December 10, 2020 Read More →

Illinois Rep. Casten calls for cross-agency energy policies

Financial Times Energy Source:

Joe Biden, in an unprecedented move, is promoting climate change as a whole-of-government issue – making it the responsibility of key members of his administration who will transcend government departments and agencies. The same should be done for energy policy, which for decades has been the purview of a dilapidated patchwork of government agencies with little or no centralization.

That’s the point of view of Sean Casten, Democratic Congressman from Illinois and former clean energy leader.

“We still don’t coordinate energy policy,” Rep Casten, a moderate Democrat, who sits between the party’s pro and anti-fossil fuel extremes, told ES. “Where is energy policy in the United States? Is it the Department of Energy, is it the EPA, is it the Department of Transportation? Nobody knows.” 

According to data compiled by the Institute for Energy Economics and Financial Analysis, U.S. shale companies spent less on capital spending in the third quarter of this year than in any other quarter of the past decade, with falling prices. oil prices have put the finances of the sector in a vice.

The group of 33 fracking-focused companies included in the analysis spent just $5.8 billion in the quarter, down nearly 60% from the same period in 2019. The all-time high was over $16 billion in the third quarter of 2018, when U.S. oil production was growing at a record pace.

The historically low spending levels came in response to April’s historic price drop, which prompted companies to cut budgets, cut drilling plans and lay off workers.

Significantly lower capital spending during the quarter, combined with a rebound in the price of a barrel in the 1940s, allowed companies to generate significant free cash flow, a reversal for a sector that has historically spent more than [it has earned in operations]. [The sector] did not report any quarterly free cash flow performance over the past decade, according to the IEEFA. 

[Derek Brower and Myles McCormick]

More: The decidedly non-sexy energy work Biden should be doing

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