Drumbeat: July 8, 2013
Posted by Leanan on July 8, 2013 - 10:27am
A train disaster that killed five people in Quebec promises to touch off debate over the safety of shipping crude oil by rail or pipelines such as TransCanada Corp. (TRP)’s Keystone XL.
As authorities began investigating the explosion of refinery-bound tank cars hauled by Montreal, Maine & Atlantic Railway Ltd., Quebec’s Green Party demanded stricter regulations and an energy industry association predicted tough scrutiny ahead for rail carriers.
“People think rail is costless until something like this happens,” said John Stephenson, fund manager with First Asset Investment Management Inc., said from Toronto, where he helps manage C$2.70 billion ($2.65 billion). “This is another data point that shows how much costlier and riskier rail is compared to pipelines and will probably move Canada closer to having an energy strategy.”
The deadly weekend explosion of a runaway crude-carrying train in Quebec threatens to ratchet up scrutiny of rising crude-by-rail shipments on both sides of the U.S.-Canada border, amid a boom in North American oil production.
In both countries, shipments of crude by rail have shot up sharply, as producers race to get all their new oil to market and as pipeline companies scramble to build new lines or reconfigure old ones to handle the growing volumes. Meanwhile, uncertainty over several big pipeline projects—including approval delays for TransCanada Corp.'s Keystone XL, which would connect Western Canada's booming oil sands development to the Gulf Coast—have sent some oil companies looking to rail as a longer-term solution.
Investigators say they’ve recovered the “black box” that should help determine what happened before a Montreal, Maine & Atlantic Railway Ltd. train carrying crude oil derailed and exploded in a Quebec town, killing at least five people.
The train with 72 carloads of crude oil crashed and burst into flames early Saturday near the center of Lac-Megantic, in the southeastern part of the province, forcing the evacuation of 2,000 people, police said. Forty people remain unaccounted for and a criminal investigation is under way.
(CNN) -- The search continues for about 40 people still missing after a runaway train plowed into a Canadian town, setting off massive explosions when the train's haul of crude oil ignited.
At least five burned bodies have been found, but "we know that there will be many more" deaths, Quebec provincial police Lt. Michel Brunet said Sunday.
Harper has called railroad transit "far more environmentally challenging" while trying to persuade the Obama administration to approve the controversial Keystone XL oil pipeline from Canada to the Gulf Coast. Greenpeace Canada said Sunday that federal safety regulations haven't kept up with the enormous growth in the shipment of oil by rail.
Officials with the Montreal, Maine & Atlantic Railway said that despite the disaster, they feel transporting oil by rail is safe.
"No matter what mode of transportation you are going to have incidents. That's been proven. This is an unfortunate incident," said Joe McGonigle, Montreal, Maine & Atlantic Railway's vice president of marketing.
Natural gas futures gained in New York, trimming a loss last week that followed forecasts for moderating temperatures in the Eastern U.S.
Gas for August delivery rose as much as 0.9 percent to $3.650 per million British thermal units in electronic trading on the New York Mercantile Exchange and was at $3.648 as of 9:48 a.m. in Singapore. The contract declined 2 percent on July 5 to $3.617.
U.S. natural gas will average $3.85 per million British thermal units in the third quarter and $4.25 in the fourth quarter, below earlier forecasts as supply increases, Goldman Sachs Group Inc. said.
“Debottlenecking” at the Marcellus shale sites in West Virginia and Pennsylvania are among the drivers of supply gains, Goldman Sachs analysts led by Damien Courvalin in New York said in an e-mailed report today. Goldman previously forecast U.S. natural gas prices would be $4.50 in the third and fourth quarters.
BEIJING (Xinhua) -- A natural gas price increase kicking off in China on Wednesday will significantly boost the profitability of Chinese gas companies, Moody's said on Monday.
REUTERS - India has agreed on a pricing formula for gas supply contracts with producers from April 1, 2014, when the current benchmark deal with Reliance Industries expires.
The new formula will be valid for five years and applies only to new contracts or renewals when existing ones expire. It does not apply to contracts which contain a specific formula for natural gas price indexation or fixing.
(Reuters) - India said it is interested in importing liquefied natural gas (LNG) from Iraq, with imports of the cleaner fuel becoming attractive after New Delhi decided to raise prices of locally produced gas from April 2014.
Iraq has emerged as the second-biggest crude oil supplier to India after supplies from Iran were hit due to pressure from western sanctions.
PanARMENIAN.Net - The head of Russia’s state-owned energy giant Rosneft has called for a large reduction in the tax burden on the oil industry, Vedomosti newspaper said Monday, July 8, in a move that could increase friction with the government, according to RIA Novosti.
Supporters of deposed Egyptian President Mohamed Mursi clashed with the military today outside a main security installation, in violence that authorities said killed at least 42 people.
More than 300 were also wounded in the fighting outside the Republican Guards headquarters in Cairo, ambulance service head Mohamed Sultan, who also gave the death toll, said by phone. Protesters opened fire on the military with live ammunition as they tried to storm the building, armed forces spokesman Ahmed Ali said. The Muslim Brotherhood, from which Mursi hails, said the attacks were unprovoked.
CAIRO (AP) — Egyptian soldiers and police opened fire on supporters of the ousted president early Monday in violence that left at least 40 people killed, including one officer, outside a military building in Cairo where demonstrators had been holding a sit-in, government officials and witnesses said.
There were conflicting accounts of how the violence began. A military spokesman said gunmen attempted to storm the building at dawn, prompting the clashes. Supporters of ousted President Mohammed Morsi, meanwhile, said the security forces fired on hundreds of protesters as they performed early morning prayers. It was not immediately possible to reconcile the two accounts.
SPIEGEL: Mr. ElBaradei, you opposed the authoritarian rule of former President Hosni Mubarak. Now, it appears that you will play a significant role in the interim government put in place after military leaders overthrew the democratically elected president of Egypt. Should a Nobel Peace Prize laureate be part of such a coup?
ElBaradei: Let me make one thing clear: This was not a coup. More than 20 million people took to the streets because the situation was no longer acceptable. Without Morsi's removal from office, we would have been headed toward a fascist state, or there would have been a civil war. It was a painful decision. It was outside the legal framework, but we had no other choice.
(CNN) -- The ouster of Mohamed Morsy as Egypt's president is unlikely to end the country's political turmoil. As a result, the United States -- which has great stakes in Egypt's stability -- must use its limited leverage to nudge Egypt back onto a democratic trajectory.
The lesson of Egypt's 2011 revolution was that lasting stability demands an inclusive government that is accountable to Egypt's people and responsive to their demands for dignity and freedom. But Morsy and his Muslim Brotherhood apparently didn't get the memo.
Europe’s biggest oil companies have withdrawn some staff from Egypt as supporters of ousted President Mohamed Mursi clashed with the military.
BP Plc, BG Group Plcand Eni SpAhave removed non-essential staff, officials at the companies said. Royal Dutch Shell Plc said today it temporarily relocated some workers and dependents as violence in the country left at least 35 people dead.
BEIRUT (AP) — A Syrian government official claimed that the army wrested a contested district of a key city from rebels on Monday after ten days of fierce fighting. But two activists based in the city denied the claim, saying rebels were under heavy fire but still holding on.
President Bashar Assad's forces have launched a major offensive to retake the strategic city of Homs, a transport hub that sits between the capital, Damascus, and costal areas overwhelmingly loyal to the regime. Rebels seeking his ouster have held on to parts of the city they took over a year ago, but have been under siege.
Iran is implementing hydropower project water works abroad valued at $3.5 billion, Tehran Times reported, citing Iranian Deputy Energy Minister Alireza Daemi.
Iran is also in talks on $2.7 billion of related deals, Daemi was cited as saying by the paper without giving details about the projects or location. Iranian companies have helped work on water and power projects in about 40 countries, mostly in Central Asia, the Middle East, Latin America and Africa, according to today’s Times, which didn’t give a timeline.
JPMorgan Chase & Co. is the latest international bank after Citigroup Inc. and Standard Chartered Plc to expand business in Iraq as OPEC’s second-largest producer boosts crude oil output and rebuilds its economy.
JPMorgan signed a one-year agreement yesterday to help the Trade Bank of Iraq finance imports of goods and services, John Gibbons, managing director and EMEA regional executive for the New York-based bank, said in an interview in Baghdad.
Statoil has been hauled over the coals by Norway’s Environment Agency (EA) for failing to report a leak of pollutive chemicals on the seafloor beneath its Njord field until more than two years after it was discovered.
Most of some 3400 tonnes of chemicals and oily water that were injected into the reservoir of the Norwegian Sea field over a period from 1999 to 2006 spilled onto the seabed due to a leakage in an injection well, Statoil has found.
(Reuters) - A Paris court on Monday acquitted oil giant Total of corruption charges related to the United Nations oil-for-food programme in Iraq and the company's chief executive was acquitted of misusing assets.
In three years, Russia will have the world’s first floating nuclear power plant, capable of providing energy and heat to hard-to-get areas as well as drinking water to arid regions.
The unique vessel should be operational by 2016, the general director of Russia’s biggest shipbuilders, the Baltic Plant, Aleksandr Voznesensky told reporters at the 6th International Naval Show in St. Petersburg.
Kansai Electric Power Co. and three other regional utilities applied to Japan’s nuclear regulator for safety checks, a step toward restarting reactors idled after the Fukushima atomic disaster in March 2011.
The applications filed today by Kansai Electric, Shikoku Electric Power Co., Hokkaido Electric Power Co. and Kyushu Electric Power Co. seek the Nuclear Regulation Authority’s clearance to operate 10 reactors with a total installed capacity of 8.84 gigawatts.
TOKYO — Japanese nuclear operators applied Monday to restart reactors under rules drawn up after the Fukushima disaster, but early approval is unlikely as a more independent regulator strives to show a skeptical public it is serious about safety.
Vienna is employing some old-fashioned technology to run shiny new electric buses wending their way through the narrow inner-city streets.
The Austrian capital is switching from buses powered by liquefied petroleum gas to a novel, first-of-its-kind fleet of electric buses that run unplugged, go anywhere, and recharge their batteries using the overhead power lines of older trams. Twelve of the buses, each of which can carry 40 passengers, are in service.
IT’S well-known that Portland really likes its bicycles. But its embrace of bike culture goes beyond its catering to commuters, leisure riders and athletes. So bike-centric is Portland that its residents can have any of the following delivered to their doorsteps by cycle: a pizza, a keg of pilsner, plumbing services or a hot tub. And the list grows from there.
It’s logical, then, that a Portland entrepreneur, Franklin Jones, would have helped pioneer the new field of pedal-powered freight delivery. In 2009, Mr. Jones, a former teacher, founded B-Line Sustainable Urban Delivery, a company that delivers produce, baked goods, coffee beans, bike parts and office supplies to restaurants, bike shops and other businesses throughout Portland’s downtown area using electric-assisted tricycles that pull 60-cubic-foot cargo boxes with a 600-pound capacity.
With the cycle hire scheme as popular as it has proved to be, it was only a matter of time before a fatality occurred. With thousands of potentially inexperienced cyclists on the roads every day, it is essential to make those roads as safe as possible to reduce the likelihood of this happening again. It is unrealistic and unfair to put the onus on cyclists to be solely responsible for their own safety in these situations while simultaneously encouraging less confident riders to get on bikes and explore the city.
The danger posed to cyclists by lorries on busy streets is a widely acknowledged and easy to mitigate problem that continues to kill on an all too regular basis. Lorries are involved in about 50% of cyclist deaths in London, and any plan to increase the take up of cycling needs to make addressing this issue a top priority. While no trivial matter, it will be much easier to make legislative changes here than to properly address infrastructure concerns, which although necessary will take time.
Solar Impulse’s second generation aircraft could be ready to take off by the end of 2013, with test flights to commence early next year.
Europe’s biggest oil companies are scaling back work on the next generation of biofuels, a setback for the effort to create a gasoline substitute that doesn’t drain the food supply.
BP Plc and Royal Dutch Shell Group Plc have halted funds for four separate ventures because the technology to produce fuel from woody plants and waste won’t be economical until 2020 or beyond, executives at both companies said in interviews.
Ethanol and other biofuels might have made some sense when Congress passed the 2005 Energy Policy Act, requiring that refiners and consumers purchase large quantities of ethanol and other biofuels. This is not 2005.
The hydraulic-fracturing revolution has obliterated the notion of “peak oil” popularized by the Club of Rome that we are rapidly exhausting the world’s petroleum. Meanwhile, Climategate and other scandals have demonstrated that the “science” behind climate-cataclysm claims is conjectural, manipulated and even fraudulent — and actual observations of temperatures, storms, droughts, sea levels and Arctic ice have refused to cooperate with computer models and disaster scenarios.
Because we seem to have reached a point in this culture where no conversation about food is complete without a mention of Michael Pollan, Sharpless offers his own variation on that writer’s now-famous dictum. “Eat wild seafood,” begins Sharpless’s version. “Not too much of the big fish. Mostly local.” Though they’re not wild, farmed oysters, clams, and mussels also figure into this equation, since these shellfish actually behave like ecosystem cleaners, improving their habitats by “scrubbing” the water as they feed. Both forage fish and shellfish have the added benefit of being relatively easy to recognize; a report released in February found that one-third of fish sold in this country today are labeled as something other than what they actually are.
Owners of energy-efficient homes should pay less for their council tax and stamp duty to drive take-up of the government's flagship energy-efficiency scheme, according to campaigners.
Publishing an analysis on how to improve the green deal, the UK Green Building Council said the changes would be funded by making the owners of the country's leakiest, most inefficient homes pay more under the two taxes.
Anyone who faces risky situations over time -- and that’s essentially everyone -- needs to handle those risks well, on average, over time, with one thing happening after the next. The seductive genius of the concept of probability is that it removes this history aspect, and estimates the average payoff by thinking of a single gamble alone, with two outcomes. It imagines the world splitting with specific probabilities into parallel universes, one thing happening in each. The expected value doesn’t reflect an average over time, but over possible outcomes considered outside of time.
This is so familiar that most of us take it as the obvious method of reasoning. That’s a mistake. As the physicist Ole Peters of the London Mathematical Laboratory has shown in several recent papers, averages through time and over probable outcomes aren’t the same, and the latter calculation offers a dangerously misleading guide to risky choices. Especially whenever downside risks get large, real outcomes averaged through time are much worse than the expected value would predict. Even in the absence of risk aversion, there can be sound mathematical reasons for being unwilling to take on gambles (or projects), despite wildly positive expected payoffs.
Dr. Levitt is a university professor who has a duty to society to get things right. We do, and should, hold university faculty to a higher standard than Fox, CNBC, the Wall Street Journal and the Heartland Institute.
Are there business or economics experts who actually get the science right? The answer is yes, there are. Some of the groups with the most skin in the game actually understand what is going on. One excellent example is the reinsurance company Munich Re which made a splash with its climate cost declarations. Another great recent example is the article Race of our Lives by Jeremy Grantham of GMO, a large global investment management firm.
By the end of 2011, then, climate change looked like a political loser, and "green jobs" had tumbled into the maw of political polarization. On climate, Obama became a man without a message—which probably explains why, especially during the presidential campaign, he didn't talk much about the issue (his 2012 Democratic National Committee acceptance speech—which in effect previewed his new climate message—being a notable exception).
But at the same time, extreme weather was really starting to catch our attention. The year 2011 saw a stunning 14 separate weather events, ranging from Hurricane Irene to multiple tornado strikes, whose damage exceeded $1 billion. That was a new record for the number of different high cost disasters in a single year. Then came 2012, and winter heat that seemed simply unreal. It felt as if the normal pattern of changing seasons had simply ceased to exist.
Experts say that wildfires across the West are becoming increasingly dangerous and unpredictable adversaries. They are burning bigger today than they were 30 years ago, a result of persistent drought and overgrown vegetation, which have led to longer and hotter fire seasons. To make matters worse, budgets for managing forests to reduce risk have been cut or siphoned off to help cover the increased cost of fire suppression.
This winter, a fire continued to burn inside Rocky Mountain National Park even after the snows arrived. And as development pushes deeper into the wild, fire experts say, more houses will be destroyed and more firefighters will be put at risk trying to protect homes and residents from the flames.
There will be more Yarnell Hill and Esperanza fires, with their attendant danger and high risk, though let us hope not with matching death tolls. We are in a new world with wildland fire, and it's getting worse. Fire seasons are starting earlier and lasting longer. Again and again we hear from firefighters, "These are the most extreme fire conditions we've ever seen." Those on the fire line over the last decade tell us global warming is real. States set new records each year for destruction of property and acreage burned.
LOS ANGELES -- There's a dangerous but basic equation behind the killer Yarnell Hill wildfire and other blazes raging across the West this summer: More heat, more drought, more fuel and more people in the way are adding up to increasingly ferocious fires.
Scientists say a hotter planet will only increase the risk.
Global warming has increased five-fold the probabilities that Australians will bake in record hot summers, according to new research from the University of Melbourne.
And human activities - including greenhouse gas releases from fossil fuels - must account for at least half of these extreme summer temperatures of the future, the scientists say.
The stark choice between the 'climate makers' and the rest of us underlines a competition of two radically different visions. It is a fight over the very future of Australia.
Waterways warmed by climate change will increase electricity prices by as much as a third in southern Europe as producers struggle to cool power stations, a study showed.
Countries from Romania to Bulgaria and Slovenia face the biggest price increases, according to research today from the Laxenburg, Austria-based Institute for International Applied Systems Analysis. Dutch, German and Spanish scientists participated in the study.
“The combination of increased water temperatures and reduced summer river flow under climate change is likely to affect both hydropower and thermoelectric power generating capacity in Europe,” wrote the authors, led by Michelle van Vliet, whose research focuses on how warming climate will affect world river flows.