Energy Update - October 2017

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October 1, 2017

The number of active drilling rigs at work in Texas is stable around 450, significantly higher than last year but slightly lower than last month's count, according to oilfield services firm Baker Hughes. Nationally, there were 908 rigs at work, down from 916 at this time last month. Overall, US crude production is steady around 9.5 million barrels/day, according to the Energy Information Agency. Oil prices rose gradually throughout September despite the disruptions to the supply chain caused by Hurricane Harvey. The price of West Texas Crude topped $51 for the first time in four months and the price of Brent Crude topped $56 – evidence, producers say that the world market is rebalancing. Stable prices will likely increase drilling activity in Texas.

In Washington, the International Trade Commission voted 4-to-0 that Chinese solar cell imports were unduly harming U.S. manufacturers. Solar cell prices have collapsed in recent years, hurting domestic manufacturers but allowing for a boon in solar power installation. “We brought this action because the U.S. solar manufacturing industry finds itself at the precipice of extinction at the hands of foreign market overcapacity,” said German-owned Suniva, which manufactures solar cells in the United States. The White House now has 60 days to respond to the ruling, and could possibly place tariffs on imported solar panels. The Republican Governors of Nevada and Massachusetts are lobbying against solar tariffs, noting that they will increase solar cell prices for consumers.

Across the world, scientists reacted to a new analysis published in the journal Nature Geoscience by Oxford climatologist Richard Miller, regarding the size of the carbon "budget" that would keep global warming below 1.5 °C. A carbon budget is the amount of cumulative carbon that can be put into the atmosphere  – currently, it is estimated to be around 2.25 trillion tons of post-1870 carbon dioxide emissions, a target that previous models predicted would be reached in 2020. However, Dr. Miller's new analysis suggests that the budget will last a few decades, rather than a just a few years. If true, this could give the world additional time to reduce emissions before reaching catastrophic levels of warming. However, the results are highly controversial, and Dr. Miller is just one of many climatologists working to create and revise complex climate models.