Back to the Arctic for oil and gas [Recharge]

Shell gets a green light to return to the Arctic; What TPP means for LNG; The shale boom slows down. Catch up on global energy with the Monitor's Recharge.

Recharge is a weekly e-mail digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.

Arctic: With global oil prices hovering around $65, it’s hard to imagine why anyone would want to drill for oil in the Arctic. But Shell is betting those prices won’t stay low forever, and is already preparing a return to the formidable and ecologically sensitive region. It’s now got approval from the Obama administration to do so, much to the chagrin of environmental groups across the globe. Russia, Norway, and others will be watching closely, too, and plotting their own forays into one the world’s last major reserve of oil and gas.

TPP: Tapping into newfound US gas riches was a big reason post-Fukushima Japan signed up for the Trans-Pacific Partnership trade deal back in 2013. The deal, under debate in Congress this week, would give the world’s largest LNG importer easier access to US liquefied natural gas. But even without TPP, Japan has managed to secure a significant stake in US LNG projects, and depressed Asian gas prices suggest it will look closer to home for new suppliers.

Slowdown: Months of cost-cutting, rig-stacking, and hunkering down have finally taken their toll on US shale oil producers: For the first time in years, US light tight oil output is slowing. That's a success for Saudi Arabia, the OPEC mega-producer that has been stomaching low prices to hold market share and dampen US production. But slowing US output doesn’t mean Saudi Arabia is in the clear – other non-OPEC producers like Russia and Brazil have had surprisingly resilient production, despite low prices.

In the pipeline

• Monday, May 18 to Thursday, May 21: NEW YORK – The UN hosts its second annual Sustainable Energy for All forum with addresses from Ban Ki-moon and Jim Yong Kim.
• Monday, May 18: WASHINGTON – Vitor Gaspar, director of the IMF’s Fiscal Affairs Department, will present key findings of a new IMF study on global energy subsidies at a discussion hosted by the Brookings Institution.

 

Drill deeper

What's behind Saudi Arabia's new muscularity
[The Christian Science Monitor]
“By maintaining production and keeping oil prices low, the Saudis succeed in hurting Iran, which, unlike Riyadh, does not have billions of dollars in currency reserves to soften the blow,” Taylor Luck writes. “The oil-price plunge also harms economically ailing Russia, whose ties with Iran and unflagging support of Assad have heightened tensions between Riyadh and Moscow.”

Welcome to the revolution of low-cost batteries and software [Fortune]
Innovations in lithium-ion batteries and related software could dramatically alter the way we get energy – in our cars, in our homes, and in our businesses. Battery heavy-hitters like Tesla CEO Elon Musk imagine a future in which batteries are as cheap, ubiquitous, and game-changing for energy as low-cost hardware has been for phones, computers, and more over the last few decades.

The Environmental and Climate Stakes in Arctic Oil Drilling
[Council on Foreign Relations]
“Navigating the local economic and environmental tradeoffs involved in Arctic oil development is difficult enough without turning every decision into a climate litmus test,” writes Michael Levi. “And getting serious on climate change is plenty tough without pretending that playing fossil fuel whack-a-mole whenever possible will be effective in reducing emissions.”

Energy sources

• IEA: "It would thus be premature to suggest that OPEC has won the battle for market share. The battle, rather, has just started."
• Institute for Global Environmental Strategies: "…[F]or a 15% nuclear power share [in Japan], a level that can be achieved by operating all restartable reactors and extending the lifetime of some reactors from 40 years to 60 years, a 25% reduction of GHG emissions from 1990 levels can be achieved e.g. with a 30% share of RE/CCS electricity, a 20% reduction of final energy use (TFC) from 2010 level, and a 60% gas-fired power share in total unabated fossil fuel-fired power generation (gas power ratio)."
• AAA: "AAA predicts that automotive travel this Memorial Day holiday will be up 5.3 percent (33 million travelers) compared to last year’s holiday weekend, which would be the highest volume in ten years."

Unplug

– EIA

Recharge is a weekly e-mail digest of energy news and analysis written by Monitor reporters David J. Unger and Jared Gilmour.