allies in January discussing an agreement for the US to accept 1,250 refugees.



Macro Trends


Interest rates were left alone until June (at least). The US Federal Reserve will maintain interest rates at its May 3 meeting, but could increase then in June (English). In March, jobs growth slowed sharply, but the unemployment rate dropped to 4.5%, a near 10-year low.


Mnuchin said US growth can reach 3% by 2019. US Treasury Secretary Steven Mnuchin declared that 3% economic growth is achievable in two years (English). The announcement came after government data showed a 0.7% economic growth for the last quarter.


US crude oil inventories are down. The US Energy Information Administration said that US commercial crude oil inventories dropped by 900,000 bbl to a total of 527.8 million bbl until April 28 (English). US crude oil imports averaged 8.3 million barrels per day, a reduction of 648,000 b/d from the previous week.


The S&P 500 tech index is nearing the US$5 trillion mark. The S&P 500 technology index will reach US$5 trillion in two months if its 16% growth continues at the same rate (English). Apple accounts for 3.8 percent of the S&P 500, rivaling ExxonMobil and Microsoft.



Lateral Thinking


The world’s biggest X-Ray laser will capture atomic processes. The European XFEL project will capture images of atomic processes and biochemical reactions and map the molecular structure of new drugs (English). French, German, Italian, Polish, Russian, Spanish, Swedish, and Swiss institutions participate in the project.



Quote of the Week


“If any man seeks for greatness, let him forget greatness and ask for truth, and he will find both.”


-Horace Mann (1796-1859), American education reformer



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