Norway’s sovereign wealth fund will…
Strong demand for oil products…
In a rare instance of agreement between environmentalists and the oil industry, the American Petroleum Institute last Friday sent a letter to the White House urging the President not to throw a lifeline to struggling FirstEnergy’s nuclear and coal businesses. The two subsidiaries of the utility filed for bankruptcy protection earlier this month.
Prior to that, however, the parent company had called on Energy Secretary Rick Perry to use emergency powers to force regional power grid operator PJM Interconnection to compensate FirstEnergy’s local power plant operating unit for the benefits its business provides the region through the negotiation of a new contract. Among these benefits, FirstEnergy listed reliability of power supply and the employment they provide.
The utility’s nuclear and coal business has been hit hard by the abundance of cheap gas unleashed by fracking, just like pretty much every other coal or nuclear power company in the country. The API, however, sees nothing wrong with that, just like environmentalists, although the reasons differ. For the API, it’s a question of “letting the market work.”
“The natural gas industry and the shale revolution” the letter reads “are poster children for ‘letting the markets work”. The energy abundance wrought by the ‘shale gas revolution’ is a prime example of competition at work. Regulators chose to unfetter the natural gas market and allow a truly competitive model to emerge.”
Secretary Perry last year proposed a subsidy plan for the industry, but regulators rejected it. The proposal suggested that coal and nuclear plant operators should get paid for providing base load electricity—that is, round-the-clock electricity generation.
The regulator said it will study the national grid’s resilience to supply interruptions, but many grid operators said they are already factoring in everything that has to do with their grid’s resilience to disruptions. The API also noted that the U.S. grid is already resilient enough, featuring a mix of primary energy sources—including coal and nuclear—but noted the important place of gas in this mix as a cleaner fossil fuel than coal that contributes to the decline in emissions.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
I see API as all over the map. A couple of months ago it was all in favor of the PES bail-out. But when the shoe is on the other foot, coal or nuclear energy, let'em die!
Now API is hard at work, on another grand plan. Rolling up their sleeves to fight year round sales of E15, any way they can. (You know, the fuel mix that actually Reduces Harmful Vehicle Emissions). Very short sided for the declared spokesman for the oil industry, I would say.
I can't wait until Keystone XL wants to resurrect plans to build their new pipeline through South Dakota and Nebraska. You know, through corn country, the people API is fighting tooth and nail, over a few percents of market share. Such wisdom. If that is API's plan, then I hope the Midwest States, Block Keystone XL ----- Forever!
Perhaps a better path might be corporation. Let both industries prosper. You know, what API said in this article: Letting the markets work? (Or is that just for sometimes, API)? I have an idea, stop fighting E15 and ethanol, and get to build Keystone XL through South Dakota and Nebraska, - with State Corporation. I would think, that much more could be accomplished for both industries, through corporation, rather than through constant confrontation.
How about it API?
Are you ready to look at the Big Picture?
Or is constant fighting, just more fun?
Once upon a time, somebody suggested Win-Win? Maybe nobody was listening.