Skip to content

Energy News Round Up

February 26, 2016

By Paul Homewood 


A round of news on the energy front this week:   


1) Abengoa unit files for U.S. bankruptcy with up to $10 billion in debt


Abengoa SA put its U.S. bioenergy unit into Chapter 11 bankruptcy on Wednesday with up to $10 billion in liabilities, the latest twist in the multinational parent’s race to avoid becoming Spain’s largest corporate failure.

The U.S. filing came as the Spanish company faced a March 28 deadline to agree on a wide-ranging restructuring plan with its banks and bondholders, without which it could be forced to declare bankruptcy.–sector.html;_ylt=A0LEV7jxkdBWDlUAG6UnnIlQ;_ylu=X3oDMTEya2hwNmRoBGNvbG8DYmYxBHBvcwMxBHZ0aWQDQjE3NDVfMQRzZWMDc2M-


Abengoa’s US unit is one of the leading producers of ethanol, while its Spanish parent is heavily exposed to renewable energy in Spain.


2) Energy price war spreads to gas as US shale storms global market, stalks Russia


The US has exported its first shipment of natural gas in a historic move that shifts the balance of power in the global energy market and kicks off a struggle with Russia for market share. Surging US supply over the next five years threatens to break the Kremlin’s dominance over Europe’s gas market, and is already provoking talk of a "Saudi-style" counter attack by Moscow to drive US shale gas frackers out of business before they gain a footing. At the very least, it sharpens a global price war as liquefied natural gas (LNG) bursts onto the scene, and closes the chapter on the 20th century system of pipeline monopolies. –Ambrose Evans-Pritchard


3) Forget Paris: New EU Energy Security Framework Based On Natural Gas


The future of Europe’s energy supply is to rely heavily on natural gas for the coming two decades and beyond, according to a new strategy set out on Tuesday by the European commission
The plans were immediately attacked by green campaigners, who contrasted the continued role of fossil fuels with commitments to cut carbon dioxide made by the EU at the
Paris climate summit two months ago.
Gas will have to be imported, from sources including Russia, Norway, Qatar and other Gulf states, under plans set out in the commission’s “Sustainable
Energy Security Package”.
This will require tens of billions of euros of investment in infrastructure, including new cross-border pipelines, and the development of terminals for the import of liquefied natural gas (LNG). Most LNG currently comes from the Gulf but which in future could also be supplied from the shale fields of the US.
Miguel Arias Cañete, EU climate change commissioner, acknowledged the
problems with gas supply that have haunted Europe in the recent past, such as Russia turning off supplies to the Ukraine for political ends. But he said that the renewed focus on diversifying supply and on constructing storage facilities would improve energy security.
“After the gas crises of 2006 and 2009 that left many millions out in the cold, we said never again. But we are still far too vulnerable to major disruption of gas supplies, and the political tensions on our borders are a sharp reminder that this problem will not just go away,” he said. “Today’s proposals are about a reliable, competitive and flexible system in which energy flows across borders and consumers reap the benefits. They are about standing together to protect the most vulnerable. They are about securing our clean energy future.”
While gas is a lower carbon fuel than coal, the implication of such a massive new investment in gas infrastructure is that its use will continue for decades to come. This could open up conflicts with the EU’s targets on reducing greenhouse gas emissions, enshrined in last December’s
Paris accord, which the EU played a major role in bringing about.


4) MIT Study: Green Energy Can’t Work Unless You Tax Everything

Researchers at the Massachusetts Institute of Technology have confirmed what many in the energy world already knew: Without government support or high taxes, green energy will never be able to compete with conventional, more reliable power plants.
The study, announced by MIT’s News Office Wednesday, determined that conventional energy would be consistently less expensive than green energy over the next 10 years. The study concludes that the government could make green energy competitive by offering enormous amounts of taxpayer support.
The study confirms that green energy can only work when energy prices are extremely high and require government support. Projections from the International Energy Agency estimate that developing wind and solar power enough to substantially impact global warming could cost up to $16.5 trillion by 2030.
“Windmills, solar panels, and ethanol could not compete with coal, natural gas, and oil without mandates and subsidies even when the price of the conventional fuels was relatively high,” Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, told The Daily Caller News Foundation. “Now that prices for fossil fuels have plummeted, very little new renewable energy capacity will be installed unless the mandates and the subsidies are raised even higher.  The bankruptcy this week of Abengoa’s U. S. solar unit with up to $10 billion in debt is a sign of things to come.”



5) Will cheap gas kill electric and hybrid cars?



High gas prices tend to be good news for electric cars and hybrids. In March 2012, gas  averaged $3.92 a gallon , bringing it uncomfortably close to the record $4-plus peak seen in 2008. That same month, Toyota ( TM ) and General Motors ( GM ) reported record sales for the  Prius hybrid and  Chevrolet Volt hybrid-electric car , respectively. Today, however, the nationwide average gas price for February is  below $2.00 per gallon . Now that gas prices are at record lows, the argument that these eco-friendly vehicles save consumers money at the pump seems weak.

A look at last year’s car-sales data reveals that Americans are increasingly gravitating toward pickup trucks and SUVs, which, while improving their fuel consumption, are still less fuel-efficient than electric cars and hybrids. In 2015, car makers sold an unprecedented 17.5 million vehicles , up 5.7% from the prior year and 0.4% from the record set in 2000. According to Kelley Blue Book, more than half of all transactions comprised truck and SUV sales, driving up the  average sales price to $34,428 .

Several factors contributed to last year’s uptick in car purchases: increased employment, low interest rates (which means better deals on auto financing) and cheap gas. Apparently, these trends haven’t extended their benefits to electric and hybrid cars: per InsideEVs, overall electric vehicle sales declined year-over-year between 2014 and 2015,  falling 5.2% from 122,438 to 116,099 . According to data from, hybrid sales plummeted 14.9% from 451,702 in 2014 to 384,404 in 2015.

  1. dangeroosdave permalink
    February 26, 2016 11:12 pm

    I love my Flex-Fuel Impala LT. I particularly love putting fuel in it, when I pay $1.62/gal and the government chips in the other $7.00. It’s nice being on the other side of the transaction for a change. 🙂

  2. February 27, 2016 2:41 pm

    What you fail to consider with your Flex-Fuel is that you’re not getting the full benefit of a standard gallon of gasoline. You’re getting only about 75% of the fuel economy that you would otherwise. No bargain at all when you do the numbers. See

Comments are closed.

%d bloggers like this: