LONDON, Feb 6 (Reuters) – Fracturing oil and gas from
tight rock formations promises secure energy supplies for
generations, but only if industry and regulators can convince
voters it can be done safely without poisoning water supplies or
adding to global warming.

Like other forms of petroleum production, and innovative
technologies such as liquefied natural gas and nuclear, shale
gas and oil need a political “licence to operate”. The
still-born nuclear industry shows what happens when industry and
regulators fail to win the public argument over safety and
environmental impacts.

LONDON, Jan 30 (Reuters) – Investors’ enthusiasm for
commodity indices and other investment products has supported a
huge expansion in banks’ commodity desks as well as the number
of specialist commodity funds and hedge funds. The question is
whether it can be sustained if returns do not start to improve.

The best columns begin with a chart. This one starts with a
graph showing excess returns on the Standard and Poor’s Goldman
Sachs Light Energy Index since 1970:

LONDON, Jan 27 (Reuters) – Intra-day price movements
are becoming less informative about longer-term changes in oil
prices as the ratio of genuine price signals to random noise
deteriorates, at least over shorter-time horizons.

Even a cursory look at the chart for front-month Brent
futures reveals that significant intra-day moves are
increasingly being reversed before the market closes, more often
than not leaving prices back where they started.

LONDON, Jan 26 (Reuters) – EU sanctions on Iran’s oil
exports and fears about disrupted supply lines may not have made
bullish oil analysts more confident since the start of the year,
but they have forced bears with below price average forecasts to
scale back their estimate of downside risk.

Seven analysts have made significant changes to their
forecasts for average Brent crude prices in 2012 in January
compared with December, according to an analysis of the latest
oil price poll published by Reuters.

LONDON, Jan 26 (Reuters) – EU sanctions on Iran’s oil
exports. Signs of building economic momentum in the United
States. Renewed recession in Europe. China’s slowdown. Forecasts
from the Fed that it expects to leave interest rates at
ultra-low levels until the end of 2014.

Ordinarily any one of these factors would be enough to cause
a sharp move in oil prices. Prominent analysts have warned that
price risks on both the upside and the downside will be
unusually large in 2012. The mantra was “buy volatility”.

LONDON, Jan 25 (Reuters) – Hydraulic fracturing and
horizontal drilling have laid to rest concerns about peaking oil
and gas supplies for a generation, but they have also made the
search for comprehensive policies to restrain greenhouse gas
emissions more urgent.

In a world where fossil energy remains abundant and
relatively cheap the economy will combust increasing quantities.
Oil and gas reserves will last long after the planet has been
gently cooked unless governments enact deliberate policies to
restrain consumption.

LONDON, Jan 24 (Reuters) – Jobs have taken over from
emissions as the main currency for measuring the impact and
benefits of energy policy in the United States as recession and
fears about structural decline push climate change down the list
of priorities.

In an editorial previewing President Barack Obama’s State of
the Union, White House energy and climate change adviser Heather
Zichal highlighted the Department of Energy’s loan guarantee
programme, which “has already supported more than 40 clean
energy projects that will ultimately employ more than 60,000
Americans”.

LONDON, Jan 24 (Reuters) – President Barack Obama will
use his annual State of the Union address to call for a “new era
of American energy”, according to advance materials being
circulated in Washington.

The White House is trying to shape reactions and reclaim the
initiative going into this year’s presidential election
campaign.

LONDON, Jan 20 (Reuters) – Critics will seize on a
government report, showing U.S. natural gas exports could raise
prices for domestic users, to press the Department of Energy to
withhold permission for a string of new LNG export terminals.

But restricting gas exports to ensure a captive supply of
cheap energy for U.S. chemical companies and other manufacturers
would constitute a crude form of protectionism. It is not
consistent with U.S. policies favouring free trade abroad and
free markets at home.

LONDON, Jan 19 (Reuters) – President Barack Obama’s
decision to block Keystone XL is an illustration of everything
that is wrong with U.S. energy policy.

There are strong arguments for and against the project. But
leave them to one side for the moment (“This announcement is not
a judgement on the merits of the application”, according to
Obama) to focus on the decision-making process itself.