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Texas Senator Blocks House-Senate Energy Conference
Ben Geman, E&E Daily via Rigzone
Sen. Kay Bailey Hutchison (R-Texas) yesterday took the credit for standing in the way of a formal House-Senate conference to reconcile competing energy bills.
In an interview with reporters, Hutchison said she opposes the repeal of billions of dollars in tax breaks for oil and gas companies and has blocked an effort to move to conference.
“I am very concerned about pieces of the legislation, and I am holding it up right now,” Hutchison said in the Capitol late yesterday, citing “egregious” tax provisions in the House effort.
The House bill would repeal eligibility among oil producers and refiners for a tax deduction on income from domestic products, a provision that would raise an estimated $11.4 billion over 10 years.
(23 October 2007)
Saudi Arabia holds key to oil and dollar link
Adam Robison and Edward Morse, Financial Times
After a generation on the sidelines, the US dollar has re-emerged as a central issue in the pricing of oil. Since the credit crunch in August, when the dollar has gone down, oil has gone up, by an average ratio of more than 5 to 1. Since August 21, the greenback has declined 4 per cent versus the euro; West Texas Intermediate crude, the global oil benchmark, meanwhile, is up 25 per cent.
Why are commodities traders fixated on the dollar? Like other oil market puzzles, the answer may lie in Saudi Arabia.
With a booming economy and inflation ticking higher, some speculators worry that Riyadh will de-peg its currency from the dollar. And they see such a step as having the effect of re-pricing oil in euros and yen.
That’s because if Saudi Arabia de-pegs and does nothing else, it will be sitting on two rapidly depreciating assets: $20,000bn in oil reserves and $800bn in US dollar reserves.
But if it were to diversify its currency reserves or oil pricing regime, then it is almost certain that the dollar would weaken. As a result, oil prices in dollar terms would have to jump to keep oil demand growth from Asia in check. For speculators with this mindset, oil at almost any price looks cheap, especially when the market is pricing in another dollar-weakening Fed cut this month.
Adam Robison is an energy research analyst at Lehman Brothers. This piece was co-authored by Edward Morse, chief energy economist.
(24 October 2007)
Pace of coal-power boom slackens
Mark Clayton, Christian Science Monitor
Rising construction costs and potential climate legislation in Congress halt at least 18 proposed power plants in the past nine months.
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Sunflower Electric Power’s two new 700-megawatt generators near Holcomb, Kan., were supposed to be part of a wave of new coal-fired power plants heralding coal’s comeback as America’s fuel choice for cheap energy. They were to join at least two dozen other coal-power projects already under construction in the US.
But that was before last week. That’s when a Kansas regulator pulled the plug on Sunflower’s proposal, citing concerns that the plants’ emissions would contribute to global warming.
It’s the latest hiccup – perhaps even a major interruption – in plans for a big resurgence in coal power, which already provides about half of US electricity. Among other concerns that are unsettling to coal advocates: soaring construction costs due to international competition for building materials, and worry among utilities that Congress will craft climate legislation that attaches a high price tag to greenhouse-gas emissions.
Just nine months ago, the federal government listed more than 150 coal-power plants as “in development.” Since then, at least 16 have been canceled, and many others have been put on hold, according to data from the US Department of Energy (DOE). Sunflower’s plants appear to be the 17th and 18th coal plants to get bumped this year – but not the first to get bumped because of regulators’ climate concerns.
(25 October 2007)
Getting more power out of using less
Sam Eaton, Marketplace, American Public Media
Rising construction costs and concerns over global warming legislation have caused utilities to cancel plans for 16 new coal-fired power plants in recent months. Instead, they’re opting for something much cheaper — conservation.
(23 October 2007)
Illinois’ Jack Lavin explains why his state should host DOE’s FutureGen project (video)
OnPoint, E&E TV
By year’s end, the Department of Energy is expected to choose a site to host its $1.5 billion FutureGen project — a project that will produce a nearly emission free coal power plant. Illinois and Texas are currently vying for the host position.
During today’s OnPoint, Jack Lavin, director of the Department of Commerce and Economic Opportunity for the state of Illinois, explains why his state should be home to the FutureGen project.
He discusses geographical and geological issues that put Illinois in a better position than Texas. Lavin also discusses the Illinois public’s reaction to the proposed project and explains how FutureGen will affect economic development in his state.
(24 October 2007)
