Tom Russo's blog

Will NAFTA Renegotiation Stop Greening of Mexico’s Power Sector?

Mexico decouples CO2 emissions with electricity generation

Today trade representatives from Canada, Mexico and the United States are meeting in Washington DC to begin renegotiating the North American Free Trade Agreement (NAFTA). Everyone is focused on jobs, competitiveness and modernizing the agreement. Few people are tuned into the environmenal side of things at this time, but they should be because of the environmental benefits. Read more about Will NAFTA Renegotiation Stop Greening of Mexico’s Power Sector?

Use of Natural Gas Indices

How Natural Gas was priced in 2016

Recently the FERC held a technical conference on Natural Gas Indices. Back in March 2017, I was asked by the the Natural Gas & Electricity Journal to write about natural gas indices. I hope the article below will provide a good overview of the issues and stimulate discussion.

"Russo, T. (2017, August). Using natural gas price indices. Natural Gas & Electricity 34/1, ©2017 Wiley Periodicals, Inc., a Wiley company."  Read more about Use of Natural Gas Indices

Will NAFTA's Repeal Threaten U.S. Natural Gas Exports to Mexico and Global Markets?

Mexico is becoming more dependent on pipeline gas from the U.S.

There is a great deal at stake in modernizing the North American Free Trade Agreement (NAFTA). While many news outlets have focused on factory jobs leaving the U.S., I wanted to take a closer look at the growing exports of natural gas to Mexico and how natural gas and electric power infrastructure investments in both countries could be affected if NAFTA is repealed or negotiations go poorly.

Besides energy investments, I also touch upon how U.S. Disrespect disrespect and truculence from President Trump regarding immigration and "the Wall" can influence Mexico's 2018 Presidential Election and lead to a "lose-lose" situation for both countries.  The consequences can be dire and may affect the ability of the U.S. to compete in the global market place.

The University of Colorado Denver's Institute for International Business/CIBER and Global Energy Management Program was kind enough to extend me an invitation to speak on the matter on March 29, 2017. While it's impossible to share all aspects of our discussion, I still wanted to share the presentation [PDF} with you and welcome comments and questions on the subject.

Note: These ideas are my own and I am not representing any organization or government. Nor I am I being paid to write this post. Read more about Will NAFTA's Repeal Threaten U.S. Natural Gas Exports to Mexico and Global Markets?

The Trump Effect on U.S. Hydropower

U.S Army Corps Dam

The following post was co-authored by Tom Russo and Kleinschmidt Principal, Kelly Schaeffer.

The U.S. Army Corps of Engineers (Corps) could play a lead role in increasing the number of hydropower projects licensed at its navigation and flood control dams. The biggest challenge to realizing this is not the lack of legislation or new regulations, but rather the lack of experience and familiarity with the review of hydropower project proposals. The Trump Administration’s penchant for results over process may provide added incentives to both the Corps and the Federal Energy Regulatory Commission (FERC) to cooperate and facilitate more hydropower development at Corps dams. Successfully implementing a recently signed Memorandum of Understanding (MOU) between these two agencies is the key to success. Read more about The Trump Effect on U.S. Hydropower

Why the Oil and Natural Gas Shale Revolution is so Resilient

Someone asked me why the North American Oil and Shale Gas Revolution didn't stall given declining oil and natural gas prices. What came to emy mind was resilency and seven other factors which taken together can explain why OPEC and Russia did not get their wish.

The most important factor is that Oil and Natural Gas can't just be looked at as a single commodity. The fact is, depending on where you drill a hole in North America's onshore shale basins, you will probably get oil and associated natural gas, natural gas and natura gas liquids (NGLs) or just natural gas. So a producer can rely on multiple revenue streams from all or a combination of these commodities or a portfolio of assets. Fortunately, each commodity's price is different and not exactly related. It also helps to have th infrastructure to process and refine these commodities and move them to markets in North America and abroad.  Read more about Why the Oil and Natural Gas Shale Revolution is so Resilient

Important Economic & Policy Issues facing the Energy Industry

The National Capital Area Chapter of the U.S. Association for Energy Economics (NCAC-USAEE) featured Tom Russo, Founding Partner of Russo on Energy LLC in its July 2016 newsletter. Tom spoke about key economic/policy issues facing the energy industry and why the NCAC-USAEE is a great place to network in Washington DC.

Read more about Important Economic & Policy Issues facing the Energy Industry

2 Energy Books to Read This Summer

Several friends and colleagues recently asked me for suggestions on what energy books to read this summer. They were planning vacations at the beach, the mountains and a few were venturing overseas. Two books came to mind that I thought would fascinate them and at the same time give them an edge in engaging new friends who always seem to want to discuss U.S. energy policy and environmental matters. Should you read both books? Given that the power sector is becoming a large consumer of gas it would be wise to read The Green and the Black first and then follow it with The Domino Effect. Reading both books is like eating "Mac and Cheeze." They are an unbeatable combination.  Read more about 2 Energy Books to Read This Summer

Vintage Approaches for Planning & Regulating Sustainable Hydropower

22,500 MW Three Gorges Dam in China

Recently, a colleague doing work for the United Nations Development Programme in Russia requested me to send her the best guidance available on planning international hydropower projects. She was attempting to minimize impacts on biodiversity and ecosystem services. While I have been away from Hydropower for a while, I was really hard pressed to find current documents that would help her. Most reports were too general and few, if any, talked about planning and regulating hydropower projects, which can last 50 years or longer. I found this difficult to understand despite the wealth of experience in the U.S. and Canada in siting and regulating hydropower. 

I quickly realized that in the hydro arena, we were still grappling with environmental, regulatory and social issues. The same is true for siting natural gas and renewable energy. However, the stakes are higher today since the World Bank Group and the Asian Infrastructure Bank are investing in hydropower in to spur economic development, address Climate Change and move countries away from fossil fuels. So I dusted off three publications below that should help both developing and developed countries to better plan and manage their hydropower and other energy projects. Here's a short explanation of each:

Read more about Vintage Approaches for Planning & Regulating Sustainable Hydropower

'People Think if They Can Stop Pipelines They Can Stop Fracking,' says Tom Russo

http://www.bloombergbriefs.com/power-gas/

Tom Russo, who founded energy consultancy Russo on Energy after spending 30 years at FERC, spoke to Bloomberg's Christopher Long about the state of pipeline build-out in the U.S, and the future of the U.S. natural gas market. The interview also appears in Bloomberg Brief- Power & Gas. Read more about 'People Think if They Can Stop Pipelines They Can Stop Fracking,' says Tom Russo

Southern California’s Summer Electric-Gas Reliability Stress Test

Electric plants served by Aliso Canyon Storage

Excuse my use of the term “stress test”, but that’s exactly how I view the challenges that the California grid operator, State officials and energy companies will confront this summer when they have to operate their electric system without the natural gas from the Aliso Canyon Gas Storage facility. As most of you know, the State of California has banned use of the facility for safety reasons. 

It’s definitely not “business as usual” with Aliso Canyon out of the picture. California takes pride in its renewable energy portfolio, but relies on 17 gas-fired power plants in the Los Angeles Basin and San Diego to meet peak demand and changes in supply due to the variable nature of solar and wind power generation. These 17 power plants are normally supplied by the Aliso Canyon Gas Storage Facility.  Other electricity regions also rely on gas-fired generation and available pumped storage hydro projects to manage changes in wind and solar power. If they lost significant natural gas infrastructure, they would be in the same position as California.

The opportunities to learn this summer from California’s experience are great. The electric power industry relies heavily on modeling to forecast likely events and necessary investments in electric infrastructure and the fuels to operate power-generating facilities. Hopefully we can argue less about banning fracking and natural gas facilities and learn more about how to operate an increasingly “gassy” and renewable energy portfolio in California under less than ideal conditions. Of course, the weather will dictate the electricity demand and what resources California will use to maintain adequate service, and maintain electric reliability and air quality. Read more about Southern California’s Summer Electric-Gas Reliability Stress Test

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