EuroWire July 2018

Transatlantic Cable

fast approaching,” Stephen Brennock, an oil analyst at the Singapore-based brokerage rm PVM Oil Associates, wrote to clients in April. † Mr Aleem shared his own pessimism, with ampli cations. “If [Mr] Trump took military action against Iran, it would likely spark protests on the left and among his anti-war supporters,” he wrote. “A spike in the price of gas would probably help fuel [the protests].”

Fallout at the gas pump

An unintended consequence of the American withdrawal from the Iran nuclear pact: a spike in gasoline prices across the USA In early May, Americans faced the fact that President Donald Trump was about to follow through on his campaign pledge to pull the USA out of the 2015 Obama-era agreement with Iran. They also faced the prospect that gasoline prices would surge past $3 a gallon at the start of the summer driving season. Mr Trump had repeatedly threatened to renounce the deal – under which the USA lifted sanctions on Tehran in exchange for the downsizing of the Iranian nuclear programme – and reimpose punishing sanctions on Iran unless Europe helped “ x the terrible aws” in the agreement. The other signatories – the European Union, the United Kingdom, Russia, France, Germany and China – declined to oblige; and interested parties including President Emmanuel Macron of France guessed – correctly, as it turned out – that Mr Trump really was about to pull the USA out of the agreement. Writing in Vox , Zeeshan Aleem reported that the reimposition of sanctions on Iran “would infuriate the US’s allies and deal a serious blow to Iran’s economy, and could ultimately inspire Iran to pursue nuclear weapons.” But he noted something else as well. Because Iran is an oil powerhouse, and sanctions on its oil exports could cause the price of oil to surge across the globe, Americans would feel it immediately at the gas pump. (“You’re Going to Pay a Lot More at the Gas Station If Trump Kills the Iran Deal,” 4 th May) Experts consulted by Mr Aleem said that, when US participation in the Iran deal was scrapped, the price of gas in the USA could increase by upwards of 30 cents per gallon. “Gas prices nationally would rise to over $3 a gallon if Trump places wide-ranging sanctions on Iran,” Patrick DeHaan, a senior petroleum analyst at GasBuddy, a rm that monitors gasoline pricing, told Vox . Analysts said prices could go higher still if withdrawal from the Iran deal were to be followed by further escalation of tensions between the USA and Iran; and, if Mr Trump resumes his talk of using “ re and fury” to take out Iran’s nuclear capability, the price of oil could jump enormously. Fears of widespread turbulence and war in the Middle East would cause a scramble for oil supplies. Some experts said gas prices could spike past $4 a gallon in some US states if war looks imminent. † This spring, oil watchers were not hopeful. “The Iranian nuclear deal is dead in the water and a Trump torpedo is

Energy

Image: www.bigstockphoto.com Photographer Adrian Grosu

Quick-marching into a clean energy future, California becomes the rst US state to require solar panels in all new houses Building standards requiring solar panels on all newly built single-family houses provide an example of California’s ambition to slash greenhouse gas emissions in coming decades. On 9 th May, the state’s Energy Commission voted unanimously to mandate the installation of the panels on all new homes, putting California even further to the fore in the use of solar power. The regulations, set to take e ect in 2020, will also apply to new multi-family buildings of three storeys or fewer, and do not need the approval of the State Legislature. They initiate a broad slate of sweeping policy changes to promote renewable energy, electric vehicles, and denser neighbourhoods in which people will drive shorter distances on their daily rounds. “This is going to be a signi cant increase in the solar market in California,” Kelly Knutsen of the trade group California Solar & Storage Association told Andrew Khouri of the Los Angeles Times (9 th May). “We are also sending a national message that [California is] a leader in the clean energy economy.” Right now, about a fth of new houses in California are equipped with solar panels, one business group estimates. “Going to 100 per cent is a really big, big jump,” said Stuart Waldman, president of the Valley Industry & Commerce Association, which represents San Fernando Valley businesses and opposes the mandate. In explanation of that opposition, Mr Khouri noted that – when taken together with factors including the Trump administration’s tari s on imported solar panels, other state and local mandates, and rising construction costs and government fees – the new rules will likely add $9,500 to the cost of building a new house.

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July 2018