Drumbeat: June 23, 2010
Posted by Leanan on June 23, 2010 - 10:16am
NEW ORLEANS -- The Coast Guard says BP has been forced to remove a cap that was containing some of the oil gushing into the Gulf of Mexico.
Coast Guard Adm. Thad Allen says an underwater robot bumped into the venting system. That sent gas rising through vent that carries warm water down to prevent ice-like crystals from forming in the cap.
PENSACOLA BEACH, Fla. -- Thick pools of oil from the spill in the Gulf of Mexico washed up along miles of Pensacola Beach overnight.
Dozens of workers used shovels Wednesday to scoop up the oil and orange-tinged sand. There were a few sunbathers at the beach, but no one was in the water.
(Reuters) - New York state's pension fund plans to sue BP Plc to recover losses from the drop in the company's stock price following the worst oil spill in U.S. history, Comptroller Thomas DiNapoli said on Wednesday.
If the Gulf oil spill has taught us anything it should in the last 60 days, have awakened us to the fact that the "Peak Oil" concept is as deeply flawed as is Al Gore's "Global Warming" and Chicken Little's "The Sky is Falling"!
Amid recent media reports of smart grid security concerns and meter angst, it's easy to wonder whether U.S. plans for an energy overhaul are really all that "smart." Ask the experts, however, and they'll assure you that we've chosen the right direction for energy production, transmission, distribution and usage. We just have to fine-tune how we're going to get there.
Belarus says it has fully paid off its debts to Gazprom for Russian gas.
The announcement came shortly after Russia made a further cut in the gas supply to Belarus in a row over payments, reducing it by 60% in all.
Belarus transferred $187m to Gazprom's account on Wednesday "to clear the debt", Belarus First Deputy PM Vladimir Semashko said.
Mr Semashko said Belarus had borrowed $200m in order to pay off the debt to Gazprom.
In terms of Russia, itself, I find myself wondering more and more whether the extent of the late 2008 and 2009 collapse in gross domestic product has been a good thing in some respects. As one other forum delegate remarked, back in the summer of 2008, Russia was "drunk on oil prices." At that forum, I had been asked to present a 2020 BRIC (Brazil, Russia, India, China)-type presentation to suggest where Russia might be in the world. My presentation of average real GDP growth of below 4% was roundly regarded as deeply pessimistic and appeared to surprise many. My main reasons were simple: Oil prices won't rise forever, Russia has poor demographics, and its governance especially for business needs considerable improvement.
If BP Plc’s (BP) $20 billion escrow account runs out, and the oil giant quickly burns through the $10 billion dollars in savings from its recently suspended dividend, the beleaguered company still has plenty of assets to sell before bankruptcy becomes a realistic option.
NEW ORLEANS—Is a strip club that caters to oil-rig workers entitled to a piece of the $20 billion fund for victims of the Gulf of Mexico disaster? How about a souvenir stand on a nearly empty beach? Or a far-off restaurant that normally serves Gulf seafood?
The farther the massive spill's effects spread, the harder it will get for President Barack Obama's new compensation czar to decide who deserves to be paid.
The Gulf oil spill doesn't exactly scream 'marketing opportunity,' but that didn't stop these four companies from rolling out ad campaigns tied to the tragedy.
BP provided further details about the previously-announced new organization that will manage the company's long-term response to the Deepwater Horizon incident and the MC252 oil and gas spill. Effective immediately, Bob Dudley has been appointed President and Chief Executive Officer of BP's Gulf Coast Restoration Organization. Mr. Dudley will report to Tony Hayward, BP's Group Chief Executive.
A boat captain working to rescue sea turtles in the Gulf of Mexico said he saw BP ships burning sea turtles and other wildlife alive, myFOXtampabay.com reported late Tuesday.
The oil spill disaster off U.S. Gulf Coast has already begun affecting Mexico, an official said on Tuesday.
"There has been a real impact in bird migration and fish food, which is a worrying fact that could worsen in coming months," said Salvador Trevino Garza, head of the Tamaulipas state's Environmental Agency for Sustainable Development. "We will continue monitoring this problem," he added.
The BP oil spill is making it even worse. But few people paid much attention to this 25-year-long environmental disaster.
There other ways the U.S. can transition away from petroleum. The IEA outline for reducing American oil consumption by 29 percent between 2007 and 2030 includes increasing public transportation, shifting to hybrid and plug in hybrid vehicles, using more biofuels, increasing conservation in heating homes, and almost eliminating oil use in electricity generation.
A phased-in oil tax that reached the equivalent of about $1.70 per gallon of gasoline by 2030 would reduce oil consumption by around 10 to 15 percent, says Ian Parry, senior fellow at Resources for the Future.
Yemen, which is dependent for up to 80% of its revenues on oil that is running out, is counting on tourism to provide a more sustainable income source. Indeed, the government, which had restricted entry to the 1,400 sq. mile island until 1991, now wants more people to visit. But you still have to go through the mainland in order to reach Socotra and eco-tourism is being held back by fears of al-Qaeda and the kidnapping of foreigners for ransom in the mainland. (And, in the not so distant past, Socotra has seen its share of trouble: the hulks of Soviet tanks stand rusting on its western shores.) So for now, Socotra's long white beaches and translucent turquoise waters remain lonely and unfamiliar.
A World Bank report has revealed that the country’s short term energy options will be costly. The country is expected to spend around US$4 billion cumulatively, the Morupule B Generation and Transmission Project, project appraisal document has revealed.
WASHINGTON: Pakistan hasn't quit its habit of courting insurgents, and extremist networks with current or former ties to the government pose a significant risk to the United States and Pakistan's elected government itself, a new study concludes. A rising number of terrorist plots in the United States with roots in Pakistan stems in part from an unsuccessful strategy by the US-backed government in Pakistan to blunt the influence of militant groups in the country, the report by the RAND Corp said.
Many might be alarmed to learn of a homemade nuclear reactor being built next door. But what if this form of extreme DIY could help solve the world's energy crisis?
(Bloomberg) -- Uranium One Inc., which has slumped 7.3 percent in Toronto trading since agreeing to a takeover by Moscow-based Uranium Holding ARMZ, said shareholders have nothing to fear from Russian state control.
Recommended by the city's bike safety task force, the ordinance would require new businesses and apartment complexes with 20 or more parking spaces to provide at least two dedicated bicycle parking spaces with racks.
Malls and other places with huge parking lots could have to make room for up to 30 bicycles.
Helena currently has four community gardens, and two more in the planning stages. But with the city facing a $750,000 budget crunch, one of the items on the list to go is a water supply to those two gardens.
Economic growth may be the world’s secular religion, but for much of the world it is a god that is failing—underperforming for most of the world’s people and, for those in affluent societies, now creating more problems than it is solving. The never-ending drive to grow the overall U.S. economy undermines communities and the environment. It fuels a ruthless international search for energy and other resources; it fails at generating the needed jobs; and it rests on a manufactured consumerism that is not meeting the deepest human needs. Americans are substituting growth and consumption for dealing with the real issues—for doing things that would truly make the country better off.
After people began to ransack fixtures from the vacant homes, Victorville town officials warned the bank owning the sixteen-home development that it would be on the hook for security and fire calls. The bank, which had inherited the mess from the defaulted developer, assessed the hemorrhaging local real estate market and decided to cut its losses. A work crew was dispatched to rip the houses down and get what they could—money, beer, whatever—for the remains.
(Reuters) - Canada will reduce greenhouse gas emissions by introducing new regulations for coal-fired electricity generation, Environment Minister Jim Prentice said on Wednesday.
The price of crude oil, in the money of the day, fell as low as 4 cents a barrel in early 1933 – or, expressed in equivalent 2009 terms, 66 cents (U.S.). It bounced back to 10 cents (2009: $1.64). Yet the decade of the Great Depression produced the greatest oil field discoveries in the history of the United States. Was this, as some Malthusian economists assert, mere predestination, documentary proof of the country’s upward thrust on a preordained Bell curve trajectory toward peak oil?
No, says University of Calgary economist John R. Boyce, not so. The oil boom of the Dirty Thirties, he says, proved only that crude oil behaves as other finite commodities behave. Crude oil discoveries tracked price incentives in the Great Depression – and tracks them globally now.
With production quotas imposed in the Depression (mostly to assist Big Oil), Prof. Boyce notes, the price of crude abruptly increased tenfold to $1.18 a barrel (2009: $19.35). The subsequent increase of oil field discoveries, 1933 through 1940, was never subsequently matched in the continental U.S. Significant discoveries did occur again when crude prices hit $140 a barrel in 2007. In this instance, though, these discoveries followed a mere doubling of prices. Think what further discoveries would probably have occurred, Prof. Boyce suggests, were prices to rise by a Depression-equivalent factor of 10 – taking oil to $700 a barrel.
In a paper published last year, Prof. Boyce offers a devastating analysis of peak oil theory. Obviously, he wrote, any finite commodity can ultimately “peak,” assuming accumulative consumption exceeds accessible reserves and keeps rising. But crude oil itself has already peaked – at least five times since 1950, Prof. Boyce says – without beginning to approach the demise of oil anticipated by peak oil theory’s famous Bell curve. Indeed, crude oil reserves have doubled roughly every 15 years since 1850 and the world now has more proven reserves than it has ever had in the ensuing 150 years.
Crude oil declined in New York for a second day amid evidence that demand is falling in the U.S., the world’s largest energy consumer.
Crude inventories increased 3.69 million barrels last week for a second week, according to a report late yesterday from the industry-funded American Petroleum Institute. A U.S. government report on inventories today may show a drawdown. European equity markets declined.
“The API figures were very bad. They pushed the market lower,” Roland Stenzel, a crude and carbon trader at E&T Energie Handelsgesellschaft mbH, said from Vienna. “Equities could be negative for the market today.”
World oil demand will grow faster than earlier expected through 2015 due to stronger economic growth, particularly in developing countries like China and India, the International Energy Agency forecast forecast Wednesday.
The IEA, which advises oil-consuming countries, said world oil demand will grow by an average of 1.4 percent annually through 2015. That compares with last year's forecast of average annual demand growth of 0.6 percent over the 2008-2014 period.
Demand would reach 92 million barrels a day by 2015, assuming annual economic growth of 4.5 percent from 2010.
The Paris-based agency said it expects a strong rise in oil demand in China, India and the Middle East, but weaker or flat growth elsewhere, particularly in Europe where the economy is fragile.
BP's web site is filled with a wide range of Gulf-spill related updates. The energy giant is overwhelming visitors with frequent updates in a bid to show that it is taking matters quite seriously.
Lost in all those updates, investors may have missed a fairly important annual document that has just been released called the "Statistical review of world energy." BP takes a fresh look at the global oil picture every June, and they've reached some interesting conclusions.
China plans to pump about 11 million barrels of state reserve crude oil into private storage tanks by year-end, according to reports as Beijing expands its strategic oil stockpiling beyond state oil giants.
The real imbalance in the global economy is that those countries that have room for further fiscal stimulus are precisely those whose economies don’t require it, while the economies that are in desperate need of it don’t have the budgets to pay for it.
Annual deflation worsened to 3.6 percent in May, after staying at 3.0 percent in the previous two months, the data from Qatar Statistics Authority showed.
While volume remains comparatively low, investors have been turning to the Ultra increasingly as deflation, not inflation, has become a bigger worry for the economy.
(Reuters) - Whether it's snapping up glitzy buildings or stakes in luxury carmakers, Qatar's state fund has its hands everywhere -- and more high-profile deals are expected, fuelled by the Gulf state's natural gas riches.
Petroleo Brasileiro SA, Latin America’s biggest company by market value, delayed the sale of as much as $25 billion of stock until September because a price hasn’t been set in a related deal to buy oil reserves from the government.
LONDON (Reuters) - British diversified logistics company Falkland Islands Holdings posted results ahead of expectations as the return of oil drilling to the disputed islands boosted its business.
MOSCOW (AFP) – Russia on Wednesday cut gas supplies to Belarus by 60 percent as a payment feud between the ex-Soviet neighbours that has raised fears for European consumers went into a third day.
But despite threats from maverick Belarussian leader Alexander Lukashenko that he was shutting down transit of Russian gas to Europe, Russian state gas giant Gazprom said gas was flowing normally.
MOSCOW (Itar-Tass) - Belarus has conceded the contract price of gas in payments for Russian supplies in May. Beltransgaz paid for the supplies in May at the rate of 184 dollars per 1,000 cubic meters, PRIME-TASS reported.
The payment amounted to 260,134 million dollars. Beltransgaz calculated the sum in accordance with the contract of gas supplies dated December 31, 2006.
(Reuters) - Belarus, in dispute with Russia over debts for gas, has cut supplies of the fuel to Lithuania and the Russian region of Kaliningrad, Lithuania's gas company said on Wednesday.
KIEV (Itar-Tass) -- Russian gas transit supplies through Ukraine increased by 40% since the beginning of the year against the same period in 2009, Ukrainian Minister of Fuel and Energy Yuri Boiko said at an enlarged government meeting on Wednesday involving President Viktor Yanukovich and parliament speaker Vladimir Litvin over 100 days of work of the government.
DENVER (AP) -- Democratic gubernatorial candidate John Hickenlooper and GOP opponent Scott McInnis vowed Tuesday to revamp tougher state oil and gas regulations that took effect last year.
The Denver mayor told energy industry executives that some rules pushed by Democratic Gov. Bill Ritter and his administration and approved by the Legislature may not be necessary, including strict rules on pit liners and requirements to pump production water back into the ground instead of using it for agricultural purposes.
Hickenlooper, a former geologist, said the new rules were partially responsible for the decrease in drilling and loss of jobs over the past three years.
An enduring feature of the gulf oil spill is that, even when you think you've heard the worst-case scenario, there's always another that's even more dire.
The base-line measures of the crisis have steadily worsened. The estimated flow rate keeps rising. The well is like something deranged, stronger than anyone anticipated. BP executives last month said they had a 60 to 70 percent chance of killing it with mud, but the well spit the mud out and kept blowing.
The net effect is that nothing about this well seems crazy anymore. Week by week, the truth of this disaster has drifted toward the stamping ground of the alarmists.
LONDON - After weeks of suffering the ire of the White House over the Louisiana rig spill, the oil industry is fighting back.
Rallying around beleaguered BP at a major oil conference Tuesday, industry leaders pressed President Barack Obama to lift the six-month ban on deepwater drilling he ordered after the Gulf oil spill. Deepwater drilling is expensive, risky and largely uncharted, but the industry argues it is necessary in a world where land and shallow-water oil supplies are running out.
WASHINGTON (AFP) – US Interior Secretary Ken Salazar has said he would issue a new order in the coming days to enforce a freeze on deepwater drilling in the Gulf of Mexico in the wake of the BP oil disaster.
Salazar was responding to the decision of a district judge who blocked the six-month moratorium announced by President Barack Obama in May because of its effect on the livelihoods of those on the Gulf coast.
Oil companies and contractors with operations in the deep waters of the Gulf of Mexico won’t resume drilling until they see how a federal judge’s decision to lift a U.S. ban plays out, analysts said.
Oil rig owners and the companies who lease them are fighting over who should pay for the losses incurred during the enforced idleness triggered by U.S. President Barack Obama’s moratorium on deepwater drilling, the Wall Street Journal reported, citing industry officials.
Although a federal judge overturned Obama’s ban, brought in after the April 20 Deepwater Horizon disaster in the Gulf of Mexico, major oil companies are unlikely to resume operations until appeals to higher courts are completed; some rigs are costing as much as $600,000 a day while not in use, the newspaper said.
There are multiple possible human health effects of the Gulf of Mexico oil spill, experts told an Institute of Medicine workshop in New Orleans on Tuesday. The problem for now is that true danger levels aren't known.
"There is a threshold for these effects" based on the amount of toxins people are exposed to and for how long, says Peter Spencer, a neurology professor at the Oregon Health & Science University in Portland. "And we don't know if these thresholds will be reached in this spill."
Early indications are that naturally occuring bacteria are doing their work on the spilled oil. Government scientists are measuring this indirectly by monitoring oxygen levels in the gulf. The bacteria consume oxygen as they eat oil, and oxygen levels are normal or slightly depressed, the official said.
VENICE, La. — Pete Parker’s not-so-small frame radiates purpose. Striding around a dockside yard where his “decontamination unit” works, he keeps an eye on 11 workers who are stooped over drills, bolts and iron mallets to repair oil-containment booms damaged by waves and strong currents in the gulf.
Like a cobbler in a town where no new shoes are to be had, Mr. Parker, 60, is helping the oil-spill containment effort get by with the boom it has. Many days, no new boom is delivered. The goal of his unit, which works for an emergency response company known as O’Brien’s Response Management, is to supply boom as soon as it can be made seaworthy again.
Singer Jimmy Buffett and two friends are hoping their new rescue boats could help save birds and marine life under threat from the nation's worst oil spill.
The boats are specially designed to traverse shallow marshlands, the breeding grounds for a wide variety of wildlife off the Gulf Coast.
How much oil flows into the sea aside from the BP spill? That question arose as I researched a story about a fascinating group of sea creatures that live on the bottom of the Gulf of Mexico. Over the eons, the animals have evolved to thrive on oil and gas seeping up from the seabed.
The answer to the flow question turns out to be a lot.
Regulators say they're on high alert for companies trying to take advantage of the Gulf of Mexico oil spill cleanup to mislead investors.
The Securities and Exchange Commission on Tuesday suspended trading in Green Energy Resources for allegedly failing to provide accurate information about its role in the Gulf cleanup. The shares had traded on the Pink Sheets market and closed Monday at $0.002. The halt ends July 6, and no charges were made.
BP Plc’s expenses for stopping and cleaning up the worst oil spill in U.S. history have accelerated as it prepares to strengthen its capture system for the hurricane season.
As the Gulf of Mexico oil spill crisis enters a third month, the economic impact of this environmental nightmare is starting to become clearer. The truth is that the "oil volcano" spewing massive amounts of oil into the Gulf has absolutely decimated the seafood, tourism and real estate industries along the Gulf coast. Not only that, but energy industry insiders are now warning that the chilling effect that this crisis will have on offshore drilling could precipitate a new 1970s-style energy crisis. Considering the fact that the U.S. economy was already on incredibly shaky ground even before the oil leak, the last thing we needed was a disaster of this magnitude. But it has happened, and the reality is that the long-term effects of this crisis are potentially going to reverberate for decades.
Thousands of residents, businesses and organizations across the nation will unite under the banner of Hands Across the Sand on Saturday, June 26, to demonstrate their objection to dangerous offshore drilling and to call for a renewable energy policy at the state and federal levels.
PARIS - THE oil spill in the Gulf of Mexico is a catastrophy caused by human error which could have been avoided, the head of the International Energy Agency said here on Wednesday.
On June 15, in their testimony before the House Energy and Commerce Committee, the chief executives of America's leading oil companies argued that BP's Deepwater Horizon disaster in the Gulf of Mexico was an aberration - something that would not have occurred with proper corporate oversight and will not happen again once proper safeguards are put in place.
This is fallacious, if not an outright lie. The Deepwater Horizon explosion was the inevitable result of a relentless effort to extract oil from ever deeper and more hazardous locations. In fact, as long as the industry continues its relentless, reckless pursuit of "extreme energy" - oil, natural gas, coal, and uranium obtained from geologically, environmentally, and politically unsafe areas - more such calamities are destined to occur.
The oil catastrophe in the Gulf of Mexico, as horrible as it has been, was yet another opportunity. In his address to the nation from the Oval Office last week, President Obama could have laid out a dramatic new energy policy for the U.S., calling on every American to do his or her part to help us escape the insidious, nonstop destruction that is the result of our obsessive reliance on fossil fuels.
He chose not to.
Washington – Senate Democrats are taking a fresh run at energy legislation this week, beginning with a bipartisan White House meeting on Wednesday and a Democratic caucus meeting on Thursday to find common ground.
The hope that the Gulf oil spill disaster might break partisan deadlock as 9/11 did – leading to a flood of new legislation – has not come to pass. So far, it has only reinforced the partisan tensions.
After more than a decade of relative freedom, Russia's economy is still stuck in its dependence on energy, sending natural gas to Europe and petroleum to the world, and leading Medvedev to look for new industries.
Baghdad - Iraq's minister of oil was assigned control of the Electricity Minister until a new national government can be formed, the Iraqi government announced on Wednesday.
People here commonly have only a couple hours of power a day for appliances such as fans and air conditioners. Those who can afford it rely on costly gas-powered generators to produce electricity.
Last week, frequent electricity outages prompted thousands in the oil-rich southern province of Basra to take to the streets.
"Prison is more comfortable than our homes," signs carried by angry demonstrators said. A coffin on the roof of a van had the word Al-kahraba (electricity) written on it.
WASHINGTON — Gen. Stanley McChrystal's forced return from Afghanistan Wednesday to explain embarrassing comments about President Obama and his top advisers could hardly come at a worse time.
A spring offensive against the Taliban in southern Afghanistan is moving slower than expected. The promised effort to retake Kandahar, the country's second-largest city, will take longer than initially forecast. Attacks on U.S. and coalition troops are setting records each month, and June is on track to be one of the bloodiest months for Americans in the 9-year-old war.
There’s a huge renaissance going on,” said Paul Lorenzini, a former utility executive who now heads NuScale Power, an Oregon company developing small reactors. “You don’t have to build the whole plant all at once,” he said, promising a huge change from the way the nation’s 104 commercial nuclear reactors were built decades ago, each custom-designed and built, each one different from the next.
But it’s not happening here in California. New plants using radioactive uranium to make steam to power electric generators are being planned elsewhere in the country, primarily the southeastern U.S., said Ted Quinn, the nuclear society’s former president.
While emissions from burning wood are initially higher than from fossil fuels, regrowing forests sequesters carbon, a process that eventually can yield greenhouse gas levels lower than would have resulted from continued burning of fossil fuels.
The key issue, and the focus of the Manomet study, is the timing and magnitude of these effects. Energy and environmental policymakers will need to carefully weigh these short- and long-term trade-offs of biomass energy development. All the headlines miss the details and therefore serve to misinform rather than inform the public. It’s unfortunate that the story can’t be reduced to simple sound bites, but these types of life cycle analyses inevitably are complicated.
BRASILIA, Brazil – Brazil's president has blasted "gringo" outsiders for protesting a planned hydroelectric dam to be built in the Amazon.
President Luiz Inacio Lula da Silva says no "gringo should stick their nose in where it does not belong."
CONCORD, Mass. — Henry David Thoreau was jailed here 164 years ago for refusing to pay taxes while living at Walden Pond. Now the town has Jean Hill to contend with.
Mrs. Hill, an octogenarian previously best known for her blueberry jam, proposed banning the sale of bottled water here at a town meeting this spring. Voters approved, with the intent of making Concord the first town in the nation to strip Aquafina, Poland Spring and the like from its stores.
SARATOGA SPRINGS — How locally based is the economy of Saratoga Springs? What effect does development in neighboring municipalities have on the city? Is the Spa City financially prepared for the future global economy?
These are just a few of topics discussed Tuesday night at Skidmore’s Gannett Auditorium during a panel discussion titled “Making and Preserving a Resilient Local Economy.”
In its first-ever ruling on genetically modified crops, the Supreme Court on Monday overturned a lower court’s ban on the planting of alfalfa seeds engineered to resist Monsanto’s Roundup herbicide.
The decision was a victory for Monsanto and others in the agricultural biotechnology industry, with potential implications for other cases, like one involving genetically engineered sugar beets.
On the high seas, the bluefin is being hunted into extinction. Will we ever be able to think about seafood the same way?
The battle over the initiative, launched by Texas oil giants Valero and Tesoro, will pit that industry against environmentalists and the state's clean-tech businesses.
GENEVA – The U.N. science body on climate change has released a list of 831 scientists who will write its fifth report on global warming.
The Intergovernmental Panel on Climate Change received 3,000 nominations and the authors were drawn from fields including meteorology, physics, oceanography, statistics, engineering and economics, the Nobel Prize-winning body said.