Volume 14 Issue 1
September 21, 2022 – September 27, 2022
Andrew Ji ‘25 | Wilder Crosier ‘25 | Cameron Farid ‘26 | Hagop Alajajian ‘26 | Neha Ayyalapu ‘26
America has Lost Its Oil Buffer
September 22, 2022 | The Wall Street Journal | Jinjoo Lee
America has been rapidly drawing from its oil reserves, reducing prices but leaving it vulnerable to market disturbances. Enacted in response to the 1973-1974 oil embargo, the Strategic Petroleum Reserve (SPR) consists of multiple underground tanks in Louisiana and Texas with the maximum capacity to store 714 million barrels of crude oil. When Russia invaded Ukraine earlier this year, fears of a supply emergency resulting from a reduction in Russian exports spurred the government to pull from the SPR. Since March 31, 2021, the US has sold 155 million barrels from the stockpile, reducing the reserves to their lowest level since 1983. The government action has helped bring gas prices down from over $5 per gallon in June to near $3.50 today. However, given uncertainty around Russian exports and the potential for additional Covid lockdowns around the world, the lack of cushioning leaves the US at the whim of potentially painful energy shocks in the future. –WC
British Government to Lift 2019 Ban on Fracking Ahead of Growing Energy Concerns
September 22, 2022 | CNBC | Jenni Reid
As energy prices continue to surge across Europe as a result of Russia’s invasion of Ukraine, the British government has lifted a 2019 ban on hydraulic fracturing. Hydraulic fracturing, also known as fracking, is an extraction method in which a pressurized fluid is injected into the ground, creating cracks which free trapped oil and gas. It has drastically reduced energy dependence within the US over the past two decades, but was banned in the UK after an earthquake occurred near the nation’s sole fracking site. Natural gas heats 80% of the UK’s homes and produces nearly 50% of the nation’s electricity, so amping production can help Britain supply its energy demand through the cold winter ahead. That’s not to say this is a perfect solution. Water contamination, for example, can become an issue near fracking sites. Additionally, it is uncertain whether production has the speed or financial feasibility to offset the monetary strain of many British families. - CF
An Israel-Lebanon Border Deal Could Increase Natural Gas Supplied
September 27, 2022 | The New York Times | Clifford Krauss
Since 2018, countries in the eastern Mediterranean have increased their efforts to take advantage of gas buried on the seafloor. The crisis in Ukraine has accelerated this process in an attempt to end their dependence on Russian gas. The agreement is still rather contentious, with Lebanese officials threatening to attack an oil field, and the Israeli government shooting down the unarmed drone. However, if Israel and Lebanon resolve their long-standing maritime border dispute (with the Biden administration acting as an intermediary), the increased energy production would not offset the losses from the cutoff of Russian gas. Regardless, this represents an opportunity for a revival of eastern Mediterranean economies. -NA
September 26, 2022 | CNBC | Hagop Alajajian
The Department of Energy (DOE) is committing another funding package into the fusion energy industry, announcing today that $50 million will finance the private nuclear sector. This is in addition to another $650 million invested into fusion research by the US government annually. This recent contribution was authorized by the Energy Act of 2020, which was signed into law in December 2020 by the Trump administration. This new round of investment can help prove the commercial viability of nuclear fusion. As opposed to nuclear fission, which involves the process of large atoms splitting, nuclear fusion occurs when two heavy atoms bind together to form a new atom. Research on nuclear fusion—known for its ability to produce boundless amounts of energy in a safe and clean manner—today looks to find ways to commercialize and scale, which has faced steep challenges so far. -HA