While Hurricane Isaac managed to leave Gulf oil platforms largely untouched, New Orleans' strengthened levees were put to the test as the storm made landfall on the seventh anniversary of Hurricane Katrina.
More than 90 percent of all oil production and roughly 66 percent of all gas output was shut down as a precautionary measure as Isaac approached the Louisiana coast last Tuesday. As the hurricane weakened into a tropical storm on land, reducing the threat to offshore production, energy prices dropped. Gasoline prices rose by roughly five cents nationwide -- the largest one-day jump in gas prices in 18 months just as the holiday weekend approaches. Though losses will be less than other storms, Reuters reports a $1 billion economic loss for offshore energy.
Oil production in the Gulf is expected to return to normal quickly; nonetheless, the Group of Seven (G7) urged oil-producing countries to raise output to ensure the market was well supplied. The G7 has said it is ready to release oil from strategic reserves, perhaps as soon as September. The International Energy Agency has dropped its opposition to the plan, which has been spearheaded by the U.S.
As Hurricane Isaac continues to churn in the Gulf region, it could stir up remnants of up to 1 million barrels of crude oil that leaked into the ocean as a result of the BP Deepwater Horizon spill. The Governor's Office of Homeland Security and Emergency Preparedness warned coastal residents that oil material -- such as tar balls -- could wash ashore.
Meanwhile, Tropical Storm Kirk became the Atlantic's 11th named storm of 2012, a feat typically not reached until closer to the end of hurricane season in November. A study in the journal Atmospheric Science Letters suggests hurricanes could be stopped if the clouds that float above hurricane-forming regions were brightened.
Rule Promotes Cleaner Cars
A new fuel economy rule that will nearly double the efficiency of the nation's cars and trucks to a fleet-wide average of 54.5 miles per gallon over the next 13 years was finalized by the Obama administration this week. The requirements of the rule will be phased in gradually between now and then, and automakers could face fines for non-compliance.
The U.S. Environmental Protection Agency and the National Highway Traffic Safety Administration estimate the rule will increase the average price of a vehicle by $1,800 in 2025. Consumers could save an estimated $5,700 to $7,400 in gasoline over the life of the vehicle. Additionally, the rule is expected to save 4 billion barrels of oil, and reduce greenhouse gas emissions by 2 billion metric tons.
The rule, some argued, doesn't come without consequences. Higher-efficiency vehicles that consume less fuel could reduce revenues from the gasoline tax 21 percent by 2040. As a result, spending on road repairs could decline.
Forbes says regardless of the high 54.5 mpg requirement, your average will likely be closer to 40 mpg.
Deal Creates Largest Carbon Market
The European Union will link its "cap-and-trade" system with Australia's carbon market, creating the largest emissions trading scheme in the world. A partial link of the two markets will begin in July 2015, and the association will be complete by 2018. The deal will not only provide a boost for the declining European market, but also allow Australian companies to buy cheaper credits from the European Union.
In the U.S., California will open the country's first full-scale carbon market in November. Before then, the California Air Resources Board plans to hold a practice auction -- testing its electronic platform for selling carbon allowances to companies. The practice auction comes in the middle of a political debate over whether the state should auction revenues at all.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University's Nicholas Institute for Environmental Policy Solutions.