AOL Energy Week In Review

on July 29, 2011 at 4:05 PM

It was a nervous week in the energy business, reflecting uncertainty in the world at large.

Companies and individuals braced themselves for a potential technical default by the US federal government and downgrading of its debt amid continued political intransigence. Constrained access to credit and slowed economy were talked about as the best likely outcome by energy executives, with many hesitant to discuss the potential turmoil if hedging or other basic financial transactions were hindered.

Federal funding has been a centrally important driver of renewable fuels infrastructure development and research, and businesses in the sector fear that the political focus on debt levels could limit access to funds. Even for traditional generation sectors like nuclear, company leaders are preparing for a disappearance of federal loan guarantees that were expected to support building of a new generation of baseload electricity infrastructure.

The anticipation that central government support could fade or even disappear entirely comes just as some of the technologies that have boosted use of renewable fuels enter the marketplace. Renewable fuel is set to make up a quarter of the world’s electricity generation base in 2011, according to a recent review of the sector, due in large part to government support. The use of solar enhanced oil recovery by oil majors, covered in two pieces this week, is an example of the renewable energy sector’s accelerating move away from “alternative” energy into the commercial mainstream.

While the US begins the early stages of stepping away from investing in energy and firms prepare for potential cutbacks in investment, other countries’ corporate leaders are not holding back on energy investments. With its eye on membership at the top of the global energy business, Petrobras announced plans to invest more than $200 billion by the middle of the decade, much of it on exploration and production.

In an environment of tightening resources, companies are using technology to brunt the impacts of limited capacity on transmission lines, but changes in consumer behavior are coming as well. Many of the practices energy executives cite are wasteful, but changes compelled by limited capacity and robust demand are also in the works.

With a long weekend’s work ahead of politicians on Capitol Hill, the energy business and the rest of the world are stuck waiting, gauging the shape of an increasingly unpredictable future.

Read More:
Urgency On Nuclear Safety, Waste Issues Builds
Cable Knitting The Grid
Utility Nightmares Of Electric Cars

Photo Caption: Traders work on the floor of the New York Stock Exchange during morning trading on July 27, 2011 in New York City.