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DOE — 2013 Distributed Wind Market Report (August 2014)

August 21, 2014 Comments off

2013 Distributed Wind Market Report
Source: U.S. Department of Energy

In 2013, 30.4 megawatts (MW) of new distributed wind capacity was added, representing nearly 2,700 units across 36 states, Puerto Rico, and the U.S. Virgin Islands (USVI). Since 2003, nearly 72,000 wind turbines have been deployed in distributed applications across all 50 states, Puerto Rico, and the USVI, totaling 842 MW in cumulative capacity. The 83% decline from 2012 to 2013 of distributed wind capacity additions is in line with the 92% decline from 2012 to 2013 in overall U.S. wind capacity deployed.

To compensate for weaker domestic sales, U.S. small wind turbine manufacturers shifted their focus to growing international markets. Exports from U.S.-based small wind turbine manufacturers increased 70% from 8 MW in 2012 to 13.6 MW in 2013. U.S. small wind turbines were exported to more than 50 countries in 2013, with top export markets identified as Italy, UK, Germany, Greece, China, Japan, Korea, Mexico, and Nigeria. In 2013, 76% of U.S. manufacturers’ new small wind sales capacity went to non-U.S. markets, a substantial increase from 57% in 2012.

The purpose of this report is to quantify and summarize the 2013 U.S. distributed wind market to help plan and guide future investments and decisions by industry, utilities, state and federal agencies, and other interested parties. Distributed wind is defined in terms of technology application based on a wind project’s location relative to end-use and power-distribution infrastructure, rather than on turbine or project size. While the distributed wind market includes wind turbines and projects of many sizes, this report breaks the market into two segments when appropriate: wind turbines up through 100 kW (in nominal capacity) referred to in this report as “small wind,” and wind turbines greater than 100 kW used in distributed applications.

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The Role of Oil Price Shocks in Causing U.S. Recessions

August 20, 2014 Comments off

The Role of Oil Price Shocks in Causing U.S. Recessions
Source: Federal Reserve Board

Although oil price shocks have long been viewed as one of the leading candidates for explaining U.S. recessions, surprisingly little is known about the extent to which oil price shocks explain recessions. We provide a formal analysis of this question with special attention to the possible role of net oil price increases in amplifying the transmission of oil price shocks. We quantify the conditional recessionary effect of oil price shocks in the net oil price increase model for all episodes of net oil price increases since the mid-1970s. Compared to the linear model, the cumulative effect of oil price shocks over the course of the next two years is much larger in the net oil price increase model. For example, oil price shocks explain a 3 percent cumulative reduction in U.S. real GDP in the late 1970s and early 1980s and a 5 percent cumulative reduction during the financial crisis. An obvious concern is that some of these estimates are an artifact of net oil price increases being correlated with other variables that explain recessions. We show that the explanatory power of oil price shocks largely persists even after augmenting the nonlinear model with a measure of credit supply conditions, of the monetary policy stance and of consumer confidence. There is evidence, however, that the conditional fit of the net oil price increase model is worse on average than the fit of the corresponding linear model, suggesting much smaller cumulative effects of oil price shocks for these episodes of at most 1 percent.

EPA’s Proposed CO2 Rule for Existing Power Plants: How Would It Affect Nuclear Energy? — CRS Insights (August 4, 2014)

August 15, 2014 Comments off

EPA’s Proposed CO2 Rule for Existing Power Plants: How Would It Affect Nuclear Energy? — CRS Insights (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The Environmental Protection Agency (EPA) published a proposed rule on June 18, 2014, to address CO2 emissions from existing power plants. Because nuclear power plants directly emit little or no CO2, a significant policy question is whether EPA’s proposed regulations would encourage the growth of nuclear energy or at least the continued operation of existing reactors. The formula in the proposed rule for setting CO2 goals explicitly accounts for some existing nuclear capacity and reactors under construction, providing a potential incentive for states to try to keep those plants operating. However, EPA’s proposed rule allows states to develop their own plans for meeting the CO2 emission rate goals, making it difficult to predict how nuclear energy might ultimately fare.

The proposed EPA standards would set state-specific goals for the amount of CO2 that could be emitted in 2030 for each megawatt-hour (MWh) of electricity generated. EPA projects that, under those proposed emissions rates, U.S. power plants would produce 30% less CO2 by 2030 than they did in 2005 (the base year in President Obama’s Climate Action Plan).

McKinsey on Sustainability & Resource Productivity — Issue 2, Summer 2014

August 14, 2014 Comments off

McKinsey on Sustainability & Resource Productivity — Issue 2, Summer 2014
Source: McKinsey & Company

Articles in this issue

McKinsey on Sustainability & Resource Productivity—Introduction
In this second issue of McKinsey on Sustainability & Resource Productivity, we seek to establish the value of sustainability and to demonstrate how these opportunities can (and are) being captured in a range of industries.

Profits with purpose: How organizing for sustainability can benefit the bottom line
Becoming a sustainability leader requires big changes, but the effort is worth it—in both environmental and economic terms.

The human factor: Amassing troops for the ’resource revolution‘
Companies on the front lines of the resource revolution need to implement creative talent-management strategies.

Riding the resource wave: How extractive companies can succeed in the new resource era
With economic and social expectations rising in resource-rich countries, extractive companies must rethink how they do business.

Brave new world: Myths and realities of clean technologies
Don’t be fooled by high-profile setbacks. The cleantech sector is gaining steam—with less and less regulatory assistance.

Unconventional wisdom: Fracturing enters a new era
Faced with change on a scale not seen in decades, companies must alter their business plans to accommodate unconventionals or else risk irrelevance.

The disruptive potential of solar power
As costs fall, the importance of solar power to senior executives is rising.

Bioenergy in Europe: A new beginning—or the end of the road?
Bioenergy faces challenges in Europe, but there is reason to believe it can make a comeback.

CRS — Shale Energy Technology Assessment: Current and Emerging Water Practices (July 14, 2014)

August 14, 2014 Comments off

Shale Energy Technology Assessment: Current and Emerging Water Practices (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Shale oil and gas (collectively referred to as shale energy), long considered “unconventional” hydrocarbon resources, are now being developed rapidly. Economic extraction of shale energy resources typically relies on the use of hydraulic fracturing. This technique often requires significant amounts of freshwater, and fracturing flowback and related wastewaters must be recycled or disposed of after a well is completed. While shale energy presents a significant energy resource, its development has the potential to pose risks to water availability and water quality.

CRS Insights — Shale Gas Gathering Pipelines: Safety Issues (August 1, 2014)

August 13, 2014 Comments off

CRS Insights — Shale Gas Gathering Pipelines: Safety Issues (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

The recent expansion of U.S. natural gas resources extracted from unconventional sources, primarily shale, has resulted in a glut of U.S. natural gas supply and the lowest domestic gas prices in over a decade. Absent any new constraints, unconventional gas is projected to become the dominant source of the U.S. natural gas supply by 2040. This unprecedented growth of natural gas production is driving massive infrastructure investments by the U.S. gas industry. Such infrastructure includes new roads to access gas fields, well sites, drilling equipment, gathering pipelines to collect produced gas from the wells, processing facilities to separate the natural gas from other products, transmission pipelines to transport the gas long distances, and natural gas storage facilities. Of these infrastructure investments, new pipelines have received particular attention among policy makers because they are widespread and essential for transporting natural gas from producing regions to consuming markets.

Cash for Corollas: When Stimulus Reduces Spending

August 12, 2014 Comments off

Cash for Corollas: When Stimulus Reduces Spending
Source: National Bureau of Economic Research (via Texas A&M)

Cash for Clunkers was a 2009 economic stimulus program aimed at increasing new vehicle spending by subsidizing the replacement of older vehicles. Using a regression discontinuity design, we show the increase in sales during the two month program was completely offset during the following seven to nine months, consistent with previous research. However, we also find the program’s fuel efficiency restrictions induced households to purchase more fuel efficient but less expensive vehicles, thereby reducing industry revenues by three billion dollars over the entire nine to eleven month period. This highlights the conflict between the stimulus and environmental objectives of the policy.

New From the GAO

August 11, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. New Markets Tax Credit: Better Controls and Data Are Needed to Ensure Effectiveness. GAO-14-500, July 10.
http://www.gao.gov/products/GAO-14-500
Highlights – http://www.gao.gov/assets/670/664716.pdf

2. Electricity Markets: Actions Needed to Expand GSA and DOD Participation in Demand-Response Activities. GAO-14-594, July 11.
http://www.gao.gov/products/GAO-14-594
Highlights – http://www.gao.gov/assets/670/664754.pdf

3. Health Prevention: Cost-effective Services in Recent Peer-Reviewed Health Care Literature. GAO-14-789R, August 11.
http://www.gao.gov/products/GAO-14-789R

EIA mapping tool shows which U.S. energy facilities are at risk from flooding

August 8, 2014 Comments off

EIA mapping tool shows which U.S. energy facilities are at risk from flooding
Source: Energy Information Administration

The public now has a new online tool to help inform them about energy facilities’ exposure to flooding caused by hurricanes, overflowing rivers, flash floods, and other wet-weather events. Developed by the U.S. Energy Information Administration (EIA), the Flood Vulnerability Assessment Map, shows which power plants, oil refineries, crude oil rail terminals, and other critical energy infrastructure are vulnerable to coastal and inland flooding.

The mapping tool combines EIA’s existing U.S. Energy Mapping System with flood hazard information from the Federal Emergency Management Agency (FEMA) and represents EIA’s latest step in making energy data more accessible, understandable, relevant, and responsive to users’ needs.

Effective Tax Rates of Oil & Gas Companies: Cashing in on Special Treatment

August 8, 2014 Comments off

Effective Tax Rates of Oil & Gas Companies: Cashing in on Special Treatment
Source: Taxpayers for Common Sense

From 2009 through 2013, large U.S.-based oil and gas companies paid far less in federal income taxes than the statutory rate of 35 percent. Thanks to a variety of special tax provisions, these companies were also able to defer payment of a significant portion of the federal taxes they accrued during this period.

According to their financial statements, 20 of the largest oil and gas companies reported a total of $133.3 billion in U.S. pre-tax income from 2009 through 2013. These companies reported total federal income taxes during this period of $32.1 billion, giving them a federal effective tax rate (ETR) of 24.0 percent. Special provisions in the U.S. tax code allowed these companies to defer payment of more than half of this tax bill. This group of companies actually paid $15.6 billion in income taxes to the federal government during the last five years, equal to 11.7 percent of their U.S. pre-tax income. This measure, the amount of U.S. income tax paid regularly every tax period (i.e. not deferred), is known as the “current” tax rate.

Four of the companies in this study – ExxonMobil, ConocoPhillips, Occidental, and Chevron – account for 84 percent of all the income and paid 85 percent of all the taxes for the entire group. These four had an ETR of 24.4 percent and a current ETR of only 13.3 percent. The smaller firms paid an even smaller share of their tax liability on a current basis. When the top four companies and those with losses are excluded from the analysis, the remaining companies reported a 28.9 percent ETR on U.S. income, but only a 3.7 percent current rate. They deferred over 87 percent of their tax liability.

Making the Best of New Energy Resources in the United States

August 7, 2014 Comments off

Making the Best of New Energy Resources in the United States
Source: OECD

Since around 2007, the country has been enjoying an “energy renaissance” thanks to its abundant stocks of shale oil and gas. The resurgence in oil and gas production is beginning to create discernible economic impacts and has changed the landscape for natural gas prices in the United States, boosting competitiveness. In order to reap the benefits fully, significant investment is needed. Federal and state governments capture some of the resource rents, but there are potential opportunities to increase taxation and use the revenues to support future well-being. Taxing natural resource rents with profit taxes can be less distortionary than other forms of taxation, though only one state uses this form of tax. Production of shale resources, like other forms of resource extraction, poses a number of challenges for the environment. Respecting demands on water resources requires adequate water rights are in place while state and federal regulators need to monitor the environmental impact of hydraulic fracturing closely and strengthen regulations as needed. Natural gas is a potential “bridge fuel” towards a lower carbon economy, helping to reduce emissions by leading to a substitution away from coal. Flanking measures are desirable to counter natural gas hindering renewables and low prices stymieing innovation.

Distributed Energy: A Disruptive Force

August 4, 2014 Comments off

Distributed Energy: A Disruptive Force
Source: Boston Consulting Group

Distributed energy (DE) technologies have grown significantly in the U.S. Last year, DE represented one of the largest investments in the utilities space, and that investment, along with consequent growth, is likely to accelerate. From 2010 to 2013, DE accounted for about 21 percent of all new capacity in the nation. (See Exhibit 1.) The number of commercial and residential rooftop solar installations, for example, increased by 22 percent in 2013. The increase comprised about 1.9 gigawatts and represented roughly $8 billion in investments.

Sunny states, such as California (with about 700 megawatts) and Hawaii and Arizona (with about 130 each), led the growth. New Jersey and Massachusetts, with about 225 and 200 megawatts respectively, also are growth markets because of state-funded support. Government incentives, offered at both the state and the federal levels, have helped drive this growth so far, as have improving economics in the form of decreasing costs and rising retail electricity prices. As the trend toward DE gains strength, however, growth will no longer rely on such subsidies.

Already, costs have declined significantly. In the past decade, prices for residential rooftop photovoltaic (PV) solar systems, for example, have dropped by more than 50 percent, declining from about $9.15 per watt in 2004 to $4.50 per watt in 2013. At the same time, improvements in technology have created new applications and market segments that previously were not viable. These technology improvements and ongoing cost reductions, combined with heightened consumer awareness and federal and state incentives, continue to bolster DE’s growth.

Country Analysis Brief: Azerbaijan

August 4, 2014 Comments off

Country Analysis Brief: Azerbaijan
Source: Energy Information Administration

Azerbaijan, one of the oldest oil producing countries in the world, is an important oil and natural gas supplier in the Caspian Sea region, particularly for European markets. Although traditionally it has been a prolific oil producer, Azerbaijan’s importance as a natural gas supplier will grow in the future as field development and export infrastructure expand. The conflicting claims over the maritime and seabed boundaries of the Caspian Sea between Azerbaijan and Iran continue to cause uncertainty, with Iran challenging Azerbaijan’s hydrocarbon exploration in offshore areas claimed by both sides.

Natural gas accounted for about 67% of Azerbaijan’s total domestic energy consumption in 2012. Oil accounted for 30% of total energy use, and hydropower contributed a marginal amount. Overall, Azerbaijan is a net energy exporter. The country swaps small volumes of natural gas with Iran—the Nakhchivan exclave receives all of its natural gas from Iran, because it is not connected to Azerbaijan’s pipeline network.

Oil and gas production and exports are central to Azerbaijan’s economy. The country’s economy is heavily dependent on its energy exports, with more than 90% of total exports accounted for by oil and gas exports, according to data from the International Monetary Fund.

DHS OIG — Domestic Nuclear Detection Office Has Taken Steps To Address Insider Threat, but Challenges Remain

August 1, 2014 Comments off

Domestic Nuclear Detection Office Has Taken Steps To Address Insider Threat, but Challenges Remain
Source: U.S. Department of Homeland Security, Office of Inspector General

We reviewed the efforts of the Domestic Nuclear Detection Office (DNDO) to address the risk posed by trusted insiders. Our objective was to assess DNDO’s progress toward protecting its information technology assets from threats posed by its employees, especially those with trusted or elevated access to sensitive, but unclassified information systems or data.

Steps are underway to address and mitigate the insider risk at DNDO. Specifically, the Department of Homeland Security (DHS) Acting Under Secretary of Intelligence and Analysis established an Insider Threat Task Force to develop a program to address the risk of insider threats for DHS, including DNDO. In addition, the DHS Office of Intelligence and Analysis has detailed a counterintelligence officer to DNDO to help mitigate espionage‐related insider risks. The DHS Office of Intelligence and Analysis routinely briefs DNDO on counterintelligence awareness, including insider threat indicators. In addition, DNDO provides security awareness training to its employees and contractors regarding security‐related topics that could help prevent or detect the insider risk. In September 2013, the DHS Office of the Chief Security Officer began a comprehensive vulnerability assessment of DNDO assets, which includes identifying insider risks and vulnerabilities. The DHS Security Operations Center monitors DNDO information systems and networks to respond to potential insider based incidents. Finally, the DHS Special Security Programs Division handles and investigates security incidents, including those types attributed to malicious insiders.

Additional steps to address the insider risk at DNDO are required. Specifically, DNDO needs to implement insider threat procedures, upon receipt of policy issued by the DHS Office of the Chief Information Officer (OCIO) that defines roles and responsibilities for addressing insider risks to unclassified networks and systems. DNDO also needs to provide documentation that clearly shows the effectiveness of controls or processes in place to detect and respond to unauthorized data exfiltration from DNDO unclassified information technology assets via email services provided by the DHS OCIO.

DNDO can strengthen processes and controls for its own technology infrastructure. They can disable portable media ports on controlled information technology assets where there is no legitimate business need. DNDO can apply critical security patches to these assets and perform periodic security assessments of controlled sites to identify any indication of unauthorized wireless devices or connections to DHS networks.

CBO — The Renewable Fuel Standard: Issues for 2014 and Beyond

July 30, 2014 Comments off

The Renewable Fuel Standard: Issues for 2014 and Beyond
Source: Congressional Budget Office

The Renewable Fuel Standard (RFS) establishes minimum volumes of various types of renewable fuels that must be included in the United States’ supply of fuel for transportation. Those volumes—as defined by the Energy Independence and Security Act of 2007 (EISA)—are intended to grow each year through 2022 (see the figure below). In recent years, the requirements of the RFS have been met largely by blending gasoline with ethanol made from cornstarch. In the future, EISA requires the use of increasingly large amounts of “advanced biofuels,” which include diesel made from biomass (such as soybean oil or animal fat), ethanol made from sugarcane, and cellulosic biofuels (made from converting the cellulose in plant materials into fuel).

One of the main goals of the Renewable Fuel Standard is to reduce U.S. emissions of greenhouse gases, which contribute to climate change. EISA requires that the emissions associated with a gallon of renewable fuel be at least a certain percentage lower than the emissions associated with the gasoline or diesel that the renewable fuel replaces. Advanced biofuels and the subcategory of cellulosic biofuels are required to meet more stringent emission standards than those that apply to corn ethanol.

Policymakers and analysts have raised concerns about the RFS, particularly about the feasibility of complying with the standard, whether it will increase prices for food and transportation fuels, and whether it will lead to the intended reductions in greenhouse gas emissions. Because of those concerns, some policymakers have proposed repealing or revising the Renewable Fuel Standard.

In this analysis, CBO evaluates how much the supply of various types of renewable fuels would have to increase over the next several years to comply with the RFS. CBO also examines how food prices, fuel prices, and emissions would vary in an illustrative year, 2017, under three scenarios for the Renewable Fuel Standard…

EIA — OPEC Revenues Fact Sheet

July 28, 2014 Comments off

OPEC Revenues Fact Sheet
Source: Energy Information Administration

The U.S. Energy Information Administration (EIA) estimates that, excluding Iran, members of the Organization of the Petroleum Exporting Countries (OPEC) earned about $826 billion in net oil export revenues in 2013. This was a 7% decrease from 2012 earnings, but still the second-largest earnings totals during the 1975-2013 period for which EIA has tracked OPEC oil revenues. OPEC earnings declined largely for two reasons: a drop in OPEC oil production in 2013 (largely because of the supply disruption in Libya), and a 3% decline in average crude oil prices (as measured by the Brent crude oil price marker).

Saudi Arabia earned the largest share of these earnings, $274 billion in 2013, representing approximately one-third of total OPEC oil revenues. On a per capita basis, OPEC (excluding Iran) net oil export earnings reached about $2,520 in 2013. These net export earnings do not include Iran’s revenues, because of the difficulties associated with estimating Iran’s earnings, including the country’s inability to receive payments and possible price discounts Iran offers its existing customers.

Based on projections from EIA’s July 2014 Short-Term Energy Outlook (STEO), EIA estimates that OPEC (excluding Iran) could earn about $774 billion in net oil export revenues in 2014 and $723 billion in 2015 (unadjusted for inflation). These declines from the 2013 level are the result of projected declines in the call on OPEC crude oil production because of the large increases in non-OPEC production for 2014-15, as well as expected crude oil price declines that are also the result of declines in the call on OPEC crude oil production.

Country Analysis Brief: Algeria

July 25, 2014 Comments off

Country Analysis Brief: Algeria
Source: Energy Information Administration

Algeria is the leading natural gas producer in Africa, the second-largest natural gas supplier to Europe outside of the region, and is among the top three oil producers in Africa. Algeria became a member of the Organization of the Petroleum Exporting Countries (OPEC) in 1969, shortly after it began oil production in 1958. Algeria’s economy is heavily reliant on revenues generated from its hydrocarbon sector, which account for about 30% of the country’s gross domestic product (GDP), more than 95% of export earnings, and 60% of budget revenues, according to the International Monetary Fund (IMF).

Country Analysis Brief: Iran

July 24, 2014 Comments off

Country Analysis Brief: Iran
Source: Energy Information Administration

Iran holds some of the world’s largest deposits of proved oil and natural gas reserves, ranking as the world’s fourth-and second-largest reserve holder of oil and natural gas, respectively. Iran also ranks among the world’s top 10 oil producers and top 5 natural gas producers. Iran produced 3.2 million barrels per day (bbl/d) of petroleum and other liquids in 2013 and more than 5.6 trillion cubic feet (Tcf) of dry natural gas in 2012.

The Strait of Hormuz, on the southeastern coast of Iran, is an important route for oil exports from Iran and other Persian Gulf countries. At its narrowest point, the Strait of Hormuz is 21 miles wide, yet an estimated 17 million bbl/d of crude oil and oil products flowed through it in 2013 (roughly one-third of all seaborne traded oil and almost 20% of total oil produced globally). Liquefied natural gas (LNG) volumes also flow through the Strait of Hormuz. Approximately 3.9 Tcf of LNG was transported via the Strait of Hormuz in 2013, almost all of which was from Qatar, accounting for about one-third of global LNG trade.

How oil and gas firms gained influence and transformed North Dakota

July 23, 2014 Comments off

How oil and gas firms gained influence and transformed North Dakota
Source: Center for Public Integrity

Oil development has transformed this state to the point where it’s hard to find a place or person that hasn’t been touched by the boom. Energy companies have drilled more than 8,000 wells into western North Dakota’s rugged prairie since the beginning of 2010, quadrupling the state’s oil production. From July 2011 through June 2013, the state collected $4 billion in oil taxes, and is expecting a $1 billion surplus for the current biennium, not including an oil-funded sovereign wealth fund that will approach a balance of $3 billion. North Dakota is in the uncommon position of facing a labor shortage, spurring a state-run campaign to attract workers, paid for in part by Hess Corp.

In addition to the tax revenue they’ve brought, the oil companies have showered the state with additional money — new millions for universities, museums, hospitals and other charitable causes. They’ve also given hundreds of thousands to politicians, making the sector the largest single source of those contributions. The oil industry is the top contributor to Gov. Jack Dalrymple, according to the National Institute on Money in State Politics, and gave money in all but 10 of the 75 legislative races held in 2012.

State of the World’s Forests 2014

July 23, 2014 Comments off

State of the World’s Forests 2014
Source: Food and Agricultural Organization of the United Nations

Across the world, forests, trees on farms, and agroforestry systems play a crucial role in the livelihoods of rural people by providing employment, energy, nutritious foods and a wide range of other goods and ecosystem services. They have tremendous potential to contribute to sustainable development and to a greener economy. Yet, clear evidence of this has been lacking. This evidence is critical to inform policies on forest management and use, and to ensure that the benefits from forests are recognized in the post-2015 development agenda, not only with respect to the environment, but also for their contributions to broader social issues. This edition of State of the World’s Forests addresses this knowledge gap by systematically gathering and analysing available data on forests’ contributions to people’s livelihoods, food, health, shelter and energy needs. Crucially, the report also suggests how information might be improved and policies adjusted, so that the socioeconomic benefits from forests can be enhanced in the future.

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