Today’s section will feature a quick recap of each of the sub sectors within the energy sector. We have highlighted some of the most important current trends, significant events, and overall changes below.
There are a myriad of conflicting, and speculative headlines on the future of the oil industry and where prices will go given a continued global glut. On average, gas prices have been falling, and U.S oil production has been increasing. However, the number of oil rigs being added has slowed, which has contributed to a slight uptick in prices over the past couple of weeks. Additionally, Chinese demand for oil has grown this year, and OPEC members remain hopeful that increased demand will help get rid of the surplus. In general, it appears that price and output predictions are all over the place, especially before a landmark OPEC meeting scheduled for next Monday. The meeting between the Organization’s countries is centered around the market’s current situation, and whether to include Libya and Nigeria in their efforts to cap oil output since both countries increased their own. There are even rumblings that OPEC members have reached out to some U.S shale oil producers, though their intentions, thus far, remain unclear. For U.S consumers, the relatively low crude prices, particularly relative to what they were several years ago, indicate significant at-the-pump savings. It might be a good idea to take that summer road trip after all.
Prices have continued to decline, and production has sharply accelerated in the last few years, though it has dipped a bit in 2016. These factors have contributed to substantially lower country-wide electricity prices, though there have been some environmental concerns as pipelines continue to expand in the wake of the U.S shale boom. Despite the dip and environmental worries, in 2016 natural gas-fired electricity generation had, for the first time, outpaced coal.
As noted above, coal, once the leading generator of U.S electricity, has slowly fallen into 2nd place. According to numbers by the Energy Information Administration, net generation continues to decrease significantly, and this trend is unlikely to reverse. Diane Cardwell and Clifford Krauss of the New York Times reported that, even in places where coal is traditionally seen as king, big industry players are moving away from the commodity. They are, instead, opting to increase their capacity of other energy sources and work out energy deals with large firms like Microsoft and other Fortune 500 giants. The impacts of coal’s slow exit have adversely affected some communities that relied unduly on it in the form of lost jobs and substantially lower tax revenue.
Total electricity generated from renewables rose to over 11 percent in 2016, according to a UN press release. Wind power investment appears to be most prominent in Europe and China, and the usage of wind energy in the U.S grew 19 percent in 2016. As solar energy continues to be one of the fastest growing portions of the sector, consumers may find themselves inclined to add on a panel or few, depending on their needs. Even some, like former Congressman Gresham Barrett of South Carolina, have strongly supported the expansion of solar energy because it is cost-efficient in the long run, and helps diversify our energy portfolio. Consumers that are considering a solar power investment can find accurate estimates for full installations and other, various tips on shopping around at Energysage.com. Renewables of all shapes and sizes have seen substantial increases, and this is likely to continue seeing as, according to Brian Eckhouse of Bloomberg, almost half of the largest U.S companies have self-imposed clean energy goals onto themselves, and that 23 of them have 100 percent renewable-energy targets.
Once heralded as the future of energy, nuclear has somewhat fallen by the wayside as its generative capacity has mostly flatlined, according to numbers from the EIA. Due to the very high initial costs of building a plant, the price declines in natural gas, coupled with the increasing investment in renewables, have made nuclear energy a harder sell. With two plants in Georgia and two plants in South Carolina currently under construction in the U.S, capacity is slated to increase, but not nearly at the rate of other competitors in the sector. Concerns over Three Mile Island-like disasters dominate public discourse about the industry, though some, like environmental policy expert Michael Shellenberger, believe these claims are overblown, particularly because developed countries like France generate the overwhelming majority of their energy from nuclear sources. While certainly a contentious topic, consumers in Georgia and South Carolina may enjoy some of the benefits outlined from increased nuclear investment.
Each of the sub sectors in the energy industry is undergoing immense amounts of change, whether it be economic, political, or even just speculative in nature. The consumer implications of these shifts are all too real, and will hopefully be talked about in the coming months.