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July 4-8: Cape Wind victory and a rowdy EPA hearing

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Message in a (Word)Cloud

Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

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Essential Energy Insights - January 2021


July 4-8: Cape Wind victory and a rowdy EPA hearing

A brief lookback at successes and setbacks in the energy industry.

Highs

ALPHA — Alpha NaturalResources Inc. reached a dealon a reorganization plan that should allow the coal producer toexit bankruptcy by the end of July. The plan includes deal with a number offederal and state agencies, as well as funds controlled by the United MineWorkers of America. "Confirmationof Alpha's plan represents the final court milestone in a complex, one-yearrestructuring process," Alpha's Chairman and CEO Kevin Crutchfieldsaid. Alpha should emerge as a privately held company, "positioned well tosatisfy its environmental obligations."

WILLIAMS — A number of analysts predict a bright future for now that it hasavoided a prolonged and rocky acquisition by Energy Transfer Equity LP. "Williams can breathe a sigh ofrelief that it's over, and they can go back to business as usual," saidJake Dollarhide of Longbow Asset Management. Jay Hatfield, portfoliomanager for the InfraCap MLP exchange-traded fund, sees this year as a bottomfor Williams, which he said is undervalued by more than 40%. "Williams hasa lot of expansion opportunities," Hatfield said. "What's bad in thedownturn is good in the upturn."

CAPE WIND — Both CapeWind Associates and opponents of the developer's proposed wind farmoff the Massachusetts coast claimed victory after a . Apanel of judges for the U.S. Court of Appeals for the District of ColumbiaCircuit ruled that the 2009 Interior Department's environmental impactstatement on the wind project did violate the National Environmental PolicyAct, and ordered the agency to supplement it. But the court did not vacate CapeWind's lease or other regulatory approvals based on the NEPA violation. Cape Wind CEO Jim Gordon in a statementalso welcomed the court decision that put to rest "the bulk of baselessissues that opponents have raised over the years." But environmental opponents of theproject declared their side to be the winner, based on the requirement thatCape Wind will have to seek a Migratory Bird Treaty Act permit.

Between

SOUTHERN — The New York Times ran a front-page investigativearticle July 5focusing on cost overruns, delays and possible project mismanagement atMississippi Power Co.'sintegrated gasification combined-cycle project in Kemper County, Miss.Southern Co. pushedback hard against the piece, calling it, "a negative recap of previously discloseddevelopments that have already been addressed." But the prominent play the Times gave its coverage prompted severalmore days of coverage, of Kemper itself, its technology and the political andregulatory environment from which the project emerged. But while dealingwith negative Kemper coverage, Southern also announced three renewable deals:snatching up a 74-MW solar facility inNorth Carolina; a 102-MW solar project ; and a in a 102-MW solarfacility in California.

Lows

FIRST SOLAR — Shares of FirstSolar Inc. plunged 9.75% on July 7 after Deutsche Bank SecuritiesInc. downgraded the companyto "hold" from "buy" and cut its price target to $44 from$80. The downgrade was prompted by slow growth in bookings and growing pricingpressure in competitive international segments, among other factors. "Even though FSLR remains one of thebest run companies in our coverage, we believe it would be difficult formanagement to grow earnings amidst some of the expected near term headwinds,"Deutsche Bank analyst Vishal Shah said. Other analysts, more optimisticon First Solar, characterized theshare price dip as a buying opportunity. "We believe thecompany is positioned for long-term growth and would be aggressive buyers ofshares at current levels," Robert W. Baird & Co. analyst Ben Kallowrote.

JANET McCABE —The EPA's acting assistant administrator for the office of air and radiation,Janet McCabe, endured a roughhearing before the House Energy and Commerce Committee'sSubcommittee on Energy and Power regarding the Obama administration's energypolicies. Rep. Bill Johnson, R-Ohio, blasted McCabe for EPA regulations he saidwere, "draining the lifeblood," out of businesses and the economy. "Ithink it's absurd, I think it's irresponsible. Quite honestly, Ms. McCabe, Ithink it's un-American," Johnson said. Rep. Eliot Engel, D-N.Y.,said he was "taken aback by the hostility" in the room as otherDemocrats pushed back against the implications at McCabe or the agency are "un-American."At times, subcommittee Chairman Ed Whitfield, R-Ky., had to bang his gavel torestore order.

MURRAY —Murray Energy Corp.clarified that a news release warning of the potential layoffs of 4,400 workersacross six states, issued the week prior, represents . MurrayEnergy said the layoff notices were issued to comply with the WARN Act shouldmass layoffs be necessary. "This is a precautionary measure due to this legalrequirement," the statement said. "But, no layoffs are contemplatedor expected at this time." Based on commentsby Murray Energy founder and CEO Robert Murray, 4,400 employees amounts toabout 82% of the company's workforce.