May 17, 2020

IEA says U.S. to Tap Oil Reserves

international energy agency
IEA
U.S.
Oil
Admin
3 min
The International Energy Agency (IEA) says it will release 60 million barrels of oil from global reserves.  Half will come from the U.S.
With oil prices still averaging above $100, the international community is scrambling for a quick fix to relieve the pressure at the pump that has slo...

 

With oil prices still averaging above $100, the international community is scrambling for a quick fix to relieve the pressure at the pump that has slowed economic activity.  In a move that has only occurred twice in the past, the International Energy Agency (IEA) has announced that global reserves will be tapped, releasing 60 million barrels of oil into the global market.  More than half of the boosted supply will come from the U.S. Strategic Petroleum Reserve.

The IEA estimates that the released reserves will be dispersed at a rate of 2 million barrels per day.  The organization claims the move comes as an effort to replace the Libyan crude supply that has been missing from the market since the NATO led air strikes caused the country to cut off oil exports.  The IEA notes another cause for tapping reserves is high petroleum demand in China—up 9 percent over last year due to rampant diesel generator use in the midst of widespread electric power outages.

The last time the IEA collectively released oil reserves was in 2005 following Hurricane Katrina.  The devastation in the Gulf of Mexico saw damaged offshore oil rigs, pipelines, and refineries.  The only time prior to that was during the Iraqi/Kuwait conflict in the early 1990s.

 

SEE OTHER TOP STORIES IN THE WDM CONTENT NETWORK

CERAWeek 2011: Natural Gas Solution to Oil Shortfall

Streamlining Inspection of Oil & Gas Well Sites & Processing Facilities

Consensus Building for Arctic Offshore Oil & Gas Drilling

The IEA claims the reserves should hit the market by the end of next week.  The U.S. will contribute at least 50 percent of the total released reserves, while Europe will contribute 30 percent and Asia 20 percent. 

Some analysts believe that the IEA’s actions will only be a short-term fix, and by the end of the summer, oil prices could reach unprecedented heights.  With such uncertainty in producing countries like Libya, coupled with Iran and Saudi Arabia’s continued bickering behind the walls of OPEC, not to mention the market manipulation occurring daily in the commodities trading sector, there is no certainty in the future of oil-based energy security at this point. 

The best we can hope for is that the world’s leaders act responsibly amidst such chaos, and perhaps consider a fast-tracked multilateral global movement toward alternative energy modes.  The reserves we have left MUST be used as a buffer to provide the energy necessary now to develop the renewable energy infrastructure that will take us peacefully into the next century.  If these reserves are squandered and not utilized properly, then there may come a time when the bulldozers, cranes, and other equipment necessary to advance energy infrastructure to the next phase won’t have the fuel to operate. 

Share article

Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

Share article