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  • W&J Energy Review | April 30 2015


Editors: Diana Stares, Jack Myint

Local Affairs

Wolf appoints political insider as energy advisor | StateImpact, April 14 2015

Attorney, lobbyist and political insider David Sweet will be advising Governor Tom Wolf on energy and manufacturing issues starting Monday. Wolf spokesman Jeff Sheridan says Sweet, who currently works for the law firm Buchanan Ingersoll, will serve as a special assistant to the governor. In the position, Sweet will report directly to Governor Wolf and act as a deputy secretary at the Department of Community and Economic Development. The position is a departure in some ways from the Corbett administration’s “energy czar,” or “energy executive”, a cabinet position held by Patrick Henderson, who advised the governor on energy issues. In this new position, David Sweet will work on issues related to both energy and manufacturing.


Solar subsidies debate heats up in Pennsylvania | StateImpact, April 15 2015

According to the Solar Energy Industries Association, Pennsylvania invested $27 million in 2014 on solar installations. Gov. Tom Wolf in 2015-16 wants the state to increase its efforts to use solar and renewable energy. PennFuture, an advocacy organization for “strong environmental and public health policies” created by the Pew Charitable Trusts and the Heinz Endowments in 1998, backs Wolf’s energy policy agenda, which includes taxing the natural gas industry by 5 percent. That money would then be used to subsidize the PA Sunshine Solar Program, spending up to $225 million in a new “comprehensive energy portfolio.” The Pennsylvania Sunshine Solar Program was allocated $100 million in rebates to help fund solar electric (solar photovoltaic), solar hot water (solar thermal) projects, and battery back-up systems for homeowners and small businesses in Pennsylvania, the Pennsylvania Department of Environmental Protection reports. The program was authorized by the Alternative Energy Investment Act in 2008, and it was administered by the Department of Environmental Protection.


Energy showcase to help Pennsylvania businesses cut costs, achieve sustainability | PA Business Central, April 30 2015

Penn­sylvania businesses that are interested in cutting costs and operating in more environ­mentally friendly ways can find the answers they need at a Penn State conference in April. More than 200 people are expected to attend the PA Strategic Energy Manage­ment Showcase from 8 a.m. to 4:30 p.m. on Tuesday, April 7 at the Penn Stater Conference Center Hotel in State College. The U.S. Department of Energy (DOE), the state Department of Environmental Protec­tion (DEP) and manufacturers from across the commonwealth will present information about ISO 50001 and Superior Energy Per­formance (SEP). The conference was organized by the Pennsylvania Technical Assistance Pro­gram (PennTAP) at Penn State. One of the presenters, General Dynam­ics— a defense contractor located in Scran­ton, worked with PennTAP to implement both programs and reported saving nearly $1 million in energy costs annually. The forum is an opportunity for companies to meet with DOE and DEP representatives and talk to colleagues about their experi­ences with each system.


Philadelphia’s mayoral race has candidates talking shale gas | StateImpact, April 17 2015

On Thursday evening business leaders and local politicians gathered at Drexel University in Philadelphia to talk about exporting Pennsylvania’s Marcellus Shale gas from the Port of Philadelphia, and got an earful from activists. But the export terminal is just one idea inside of a larger vision to turn Philadelphia into an “energy hub,” an issue that continues to come up in the city’s Democratic mayoral primary race. The energy hub’s most powerful advocate is Phil Rinaldi. Rinaldi runs Philadelphia Energy Solutions. That’s the company bringing in all that crude oil from the Bakken Shale in North Dakota across the state, inching along the city’s railroad tracks in black tank cars. He also sits on a committee formed by the Philadelphia Chamber of Commerce called the Energy Action Team. Rinaldi and the Chamber have been pushing for an energy hub and held a closed door conference last December, where they worked to recruit new businesses to the city using cheap shale gas as the draw. He’s an advisor to former City Councilman and mayoral hopeful Jim Kenney. Kenney has always been known as the guy pushing for environmental protection on Philadelphia City Council. But he also has union support, and backs the energy hub.


Is Pennsylvania ready for offshore wind? | Fierce Energy, April 27 2015

Erie County, Pennsylvania has decided to invest in offshore wind power, with the decision to join the Lake Erie Energy Development Corporation (LEEDCo). LEEDCo is a nonprofit based in Northeast Ohio who is working to bring offshore wind to Lake Erie. Membership in the organization will give the county a voice in the long-term strategy for developing offshore wind in Lake Erie. Erie County is not the only government entity that has joined LEEDCo as a member -- other members include Ohio counties Ashtabula, Cuyahoga, Lake, and Lorain, as well as the City of Cleveland, NorTech and the Cleveland Foundation. "Offshore wind is our region's most abundant clean energy resource, and developing projects in Lake Erie will create jobs, boost the economy, and clean up the environment," said Erie County Executive Kathy Dahlkemper in a statement. "Joining LEEDCo gives Erie County a seat at the table to ensure that our local environmental and economic benefits are maximized and that the best interests of the public are protected as the offshore wind industry grows."


Pushback expected on Pa. PUC's proposed new net-metering limits |, April 24 2015

The Pennsylvania Public Utility Commission moved forward Thursday to set controversial rules and limits for "net-metering" customers who generate their own power from sources such as solar cells. The commission tentatively adopted regulations that would allow "customer-generators" to produce up to 200 percent of their annual power needs and receive retail electricity prices for any surplus they sell back to the grid. Solar-energy proponents were encouraged that the PUC's rules were more generous than earlier proposals, which would have limited power production to 110 percent of power needs. But they questioned whether the PUC has the authority to set even a 200 percent limit. "There's no legal basis in the statute to add that restriction," said Robert Altenburg, a senior energy analyst with PennFuture, who represented several environmental groups in the rule-making process. The PUC's action will trigger a new round of comments before the commission approves final regulations. And those rules could come under legal challenge. The PUC's authority to regulate net-metering was outlined under the Alternative Energy Portfolio Standards Act of 2004. That law was amended by a 2008 law known as Act 129, which set targets for utilities to reduce energy demand.


National Affairs

With shale boom, U.S. expected to become net energy exporter | StateImpact, April 15 2015

In its Annual Energy Outlook, the U.S. Energy Information Administration (EIA) says advanced technologies are reshaping the nation’s economy. The outlook includes predictions to 2040 and assumes a business-as-usual trend, with current laws and regulations going unchanged. “With continued growth in oil and natural gas production, growth in the use of renewables, and the application of demand-side efficiencies, the projections show the potential to eliminate net U.S. energy imports in the 2020 to 2030 timeframe,” said EIA Administrator Adam Sieminski in a statement. ”The United States has been a net importer of energy since the 1950s.”  The EIA expects the country will also switch from being a modest net importer of natural gas, to a net exporter by 2017. By 2040, the agency expects gas exports to range from 3 to 13 trillion cubic feet, depending on a high or low resource scenario. The agency predicts dry natural gas production to continue to grow, with most of that growth coming from the Marcellus and Utica Shales. This will cause a significant realignment of pipeline infrastructure, which many Pennsylvanians have already started to see.


America's Good News Energy Story | USNews, April 29 2015

The United States is beginning to realize the strategic benefits of the fracking revolution. And they just keep growing. This week at the IHS CERAWeek energy summit in Texas, Secretary of Energy Ernest Moniz said that the United States anticipated "becoming big players" in the global liquefied natural gas market and that “there’s a good chance that we will be LNG exporters on the scale of Qatar,” which he noted was the world’s largest LNG exporter. Technological leaps in fracking and more efficient drills have dramatically altered the energy landscape. Data from the U.S. Energy Information Administration illustrates how swiftly the revolution in LNG has come. In 2005, the U.S. imported a net 4 trillion cubic feet of LNG; by 2025 the U.S. will be a net exporter of that amount. Another report shows current U.S. monthly dry shale gas production at almost 40 billion cubic feet per day, up from about 2.5 billion cubic feet in 2000. One field, the Marcellus basin under West Virginia, Pennsylvania and New York, is responsible for over a third of the increased output. Marcellus was producing only fractional amounts five years ago.


U.S. economy stumbles in first quarter as weather, low energy prices weigh | Reuters, April 29 2015

U.S. economic growth nearly stalled in the first quarter as harsh weather dampened consumer spending and energy companies struggling with low prices slashed spending. Gross domestic productexpanded at an only 0.2 percent annual rate, the Commerce Department said on Wednesday. That was a big step down from the fourth quarter's 2.2 percent pace and marked the weakest reading in a year. A strong dollar and a now-resolved labor dispute at normally busy West Coast ports also slammed growth, the government said. While there are signs the economy is pulling out of the soft patch, the lack of a vigorous growth rebound has convinced investors the U.S. Federal Reserve will wait until late this year to start hiking interest rates. The recovery is the slowest on record and the economy has yet to experience annual growth in excess of 2.5 percent.


U.S. Emissions, Economic Growth Headed Toward Divorce | Climate Central, April 29 2015

Call them a couple: The U.S. economy and energy consumption, along with the greenhouse gas emissions they create, have always grown and plunged together. But as the U.S. embraces energy efficiency and renewables, those things aren’t dancing to quite the same beat anymore. In fact, they’re “decoupling,” and could be heading toward a permanent divorce. New data from the U.S. Department of Energy shows that overall U.S. energy consumption is slowing and is not expected to grow much at all over the next 25 years despite both a growing economy and population. Overall, U.S. energy consumption is expected to grow 0.3 percent annually between now and 2040. That’s half the expected U.S. population growth rate and dramatically less than the projections for U.S. economic growth through 2040 — 2.4 percent. Greenhouse gas emissions from burning energy are expected to grow 0.1 percent in that time.


Could the West's water shortage create power shortage? | BoingBoing, April 29 2015

People in California and other West Coast states where the four-year-drought continues to worsen may have more to worry about than water, says the U.S. energy secretary. Our access to electricity is threatened, too.    Power brownouts are coming as hydroelectric power stations struggle, the U.S. energy secretary said Monday. The outlook for climate change could mean additional problems for power plants, he added. "That is certainly a risk," Energy Secretary Ernest Moniz told reporters at a Christian Science Monitor breakfast on Monday, when asked whether the region could see a summer of power brownouts, or reductions in availability of electricity supply. "Hydro power is a renewable (form of energy) but if you look historically there is actually quite a bit of fluctuation from year to year, depending upon what happens over the winter," he said.


The Big Opportunity in US Energy Right Now--and Why | ProactivInvestors, April 28 2015

Logistics are a bigger piece of the energy pie than ever before—especially rail.  Most energy investors are familiar now with the huge rise in crude-by-rail; getting Canadian and Bakken crude to the east and west coast refineries in the United States. It saved the profit margins for many oil producers, and allowed them to choose from more customers (refineries)  that many chose to continue railing crude even when pipelines became available. Logistics made me and my subscribers huge money in 2014 as there wasn’t enough rail capacity to get ethanol to markets during the Polar Vortex that year—especially along the west coast.  Profit margins for ethanol producers soared from 20 cents a gallon to over $2 a gallon in four months, causing ethanol stocks to go up 200-800%.


U.S. could be energy independent within four years | CNN, April 26 2015

The United States could be energy independent in as little as four years, according to a new forecast from the U.S. Energy Department. The price of oil is fairly low -- about $55 a barrel. But if it spikes above $100 that could spur more U.S. oil production and cut demand for imported oil, according to the Energy Information Administration. In that case, "the United States becomes a net exporter of energy in 2019," the EIA said Tuesday. But oil prices are more likely to post a slow and modest rise, said the EIA. That would mean the U.S. won't hit energy independence until 2028. But even that would be notable. A year ago the agency projected that the U.S. could only achieve energy independence with a steep price spike. U.S. oil production has soared in recent years, to the point where the U.S. has already passed Saudi Arabia as the world's largest oil producer by some measures. New technology known as fracking provides access to new supplies of oil and natural gas. The jump in oil production helped bring down the price of both oil and natural gas, as it flooded the market with supply. As a result, some oil companies have cut back on their drilling plans.


International Affairs

World's energy markets stuck as China 'rebalances' its economy | EnergyWire, April 28 2015

U.S. coal and oil companies have enough on their minds trying to cut costs, protect cash flows and placate investors who keep glancing at the exits. That leaves very little time to contemplate the giant in the east: China, whose energy demand is shifting and setting it up as a wild card in world energy markets. Coal and oil prices are stuck in deep troughs, and analysts believe that won't change until their global oversupplies are corrected. But a growing body of analysis indicates that China's future demand for these fuels -- long taken for granted -- won't grow as quickly as it has in the past. This weaker growth could hit U.S. producers where it hurts: lower prices. "China's impact on global energy markets will be transformed as its oil and coal consumption growth slows fast," analysts with Barclays wrote last month. "Investment in renewables is likely to surge and China is likely to become much more important in global gas markets."


Tesla Could Be Changing The Dynamics Of Global Energy | The Market Oracle, April 30 2015\

Tesla's announcement last week about creating a new line of batteries for use by businesses, consumers, and the electrical grid at large is a game-changer for the industry. Currently, when individuals or companies need back-up power, they usually rely on generators. Effective battery storage for large amounts of energy would be a game changer in that it would enable a separation of generation and use of energy produced through clean fuels like solar and wind power. The big problem with solar and wind right now is that the energy is only useful when it is actually produced and, because a company cannot modify generation to correspond with demand needs, any excess power has to be sold back to the market for immediate use. Tesla's new batteries could go a long way towards solving this problem. It is likely that Solar City, for example, would be very interested in any home application for large scale battery technology.


Like shale oil, solar power is shaking up global energy | Reuters, April 26 2015

By starting mass-production of solar panels, China is the driving force in bringing down solar manufacturing costs by 80 percent in the last decade, according to Germany's Fraunhofer Institute. In Japan, residential solar power production costs have more than halved since 2010 to under 30 yen ($0.25) per kilowatt-hour (kWh), making it comparable to average household electricity prices. Wood Mackenzie expects solar costs to fall more as "efficiencies are nowhere near their theoretical maximums." Solar is already well-entrenched in Europe and North America, but it is the expected boom in Asia that is lifting it out from its niche. China's new anti-pollution policies are making the big difference. Because of these policies, Beijing is seeking alternatives for coal, which makes up almost two-thirds of its energy consumption.


Can the World Run on Renewable Energy? | Social Impact, April 23 2015

Without doubt, renewable energy is on a roll. Denmark is producing 43% of its energy from renewables, and it aims for 70% by 2020. Germany, at more than 25% now and 30% soon, is going for 40% to 45% clean power by 2025, 55% to 60% by 2035, and an incredible 80% by 2050. China, despite many challenges, is the world’s leading source of renewable investment, as well as the largest solar manufacturer. The United States, with about 13% renewable energy generation, has some catching up to do, though California (where some developers are incorporating solar into every house they build) points the way forward. The Solar Energy Industries Association reports that the solar market in the U.S. grew by 41% in 2013, and that it made up 20% of all new generating capacity in that year.


Clean energy is growing fast — but it's not yet winning the race against fossil fuels | Vox, April 30 2015

For decades, fossil fuels have provided the vast, vast majority of the world's energy. But in recent years, cleaner sources like wind and solar have been growing at an astonishingly rapid clip. So a lot of people are keenly interested in when we might hit a tipping point. When will clean energy start growing faster than fossil fuels? This week, Bloomberg declared we've already hit that point: "Fossil Fuels Just Lost the Race Against Renewables." That's stirred a lot of excitement. Unfortunately, that headline isn't quite right. Clean energy isn't winning the race against fossil fuels. Not yet. And it's worth exploring in more detail why this is wrong — to better understand just how massive a task it will be to clean up the world's energy supply and avoid significant global warming.


Five-nation energy conference kicks off today in Missoula | Missoulian, April 29 2015

Energy experts from five nations will converge Wednesday in Missoula for a two-day conference on the extraction, politics and business of energy. Hosted by the Mansfield Center at the University of Montana, the Asia-Montana Energy Summit represents the largest energy-focused conference held to date in Missoula. “By 2025, the U.S. is expected to transition from a net energy importer to a net exporter,” said Abraham Kim, director of the Mansfield Center at the University of Montana. “That will have broad implications, not only in the global economy, but in geopolitics and our relationship with countries abroad.” Speakers from South Korea, Japan, China, Canada and the U.S. will explore future scenarios in the world energy market, along with resource extraction, local economic development and trends in the Asian market. Climate change, national security and global trade will all have a seat at the table.


Exxon CEO talks Arctic oil drilling, risks, lessons | Tulsa World, April 5 2015

The Arctic is the next great frontier for oil and gas — and one of the most environmentally fragile places on earth. An Energy Department advisory council study adopted last week said the U.S. should start exploring for oil and gas in the Arctic soon in order to feed future demand, and that the industry is ready to safely exploit the Arctic’s huge reserves, despite recent mishaps.

In an exclusive interview with the Associated Press, ExxonMobil CEO Rex Tillerson, who led the committee that produced the report, talked about why he thinks Arctic exploration is worth the risk. Exxon has decades of experience working in that part of the world, including successful projects in Russia — but also a catastrophic oil spill in Alaska’s Prince William Sound when the Exxon Valdez oil tanker ran aground in 1989.


The Top 9 Stories You Need To Know About Oil & Gas Today, OilPro

  • Al-Falih In, Ali Naimi Out, As Saudi Aramco Chairman.
    In a surprise move on Wednesday, Saudi Arabia's King Salman issued a series of royal decrees, changing the Royal Kingdom's succession plan, replacing a number of government ministers and further shifting away from the legacy of his predecessor King Abdullah. Among the moves was the king's appointment of Khalid al-Falih as chairman of Saudi Aramco, replacing Oil Minister Ali Naimi. King Salman did not appoint a successor for Al-Falih as Aramco CEO, thus leaving open for now the number one position at the largest oil company in the world in terms of production. [Oilpro]

  • Hess Pursuing Additional Reductions Amid Low Oil Prices. Hess Corp said in its 1Q15 earnings release that it will cut 2015 capital spending 6.4% to $4.4 billion. Exploration and Production losses were $286 million in the first quarter of 2015, compared with net income of $508 million in the first quarter of 2014. "We delivered strong operating results for the quarter and captured significant cost savings for the year, with additional reductions being pursued," CEO John Hess said. [Hess Corp]

  • US-Flagged Vessel Intercepted By Iran In Strait Of Hormuz Last Friday.
    The US Navy told CNN on Tuesday afternoon that a US-flagged ship was intercepted by an Iran Revolutionary Guard naval patrol last Friday. Four Iranian naval vessels surrounded the Maersk Kensington in the Strait of Hormuz, a major global oil chokepoint. [Oilpro]

  • Subsea 7 Bucks Against Oil Sector Gloom Posting Strong 1Q Results.
    The oil services firm reported surprisingly strong earnings and orders on Wednesday. Subsea 7 increased earnings and margins, and secured more new orders than the market had forecast, even though energy firms are continuing to delay projects following the slide in crude oil prices. [Subsea 7]

  • US Will Be A Net Natural Gas Exporter AT LEAST By 2040, EIA Says.
    The EIA's most conservative estimate sees the US as a net natural gas exporter by 2040. In the agency's recently released Annual Energy Outlook 2015 (AEO2015), it said (in its most probable estimate) it expects the US to be a net natural gas exporter by 2017. Following 2017, the EIA says the natural gas trade will driven largely by the availability of natural gas resources and by global energy prices. [Oilpro]

  • Petrofac, Amec Foster Wheeler Plan Job Cuts.
    BBC reports that Petrofac is in consultations with workers both onshore and offshore. According to Reuters, Amec said it was in consultation with 149 employees based in Aberdeen and that 64 positions might be affected. The company employs 40,000 people.A Petrofac spokesperson said, "Consultations are ongoing both on and offshore. In each case we will make every effort to manage the impact on our staff, including looking to deploy personnel elsewhere where possible." [Oilpro, offshoreenergytoday]

  • Marathon Petroleum Announces Plan To Split Stock Two-for-One.
    Marathon Petroleum Corporation (MPC) announced Wednesday that its board of directors declared a dividend of $0.50 per share on common stock on a pre-split basis. The dividend is payable on June 10, 2015, to shareholders of record as of the close of business May 20, 2015. The company also declared a two-for-one stock split in the form of a stock dividend to be distributed on June 10, 2015. [Oilpro]

  • Vietnam: Nobody Can Prevent Oil Exploration In Our Waters.
    China has cautioned that it would firmly oppose any exploration activity in South China Sea if it undermines its sovereignty and interests. In an apparent reference to China, Vietnam asserted that "nobody" could prevent India's oil exploration efforts in its country, stating it was being undertaken in Hanoi's exclusive territorial waters. [Oilpro]

  • Gazprom Profits Hit By Weak Rouble.
    The company reported a net profit of 159bn roubles ($3.1bn: £2bn) for 2014, down 86% from a 1.14-trillion-rouble profit the year before. Last year's fall in oil prices also contributed to the plunge in profits. At the same time, a debt and pricing dispute meant Gazprom cut gas supplies to Ukraine, one of its key markets. Gas sales to Europe and other countries declined by 8.5%. [BBC]