Republicans capture Senate; Report warns of climate change; Cheap oil creates price showdown [Recharge]
Republicans won the Senate in last week's midterm elections, setting the stage for pro-oil and gas legislation and a fight over Obama's clean power plan. The International Panel on Climate Change released a report describing "severe, widespread, and irreversible impacts" of climate change. Tumbling oil prices threaten Saudi Arabia's profits and the US's shale boom.
Senate Minority Leader Mitch McConnell of Kentucky greets people at a coal tipple operation in Manchester, Ky. Under Mr. McConnell, Republicans will likely use their Senate Majority to push back on Obama's carbon regulations and bolster America's oil and gas boom.
J. Scott Applewhite/AP
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Wave: The GOP captured the US Senate Tuesday, setting the stage for US energy policies that proactively embrace a North American oil and gas boom. Keystone XL, LNG exports, and other GOP energy priorities already garner support from moderate energy-state Democrats, but efforts to stall pillars of Obama's climate plan would likely invite presidential vetoes (see GOP to-do list at bottom).
'Irreversible': Climate change will cause "severe, widespread, and irreversible impacts" without sharp and quick emissions reductions, according to an International Panel on Climate Change report. Sen. James Inhofe (R) of Oklahoma blasted the report as “extreme,” and said reaching zero emissions would cripple the economy. That GOP opposition may stymie Obama during international climate talks next year.
Showdown: With oil prices tumbling, US shale producers and Saudi Arabia are locked in a game of chicken. Saudi Arabia is letting prices drop to hold market share, hoping low prices will dampen US development. But so far shale producers haven't budged; instead, US drillers are slashing costs and boosting productivity, making tight oil more competitive.
In the pipeline
Monday, Nov. 10 to Wednesday, Nov. 12: BEIJING – President Obama joins Russian President Vladimir Putin and other leaders at the Asia-Pacific Economic Cooperation summit, hosted by China's President Xi Jinping. Secretary of State John Kerry was in China this week trumpeting US-China collaboration on climate change. With the GOP taking the US Senate, Mr. Obama will be under increased pressure both from home and abroad to expand US LNG trade with Asia. Meanwhile, Mr. Putin will also be eager to build upon an already growing gas alliance with Beijing.
Wednesday, Nov. 12: LONDON – The International Energy Agency releases its World Energy Outlook 2014. All eyes will be on what IEA has to say about the future of US shale and OPEC in an era of cheaper oil.
Saturday, Nov. 15 to Sunday, Nov. 16: BRISBANE, AUSTRALIA – Australian Prime Minister Tony Abbott hosts world leaders at the G20 summit. US and EU delegates are pushing to get climate change on the table, but the climate skeptical Abbott government has resisted. If it does end up on the official program it will likely be tucked under the header of "energy efficiency." Either way, President Obama will likely give global warming attention in his summit address.
Drill deeper
Greens spent millions on midterm elections and lost. Or did they? [The Christian Science Monitor]
This year environmentalists made their first real foray into the financial nuclear arms race that American political fundraising has become. Their strategy of super PACs and billionaire donors largely fell flat in this election cycle. But the investment could pay dividends later on: Green groups made inroads with the GOP, and helped make energy and climate a key issue in the midterms.
This is how ISIS smuggles oil [BuzzFeed]
"Before, now, and in the future, ISIS is smuggling oil into Turkey,” an anonymous businessman tells Buzzfeed in this rare on-the-ground report. “And the border guards close their eyes.”
East African oil safe from price drop - policies are the problem [Reuters]
Collapsed oil prices threaten to undermine East Africa's hydrocarbon boom as oil firms retrench amid the bear market. But much of the optimism surrounds offshore gas, which remains an attractive prospect for many investors. Taxes, more so than cheaper oil, are what's got industry concerned about the region's energy future.
Energy sources
Naftogaz CEO Andrei Kobolyev: "Only in case of excess demand will we make use of our right to buy gas from Gazprom. The main suppliers of imported gas to Ukraine this winter are European companies."
Arbeitsgemeinschaft Energiebilanzen via German Energy Blog: "Germany’s primary energy consumption is likely to fall to about 13.100 petajoule (PJ) or 446.5 million tonnes of coal equivalent (TCE) in 2014. This would be a 5% decrease compared with 2013, and the lowest level since reunification ..."
OPEC: "[A] constant nominal price of $110/b [for the OPEC Reference Basket] is assumed for the rest of the decade, corresponding to a small decline in real values. Moving further forward, real values are assumed to approach $100/b in 2013 prices by 2035, with a slight further increase to $102/b by 2040. Nominal prices reach $124/b by 2025 and $177/b by 2040."
From oil prices to the GOP's energy agenda to climate change, Recharge delivers global energy's big ideas to your inbox each Saturday. Subscribe for free.