Exxon, Chevron Focus on Oil Projects in the Americas
The two largest U.S. oil companies are pulling back on big international oil projects and concentrating on a handful of more lucrative assets closer to home.
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This year’s Conference of the Parties (COP-29) broke new ground with the Baku Initiative for Climate Finance, Investment, and Trade (BICFIT)—the first high-profile COP initiative to place trade...
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Can AI Help Reduce Emissions of Greenhouse Gases?
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Could We See Three US LNG Export Projects Approved by 2014?
The window for US exporters to enter the global LNG marketplace will not be open forever, so why is it taking so long to approve these projects? Several high-profile energy experts mulled this and other economic, geopolitical and environmental questions at a recent Columbia University Center on Global Energy Policy gathering. The US Department of Energy – tasked with approving LNG exports to non-free trade agreement countries – must balance the financial motivation to move quickly with the need to be thorough and transparent on the regulatory side, said Christopher Smith, a high-level DOE official. He added that with decisions such as this, the Department is likely to be sued by various interested parties, so the more due diligence done on the front end the better. The US does not have FTAs with some of the world’s largest LNG consumers, like Japan and South Korea, strong US allies that pay some of the highest global LNG prices. Regarding DOE transparency, Smith said the list of pending export projects under review – and in order of review – is displayed on their website, here. Projects are considered on a first-in/first-out basis and approval does not guarantee a project will be built, as there are numerous additional financial and regulatory criteria that must be satisfied for companies to take a final investment decision. Smith also pointed out there is a degree of self-regulation that exists within natural gas markets, meaning the rationale to export US natural gas is killed when prices become too high. David Goldwyn, President and Founder of consultancy Goldwyn Global Strategies, said he expects 3 US LNG export projects to non-FTA countries to be approved by the end of this year, though he did not hazard a guess at which those might be. “Reserves are up, production is up, regulation has improved, the technology is improving pretty dramatically, the only things that are not going well right now are the politics,” said Goldwyn. Goldwyn also discussed what he sees as the greatest potential challenges to continued US oil & gas production growth. These include stricter regulation, the natural gas flaring issue, infrastructure constraints and rising domestic demand. One of the main issues being studied with regard to exporting US natural gas is whether the activity would increase domestic gas prices, thus making US manufacturers less competitive. Some players in the gas-intensive chemical industry – particularly Dow Chemical – have been a vocal opponents of unfettered US LNG exports for this reason. However, a vast majority of US manufacturing is not energy intensive, said Trevor Houser, Partner at economic consultancy Rhodium Group. While fertilizer companies, glass manufacturers and chemical concerns matter in the US economic picture and are very important in certain regions, they are only a small part of the overall US manufacturing base, he said. “For auto manufacturing, energy is 1% of production costs. Even if you give it away for free it’s unlikely that someone’s going to decide where to site an auto plant based on energy cost decisions alone.” “Outside of steel, plate glass, aluminum, chemicals, it’s unlikely that the unconventional oil & gas boom is going to significantly change the competitive position of much of American manufacturing.” – Houser Additionally, as US natural gas production has increased, so has production of natural gas liquids, like ethane, which are increasingly the feedstock of choice for chemical and fertilizer companies, said Houser. Naphtha, a crude oil derivative, is another common feedstock, but ethane prices have decreased in the US as a result of the gas supply glut that’s developed over the past 5 years. As a result, chemical companies appear to face a larger challenge in potentially escalating construction costs caused by competition from LNG export project development than from feedstock cost increases, said Houser. For example, a chemical company building a facility on the US Gulf Coast might have to compete with a proximate LNG liquefaction project for labor, steel, concrete, engineering services, etc. The environmental impacts associated with the growing international gas trade are another major area of enquiry when considering whether to export US gas as LNG. Andrew Revkin, Senior Fellow for Environmental Understanding at Pace University and New York Times Dot Earth Blogger presented some interesting on-the-ground observations. Regarding power generation and air pollution, natural gas wins against coal, said Revkin, but unconventional natural gas drilling and extraction creates a large surface footprint, which is an issue for gas companies operating in areas unaccustomed to such activity. “And this is what upstate New York landowners care about, not greenhouse gas emissions,” he said. Some natural gas developers are doing a better job at addressing the social license to operate issue than others, said Revkin. Some operators are working on waterless fracking techniques to help alleviate water usage concerns, and another company has developed an inert fracking fluid tracer that can help solve the accountability issue facing the industry. If contaminated drinking water were discovered in a potable water well or aquifer it could be analyzed for this tracer, the absence of which could rule out shale gas development as the source.
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• December 25, 2024
New Initiative to Help Unlock $3 Trillion Needed a Year for Climate and Nature
Davos, Switzerland, 17 January 2023 – The World Economic Forum, supported by more than 45 partners today launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.
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• December 23, 2024
Trump’s Tariffs Threaten Trade War with Mexico, but Natural Gas Remains Unaffected for Now
Trump's Tariffs Threaten Trade War with Mexico, but Natural Gas Remains Unaffected for Now By Christopher Lenton U.S. President-elect Trump’s social media announcement that he would impose a 25% tariff on all imports from Mexico set off a series of alarm bells in the energy sector across the integrated North American region. Mexican President Claudia
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Fossil Fuel Provisions of the Energy Permitting Reform Act of 2024 and Their Effects on Climate Goals
A bipartisan permitting-reform proposal in the US Senate includes provisions that reduce barriers to an improved electricity transmission system, which would help fortify the country’s energy system and accelerate the transition away from fossil fuels.
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TRENDS Research & Advisory strives to present an insightful and informed view of global issues and challenges from a strategic perspective. Established in 2014 as an independent research center, TRENDS conducts specialized studies in the fields of international relations and political, economic and social sciences.
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Trade Policy Disputes at COP Are Here to Stay
This year’s Conference of the Parties (COP-29) broke new ground with the Baku Initiative for Climate Finance, Investment, and Trade (BICFIT)—the first high-profile COP initiative to place trade...