Search

Begin New Search Topic Gas

111. Tangled Web: The Role of Oil, Gas and Mining in Funding Regional Governments in Indonesia

Author:
David Manley, Rani Febrianti, and Hari Subhash
Publication Date:
03-2020
Content Type:
Special Report
Institution:
Natural Resource Governance Institute
Abstract:
Indonesia’s system of funding provincial, district and city governments is one of the most complex in the world, and has undergone substantial expansion over the last two decades. While the system allows thousands of authorities to function, it is failing in three respects: inequality of funding between regions persists, funding for some governments is unpredictable and volatile and some oil- and gas-rich regions have not sufficiently prepared for a possible future with much lower revenues. Indonesia’s planning ministry, Bappenas, should investigate these issues further focusing particularly on clarifying policy objectives, ensuring more reliable funding, supporting oil- and gas-rich regions in becoming more resilient to a long-term decline in prices and clarifying the published rules around the funding system.
Topic:
Civil Society, Government, Oil, Gas, Media, Mining, and Political Parties
Political Geography:
Indonesia and Southeast Asia

112. A Race to the Bottom and Back to the Top: Taxing Oil and Gas During and After the Pandemic

Author:
David Manley, David Mihalyi, and Colin Fleming
Publication Date:
10-2020
Content Type:
Policy Brief
Institution:
Natural Resource Governance Institute
Abstract:
Earlier this year as people around the world responded to the coronavirus pandemic, their demand for oil tumbled. At the same time, OPEC and Russia initially failed to agree to coordinate supply cuts. Consequently, the price of a barrel of Brent crude oil fell from $60 in December 2019 to $20 in April 2020. As of this publication, the price is $43. If the price stays low, and if oil executives expect the price to remain low, companies may lobby governments to reduce taxes and other costly regulations. Payments to governments are often larger than costs for a company, so there is pressure on governments to reduce taxes to keep projects viable. This briefing considers the following key questions: Where will the oil price go next? What is the impact on currently operating projects, undeveloped projects, and those that are yet to be discovered? How should governments respond in changing oil and gas taxes? Will governments try to “race to the bottom,” but then lose a race back to the top? Key messages: There’s no certainty over future prices. Some rise is likely in the next few years, even if an energy transition results in a structural decline in the oil price in the longer-term. Governments must consider this uncertainty and probable rise when taxing oil and gas. Tax breaks on most currently operating projects are likely a waste of public money. Some governments may be pressured into reducing tax on projects awaiting development. But they must identify which projects would become viable with lower taxes, and which do not need a tax break. If in doubt, governments should consider whether a project that needs a tax incentive really will provide value for the country. For most countries, relative to total oil and gas produced, the production from projects that could be delayed or cancelled is small. But not so for the “new producer” countries like Senegal and Guyana. Changing taxes to make a country more attractive has the most impact before companies have invested – e.g., in attracting investment in licensing rounds. But setting low taxes now could force a government to raise taxes later if prices rise again. If a tax break is unavoidable, governments could use a “sunset clause” to limit the duration of the tax break. Ideally, governments should set progressive tax regimes that respond to changes in profit. But as many taxing authorities struggle to measure profit, governments could set simpler tax regimes based on sales revenue or prices – but must prepare to change tax rates in the future, and be prepared for the repercussion for a government’s credibility with investors. Governments should disclose contract terms detailing tax changes, tax exemptions, incentives and estimated break-even prices of projects to help government auditors, local think tanks, and the public check and support tax policy decisions.
Topic:
Oil, Natural Resources, Gas, Tax Systems, Commodities, Coronavirus, and Revenue Management
Political Geography:
Global Focus

113. Under a Cloud: The Future of Middle East Gas Demand

Author:
Robin Mills
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
During the early years of the 21st century, the Middle East emerged as a fast-growing center not just of natural gas production and exports but also of demand. Including Egypt, total growth in annual demand from 2000 to 2017 was greater than any region except Asia, a feat more surprising when considering the region’s relatively small population and economy. That’s about to change, however. After two decades of rapid expansion of natural gas consumption in the Middle East, growth should drop through 2035 due to four factors: improved efficiency, higher gas prices, slower economic growth, and alternative generation. Demand growth was driven by low, subsidized gas prices intended to spur economic growth, encourage energy-intensive industrialization, and share some benefits with the local population. But budget deficits and unsustainably rising domestic energy consumption have encouraged regional governments to cut subsidies and introduce efficiency policies, particularly since the fall in oil prices in late 2014. Industrial demand growth is also poised to fall as the Middle East’s key competitive advantage was its low energy and feedstock cost. The analysis undertaken in this paper to project future gas demand in the Middle East yields significantly lower estimates than forecasts by a number of international bodies (IEA, GECF, BP, ExxonMobil), especially post-2030.
Topic:
Energy Policy, Natural Resources, Gas, and Trade
Political Geography:
Middle East

114. Columbia Global Energy Dialogue: Natural Gas Flaring Workshop Summary

Author:
Marianne Kah
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The rapid expansion in tight oil production with its associated natural gas has made the United States the fourth largest source of flared gas in the world. The waste, emissions, and pollution caused by this flaring threatens not only the environment and human health but, ultimately, the license to operate for oil and natural gas companies. Responding effectively to the challenge of flaring requires technically and economically sound solutions that also enjoy political credibility and support. To be most credible, solutions for flaring need to be developed through open and transparent processes that provide for candid and constructive engagement by a diverse group of stakeholders. In January 2020, Columbia University’s Center on Global Energy Policy and the Energy Institute of the University of Texas at Austin gathered senior executives from the US oil and natural gas industry; current and former state government regulators; technical, market, and academic experts; and non-governmental organization (NGO) representatives with expertise in this topic for a workshop under the Chatham House Rule to discuss challenges and potential solutions to gas flaring, primarily in the Permian Basin. The gas flaring workshop focused on trends in gas flaring and greenhouse gas emissions in the United States, flaring and public policy, the disconnect between production growth and midstream infrastructure capacity, best practices and technological solutions for minimizing flaring, and regulatory and other solutions. Participants identified challenges to tackling flaring in the Permian, including poor data quality, the disconnect between the start of associated gas production and the availability of pipelines and other takeaway capacity, and the competition gas faces in the important Texas and California markets from lower-emission energy sources, and from coal in Texas. Participants also discussed potential solutions to these and other Permian flaring challenges.
Topic:
Energy Policy, International Trade and Finance, Oil, Natural Resources, and Gas
Political Geography:
North America and United States of America

115. The 2020 Oil Crash’s Unlikely Winner: Saudi Arabia

Author:
Jason Bordoff
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
With 4 billion people around the world under lockdown as the coronavirus pandemic grows, demand for gasoline, jet fuel, and other petroleum products is in freefall, as are oil prices. The price of a barrel of crude has been so low in the United States that sellers recently had to pay people to take it off their hands. As a result, oil-dependent economies are reeling. In the United States, the largest oil producer in the world, the number of rigs drilling for oil has plummeted 50 percent in just two months, almost 40 percent of oil and gas producers could be insolvent within the year, and 220,000 oil workers are projected to lose their jobs. Around the world, petrostates from Nigeria to Iraq to Kazakhstan are struggling and their currencies tanking. Some, like Venezuela, face an economic and social abyss. While 2020 will be remembered as a year of carnage for oil nations, however, at least one will most likely emerge from the pandemic stronger, both economically and geopolitically: Saudi Arabia.
Topic:
Energy Policy, Oil, Natural Resources, and Gas
Political Geography:
Middle East, Saudi Arabia, and Gulf Nations

116. The Impact of Covid-19 on LNG Supplies

Author:
Erin Blanton
Publication Date:
05-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The global LNG market, like most commodities markets, has been hit hard by the Covid-19 pandemic. The ensuing demand collapse came after a warm Northern hemisphere winter that left the global market oversupplied, and now prices for spot LNG cargoes are expected to remain low well into 2021. As market watchers search for clues as to how and when demand may recover, the coronavirus could actually bring forward and intensify longer-term tightening of the LNG market by creating conditions that do not favor additional investments in LNG projects. Already, lockdowns have slowed construction on projects in the works and companies are delaying final investment decisions (FIDs) on potential LNG supply projects by several years. The global LNG market could face a supply shortfall in a few years, a scenario that seemed unlikely at the start of 2020 when proposed projects with 186 million tons of capacity were in the pipeline. The ability of the oil and gas industry to recover from the impacts of coronavirus will have a long-term effect on companies’ potential to secure the financing required for multibillion-dollar investments in LNG supply. In addition to the 359 million tons (MT) of existing global LNG supply, there is over 100 MT of supply under construction and expected online by 2025. Some 30 MT of that supply was expected over the next 18 months, but the timing now appears in doubt.[1] These factors will create additional pressure on the LNG industry, which was already facing difficult questions, including how natural gas will fit into global efforts to reduce greenhouse gas emissions and ongoing trade relations between the US and China.
Topic:
Natural Resources, Gas, Pandemic, COVID-19, and LNG
Political Geography:
Global Focus

117. Reform Is in the Pipelines: PipeChina and the Restructuring of China’s Natural Gas Market

Author:
Erica Downs and Sheng Yan
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Beijing launched the most ambitious reform of China’s oil and natural gas industry in more than two decades with the establishment of the China Oil & Gas Piping Network Corporation (PipeChina) last December. The company is being developed from midstream assets—pipelines, liquified natural gas (LNG) import terminals, and storage facilities—and personnel transferred from China’s national oil companies (NOCs). Beijing expects that its goals of increasing China’s domestic and imported natural gas supplies and consumption will be more effectively advanced by having China’s midstream infrastructure owned and operated by a single company that provides fair and open access to its pipelines, LNG import terminals, and storage facilities instead of by three NOCs reluctant to grant third-party access to infrastructure.
Topic:
Energy Policy, Natural Resources, Gas, and LNG
Political Geography:
China and Asia

118. Nowhere to Hide: Implications for Policy, Industry, and Finance of Satellite-Based Methane Detection

Author:
Jonathan Elkind, Erin Blanton, Robert Kleinberg, and Anton Leemhuis
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
In August 2020, the Trump Administration finalized plans to roll back regulations on oil and gas industry emissions of methane from new and modified infrastructure. In the same month, the European Commission gathered stakeholder comments as part of its process to introduce the first EU-wide methane regulations. Though contradictory in direction, these regulatory processes on opposite sides of the Atlantic highlighted a critical climate protection challenge: How can the oil and gas industry—and the regulators who oversee it—best detect and address methane emissions to protect the environment and the climate in particular? The answer to this question will drive planning and operational approaches in the oil and gas industry. It could also significantly affect the future role of natural gas. Five years ago, many energy analysts expected natural gas to serve as a bridge fuel that would result in only half as much climate warming as coal, and fewer local air pollutants. Among other roles, gas was seen as a natural complement for variable wind or solar power—a way to provide firm, dispatchable, low-emissions power. Now that it is apparent that our understanding of methane emissions is poor, the climate implications of gas are far less clear. This poor grasp of methane emissions appears likely to become a thing of the past, however. In roughly the next five years, new satellite detection systems—used in concert with existing systems, aerial monitoring platforms, and ground-based monitors—can increase markedly the transparency surrounding methane leakage. The new wave of satellite monitoring capability has major implications for industry and governments. Our world is rapidly becoming a place in which methane emissions will have nowhere to hide. This commentary, co-authored by the Center on Global Energy Policy and TNO, focuses on detection and response to oil- and gas-related methane emissions, which have been the subject of increasing focus on the part of industry and the public policy community. It addresses the significance of methane emissions for the climate, and the challenges of detecting and accurately quantifying methane emissions. It then explores the evolving capabilities of satellite-based methane detection and monitoring systems, which are expected to advance rapidly in the coming years, and which can be especially powerful when used in concert with aerial and ground-based monitoring systems. It concludes with a discussion of the implications of the changing satellite detection landscape for the oil and gas industry, the finance and investment community, and the realm of public policy.
Topic:
Climate Change, Energy Policy, Environment, Gas, Finance, and Methane
Political Geography:
Global Focus

119. Completing the Southern Gas Corridor: SGC in a Post-pandemic World

Author:
Akhmed Gumbatov
Publication Date:
09-2020
Content Type:
Journal Article
Journal:
Baku Dialogues
Institution:
ADA University
Abstract:
The global spread of the latest zoonotic virus, commonly known as COVID19, has become an unprecedented calamity for all humankind. By the time this publication goes to press, it is likely that worldwide around 25 million people will have been infected and the number of lives lost will approach the one million mark.
Topic:
Energy Policy, International Political Economy, Natural Resources, Gas, and Pandemic
Political Geography:
Europe, Caucasus, Asia, and Global Focus

120. ESG Investing and the Oil and Gas Industry: Moving Toward a Holistic Approach to Risk, Governance; Performance Measurement, Disclosure, and Results

Author:
Hon Xing Wong, Marianne Kah, and Erin Blanton
Publication Date:
11-2020
Content Type:
Working Paper
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 17, 2020, Columbia University’s Center on Global Energy Policy (CGEP) held a virtual workshop about environmental performance in the oil and gas industry. Investors, senior oil and gas industry executives, NGOs, and other stakeholders participated in this candid discussion about how environmental risks should be measured, disclosed, and incorporated into investment decisions.
Topic:
Energy Policy, Oil, Natural Resources, Gas, and NGOs
Political Geography:
Global Focus