By Ed Crooks: May 6, 2016
The thoughts of everyone in the energy industry were with Fort McMurray, the heart of Canada’s oil sands industry, which was devastated by wildfires this week. The town was evacuated, and more than a fifth of the region’s oil production was halted. There was a lot of great reporting from the local and national press. The National Post particularly stood out with features such as this live map of the areas affected by fire. Maclean’s brought the scale of the fires to people outside Alberta using comparisons with other cities in Canada, the US and Britain. NBC News carried some powerful photographs of the disaster.
Several people quickly drew a link between the fires and climate change, while others rejected the suggestion that Fort McMurray had brought the catastrophe on itself, or that the oil industry had increased the threat. Elizabeth Kolbert in the New Yorker argued that “it would be wrong to blame the residents of Fort McMurray for the disaster that has befallen them”. Instead, she wrote, “we’ve all contributed to the latest inferno”. You can donate to the Red Cross relief effort for the region here.
Climate change was also a big issue in Washington DC this week at the Climate Action Summit, where the heads of the UN and the World Bank urged governments and businesses to do more to curb greenhouse gas emissions by measures such as developing renewable energy and regulating land use. ExxonMobil, which has often been criticised for its position on climate change, launched a new research programme that could lead to a breakthrough in the cost of capturing carbon dioxide emissions from fossil fuel power plants. A couple of infographics, one from Exxon and one from its partner FuelCell Energy, showed how the new technology might work.
The LA Times had a very good piece telling the story of SunEdison, the solar power supernova.
Oil bulls hoping for evidence that global over-supply is easing had some good news in booming US gasoline consumption. February’s rise over the same month of 2015 was the largest since 1978.
The big corporate news of the week was Halliburton finally confirming that it had abandoned its dream of acquiring rival Baker Hughes, following a chorus of complaints from the rest of the industry, objections in Europe and a law suit from the US Department of Justice. Adding insult to injury, Halliburton had to pay the $3.5bn break fee it had promised to win Baker Hughes’ assent to the deal. Dave Lesar, Halliburton’s CEO, was quick to blame the obstacles raised by regulators, and the health of the industry. Both companies’ shares fell during the week, but Halliburton’s outperformed Baker Hughes’s, in spite of the $3.5bn.
In the words of Nick Grealy, unconventional is the new conventional. Fracked wells provide about two-thirds of US gas production. Stephen Burns, chairman of the US Nuclear Regulatory Commission, gave a speech with some nice examples of inaccurate predictions about energy.