August 13, 2010

If energy consumption is a major standard by which to judge economic prowess, then China has joined the big leagues. The International Energy Agency now reports that China has surpassed this country to become the world's biggest energy consumer.

The distinction carries with it two implications. The first is that China now possesses unfettered weight in global markets while the second is that it carries new-found obligations to reduce its air emissions. While the Chinese are destined to supply most of their energy needs with coal, natural gas and oil for decades to come, they are nonetheless committed to building out their renewable and nuclear energy programs.

August 09, 2010

When PPL won the auction to acquire E.ON's Kentucky utilities in April, the stock plunged nearly 10 percent and left many investors scratching their heads. In fact, the stock started its steep downward spiral a few days before the actual sale when the Allentown, Pa.-based company was named by E.ON as one of three potential buyers for the assets.

PPL trumpeted that it would increase its geographical diversification and expand its capital structure, but analysts noted that by adding more regulated electricity to its portfolio, PPL was only further reducing its leverage to profit from any upswing in the economy.

July 30, 2010

The Gulf Coast has always indulged the power sector more than the rest of the country. Getting permission to build fossil-fired generation, as well as nuclear plants and LNG facilities, has been typically easier there than elsewhere.

The same is true for both deep and shallow water drilling for oil and gas in the Gulf of Mexico. After all, the region's economy is dependent on that industry. But the BP oil spill has changed some attitudes and forced some additional study. The Obama administration has thus proposed a new moratorium on drilling in the deep waters for oil while giving the less-risky shallow water natural gas developers some latitude.

July 26, 2010

Don't confuse the BP oil spill with the future of natural gas. The fuel is expected to be a global contender when it comes to reducing greenhouse gas emissions from power plants through 2050.

That's the conclusion of an MIT study group, which says that natural gas will erode coal's market share over time and particularly after domestic and international carbon controls are put in place. After 2050, however, the study -- managed by the MIT Energy Initiative -- says that carbon-free fuel sources that include both renewables and nuclear power will assume the central leadership roles.

July 23, 2010

Retail electricity competition has taken a drubbing. But information now out is suggesting that the concept is alive and well, and likely to gain momentum: More customers switched in the first quarter of this year from incumbent utilities to alternative suppliers that purport to deliver lower costs and better services.

Proponents of restructuring say that excessive regulation will lead to inefficiencies that work to the detriment of consumers and new innovation. Critics of retail deregulation are countering that it has always been a pipedream because electricity cannot be inventoried, necessitating that the industry always be under strict oversight.