Ed Morse, Citigroup’s top energy economist, has taken a fresh swipe at companies and countries that rely on the global petroleum edifice. With a typically vivid title—“The End is Nigh”—Morse argues in a new report that permanent changes in the ways we produce and consume energy are hollowing out oil demand, with head-spinning ramifications.
The nub of the March 26 report: If the market transformation resembles that which occurred after the 1979 Iranian Revolution (which Morse regards as a possibility), global oil demand would plummet by 18%, to around 74 million barrels a day from the current 90 million. Such a plunge would trigger political and economic havoc in petroleum export-reliant Russia and OPEC. It would shake out the oil industry. And it would happen regardless of what steps the major players took.
At least twenty-two of the 29 state renewables standards have been attacked by legislators or regulators in the last year or are now under attack.
Known as a Renewable Portfolio Standard (RPS) or a Renewable Energy Standard (RES), these mandates require utilities to obtain a portion of their power from renewable sources by a certain date. Research shows they add less than 5 percent, on average, to the cost of electricity bills and are an effective driver of renewables growth.
We will need fossil fuels like oil and gas for the foreseeable future. So there’s really little choice (sigh). We have to press ahead with fracking for natural gas. We must approve the Keystone XL pipeline to get Canadian oil.
This mantra, repeated on TV ads and in political debates, is punctuated with a tinge of inevitability and regret. But, increasingly, scientific research and the experience of other countries should prompt us to ask: To what extent will we really “need” fossil fuel in the years to come? To what extent is it a choice?
Valero Energy Corp. reported net income of $1 billion, or $1.82 per share, on revenues of $34.7 billion during the fourth quarter of 2012.
This compares to net income of $45 million, or eight cents per share, during the prior-year quarter. Revenues were up 0.1 percent. The company was able to improve its financial performance due to a significant improvement in refining margins.