Commentary Series

THE SHRINKING PATH FORWARD FOR U.S. OILFIELD SERVICES

The recent oil price collapse is setting the stage for yet another steep decline in revenue and profit for the U.S. Oilfield Services (OFS) sector. As challenging as it will be for U.S. OFS companies to weather this storm, it represents just another blow to a sector already beleaguered by its and its customers’ inability to deliver adequate financial returns and longer-term demand uncertainty given climate change (decarbonization) concerns. All of these threaten to shrink and transform OFS in the years to come. March 31, 2020.

COVID-19 PANDEMIC AND THE GLOBAL ECONOMY

Payne Institute Fellow Jamal Saghir writes a timely commentary.  When some experts described the COVID-19 pandemic as the most dangerous global challenge since World War II, potentially overshadowing the 2008-2009 financial crisis- they were correct. Although disasters diverge in their causes and scope of impact, they are connected by the necessity for coordinated international, regional, national, and local responses. The world is on the verge of major economic recession and the impact on every country, rich or poor, will be tremendous unless early actions are implemented quickly. March 30, 2020.

LEANING IN: MOVING AHEAD OF REGULATIONS FOR NATURAL GAS EMISSIONS

Payne Commentary about the natural gas industry, which is facing a number of headwinds. These challenges include decarbonization, electrification, and digitization. More recent pressure stems from low and volatile prices, supply gluts, heavy debt loads, and a nascent oil “war”.  March 19, 2020.

TRASHY DATA, AN EXAMINATION OF ORGANIC COMPOST DIVERTED FROM MUNICIPAL SOLID WASTE STREAMS

Payne Institute student John Massale comments about the recycling policy regarding Municipal Solid Waste (MSW) varies by region, county, and city.  This research examined the type of policy that leads to the largest diversion of compostable materials from landfills.  The data was gathered by performing small case studies of a handful of US cities that have established voluntary, mandatory, or incentivized composting programs.   January 27, 2020.

COLORADO EMISSION REDUCTION TARGETS: LOFTY GOALS OR REACHABLE TARGETS?

Payne Institute student Anna Evans comments on Colorado’s relative position in setting emission reduction targets, an analysis of Colorado’s potential reduction strategies, and looking specifically at the effects that improved insulation or the adoption of LED lighting in residential homes would have on residential emissions.  January 9, 2020.

DENVER, LYFT, AND THE ELECTRIC FUTURE

Payne Institute student Will Callahan comments about emissions from the transportation sector that pose a great risk to global health. Vehicle electrification is one way to mitigate tailpipe emission, thereby reducing the health risk. Gov. Jared Polis and Lyft recently announced Lyft’s plan to add 200 electric vehicles (EVs) to the Denver fleet. Data from EVI Pro Lite, Auto Alliance, and a doctoral dissertation on ride-hailing were used to estimate the impact of Lyft’s decision on Denver’s emission profile and existing charging infrastructure. An initial injection of 200 EVs will have a small but non-negligible effect on emissions.  January 6, 2020.

COLORADO’S 2019 CLIMATE ACTION PLAN

The Payne Institute Commentary Series has added a Student Viewpoint: Colorado’s 2019 Climate Action Plan by Madeline R. Macmillan. November 11, 2019.

POST-CONFLICT ENERGY PLANNING IN THE MIDDLE EAST

We examine the primary policy constraints that affect post-conflict energy planning in the Middle East region. The focus countries are Iraq, Syria, Yemen and Libya. We also highlight the role of renewable energy projects in promoting sustainable energy planning post-conflict. October 18, 2019.

LATIN AMERICA’S DIVERSE LITHIUM OPPORTUNITY AND LITHIUM IN A BATTERY

A two part series discussing lithium and how it can be processed into a pure metallic state, its application and uses in the growing battery market are as chemical compounds. Lithium production is relatively scarce and complex. The lithium market is growing exponentially but is marked by volatility in the short term.  September 30, 2019.
Part 1 – Latin America’s Diverse Lithium Opportunity and a Sustainable Energy Future
Part 2 – Lithium in a Battery
Parte 1 – Las Diversas Oportunidades para el Litio en Latinomérica y un Futuro Energético Sustentable
Parte 2 – El Litio en una Batería

INVESTING IN RESILIENT INFRASTRUCTURE PROJECTS

Both the public and the private sectors face challenges accessing capital and financing for climate resilience projects, as well as justifying the upfront costs by Jamal Saghir.  June 2019.

THE GOLD RUSH IN VENEZUELA COULD DESTABILIZE LATIN AMERICA AND THE CARIBBEAN

David Soud writes regarding Venezuela and the illegal gold mining that has become big criminal business, and now poses a major security risk to that troubled country’s neighbors. As Venezuela slides toward possible collapse, gold has replaced the country’s world-leading oil reserves as a means to prop up the nearly bankrupt Maduro regime. May 2019.

MOVING TO ZERO ROUTINE GAS FLARING IN COLORADO

In 2015, the World Bank launched an initiative to help move oil and gas producers across the world to “Zero Routine Flaring” by 2030 by Bjorn Hamso.  May 2019.

URBAN RESILIENCE: THE CASE OF THE MIDDLE EAST AND NORTH AFRICA REGION

As the World becomes predominantly urban, cities are increasingly emerging as the center field where the main challenges for sustainable development and growth must be tackled.  April 2019.

GLOBAL COMMODITY AND TRADE FLOWS THREATENED BY MENA POWER PROJECTIONS

International geopolitical discourse lately has been looking at the growing impact of China’s One Belt One Road initiative in Asia, Middle East and Europe. Mainstream media has extensively assessed the influence of China’s economic power projections in the targeted regions, with specific focus on the financial power of Beijing to change alliances and regional constellations. March 2019.

SCALING UP ENERGY EFFICIENCY IN EMERGING MARKETS: GLOBAL EXPERIENCES, CHALLENGES AND OPPORTUNITIES

As developing economies will play an increasingly critical role in driving global economic growth, their lack of established sound policy frameworks and mechanisms to reduce energy intensity risk negating any progress that has been made to shift the global economy to a cleaner and more efficient energy system. February, 2019.

CIRCULAR ECONOMY FOR THE ENERGY TRANSITION

The linear economy has negative impacts on the economy and environment as it relies on a continuous supply of virgin resources, omitting the utilization of the value in waste products and the synergies between the different sectors and stages of the economy. January 2019.

FOR AFRICA, IT’S GRID + OFF-GRID, NOT GRID VS. OFFGRID

Can Africans increase their access to energy faster and more broadly through an on-grid or an off-grid approach? October 2018.

PROPOSITION 112 IMPACTS ON COLORADO

Proposition 112 is a critical change in how oil and gas is regulated in Colorado, and many claims are being made about the impact. October 2018.

SIMPLE PAYBACK – THE DEATH OF MOST COST EFFECTIVE CLEAN ENERGY PROJECTS

In our personal lives, we tend to use reasonably sophisticated decisionmaking criteria, such as return-on-investment (ROI), to make retirement investment decisions. However, at work many of us seem to default to simple payback as the primary decision-making
method for clean energy investments, including energy efficiency, renewable energy and cogeneration projects. October 2018.

SUSTAINABLE FLOOD PREDICTION AND MITIGATION

Floods pose a major impact on society by loss of life, livelihood, infrastructure, agricultural lands, and water quality. October 2018.

COLORADO OIL AND GAS DEVELOPMENT AND A POLITICALLY-CHARGED BALLOT PROPOSITION

Politics are local, so good policy must be deeply rooted in local context, be precisely written, acknowledge the need to be flexible or adaptable over time, and have a realistic chance of meeting its objectives. October 2018.

THE EVOLVING ROLES AND STRUCTURES OF UNIVERSITY-AFFILIATED ENERGY AND ENVIRONMENT INSTITUTES

This is a Working Paper that we hope will elicit comments and suggestions that will be used to refine and augment the work. Its principal impetus was to better understand the landscape of university-affiliated energy and environment institutes to inform the development of the nascent Payne Institute at the Colorado School of Mines. October 2018.

THE WORLD’S MOST DANGEROUS BLACK MARKET

The oil market value is larger than the world’s valuable raw metal markets combined, with an annual production value of USD 1.7 trillion (compared to USD 660 billion for other commodities like gold, iron, copper, aluminum, and zinc). It is the most traded commodity on global markets and still the world’s leading energy source, with growing demand, a volatile pricing system, and much of its production in volatile geographic regions. It comes as little surprise, therefore, that production and trade in crude oil and refined petroleum products has produced a flourishing black market. October 2018.

A NOTE ON THE IMPACTS OF PROPOSITION 112

Colorado Proposition 112 proposes to prohibit oil and gas drilling within 2500 feet of homes, schools, or other “occupied structures” or “vulnerable areas”. October 2018.

THE FUTURE OF NATURAL GAS: A TALE OF TWO WORLDS

While shale gas has “revolutionized” the energy sector in the United States, and is starting to have an impact on global LNG trade, the picture is very different in other parts of the world. October 2018.

A GUIDE TO ECONOMIC AND POLITICAL COMPLEXITY OF FOSSIL FUEL SUBSIDY REFORMS

Explores the complex economics and politics of fossil fuel subsidies, and distils key principles for designing and implementing of effective reforms. September 2018.

FLORENCE AFTERMATH

The U.S. DOE is regularly issues status reports about the impact of Hurricane Florence on the energy sector. They outline six steps for addressing power outages ranging from generating plants, to transmission, to essential services and homes. September 2018.

INDIA’S SOLAR IMPORT DUTIES ARE SLOWING DOWN THE CLEAN ENERGY TRANSITION

In India, Prime Minister Narendra Modi’s government aims to install 227 gigawatts of renewable power generation capacity by 2022. Accounting for one-half of the targeted capacity, solar power plays a key role in these plans. September 2018.

OIL SECURITY AND GEOGRAPHY

For ten days starting July 25, Saudi Aramco suspended all oil shipments through the Bab al-Mandeb Strait, one of the world’s most vital oil chokepoints, after two Saudi oil tankers were attacked off the coast of Yemen. One of the ships was lightly damaged but no one was injured. The incident marked at least the fifth time this year that an oil tanker has been targeted by Houthi militants backed by Iran. Over the last three years, the Houthis have deployed mines, anti-ship cruise missiles, explosive drone skiffs, and their own attack boats. August 2018.

IMO 2020: ECONOMICS PROSPECTS

With the IMO 2020 rule’s imposition, diesel fuel prices could skyrocket, and the 2020 GDP loss might be as much as seven percent. August 2018.

ENERGY EFFICIENCY AND THE SUSTAINABLE DEVELOPMENT GOALS

The United Nations Sustainable Development Goals (SDGs) were adopted in September 2015. They significantly broaden the areas covered by the Millennium Development Goals (MDGs) and give an official recognition of the central role of energy as an enabler for development. August 2018.

OIL SECURITY AND GEOGRAPHY

Rising Tensions Threaten Middle East Oil Chokepoints: Background and Policy Options. August 2018.

TAXATION AND INVESTMENT DECISIONS IN PETROLEUM

When governments apply high tax rates targeted at natural resource rent, there must be generous deductions in order to avoid investment  disincentives. How generous is disputed. Based on standard theory and recommendations from the OECD and the IMF, the value of future deductions depends on the risks of these, and the companies’ after-tax weighted-average cost of capital cannot be applied directly. June 9, 2018.

GLOBAL INDUSTRIAL CARBON DIOXIDE EMISSIONS MITIGATION: INVESTIGATION OF THE ROLE OF RENEWABLE ENERGY AND OTHER TECHNOLOGIES UNTIL 2060

The Paris Climate Agreement objective of well-below 2 degrees global average temperature change requires the elimination of anthropogenic CO2 emissions shortly after 2060. The industry sector is an important source of greenhouse gas emissions. By Dolf Gielen, Payne Institute fellow and director of technology and innovation at the International Renewable Energy Agency. June 2018.

POLITICS AND BARRELS OPEC-RUSSIA PRODUCTION DECISION LEAVES MARKET IN THE DARK

Cyril Widdershoven, Payne Institute fellow and founder of Verocy, authors viewpoint for the Payne Institute commentary series. June 2018.

A NEW VIEW OF HUMAN ACTIVITIES FROM SPACE

This new image is a USA-focused subset from the 2017 Black Marble produced by the NOAA Earth Observation Group in Boulder, Colorado. The NGDC Earth Observation Group specializes in nighttime observations of lights and combustion sources worldwide. The group started working with DMSP data in 1994 and has produced a time series of annual cloud-free composites of DMSP nighttime lights. June 2018.

OUR MENTAL MODELS OF MINERAL DEPLETION—AND WHY THEY MATTER

Shortages of mineral commodities can arise for numerous reasons—mineral depletion, inadequate investment in new mines and processing facilities, unanticipated surges in demand, cartels, embargoes, wars, mine accidents, and even prolonged strikes. It is useful, however, to separate mineral commodity shortages into two distinct groups. The first includes shortages due to mineral depletion; the second, shortages owing to all other causes. May 2018.

HERE COMES THE SUN: WASHINGTON AND U.S. SHALE NEED TO WATCH OUT FOR THE NEW SUN KING

The world tour of Saudi Crown Prince Mohammed bin Salman (MBS) has generated enough interest and support in the West to proceed with his Vision 2030 and regional power plans. April 2018.

FOSSIL FUEL SUBSIDY REFORMS AND THEIR IMPACTS ON FIRMS

While the potential adverse effects of fossil fuel subsidy reform are well documented for households, the literature has largely ignored the effect of subsidy reform on firms’ competitiveness. This paper discusses how firms are affected by, and respond to, energy price increases caused by subsidy reforms. It highlights that cost increases (both direct and indirect) do not necessarily reflect competitiveness losses, since firms have various ways to mitigate and pass on price shocks. June 27, 2017.

THE SUPPLY-SIDE EFFECTS OF ENERGY EFFICIENCY LABELS

There is debate regarding the efficacy of energy-efficiency labels as a means to “green” the economy. The manner in which labels provide Information is important, people will ignore labels that are difficult to interpret. Further, demand for energy efficient homes will only translate into a greener housing stock if the supply side—builders and existing home owners—respond by investing in energy efficient construction.  This analysis will test for a housing supply side response when the form of the energy efficiency label is altered. January 2016.

BRIBES, BUREAUCRACIES, AND BLACKOUTS: TOWARDS UNDERSTANDING HOW CORRUPTION AT THE FIRM LEVEL IMPACTS ELECTRICITY RELIABILITY

This paper looks at whether bribes for electricity connections affect electricity reliability. Using detailed firm-level data, we estimate various specifications based upon repeated cross-sections and means-based pseudo-panels to show that bribes are closely related to poorer electricity reliability. December 2015.

RATIONALIZING TRANSPORT FUELS PRICING POLICIES AND EFFECTS ON GLOBAL FUEL CONSUMPTION, EMISSIONS GOVERNMENT REVENUES AND WELFARE

Society bears many costs when consumers use transport fuels like gasoline and diesel. To name a few impacts, consumption of transport fuels adds to climate change, local pollution, traffic congestion, and traffic accidents. Fuel consumers do not directly bear the burden of those impacts. November 2015.

OPTIMAL ENVIRONMENTAL BORDER ADJUSTMENTS UNDER THE GENERAL AGREEMENT ON TARIFFS AND TRADE 

Climate change is a global problem, and while coordinated efforts to mitigate climate change can reduce the global cost of action, some countries may choose to not participate. To address “free rider concerns, countries might consider trade restrictions to prevent emissions from shifting to non-regulated regions.  We analyze trade policies that could be used to support regional carbon reductions. November 2015.

POLICY LABELS AND INVESTMENT DECISION-MAKING 

In this paper we show that the WFP has distortionary effects on the renewable technology market. Using the sharp eligibility criteria of the WFP in a Regression Discontinuity Design, this analysis finds a reduction in the propensity to install renewable energy technologies of around 2.7 percentage points due to the WFP.  November 2015.

WHY HAVE GREENHOUSE EMISSIONS IN RGGI STATES DECLINED? AN ECONOMETRIC ATTRIBUTION TO ECONOMIC, ENERGY MARKET AND POLICY FACTORS

The Regional Greenhouse Gas Initiative (RGGI) is a consortium of northeastern U.S. states that have agreed to limit carbon dioxide (CO2) emissions from electricity generation through a regional emissions trading (cap-and-trade) program. Since the initiative came into effect in 2009, CO2 emissions have dropped precipitously, while the price of emission allowances has also fallen. We investigate why emission reductions were achieved so quickly and so inexpensively. November 2015.

CLIMATE POLICY AND COMPETITIVENESS: POLICY GUIDANCE AND QUANTITATIVE EVIDENCE

Climate change is a global problem because greenhouse gases (GHGs) are global pollutants. Countries that undertake unilateral policies to reduce GHG emissions will incur the cost of those policies, while all countries receive the benefits. November 2015.

ETHANOL MANDATE AND CORN PRICE VOLATILITY

Food price shocks can have substantial welfare implications, particularly in the world’s low income regions. A number of previous studies has shown that the United States ethanol mandate has increased average corn price levels. Our results suggest that the ethanol mandate has increased the likelihood of very high price levels by even more than previously thought. November 2015.

DETERMINING THE SUCCESS OF CARBON CAPTURE AND STORAGE PROJECTS

Using data on planned, cancelled, and operational CCS projects, this paper aims to elicit characteristics that render CCS projects likely to become operational. These results suggest that a focus on storage site selection and beneficial uses of carbon dioxide would encourage CCS development. November 2015.

A ONE-TWO PUNCH: JOINT EFFECTS ON NATURAL GAS ABUNDANCE AND RENEWABLES ON COALFIRED POWER PLANTS

This paper analyzes the joint impact of natural gas prices and wind generation on coal generation to better understand the effectiveness of overlapping energy and environmental policies.  The authors develop a statistical model to estimate the operations of generators across four transmission regions within the U.S. November 2015.

THE LOCAL ECONOMIC IMPACTS OF HYDRAULIC FRACTURING AND DETERMINANTS OF DUTCH DISEASE

There are a variety of reasons why an abundance of natural resources might reduce economic growth, including a phenomenon referred to as “Dutch Disease where a boom in local resource production leads to increased costs for other sectors.  We quantify the local economic impacts of the development of unconventional shale oil and gas reserves. November 2015.

 

The Payne Institute experts are regional, national, and international leaders in applied research in natural resources, energy, and the environment. Our team is involved in a wide variety of research projects in these fields, and are committed to sharing these results with academic and professional audiences.

 

DISCLAIMER: The opinions, beliefs, and viewpoints expressed are those of the author alone and do not reflect the opinions, beliefs, viewpoints, or official policies of the Payne Institute or Colorado School of Mines.