Canada’s federal government has approved a major oil pipeline which will help the country benefit from exporting its newfound oil. The “Northern Gateway” pipeline, which will run directly from Alberta’s tar sands to the west coast of Canada, will be a major force for Canada’s economy. By piping the oil several hundred miles to British Columbia, the country will for the first time be able to export its resource, with a particular focus on Asia. At present, the US is the sole buyer of Canadian oil, but this has meant that Canada receives lower prices than if they were to sell to the international market, something the new pipeline will allow them to do. However, the government followed the recommendation of a review panel and imposed 209 conditions on the construction of the pipeline, all of which are in the interest of protecting the environment or local residents. The project still faces some hurdles, particularly a strong push by Native Canadian groups who have rights over some of the land to be used.
FINSUM: In principle, this seems like a very good pipeline for Canada as it solves their decades-long “single buyer” problem, which has long left them unhedged to US oil demand.
The Groningen field, in northeast Holland, is the largest active natural gas supply in Europe, providing 35% of the EU’s total output. The field has been active since 1959, but recently it has grown unstable, as its geology has changed, its pressure has dropped, and it is experiencing multiple earthquakes. Residents in the area have grown angry over the small, but damaging earthquakes and now the government has order Shell and Exxon Mobil, who run the field, to cut production by 20% for the time being. According to analysts, these problems and the supply cuts are very important because it will lower Europe’s domestic gas supply considerably, causing a very tight market which could lead to wide-scale disruptions next winter. Europe is currently undergoing a large political and social push for more energy independence from Russia, so a cut to domestic energy supplies will likely have strong political and legislative ramifications.
FINSUM: So just at the time when Europe is wanting more domestic energy production, a major source of gas is proving faulty. This development will likely give the continent the pressure needed to follow Germany’s lead and allow fracking.
On the issue of climate change, Republican lawmakers are almost unanimous in their opinions. When asked if climate change is real, they almost unilaterally say “no”. This stance is a far cry from Republican policy of decades ago, when members of the party led the push for acknowledgement of the topic. However, new political realities, such as the fact the most Republican lawmakers hold seats in states who are economically dominated by energy production, has meant that there is everything to lose from taking a “pro-Green” stance, and much to gain from combating the theory. As such, Republicans have become enraged by President Obama’s executive order to implement the EPA’s guidelines to cut coal emissions 30% by 2030. The reason why is that many of the coal plants that Obama’s order will effectively close are major centers of employment in Republican states, such as Kentucky, where coal is a dominant industry.
FINSUM: It is disheartening to see that because of parochial interests an entire party can plainly deny the existence of a well-documented phenomenon that is affecting the world and paralyse Congress in the process.
The US’ President Obama is planning to take the country’s strongest ever action on climate change by announcing a goal to reduce the country’s carbon emissions from power plants 30% by 2030. The nation’s power plants, which are comprised of over 600 coal-fired plants, are the country’s largest source of pollution. The new plans to cut emissions are likely to put hundreds of existing coal plants out-of-business and it is probable that the way American electricity is generated will be completely overhauled in time. Obama failed in his first term to push a sweeping climate bill through Congress, but this time he is using his executive powers to enact this legislation. The new rules would give states a range of options in how to meet the 30% cut, and are designed to let them reorient their local industries in a cost-effective manner without necessarily having to close coal-fired plants. The plans have sparked mixed reactions, with environmentalists lauding the strong message and carbon industry advocates saying it would damage the electricity industry and continuity of supply. The US Chamber of Commerce said it could lower US GDP by $50 bn per year.
FINSUM: This is a major overhaul to the US power generation system and it sends a strong message to the rest of the world that even one of the worst polluters is set to clean up its act. Hopefully, others will follow suit.