Energy Brief: Global Coal Consumption Dropped Sharply in 2016

Washington Brief

  • The Environmental Protection Agency proposed a two-year delay of an Obama administration rule aiming to reduce methane emissions from natural gas systems. (The Hill)
  • Eleven states sued the Trump administration over its failure to finalize and publish energy efficiency rules that the Obama administration approved for air conditioners and other products. (The Associated Press)
  • Democrats criticized the Trump administration’s pick to lead the Environmental Protection Agency’s enforcement office during a committee hearing, at one point calling the agency’s leaders a “corporate raiding party.” (Washington Examiner)

Business Brief

  • Global coal consumption dropped 1.7 percent in 2016, compared to an average of 1.9 percent growth from 2005 to 2015. (Bloomberg News)
  • OPEC’s oil output increased in May thanks to greater production in Nigeria and Libya, which were exempted from the group’s cuts. (Financial Times)
  • French oil company Total SA is aiming to become one of the world’s biggest suppliers of electricity, in anticipation of a peak in oil demand within the next few decades. (The Wall Street Journal)

Chart Review

Events Calendar (All Times Local)

Wednesday
Senate Environment and Public Works Committee legislative hearing on Consumer and Fuel Retailer Choice Act 10 a.m.
House Energy and Commerce subcommittee hearing on energy security 10 a.m.
House Natural Resources subcommittee legislative hearing on SHARE Act 10 am.
Senate Energy and Natural Resources subcommittee legislative hearing on hydropower and water bills 2 p.m.
Thursday
Senate Agriculture Committee hearing on farm bill 9:30 a.m.
BP Statistical Review of World Energy 2017 9:30 a.m.
Senate Energy and Natural Resources Committee hearing on Forest Service budget request 10 a.m.
House Natural Resources subcommittee hearing on forest management 10 a.m.
Pruitt testifies at House Appropriations subcommittee 11 a.m.
BP Group Chief Economist Spencer Dale speaks at AGA’s Natural Gas Roundtable 12 p.m.
Friday
FERC staff Elizabeth Olson speaks at WCEE lunch 11:45 a.m.

 

General

11 States Sue Trump Administration Over Energy Standards
The Associated Press

New York, California and nine other states are suing the Trump administration over its failure to finalize energy-use limits for portable air conditioners and other products. The states filed the lawsuit against the U.S. Department of Energy on Tuesday in federal court in San Francisco.

Democrats give Trump’s pick to lead EPA enforcement a lashing
John Siciliano, Washington Examiner

Democrats came down hard on President Trump’s choice to lead the Environmental Protection Agency’s enforcement office on Tuesday. Susan Bodine, nominated to be assistant administrator of EPA’s Office of Enforcement and Compliance Assurance, faced a grilling during her first confirmation hearing before the Senate Environment and Public Works Committee.

Top Dem accuses EPA of refusing to reply to oversight requests
Devin Henry, The Hill

The top Democrat on the Senate Environment and Public Works (EPW) Committee said Tuesday that the EPA is dragging its feet on requests for information. At a confirmation hearing for President Trump’s nominee to lead the Environmental Protection Agency’s enforcement and compliance office, Sen. Tom Carper (D-Del.) said the EPA needs to reply to oversight requests before he’ll support moving forward with agency nominations.

Scientists Praise Energy Innovation Office Trump Wants to Shut Down
Brad Plumer, The New York Times

The debate over the future of energy innovation in the United States was renewed on Tuesday when a panel convened by the National Academy of Sciences released an in-depth report praising a key research office that President Trump wants to eliminate. The Advanced Research Projects Agency-Energy, or ARPA-E, was created in 2007 under President George W. Bush to fund research into long-shot technologies, such as advanced batteries or algae-based biofuels, that might one day prove useful for tackling climate change and other energy challenges.

The Heat Wave Sweeping the East Coast Comes With a Side of Smog
Brian K Sullivan, Bloomberg News

The heat wave that’s gripped the east coast over the past few days is also making it harder to breathe. The culprit is a dangerous mix of diesel exhaust, paint fumes and trees, baked by the heat to create a blanket of ozone.

Oil prices under pressure as IEA warns of ongoing glut
Jenny H. Hsu, MarketWatch

Crude futures continued to fall Wednesday after one industry group said U.S. oil and gasoline stockpiles rose again last week, while another said the global oil glut will persist this year despite efforts to curb supply. Light, sweet crude futures for delivery in July fell 61 cents, or 1.3%, to $45.84 a barrel on the New York Mercantile Exchange. August Brent crude on London’s ICE Futures exchange fell 57 cents, or 1.2%, to $48.13 a barrel.

Oil and Natural Gas

EPA moves to halt Obama methane rule for two years
Devin Henry, The Hill

The Environmental Protection Agency has proposed pausing an Obama administration oil and gas pollution rule for two years while it reconsiders the regulation. EPA officials on Tuesday formally proposed a two-year pause on implementation of the rule, which would limit methane leaks at drilling sites and set standards for equipment and employee certification within the oil and gas drilling sector.

Output from Opec members climbed in May
Anjli Raval, Financial Times

Output from Opec countries accelerated last month as Nigeria and Libya offset cuts from their peers in the cartel. The two countries have been exempt from the supply curb deal agreed among big producer countries, that started in January and which was extended in May for a further nine months.

Total Eclipse: Oil Giant Sees Its Future in Electricity
Russell Gold, The Wall Street Journal

France’s Total SA, one of the world’s largest oil companies, sent its top executives to Silicon Valley last summer, where they met with tech investors and futurists. At Tesla Inc.’s Bay Area factory, a Total executive tweeted a photo of a gleaming, red Model S—an electric car that burns no oil products at all.

Excess oil inventories to last until 2018 – IEA
Anjli Raval, Financial Times

Oil demand should outpace supply in the second half of this year but excess inventories will persist well into 2018, dealing a blow to global crude producers enacting output cuts to bring down stubbornly high stockpiles. The forecast from the International Energy Agency comes as higher than expected demand growth next year is met by even stronger output from the US and other producers outside of the Opec cartel.

U.S. shale firms more exposed to falling oil prices as hedges expire
Catherine Ngai and Swetha Gopinath, Reuters

Cash-strapped U.S. shale firms scaled back their hedging programs in the first quarter, leaving them more vulnerable to tumbling spot market prices just after OPEC reached a landmark deal to curb global supply. The pullback in hedging was driven by rising service costs and expectations that prices would continue to rally after the Organization of the Petroleum Exporting Countries extended those cuts in May, analysts said.

Utilities and Infrastructure

Upheaval at South African Power Utility Could Mean More Trouble For Zuma
Paul Burkhardt and Michael Cohen, Bloomberg News

Management upheaval at South Africa’s Eskom Holdings SOC Ltd. has dealt another blow to President Jacob Zuma as he battles allegations that he’s been pivotal to a scheme to siphon off billions of rand from the power utility and other state companies. Ben Ngubane quit as Eskom’s chairman late Monday just two weeks after the ruling African National Congress forced its board to rescind a decision to reappoint Brian Molefe as its chief executive officer.

Renewables

250MW hydroelectric power plant rising in Dubai
Gulf News

Dubai Electricity and Water Authority (Dewa) has awarded the Dh58 million consultancy contract for the pumped-storage hydroelectric power station at Hatta Dam to France’s EDF. The project is the first of its kind in the Arabian Gulf, with a total capacity of 250MW, and is expected to last between 60 to 80 years.

Coal

World Coal Production Just Had Its Biggest Drop on Record
Rakteem Katakey, Bloomberg News

It’s the end of an era for coal. Production of the fossil fuel dropped by a record amount in 2016, according to BP Plc’s annual review of global energy trends.

BP highlights ‘decisive’ shift away from coal power
Pilita Clark, Financial Times

The world has made a “decisive” shift away from coal and not even Donald Trump will be able to save it. That was the message from BP, the UK-based oil group, as it published energy data on Tuesday showing that global coal production plunged by 6.2 per cent last year, the largest annual fall on record.

The first new US coal mine of the Trump era will employ fewer people than an average supermarket
Zoë Schlanger, Quartz

The US’s first new coal mine in years, heralded by president Donald Trump as a fulfillment of campaign promises, will employ 70 people, according to Fox News. That’s significantly fewer than the 92 jobs created by the opening of one American supermarket on average (based on 2015 numbers from industry groups and and the US Bureau of Labor Statistics).

Nuclear

How Retiring Nuclear Power Plants May Undercut U.S. Climate Goals
Brad Plumer, The New York Times

Over the last decade, a glut of cheap natural gas from hydraulic fracturing has driven hundreds of dirtier coal plants in the United States out of business, a big reason carbon dioxide emissions fell 14 percent from 2005 to 2016. But more recently, that same gas boom has started pushing many of America’s nuclear reactors into early retirement — a trend with adverse consequences for climate change.

Climate

EU leaders to back closer defence ties, Paris climate accord – summit draft
Gabriela Baczynska, Reuters

European Union leaders meeting next week will agree to boost cooperation in the areas of security and defence and express support for global trade and the Paris agreement on fighting climate change, according to a draft joint statement. The EU leaders will convene in Brussels on June 22-23, in the same week that long-awaited talks on Britain’s exit from the bloc are due to begin in the biggest setback for European integration in six decades.

Energy Secretary Perry Pulls a U-Turn on Climate
Umair Irfan, E&E News

Energy Secretary Rick Perry entrenched himself as an opponent of the Paris climate agreement yesterday, reversing his earlier position.
At a White House Cabinet meeting, Perry told President Trump that he defended the United States’ withdrawal from the global accord while meeting with energy ministers last week in China and Japan.

Host of next United Nations climate conference turns to California in the global warming battle
Chris Megerian, Los Angeles Times

As the president of this year’s United Nations conference on climate change, Fiji’s prime minister is responsible for rallying countries to battle global warming. But on Tuesday, that effort drew him not to a national capital but to Sacramento, where he endorsed Gov. Jerry Brown’s ambitious plans on climate change.

Tillerson’s Support for Paris Agreement ‘Never Changed’
Jack Fitzpatrick, Morning Consult

Secretary of State Rex Tillerson said Tuesday he never changed his mind about supporting the Paris climate agreement, which President Donald Trump has said the U.S. will exit. Tillerson said in his January confirmation hearing that he believed the U.S. should “maintain its seat at the table” in the Paris agreement, which involved almost all of the world’s countries.

Opinions, Editorials and Perspectives

New Ethanol Bill Corrodes Consumer Choice
Chet Thompson, Morning Consult

If someone is telling you something that is too good to be true, it’s probably because it is. In this case, it’s the ethanol lobby that is advancing a bill under the guise of “consumer choice,” that, in fact, is merely driving a failed government mandate further. This week, Congress will evaluate the Consumer and Fuel Retailer Choice Act which, along with other policies such as the Renewable Fuel Standard, would force more ethanol into the U.S. fuel supply by granting a vapor pressure waiver for fuel containing 15 percent ethanol (E15).

Trump Is Too Late to Stop the Windmills
Justin Fox, Bloomberg View

There seems to be little doubt that Barack Obama’s energy and environmental policies had a significant impact on how electricity is generated in the U.S. Tougher air-pollution rules, subsidies for wind and solar power, and a commitment to reduce carbon emissions coincided with a fracking-driven boom in natural gas production to shift the fuel mix in a big way.

Research Reports

Household behaviour crowds out support for climate change policy when sufficient progress is perceived
Seth H. Werfel, Nature Climate Change

Household actions and government policies are both necessary to mitigate the effects of climate change. However, household behaviour may crowd out public support for government action by creating the perception of sufficient progress.