Energy In-depth: U.S., Mexico and Canada move forward on North American energy pact

Editor’s note: Each Friday, Talk Business & Politics provides “Energy In-depth,” a round-up of energy and regulatory news. 

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U.S., MEXICO AND CANADA MOVE FORWARD ON NORTH AMERICAN ENERGY PACT
The energy ministers of the United States, Mexico and Canada will meet at the 7th Clean Energy Ministerial (CEM) and inaugural Mission Innovation Ministerial in San Francisco to review their cooperative efforts underway to foster sustainable energy development, address climate change, and encourage economic growth. The meetings provide an opportunity to recognize the collective progress made to date by the three countries in advancing mutual clean energy and climate objectives.

They include accelerating investments in clean energy research and development by announcing each countries’ plans for doubling these investments over the next five years, and identifying shared North American priorities for collaboration on clean energy innovation technologies. This work by Mexico, the United States and Canada will also support the upcoming North American Leaders’ Summit in Ottawa on June 29. The three countries had signed the Memorandum of Understanding Concerning Climate Change and Energy Collaboration earlier this year. To learn more, click here.

FTC PUTS CONDITIONS ON $38 BILLION BLOCKBUSTER MERGER BETWEEN PIPELINE GIANTS
Energy Transfer Equity LP and The Williams Companies, Inc. must divest Williams’ stake in an interstate natural gas pipeline to settle Federal Trade Commission charges that ETE’s proposed $37.7 billion acquisition of Williams would likely harm competition in Florida.

According to the FTC’s complaint, Dallas-based ETE owns a 50% share in Florida Gas Transmission LLC (“FGT”), one of two interstate pipelines that serve the Florida peninsula. Tulsa-based Williams owns 50% of the other interstate pipeline – Gulfstream Natural Gas System LLC. Absent a remedy, the acquisition would eliminate the competition between FGT and Gulfstream, which historically has enabled Florida customers to obtain lower transportation rates and better terms of service. It also would have resulted in a pipeline monopoly at many natural gas delivery points within the peninsula, the FTC said.

Energy Transfer and Williams announced the deal to combine operations of the two largest energy pipeline and transport companies in North America in late September 2015, but some Wall Street analysts have predicted that the blockbuster deal could crater as plunging oil prices have cut in half the market value of both companies. This month, Tulsa Mayor Dewey Bartlett and former Williams’ CEOs called on the two companies to end the deal because it would be “tragic” to the economic fortunes of that city’s most prominent corporate denizen.

UNPLANNED CRUDE SUPPLY SNAGS CAUSE OIL PRICES TO SPIKE IN MAY, RISE ABOVE $50 THIS WEEK
Unplanned global oil supply disruptions, which tend to cause oil price spikes, averaged more than 3.6 million barrels per day in May 2016, the highest monthly level recorded since the U.S. Energy Information Administration started tracking global disruptions in January 2011.

From April to May, disruptions grew by 0.8 million barrels per day as increased outages, largely in Canada, Nigeria, Iraq, and Libya, more than offset reduced outages in Kuwait, Brazil, and Ghana. Along with other factors such as rising oil demand and falling U.S. crude oil production, the rise in disruptions contributed to a month-over-month $5 per barrel increase in Brent crude oil spot prices in May, according to a report by the EIA.

The supply disruptions continued in early June as oil prices touched an 11-month high on Thursday before retreating as traders feared higher production. West Texas Intermediate closed up 1.3%, or 67 cents at $50.56 a barrel on the New York Mercantile Exchange. Brent futures fell 1.1%, or 56 cents at $51.23 per barrel on London’s ICE Exchange.