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Energy, Security, and Climate

CFR experts examine the science and foreign policy surrounding climate change, energy, and nuclear security.

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Cyber Threats to Oil and Gas Supplies: How Much of a Worry Are They?

by Blake Clayton

What harm could a cyber attack do to oil and gas production? Could it cause a catastrophic if temporary loss in supplies, sending prices soaring?  Does it pose a serious threat to oil companies’ operations? Or is talk of a new age of cyber insecurity in oil and gas—which has been in the air ever since a virus destroyed some 30,000 Saudi Aramco computers—overblown? Read more »

Book Happenings

by Michael Levi

My book The Power Surge: Energy, Opportunity, and the Battle for America’s Future will be published next Thursday. Below you’ll find a current listing of public events for the book. But first a request: I know that many readers of this blog have bought or received early copies of the book. If you liked it, and think others would too, I urge you to post a review on Amazon. It turns out that those matter a lot; I’ll be most grateful to anyone who takes a few minutes to do that. And now on to the events (all links below are to events pages with further information)… Read more »

Is This What Energy Independence Looks Like?

by Michael Levi

The Energy Information Administration (EIA) is out with a partial release of its Annual Energy Outlook (AEO), a modeling exercise that looks at what the next twenty-five years or so might hold. One of the most interesting elements is a case where the United States achieves (by the mid-2030s) what some call “energy independence” – a state where its net import of liquid fuels drop to zero. To create this case, the EIA modelers pump up pretty much every assumption they can, trying to close the gap between U.S. supply and demand. Here’s what it takes: Read more »

Overselling Energy Innovation

by Michael Levi

Innovation will be critical to confronting the world’s energy problems, but the promise of energy innovation has too often been oversold. In an essay in the new issue of Issues in Science and Technology I explain why.

In the wake of the Copenhagen debacle and the collapse of cap-and-trade, Americans have been searching for new ways to tackle climate change. One of the most popular ideas to emerge has been a call to focus on energy innovation. Proponents of this approach argue that focusing on making clean energy cheaper rather than on making dirty energy more expensive would transform the domestic and international politics (and perhaps economics) of climate and energy policy. Read more »

New Website on the Speculation Debate

by Blake Clayton

One of the most misunderstood topics in energy markets is the role speculation plays in them, and specifically how buying and selling by financial market participants affects market behavior. Public attention to these questions tends to increase when commodity prices rise, which means that it’s been a relatively hot issue over much of the last decade.  A lot of what gets said about it, though, simply isn’t well informed. Read more »

Unexpected Energy Headlines for Obama’s Second Term

by Michael Levi

When you ask energy experts what headlines to watch for in President Obama’s second term, you’re likely to hear about issues that are hot right now: the possibility of new greenhouse gas regulations, growth of U.S. oil and gas, prospects for wind energy and distributed solar, LNG exports, and the like. All of these will almost certainly be in the news. But I’ll hazard another guess: odds are high that many of the biggest headlines and decisions will be about things that we aren’t even thinking about today. Read more »

Trading Volumes Underscore Brent’s Ascendance as World Oil Benchmark

by Blake Clayton

West Texas Intermediate (WTI) and Brent have been locked in a multi-year wrestling match for the exalted status of the definitive world benchmark price of oil. WTI’s glaring deficiencies as a barometer of supply-demand fundamentals in the global crude market, owing to an oversupply of oil at its land-locked pricing hub of Cushing, Oklahoma, have been plain for several years now. But a close look at recent futures trading volumes shows that Brent has steadily surpassed its rival as traders’ preferred way to gain exposure to oil, marking an important moment in the North Sea benchmark’s arrival as the “real” price of oil, at least for now. Read more »

Five Critical Questions About the U.S. Strategic Petroleum Reserve

by Blake Clayton

Constant chatter about an impending oil release from the U.S. Strategic Petroleum Reserve (SPR) was a prominent feature of the oil market last year. Much of the speculation was driven by the ongoing loss of crude from Iran, due to sanctions, and the possibility of a confrontation with Tehran over its nuclear program, which could have cut off traffic through the vital Strait of Hormuz. Read more »

Drilling into the American Energy Boom, in Four Charts

by Blake Clayton

One interesting feature of the U.S. hydrocarbon boom is the widening gap between the industry’s interest in drilling for oil and other liquids versus dry natural gas. It’s all about economics: the disparity in prevailing market prices and outlook between these commodities is dictating companies’ willingness to sink money into, and bear the risk of, trying to produce them. Read more »