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  • Ethanol Producers Poised To Gain From Oil Price Drop

    Energy stockholders have been watching in horror as their investments tank and those with a short time frame are considering cutting their losses, as the oil price rout looks certain to continue into 2015 and possibly beyond. But one area that could be poised to withstand the oil price carnage and might even toss out some gains for investors is the sector that produces an important, yet controversial element of gasoline: ethanol. As the prices of oil and gasoline have plummeted, so has ethanol, taking ethanol equities down with it. While that may seem like a good time to hit…

  • Low Oil Prices Killing Off Fuel Subsidies

    Instead of letting fuel prices fall, several countries are taking advantage of lower oil prices by scrapping fuel subsidies. Oil prices are at a five-year low, dropping by half in about six months. In much of the world, this has been an enormous boon to the economy. In the U.S., average gasoline prices have fallen to $2.47 per gallon as of December 18 according to AAA, down more than $1 per gallon since June. The average American will see a 3.5 percent boost in disposable income this holiday season compared to a year ago. People with lower incomes feel the…

  • NY Governor Bans Fracking In His State

    The state of New York will ban hydraulic fracturing, or fracking, because of the potential it holds for creating a public health risk and its questionable economic benefits. Gov. Andrew Cuomo essentially had removed himself from the decision-making process, saying he would rely solely on aides with expertise on the issue, including Environmental Commissioner Joe Martens and Acting Health Commissioner Howard Zucker. “I don’t think I even have a role here,” Cuomo said at a news conference. At an open cabinet meeting in Albany, the state’s capital, Zucker said he based his decision to ban frackin on a single question:…

  • Violence In South Sudan Threatens Chinese Oil Investment

    On December 15, 2013, fierce fighting broke out in South Sudan’s capital, Juba. Rebel forces loyal to Machar targeted South Sudan’s oil fields, and what started as a clash, quickly escalated to a civil war. Violence swept the country, killing tens of thousands people and displacing over one million. The UN estimates that almost a third of the population, 4 million people, is now in dire need of humanitarian assistance. The promise of nation-building seems to be a distant memory as South Sudanese leaders viciously struggle to claim power. Months of ongoing political tensions between President Kiir and Machar has…

  • Natural Gas Overwhelmingly Replaces Coal

    A new Breakthrough analysis looks at regional power generation data and finds that cheap natural gas has overwhelmingly displaced coal generation, not other sources of low-carbon energy, such as renewables, nuclear, or hydro. In fact, in regions where gas generation has grown, nuclear and hydro generation has either remained stable or risen. Growth of non-hydro renewables, by contrast, can account for little of the decline in coal generation, the analysis finds. Ultimately, the growth of natural gas generation, along with reduced electricity demand, is responsible for the vast majority of reduced emissions in the US power sector since 2007. The…

  • Kenya Exploration Strong Despite Oil Price Slump

    Despite falling oil prices, investors betting on the longer-term—and a price rebound—should be eyeing exploration and development in Kenya’s massive eastern Lokichar and Anza basins, where the big winners will be those who dig in for the long-term game.While the recent slump in oil prices could hamper exploration on a global level, Kenya and its recent finds may be more immune than other areas. In fact, exploration and production companies are cutting costs in other areas in order to shift focus to Kenya, which is poised to become the key East African oil and gas hub.Kenya appears resilient to faltering…

  • Oil Price Scenarios For 2015 And 2016

    A couple of weeks ago I had a post titled The 2014 Oil Price Crash Explained. In this post I use the empirical supply and demand dynamic described in that earlier post (Figure 1) to try and constrain the oil price a year from now and in 2016. The outcome is heavily dependent upon assumptions made about supply and demand and the behavior of OPEC and the banking sector. Three different scenarios are presented with December 2015 prices ranging from $45 to $100 / bbl. Those hoping for a silver bullet forecast will be disappointed. Individuals must judge the scenarios…

  • More To Ruble’s Collapse Than Meets The Eye

    The ruble is dying, and fast. In what is now being dubbed ‘Black Monday’ the ruble’s value to the dollar dropped nearly 15 percent. Tuesday brought no respite and the ruble fell another 10 percent. The ruble’s collapse follows a similar – though by no means as extreme – slump in oil prices. Still, the Russian economy’s troubles are deeper than that and President Vladimir Putin will be hard-pressed to find an easy out. With a recession looming, state energy companies are struggling to stay afloat, if not directly contributing to the country’s woes. On the year, the ruble has…

  • Kenya to Develop Africa’s Largest Wind Project

    Kenya may soon be home to the largest wind project on the continent of Africa. Danish wind company Vestas won a contract to provide 365 turbines for a 310 megawatt wind power project in Kenya. The Lake Turkana Wind Power project will be the largest of its kind in Africa, and is expected to generate 15-20 percent of Kenya’s electricity needs when completed. According to project developers, the site is a unique location that is favorable for wind. It is situated at high altitude (2,300 meters), and has consistent and predictable wind patterns. If the project sticks to its schedule,…

  • By Buying Canada’s Talisman, Spain’s Repsol Nearly Doubles In Size

    The Spanish energy company Repsol will buy Canada’s Talisman Energy Inc. for $8.3 billion in cash in a deal that would immediately double Repsol’s oil production and staff. Repsol and Talisman said Dec. 16 that the sale had been unanimously approved and recommended by the boards of both companies. The transaction is expected to be completed in mid-2015. If so, Repsol would pay $8 for each share in Talisman, 60 percent more than the stock’s average price over the past month, Talisman said, and the Spanish company would assume $4.7 billion in Talisman’s debt. Repsol said this transaction is the…