Welcome to our first Currents issue of 2022. We have been publishing Currents for the past six years and as such, we felt it was time to reach back out to our readers for their thoughts and suggestions as we kick off the new year. Below, you will find a survey. If you have a moment, please take the time to let us know how we are doing. Do you like the content of Currents? Is the timing of the publication appropriate? What else would you like see from our attorneys? Your input is what makes this publication helpful and insightful.
As always, thank you for reading.
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"About half of the record U.S. LNG volumes shipped last month went to Europe, up from 37% earlier in 2021."
Why this is important: The onset of a challenging winter for energy supplies to Europe is a real opportunity for U.S. shale producers. Establishing a history of reliable deliveries of low-cost LNG from domestic producers to members of the European Union will serve to divert future orders from their international competitors. In addition, the export of domestic LNG from the U.S. to Europe provides a valuable foreign policy tool in ongoing negotiations with Russia over the regulatory approvals necessary to place the Nord Stream 2 pipeline into operation. A competitive supply of LNG from the U.S. helps diversify the sources of natural gas available to the European Union and increases the nation's ability to resist attempts by Russia to use natural gas exports as economic and political leverage. --- William M. Herlihy
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"The suspension, which came after state power utility PLN reported critically low inventory levels of the fuel, sent global coal prices higher last week and prompted calls by Japan, South Korea and the Philippines for it to be eased."
Why this is important: Indonesia is looking to resume exporting coal after a shutdown just before 2022 that caused global steam coal prices to climb. When coal inventories at steam coal-fired electric generation plants in Indonesia dropped to record lows, Indonesia imposed an export ban on all coal leaving the country. Japan, South Korea and the Philippines immediately felt the impact and have called for the ban to cease. The state electric producer reported only 10 days of coal on the ground at its plants and is now working on increasing that to a 20-day supply. Indonesia also is working on a plan to require its domestic coal producers to sell 25 percent of their production to the state utility at a maximum price of $70. --- Mark E. Heath
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"Experts said 23% of global energy is electricity today but this will be 73% in 2050 (electricity plus battery storage)."
Why this is important: Electrification is likely to advance across the world, as more power is delivered through transmission lines, rather than pipelines or coal trains. But that power has to come from somewhere, and it is anyone's guess whether it will be primarily solar and wind, with battery backup, continued burning of fossil fuels, nuclear, or some other source that is not presently a major player. These predictions out to 2050 and beyond are probably as reliable as predictions made in 1990, which would have missed the shale revolution of the 2000 teens, and lower onshore wind costs. --- David L. Yaussy
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"Yet, capital available to the industry is constantly shrinking as banks continue to shun the sector due to ESG pressures and as the Biden Administration, with its green agenda and anti-oil policies, is discouraging many in the shale patch from boosting capital budgets beyond the bare minimum."
Why this is important: The Biden administration is discouraging investment in fossil fuels, banks are reluctant to lend to fossil fuel producers, and some investors are putting pressure on oil and gas companies to disinvest in the industry. But, demand for coal, oil and gas continues to be strong, meaning that prices are up, causing political problems for politicians who are hearing from constituents pinched by higher fuel costs. With limited capital to invest in finding new supplies, and high prices for what they have already found, producers are likely to sit back and take profits, waiting to see whether the political winds shift and the need for lower cost fuel will lead to more investment. --- David L Yaussy
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"2021 also marked the first year since 2014 that coal power increased in the U.S."
Why this is important: The resurgence of coal-fired power generation helped increase U.S. carbon dioxide emissions by 6.2 percent in 2021. The high cost of natural gas led to electric utility generators switching back to coal in 2021 as the U.S. economy surged an estimated 6 percent following the impact of COVID-19 in 2020. Coal’s share of electric generation increased last year for the first time in several years. The 2021 emission numbers though are still 5 percent below U.S. CO2 output in 2019. The future of coal and efforts to reduce U.S. CO2 emissions likely are tied to the price of natural gas in the coming years as despite vast U.S. shale gas reserves, natural gas prices, viewed as a significant bridge fuel to reduce emissions, have risen on world demand. --- Mark E. Heath
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"Currently, nuclear waste is mostly stored in dry casks on the locations of current and former nuclear power plants around the country."
Why this is important: Two reasons often given for opposing nuclear power are possible accidents and lack of long-term disposal of nuclear waste. The risk of deadly accidents is, and has always been, overstated. The lack of long-term storage or disposal, on the other hand, is readily apparent, and is likely to be a continued rallying point for fission opponents. The political will to come up with a disposal solution is needed to advance nuclear generation projects. --- David L. Yaussy
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● Please Fill Out Our Survey!
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This survey will help us improve our efforts to provide you with timely and helpful information. If you have a moment, please provide feedback via our survey.
Click here to take the survey.
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Here is a round-up of the latest statistics concerning the energy industry.
PETROLEUM
NATURAL GAS
COAL
RENEWABLES
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