Tensions between Iran and US leading to uncertainty in oil prices.
Oil prices edged up today with news of U.S. sanctions against Iran. The Trump Administration “put them on notice” and many think these new sanctions could be extended to crude oil if relations continue to spiral downward. Tensions between Tehran and Washington have increased since a recent Iranian ballistic missile test. Iranian oil exports were only allowed to return to normal last year, so these recent events raise concern for traders and investors that U.S. sanctions could tighten once again.
Senate repeals transparency rule for oil companies.
The Senate voted Friday morning to repeal a regulation requiring disclosures for the payments that energy companies make to foreign governments. The SEC foreign payments rule was originally meant to reduce corruption in resource-rich countries by detailing the royalties and other payments that oil, natural gas, coal and mineral companies make to governments, but ultimately imposed unreasonable compliance costs on American energy companies that were not justified by quantifiable benefits. This ended up putting US companies at a disadvantage compared to their foreign competitors.
Senate Banking Committee Chairman Mike Crapo (R-Idaho) stated that the SEC’s own research did not show a strong connection between transparency and improving the lives of citizens in countries where mineral extraction revenues fuel government corruption. He said, “Unlike the potential benefits, though, the costs of this rule are reasonably certain… The SEC estimated up to $700 million in initial costs, and up to $590 million on ongoing annual costs.”
Crapo cautioned that many small companies would be hurt in addition to major oil companies.
“We cannot view these costs as only affecting the largest companies, but must consider the plight of the smaller ones,” Crapo said.
China takes the lead on solar energy.
China isn’t the first country you think of when it comes to clean energy. Often associated with smog and a dependence on coal power, China is not typically in the renewables discussion. However, China’s National Energy Administration revealed that its solar energy production more than doubled in 2016, hitting 77.42 gigawatts by the end of the year. That means China is now the world's biggest producer of solar energy in terms of capacity (relative to population, it’s still behind – but strictly looking at capacity, they are now the top dog.) As of now, solar represents just 1 percent of China’s total energy output. However, their NEA plans to add over 110 gigawatts by 2020, giving the technology a much greater role within a few years.