As expected, President Obama concentrated on energy for much of his State of the Union Address. The President laid down the gauntlet on climate change, promising executive initiatives if Congress does not act. But he also promised to accelerate the development of oil and gas supplies on federal lands. The President also proposed an "Energy Security Trust" that would take money from the oil companies and invest it in oil-free vehicles.
Unfortunately, the President's proposal came just at the point where New York Times reporter John Broder has set off a firestorm by recounting his hapless adventure in trying to drive a Tesla from Washington to Boston. Broder ran out of charge in Milford, Connecticut and had to be towed (above). Tesla CEO Elon Musk is infuriated by the story and said Broder didn't follow driving instructions. The Times report has revived the issue of range anxiety, however, and Motley Fool reports that Tesla investors are nervous.
While the Keystone Pipeline grabs attention with the big demonstration planned for next Sunday, the US Committee on Foreign Investment has quietly given approval to the Chinese National Offshore Oil Company's purchase of Nexen, the Canadian oil company. The closing now makes China Canada's largest energy investor and that may only be the beginning. If the Obama Administration rejects Keystone, which is beginning to seem more likely, China could be investing in a pipeline to move that tar sands to the Pacific and beyond.
While Canada seeks to sell its oil abroad, the US Senate is still debating whether to allow US companies to export natural gas. The Senate Energy and Natural Resources Committee opened hearings yesterday and the lines are already being drawn. Republicans say go where the market indicates while Democrats prefer pressure-group politics. Manufacturers are pressuring Congress to keep the gas at home although Dow Chemical CEO Andrew Liveris admitted it might encourage other nations to set up trade barriers as well. Texas sees it as a win-win but environmental groups and Hollywood stars have petitioned President Obama to call a "time out."
Finally, the jousting between the European Union and Gazprom continues as Russia continues to maintain its stranglehold on EU energy supplies. Gazprom predicts another 9 percent rise in European exports this year but indications are that the Russian giant its losing its clout. Serbia has won a price reduction and the Ukraine is looking for alternative sources. Gazprom's stock is at a three-year old and Novatek, the other Russian gas giant, is seeking to end Gazprom's monopoly on exports. In the midst of all this, Rem Vyakhirev, the founding father of Gazprom, has died at 78. At least it's nice to see a successful energy businessman being honored in Russia.