Energy Roundup: Obama's Green Week, Takeovers and Bidding Wars, and More

Massive offshore drilling proposal delayed for further review — The Obama Administration this week continued its effort to undo some of President Bush’s last-minute drilling and environmental decisions. Interior Secretary Ken Salazar on Tuesday stalled a five-year drilling plan that would affect some 300 million offshore acres. Salazar hasn’t scrapped the proposal altogether. Instead, he has taken a more thoughtful approach by extending the comment period, ordering a geological survey and revamping the plan to consider renewable energy sources including wind and waves. This latest green energy move follows the adminstration’s plan to restrict mercury pollution from the nation’s power plants and Salazar’s nixing of 77 drilling leases near national parkland in Utah.

Bidding wars, hostile takeovers - who says there isn’t money out there? — Total’s hostile takeover attempt of UTS and the purchase of Tusk Energy offered a glimpse this week into what may prove to be the beginning of consolidation within the exploration and production sector. Tusk and Total weren’t the only ones to jump into the takeover fray. BG Group, intent on expanding its share of the coal seam industry, continued its bidding war with Arrow over Australia’s Pure Energy. Arrow has since responded, but expect BG, which has already purchased 10 percent of Pure Energy’s shares, to answer.

Energy funding preserved in stimulus – The majority of energy provisions in the $790 billion economic stimulus bill, negotiated by the House-Senate conference, remain including more funding for energy conservation and renewable energy. The package, which was passed by the House in a 246-183 vote Friday, addresses energy subsidies as well as injects $30 billion for a smart power grid, advanced battery technology and energy efficiency measures.

Major solar project trumps recession — BrightSource Energy and Southern California Edison signed a contract to develop one of the largest solar energy projects in the United States, with plans to eventually provide electricity to 850,000 homes. Utility executive and the people at BrightSource say the recession will not affect their ability to secure financing, although considering the size, the project is likely to reach into the billions.

Dropping oil demand delays projects, possible supply cuts — A couple of global oil forecasts were released this week - dampening an already soggy outlook - which helped push oil prices down and fueled speculation that OPEC will cut its supply. The International Energy Agency lowered its forecast for global oil demand by 1.2 percent - the biggest decline in 27 years. OPEC also cut its forecast for oil demand by 0.7 percent. In response to rising oil inventories and stagnant prices, OPEC member countries have delayed 35 projects to expand the group’s supply and could cut oil output at its next meeting in March.