Volume 1, Issue 4
February 22, 2016 – February 28, 2016
Jason Mulderrig | Anushka Dasgupta
Oil and Gas:
Once a Coup, Energy Transfer Deal Becomes a Nightmare http://www.cnbc.com/2016/02/25/once-a-coup-energy-transfer-deal-becomes-a-nightmare.html
February 25, 2016 | Leslie Picker and Julie Creswell A past issue of Power Surge touched upon Chesapeake Energy’s current financial woes. The consequences of record-low oil and gas prices continue to grow, now affecting one of Chesapeake’s primary clients, the Williams Companies. Williams was recently acquired by Energy Transfer Equity, a pipeline company whose CEO, Kelcy Warren, has a history of closing bold and successful deals. As stocks in both companies plummet, however, their financial situation looks dire. Thanks to strict agreements, Energy Transfer cannot back out of the deal and must handle the fallout carefully. Despite this news, some investors feel that the merger will ultimately be worthwhile. -AD
With U.S. Gas, Europe Seeks Escape From Russia’s Energy Grip http://www.wsj.com/articles/europes-escape-from-russian-energy-grip-u-s-gas-1456456892 https://global.factiva.com/redir/default.aspx?P=sa&an=WSJO000020160226ec2q002gx&cat=a&ep=ASE
February 25, 2016 | Georgi Kantchev Note: The first link provided above leads to the article on the Wall Street Journal website, which requires a subscription to access. Alternatively, you can log in to the Factiva database using your Princeton netid and password and find the article at the second link. The U.S. is the world’s largest natural gas producer, benefiting from the shale boom and an explosion of fracking. Increasingly, U.S. natural producers will be targeting international markets, and competing with Russia, Norway, and the U.K., to name a few. Russia, in particular, holds a powerful position in Europe’s energy industry, and has been known to wield this power as a political tool. Many European countries, especially Russia’s satellite nations, are looking to the U.S. for natural gas sans negotiation and propaganda. The recent signing of several new twenty-year contracts between U.S. and European companies could mean the first U.S. gas shipment to Europe is just a few months away. -AD.
Plan to Prop Up Oil Prices Won’t Have Support From Saudis http://www.nytimes.com/2016/02/24/business/energy-environment/saudi-oil-minister-rules-out-possibility-of-production-cuts.html?ref=energy-environment&_r=0
February 23, 2016 | Clifford Krauss The petroleum minister of Saudi Arabia, Ali bin Ibrahim al-Naimi, announced at the IHS CERAweek Conference that Saudi Arabia will not seek oil production cuts. This announcement puts further strain on the recent announcement made by Russia, Saudi Arabia, Venezuela, and Qatar to cap oil production at January 2016 levels for the foreseeable future. al-Naimi expressed hope that the oil producers themselves, rather than countries, will put an effective freeze on oil production. -JPM
Is Saudi Arabia Shooting Itself in the Foot?http://www.forbes.com/sites/kennethkim/2016/02/25/is-saudi-arabia-shooting-itself-in-the-foot/?ss=energy#7ad9f8e71114
February 25, 2016 | Kenneth Kim Given Saudi Arabia’s announcement that it will not cut oil production, analysts around the world are wondering if Saudi Arabia is shooting itself in the foot economically. However, Kenneth Kim explains how Saudi Arabia is actually engaging in a strategy the maximize its future profits. By orchestrating OPEC to not engage in oil production cuts, Saudi Arabia is purposely driving down oil prices to drive out producers from the US, Russia, and Africa. Then, when those producers are evaporated, Saudi Arabia will begin to cut oil production to drive up prices again. In effect, Saudi Arabia is sacrificing profit in the short term to reap profit in the future. -JPM
Solar:
Remember When Everyone Was Using Solar Energy? http://news.nationalgeographic.com/energy/2016/02/160225-solar-calculator-history-energy-objects/
February 16, 2016 | Gabe Bullard Read this article for a fun but sweeping take on how the public was first introduced to the idea of solar energy for the average consumer – with the tiny panel on a pocket-size calculator. The first pocket calculators, which hit the market in the 1970s, were the result of exciting developments in transistors, LCD screens, and, of course, inexpensive solar cells. It was common at the time to show off such developments with what National Geographic calls a “blockbuster application.” The article concludes on a more serious note: how do we make new energy technology, which powers homes and larger applications, as accessible and appealing as Texas Instruments once made the solar-powered calculator? -AD
Power Distribution/The Grid:
China Rolls Out Proposal for Worldwide Grid http://www.powermag.com/china-rolls-out-proposal-for-worldwide-grid/?pagenum=1
February 25, 2016 | Sonal Patel and Gail Reitenbach Saudi Arabia’s announcement at the IHS CERAweek Conference was not the only big headliner made at the conference. China’s State Grid Corp. Chainman Zhenya Liu detailed a plan for a global smart ultra-high-voltage grid that would transmit clean energy called the Global Energy Interconnection (GEI). The GEI would be composed of three components: an international network of transmission and distribution grids; large energy bases in the North Pole, the equator, and on each continent, and a platform that enables energy allocation and market activity. The GEI is set to be completed by 2050. Lui stated that this ambitious plan is needed in order to help meet targets set at the COP21 conference. -JPM
Energy Policy:
Top lobbying group in historic green energy U-turn http://www.theguardian.com/business/2016/feb/28/top-lobbying-group-green-energy-u-turn
February 28, 2016 | Terry Macalister This past week, the largest energy lobbying group in the UK, Energy UK, announced that it will start campaigning for low carbon energy alternatives for the first time in its history. This is a major change for Energy UK, which has long been seen as a protector of gas and coal interests, particularly of British Gas and SSE. The chief executive of Energy UK, Lawrence Slade, announced that the change of position was motivated by an urgency to not be left behind and “become the next Nokia.” -JPM