A year ago, the emergence and consequences of the Covid-19 pandemic had a huge impact on the energy stories of the year. This remained true in 2021, as supply chain problems combined with an economic recovery caused prices to skyrocket.
1. Energy prices are skyrocketing
For the average person, the sharp rise in gasoline prices is probably the story that has hit them the most. The root cause dates back to the Covid-19 pandemic, which had a negative impact on oil production. Demand has returned, but supply has not caught up. It is a recipe for higher oil prices, and subsequently higher gasoline and natural gas prices. Consumers saw it, as gasoline prices hit their highest level since 2014. President Biden has finally announced a release of oil from the Strategic Petroleum Reserve in an effort to stem the rise in prices. gasoline.
2. The natural gas crisis in Europe
If you live in Europe, this was probably your best energy story of the year. For some of the same reasons faced by the United States, Europe has suffered from a shortage of natural gas this year. This was exacerbated towards the end of the year by nuclear power plant failures and cold weather. Russia could help alleviate the crisis, but Germany has suspended the certification process for Russia’s Nord Stream 2 pipeline. These factors have helped push natural gas prices in Europe into record territory, resulting in the shutdown of some factories. It also caused some utilities to opportunistically switch back to coal as the crisis unfolded.
3. Executive Orders of President Biden
On the second day of his term, President Biden signed an executive order on protecting public health and the environment and restoring science to tackle the climate crisis. The biggest takeaway from the Executive Order was the cancellation of the Keystone XL pipeline license. The project was rejected by President Obama in late 2015, accelerated by President Trump in 2017, and again rejected by President Biden in 2021.
Next, the administration issued Secretariat Order No. 3395, which implemented a 60-day suspension of new oil and gas rental and drilling licenses for federal land and water. President Biden followed that action with an executive order on tackling the climate crisis at home and abroad. The biggest takeaway from that ordinance was an “indefinite pause on new oil and gas leases on public lands” until a full review of the impacts of climate change can be completed.
Although it will take years for some of these actions to have an impact on the oil supply, the political impact was felt immediately. As gasoline prices continued to rise, many pointed to Biden’s executive orders as the reason. And for its part, TC Energy
4. Energy stocks are skyrocketing
Soaring energy prices hit consumers hard, but energy companies have had a great year. The energy sector is on course to have its best year in two decades. Year-to-date (YTD), the sector has been the top performer in the S&P 500, nearly doubling the index’s return. For example, ConocoPhillips
5. The 2021 infrastructure bill
The $ 1.2 trillion infrastructure investment and jobs law was enacted by President Biden in November. Although the bill covers many areas, it promises to have a huge impact on our energy production and consumption in the years to come. The bill provides for new federal spending for electric vehicle (EV) charging stations and upgrades to the electricity transmission network. Both aim to accelerate the transition to electric vehicles. There are also provisions to encourage energy efficiency, as well as the domestic sourcing and manufacturing of many clean energy technologies (e.g. batteries, solar panels, wind turbines)
There are a number of other stories that could arguably qualify for the Top 5, and certainly the Top 10 Energy Stories of the Year.
Winter storm Uri in Texas caused a major electricity crisis there that left more than 200 people dead. The COP 26 deal on emission reductions was a big story, but only time will tell if the deals had the impact they intended. Operating nuclear power plants continue to be shut down (eg Indian Point in New York), and this may have significant implications for future power supplies (similar to what Europe is currently experiencing).
These are the best energy stories as I saw them in 2021. Thank you for reading me and wish you a Merry Christmas and Happy Holidays.