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Blog, Podcast

Columbia Energy Exchange: Jay Faison

With the devastation from hurricanes Harvey and Irma, the repercussions of climate change are getting more attention, especially the extent to which global warming may intensify the impact of storms. From a policy standpoint, the question is whether climate change will receive broader consideration in Washington as hurricanes, wild fires and other natural calamities wreak havoc in the U.S. and neighboring nations. In the latest Columbia Energy Exchange podcast, I talk with Jay Faison, the founder and CEO of the ClearPath Foundation, an organization dedicated to promoting conservative support for clean energy. Granted, our conversation took place before Harvey and Irma. But even then, Jay claimed growing interest among Republicans in weighing the implications of climate change and eyeing solutions. “We’ve got 20, 30 Republicans out on different caucuses stating the problem,” he told me. “I can tell you behind…

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Blog, Climate, Sustainable Energy

On climate, candy maker Mars not so quiet

For a company famously tight-lipped when it comes to most of its business operations, Mars is incredibly outspoken regarding matters like climate change. That’s become even more evident as the company launches a $1 billion plan called “Sustainable in a Generation” which expands on goals set previously by the maker of M&M’s, Snickers and other popular food brands. “Mars has been in business for four generations and intends to be for the next four generations,” Grant Reid, the CEO of the family-owned business with $33 billion in annual net sales and operations in more than 80 countries, said Sept. 5 in announcing the new initiative. But he added, “The only way that will happen is if we do things differently to ensure that the planet is healthy and all people in our extended supply chains have the opportunity to thrive.”…

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Blog, Oil, Prices

Stable outlook for U.S. oil producers at $45 a barrel

Most U.S. oil companies will be able to produce more oil while reducing operating costs at prices of $45 a barrel or so, Fitch Ratings said July 19. While the price for West Texas Intermediate, the U.S. benchmark for crude oil, has fallen from a 2017 high of $54.45 on February 23, producers with solid credit ratings can compensate for the lower price now through further gains in efficiency and lower costs per barrel, Fitch said. WTI closed at $46.02 on July 18. “Most U.S. (exploration and production) companies will continue to see production profile gains and lower costs per barrel of oil equivalent through a combination of reduced drilling days, improved well bore placement, expanded multi-well pad drilling, longer laterals and higher intensity completions, which should help offset market price pressures,” Dino Kritikos, senior director for U.S. Corporates at…

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Blog, Climate, Sustainable Energy

With void in Washington, energy policy shifts to states

As the late U.S. House Speaker Tip O’Neill said, “All politics is local,” and that pertains to energy as much as any issue. Take the Metro section in the May 17 Washington Post where three stories remind us that battles over climate change are increasingly shifting from Washington to the states and local communities, as the Trump administration puts the kibosh on Obama-era environmental policies. The lead story reports that Virginia Gov. Terry McAuliffe (D) has ordered state officials to develop regulations to reduce carbon emissions from power plants and encourage solar and other clean energy sources. McAuliffe wants the plan, which is consistent with the Obama strategy for climate change and energy, implemented by the time he leaves office in January, a tall order given the resistance he will face from the Republican-controlled legislature in Virginia. Nonetheless, his bid…

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Blog, Electricity, Natural Gas, Oil

Oil and gas M&A off to strong start in 2017

Investor interest in U.S. oil and natural gas soared in the first quarter of 2017, as measured in mergers and acquisitions. The professional services firm PricewaterhouseCoopers reports $73 billion in announced deals for the quarter, representing a striking 160% increase in deal value compared to results in the first quarter of 2016. That’s a record high for oil and gas deals in the first quarter of any year since PwC began tracking such activity in 2002. “Pleased by a pro-energy policy agenda taking shape, reassured by the relative steadiness of the price of oil, and encouraged by advances in shale technology, investors entered 2017 with renewed optimism,” PwC says in a report released April 20. The surge was driven by the upstream segment, with the Permian Basin in Texas and New Mexico continuing to stand out. In all, PwC cites…

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Blog, Oil, Shale

Amid shale revival, don’t forget oil bounty offshore

Given their extensive oil and natural gas capacity and their accessibility, U.S. shale reserves are increasingly the investment of choice for producers. Integrated oil companies like Chevron are making that clear as they plan to spend more on areas like the Permian Basin in Texas and New Mexico. But don’t rule out a comeback for oil buried deep beneath offshore waters. A new report by the consulting firm Wood Mackenzie says the deepwater industry is emerging leaner and more cost-competitive from the slump in oil prices that began in 2014, especially in the U.S. Gulf of Mexico. On average, the costs of deepwater projects have fallen by just over 20% since 2014, the Scotland-based consultancy says. Assuming a 15% rate of return for producers, 5 billion barrels of deepwater reserves now break even at $50 per barrel or less. By…

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