Oil industry faces short-term hurricane impact
While it’s too early to know the full economic and human toll of Hurricane Harvey, we expect a relatively short-term impact on the U.S. energy industry.
Australia threatened to impose restrictions on natural-gas exports as it extracted a commitment from global energy companies to supply enough gas to meet growing local demand and prevent a domestic shortage, according to the Wall Street Journal.
In a meeting with Prime Minister Malcolm Turnbull in March, local and international energy companies agreed to make more domestic gas available as soon as possible. They also vowed to supply gas in periods of high demand, such as during heat waves, to prevent more of the widespread blackouts that hit parts of the country’s south late last year.
Mr. Turnbull offered no detail on how much additional gas would be required or where it would come from, but said the new arrangements to ensure sufficient supplies to meet surges in demand would be in place before next summer. He said the government wouldn’t hesitate to regulate exports—possibly even establishing a legislated reservation for domestic use—if the industry wasn’t able to guarantee adequate supply.
“All of the powers that we have under the constitution we reserve to be able to use as and when the national interest demands it. What we’ve sought from the industry is the commitment to ensure that the domestic market has the gas supplies it needs,” Turnbull said after the meeting.
It marks a change in tack for Australia’s conservative government, which has previously argued a reservation policy could raise sovereign risk issues for producers and deter investment in new gas projects. Mr. Turnbull was moved to respond after the operator of the country’s gas and electricity markets warned of a shortfall in gas-power electricity generation in the populous southeast states as soon as next summer if no action is taken. (Source: Wall Street Journal)
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