A big day in energy. The bad news from up north is the Shell oil rig that has run aground off Kodiak Island. Eighteen crew members have been evacuated but an unexpected tropical-like storm as hindered efforts to connect a tow line. The accident occurred when the tugboat towing the rig lost engine power. Ironically, as Huffington Post notes, the rig was steaming to get out of Alaskan waters in order to avoid a tax liability that would be incurred after January 1.
And speaking of accidents, Transocean, the rig owner in the Gulf of Mexico spill, has agreed to settle with the Justice Department for $1.4 billion. The company was scheduled to go to trial in two weeks on manslaughter charges. Millions from the settlement will go to Gulf communities for recovery. The settlement brings to a close the 2010 incident. BP, the co-partner in the Deepwater Horizon operation, also settled recently. Transocean’s stock took a big jump as investors were happy to see the matter finally settled.
Green energy is emerging as the big winner in the Fiscal Cliff deal that made its way through Congress on Monday. Nearly all the green energy subsidies remained and then some. The Standard-Examiner notes there is “weird stuff” in the bill, including subsidies for two-wheeled electric scooters and coal mined on Indian reservations. “It isn’t all green.” The wind industry got a one-year reprieve but the manufacturers are now looking for something more permanent. To the Heritage Foundation, however, it’s all corporate welfare.
Corporate welfare seems to be working very well in California as major firms pile into the state to take advantage of renewable subsidies and mandates. GE, MetLife, Citibank and Mitsubishi have all invested in Electricitie de France’s plans to build solar and wind projects in the Golden State. Warren Buffett’s MidAmerica had just bought a 579-MW solar plant from SunPower as well. Does that mean the future of renewables is bright? No, it just means that California has applied so many subsidies and mandates that institutional investors such as Citibank and MetLife figure they can’t lose. The response is so great that Public Utilities Commission President Michael Peevey says the state may exceed its renewable goals.
Finally, nuclear energy once again seems to be gathering strength as China begins a new reactor project at Shandong and Japan’s new government seems ready for a cautious return to the technology. South Korea appears willing to accept the risks of nuclear development and even Egypt’s Muslim Brotherhood government is looking into reviving a reactor construction project – although there may be ulterior motives there. Uranium stocks have become hot items as a result of all this, but German Environment Minister Peter Altmaier still vows, “Never again.”