The front line in energy politics shifted noticeably this week, closing in on the Republicans as the Democrats solidified their confidence that American voters see the value in the Obama administration’s energy policy. The prevailing theory among Democrats is that Romney was instrumental in helping the Obama campaign when he made a stark shift to the right on climate issues, while Obama has proven his competency in energy and managed to trip his rival and other incumbents, from Ford to Bush. The Obama administration can also benefit from the fact that for 2012 the US has imported less oil than at any time in a decade and a half.
Also in the US, the shortage of pipelines to keep pace with the Bakken boom is resulting in major developments in the railway sector, with a BNSF Railway announcing this week that it would expand its rail network in the Great Plains with $197 million investments which would allow for the transport of 1 million barrels of crude oil per day from the region. As of this year, according to BNSF, the company’s rail delivery in the region has increased to 88 million barrels, up from 1.3 billion in 2008.
Good news for oil delivery capacity, but bad news for ethanol futures, which fell to an eight-week low in Chicago amid indications of sufficient supply and increased imports. Supplies are at around 18.5 million barrels, with imports averaging around 16,000 barrels per day in 2012, according to Bloomberg.
Oilprice.com is always keen to follow the latest technological breakthroughs, and here’s one we found interesting this week. Sumitomo Electric Industries Ltd has announced what it calls a breakthrough that could make it the market leader in wire harnesses for cars. The Japanese auto parts maker has unveiled an aluminum-based harness that it claims is strong enough to be used in the engine area but substantially lighter than the copper wiring traditionally used. The aluminum-based products, which can be used throughout a vehicle, are lighter (by about 20%), and importantly, cheaper. This is also an important development for US carmakers who will have to adhere to the new CAFÉ requirements on fuel efficiency.
The big news this week on the European energy front is the European Union’s probe of Russian gas giant Gazprom, which follows on a raid this time last year of its European offices. The EU accuses Gazprom of unfair competition in the form of throwing up obstacles to European gas diversification and fixing gas prices to oil prices, which essentially means that European customers cannot benefit from the natural gas boom in the US, which has boosted supplies and reduced open-market prices.
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By. Oilprice.com Analysts