Drumbeat: July 21, 2010
Posted by Leanan on July 21, 2010 - 10:28am
Earlier this week, the International Energy Agency announced that China was now the world's largest consumer of energy (oil, coal, natural gas, nuclear power and renewables), surpassing the U.S. for the first time.
With 1.3 billion people, China is unlikely to reach current U.S. energy consumption per capita for some time, if ever, but to double energy consumption in the last ten years is still an impressive achievement. But keep in mind that the average American is still consuming five times as much energy each year as the average Chinese. China had not been expected to overtake the US for another five years, but the global recession reduced U.S. consumption and China's strong economic rebound in the last sent Beijing's consumption soaring.
Matthew Simmons, founder and chairman emeritus of Simmons & Company International and former energy advisor to President George W. Bush, spoke with Bloomberg Television this afternoon. He said that while the GOM oil leak has been stopped from coming out of the riser, there is another more important leak five to ten miles away caused by the explosion of the blow-out preventer.
Mr. Simmons said, “What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blow-out preventer way out of the hole…and 120,000 minimum of toxic poison has now covered the floor of the Gulf of Mexico. So what they’re talking about is the biggest environmental cover-up ever. And they knew that that well, that riser, would finally deplete. And then they could say it’s over. And unfortunately, we now have killed the Gulf of Mexico.”
Tycoon's suggestions that change from fossil fuels to biofuels can be done swiftly are inaccurate, which is in fact likely to be disruptive and expensive
NEW YORK (CNNMoney.com) -- Louisiana Governor Bobby Jindal railed against the federal ban on deepwater drilling in the Gulf of Mexico at a rally on Wednesday, saying the "arbitrary moratorium" could cost the region hundreds of thousands of jobs.
Four large oil companies are committing $1 billion to set up a rapid response system to deal with oil spills in the Gulf of Mexico’s deep waters. The effort is aimed partly at deflecting efforts by some state and federal officials to stop or severely restrict drilling in the gulf in the wake of the BP spill.
A food world post peak oil will be very different. This new government must recognise that. The difficulty is breaking the news to consumers. And that's dangerous political territory.
Crude oil fell after the government reported an unexpected increase in U.S. supplies and Federal Reserve Chairman Ben S. Bernanke said the economic outlook remains “unusually uncertain.”
Inventories climbed 360,000 barrels to 353.5 million in the week ended July 16, an Energy Department report showed. Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, also increased. The price dropped 39 cents after Bernanke began speaking to the Senate Banking Committee.
(Reuters) - Reserves of conventional crude oil, the world's most popular fuel, are dwindling.
No one knows how much is left in the ground or how long it will last, and it is getting harder and more expensive to find.
But most geologists and economists believe higher prices, new technology, different sources of hydrocarbons and other forms of energy will help fill the gap, whenever it comes.
Istanbul, Turkey (CNN) -- Turkish officials are blaming a pre-dawn blast that ruptured the natural gas pipeline between Iran and Turkey on rebels from the Kurdistan Workers' Party (PKK).
The alleged act of sabotage follows two deadly clashes between Kurdish rebels and Turkish security forces on Tuesday, which left at least seven Turkish soldiers dead.
"We consider America a failed state because America could not fulfill its promises," Safiullah said after a recent meeting of village leaders here. "Instead of bringing peace and development, they brought destruction and fighting."
The Afghanistan war is at a critical juncture. The surge of 30,000 troops ordered by President Obama will be complete soon. A new commander has arrived. A full offensive against the birthplace of the Taliban —Kandahar— has been delayed.
Taliban attacks are rising as are U.S. operations against insurgent strongholds. Coalition deaths are at a high. And Afghans such as Safiullah say they are losing faith in America's ability to deliver on its promises.
You have to acknowledge that shale gas is a relatively new and significant contribution to North American supply. But I don’t believe it’s anywhere near the magnitude that is commonly discussed and cited in the press. There are a couple of key points here. First the reserves have been substantially overstated. In fact I think the resource number has been overstated.
New figures from the Canada-Nova Scotia Offshore Petroleum Board show the volume of natural gas produced so far this year from offshore fields near Sable Island are the lowest since production began in 1999.
Analysts say PetroRabigh relies on petrochemical products profitability to offset low margins from its refined oil products, most of which are destined for the Saudi market and sold at a giveaway price.
The state-owned refiner is likely to push out at least one spot parcel from the port every month after its term buyers had either reduced the volumes, or dropped their contracts citing high premiums.
EnCana Corp. says foreign exchange and hedging activity dragged it to a $505-million (U.S.) loss in the second quarter.
NEW ORLEANS — Storms are threatening to delay BP's undersea efforts to permanently plug the leaky well in the Gulf of Mexico.
The federal government's oil spill chief says Wednesday that if a storm moves into the Gulf, ships would have to leave and BP couldn't observe the capped well.
U.S. Interior Secretary Ken Salazar on Tuesday came close to accepting some responsibility for the BP oil spill, telling a U.S. House panel that government could have done more to ensure safety.
"Prior administrations and this administration have not done as much as we could have done relative to making sure that there was safer production in the outercontinental shelf," Salazar told a House Energy and Commerce subcommittee. Officials "were lulled into a sense of safety," he said.
House Democrats sought Tuesday to use a hearing on the Interior Department’s role in the Gulf Coast oil spill to blame the Bush administration for regulatory failures that may have contributed to the April 20 explosion of the Deepwater Horizon oil rig.
Democrats on the House Energy and Commerce Committee traced the roots of the disaster back to Vice President Dick Cheney’s energy task force.
This pair of items will illustrate BP’s extraordinary confidence during its planning for the Macondo well. The first item consists of selected quotes from BP’s Initial Exploration Plan (Feb. 2009). The second item is a review of the recent presentation by two veteran drilling specialists from Shell. The primary purpose of their presentation was to contrast the differences between the way Shell designs its deepwater wells and the way BP designed the Macondo well. An underlying theme of both items is the fact that the various aspects of the BP plan were conducted under the oversight of senior industry administration and federal regulators.
Pension funds in Ohio and New York want to lead the charge in a class-action lawsuit to recover what investors say are billions of dollars lost during a five-year period as fuel giant BP Plc allegedly made false claims on the safety of its drilling operations.
The Energy Gap is a tour de force review of our energy resources, their potentials, pitfalls, environmental consequences, economics, and politics. The sub-title is “How to solve the world energy crisis, preserve the environment & save civilization.” Well not quite, but it is a start.
Argentina's Planning Minister Julio De Vido said that all detected persons involved in cases of gas cylinder containers being sold at prices above the fixed rates "will be fined," adding that any "places" caught doing so would be "shut down" once the infraction is detected.
According to the minister, "there are many cases where these containers are being bought because it is cheaper, since they are subsidized."
Polskie Górnictwo Naftowe i Gazownictwo (PGNiG), Poland's largest state-controlled oil and natural gas company, has already used more than 70 percent of the natural gas it contracted from Russian supplier Gazprom for 2010.
The lack of adequate and reliable supplies of electric power is one of the most serious problems facing Indonesia today.
In 2009, energy output was about 170 billion kilowatt hours (kwh), well short of the 260-290 billion kwh we would have required to avoid rationing. Further, each percentage point in GDP growth demands a 2.5 percent increase in electric power output.
If Indonesia is to reach a 6 percent annual growth rate, we will require a power increase of at least 15 percent each year.
THE world is on the verge of a nuclear renaissance that will be driven by accelerated energy demands in China and India coupled with efforts to cut carbon emissions and combat pollution.
This was the view of Argonaut managing director and chief executive Eddie Rigg, who provided compelling figures at the Australian Uranium Conference today to back up his forecasts.
There are two main explanations for why we in Sweden are unique, for why we can brew our morning coffee and warm the children’s porridge in the microwave oven without contributing to the greenhouse effect.
One explanation is luck. The rivers that run from the mountains to the Gulf of Bothnia give us nearly half of all our electricity. The remaining four undisturbed rivers must remain undeveloped. We must become better in our nation at preserving biological diversity and those rivers are unique.
The other explanation is that PM Tage Erlander and PM Olof Palme made a strategic decision to develop Sweden’s nuclear power industry. This gives us nearly the other half of the electricity we need. Erlander had not heard of the greenhouse effect.
Some have argued that Hellenic Railways should shut down the majority of its routes, especially in the mountainous Peloponnese region where trains manned by drivers being paid as much as $130,000 a year frequently run empty.
The government, perhaps optimistically, is advocating the sale of a 49 percent stake to the French, who said this year that they would take a look. But it remains unclear how the French rail network, already burdened with its own high levels of debt, would be able to assume Hellenic’s liabilities and losses.
PITTSBURGH - Port Authority today will unveil a plan to cut transit service by 35 percent, eliminate 48 routes and raise the one-way fare for some riders to $4 to fill a projected $50 million budget deficit.
The service cuts, deepest in the authority's 54-year history, would take effect Jan. 9 and leave more than 50 communities that currently have transit service with none.
Effective Jan. 2, base fares would rise by 25 cents -- to $2.25 in Zone 1 and to $3 in Zone 2. But Light Rail Transit riders and users of 13 suburban express bus routes would be charged a new "premium" fare of $4. The authority said its cost of providing service on those routes exceeds $4 per passenger.
He fell sideways and slid some 30 feet toward a curb. And as he watched the car slowly drive off, a shocking thought came to him. This was no accident; the driver had hit him on purpose.
As it turned out, he had. The two young men in the car had been playing a real-life version of a video game: Hit a cyclist, get points. A prosecutor would later describe the young men laughing as they switched places so they could each hit a bicyclist. A few blocks later, the second driver struck a 34-year-old Brookfield man.
It’s official: New York State is drastically reducing sulfur in home heating oil.
After some uncertainty, Governor David A. Paterson on Tuesday signed into law a bill that limits the sulfur content of No. 2 heating oil to no more than 15 parts per million starting in July 2012, down from the current range of 2,000 to 15,000 parts per million.
Brussels - This summer may be hot, but the climate in Europe and the political debate on what to do about it are likely to get even hotter, the European Union's top climate official said in an exclusive interview with the German Press Agency dpa.
(Reuters) - A declaration by Venezuela last week that it hopes soon to overtake Saudi Arabia as the country with the biggest oil reserves has stoked debate on how much oil and gas the world really has left.
OPEC said last week its proven crude oil reserves rose 4 percent in 2009 to 1.06 trillion barrels, led by an increase in Venezuela. BP estimated last month total global oil reserves were over 1.33 trillion barrels -- equivalent to more than 40 years of consumption at current rates.
But many industry analysts have cast doubt on these figures, saying estimates may be inflated for a variety of reasons.
Following is a selection of some of the key issues involved:
In 40 years of offshore energy exploration, Norway has suffered just four spills -- none of the magnitude of the one in the Gulf of Mexico and none reaching the country's pristine tundra shores. Its government has made efforts to avoid the kinds of conflicts that have bedeviled the U.S. regulatory process by splitting off safety and environmental oversight duties from the Ministry of Petroleum and Energy. Perhaps most significantly, the country has a separate Climate and Pollution Agency that weighs in on every decision about whether to open up new areas to offshore drilling and has inspectors who examine rigs once they're operating.
But even as the ongoing underwater drama in the Gulf of Mexico reveals the oil industry's shortcomings when it comes to preventing or stopping the flow of an underwater geyser, Norway is pushing ahead with offshore drilling plans, including the kind of deep-water drilling that the Obama administration has suspended in the United States.
"Easy oil is running out," said Hege Marie Norheim, head of Statoil's Strategic Agenda of Arctic and Subarctic Business Development Activities. "We've been exploring for oil and gas where it lies."
FORTUNE -- The legal back-and-forth surrounding the deepwater drilling ban in the Gulf is distracting from a key truth: Nobody drills until the Obama administration says they can.
BHP Billiton Ltd., Australia’s largest oil and gas producer, said a moratorium on deep-water drilling in the U.S. Gulf of Mexico in response to the BP Plc spill and aging fields limited gains in fourth-quarter output.
Drilling at the Atlantis and Shenzi fields in the Gulf stopped during the quarter ended June 30, the Melbourne-based company said in a statement today to the Australian stock exchange. BHP said it continues to monitor the impact of the suspension, imposed after the worst oil spill in U.S. history.
SINGAPORE – Oil prices hovered below $78 a barrel Wednesday in Asia after a report showed U.S. crude supplies fell less than expected last week, suggesting demand for fuel remains tepid.
MOSCOW (AFP) – Militants burst into a hydroelectric plant in Russia's volatile Caucasus region Wednesday in a brazen dawn attack, killing two people and setting the facility ablaze with a string of blasts, officials said.
The unknown attackers set off the explosions at the station in the unrest-infested North Caucasus's Kabardino-Balkaria region by laying mines in the turbine room. The plant has been shut down as a result.
Russia may increase taxes on natural gas and oil extraction, a Finance Ministry official said on Wednesday.
Tax on gas extraction, currently at 147 rubles ($4.80) per thousand cubic meters, may increase 61 percent starting from 2011, six percent from 2012 and 5.4 percent starting from 2013, Ilya Trunin, head of the ministry’s tax and customs regulatory department, said.
"We think, and the relevant ministries agree with us, that starting from next year the rate for the extraction of natural gas could be increased by 61 percent," Trunin told journalists.
Kazakhstan’s oil reserves may be too valuable for an export-tax increase to deter companies from drilling for crude in the former Soviet republic.
Royal Dutch Shell Plc is shipping more fuel into Alberta after surging demand from motorists, including visitors attending the annual Calgary Stampede, drained pumps dry in the Canadian city.
The northern Chinese port city of Dalian has closed beaches as workers continue to clean the offshore oil spill that has shut the country’s biggest crude terminal, China Daily said.
BEIJING -China's largest reported oil spill more than doubled in size to 165 sq. miles (430 sq. kilometers) by Wednesday, forcing nearby beaches to close and prompting one official to warn of a "severe threat" to sea life and water quality.
SALT LAKE CITY (Map, News) - The Ute Indian tribe is threatening to kick Questar Corp. affiliates and a spin-off company off an eastern Utah reservation where they operate wells and natural-gas processing plants.
Japanese power prices for delivery during peak hours rose to their highest in almost two years as a heat wave continued, boosting demand from Tokyo Electric Power Co. to cool offices and homes.
So much for the International Energy Agency’s forecast for huge production increases in the kingdom. Like so many of the agency’s previous optimistic projections, this one isn’t any likelier to pan out. But what does King Abdullah know that the IEA doesn’t?
NEW ORLEANS, Louisiana (AFP) – BP said it was gaining confidence in the cap over the ruptured Gulf of Mexico oil well, as plans took shape Wednesday to seal the blown-out well for good.
The British energy giant and US government officials were evaluating the cap each day, and on Tuesday extended for another 24 hours the period of evaluation of the so-called capping stack structure that appeared to stop the oil flow last week after nearly three months.
NEW ORLEANS — Three months into the disaster in the Gulf of Mexico, the federal government's spill chief says a relief tunnel should finally reach BP's broken well by the weekend, meaning the gusher could be snuffed for good within two weeks.
US independent Apache has finalised a $7 billion deal to buy all of BP's assets in the Permian basin in Texas and New Mexico and in Egypt's Western Desert, as well as "substantially all" of BP's natural gas assets in western Alberta and British Columbia.
Despite the April 20 Deepwater Horizon disaster, BP has no plans to leave the Gulf of Mexico or stop drilling for oil in other deep ocean waters.
Just the opposite: with its runaway well apparently under control, the troubled oil giant is now staking its future more than ever on deepwater wells. Although such wells are far riskier than land-based or shallow-water ones, oil fields that are located under a mile or more of water can be extremely lucrative, and BP continues to see them as worth the risks.
Transocean Ltd. employees onboard the Deepwater Horizon drilling rig when it exploded in the Gulf of Mexico have become the focus of a U.S. government probe into the cause of the fatal disaster.
Stephen Bertone, chief engineer on the rig, and Mike Williams, chief engineer technician, were designated as parties of interest yesterday by a joint U.S. Coast Guard-Interior Department investigative panel. That boosted to five the number of Transocean workers who could face criminal charges stemming from the accident that killed 11 people.
NEW ORLEANS, Louisiana (AFP) – A hearing into an April explosion aboard a BP-leased oil rig in the Gulf of Mexico has been cancelled, after four witnesses refused to offer their testimony voluntarily.
KENNER, La. — Government investigators looking into the causes of the Deepwater Horizon oil rig explosion are colliding with a frequent obstacle: witnesses canceling their scheduled testimonies.
BP Plc’s Robert Dudley is the front-runner to replace Chief Executive Officer Tony Hayward, who is set to step down in the next 10 weeks, the London-based Times reported, citing unnamed people close to the company.
An announcement about a successor to Hayward, under fire for BP’s handling of the Gulf of Mexico oil disaster, may be made in late August or early September, the newspaper said.
BP denied a report its embattled chief executive would leave soon, as it lined up $7 billion in asset sales to help pay for the worst oil spill in U.S. history, lifting its shares on Wednesday.
CEO Tony Hayward, who has been heavily criticized for his handling of the disaster, had the full support of the board and would stay in office, a BP spokesman said, dismissing a report in the Times that he would step down within the next 10 weeks.
Hordes of helicopters, bulldozers, Army trucks, ATVs, barges, dredges, airboats, workboats, cleanup crews, media, scientists and volunteers have descended on the beaches, blue waters and golden marshes of the Gulf Coast.
That's a lot of propellers, anchors, tires, and feet for a fragile ecosystem to take, and a tough truth is emerging: In many places, the oil cleanup itself is causing environmental damage.
I always try to see the silver lining in every cloud. The Gulf of Mexico oil spill, however, presents a challenge to find anything good.
What did we learn from this experience, as everyday people?
NEW YORK (CNNMoney.com) -- Honda announced it will begin selling two new plug-in electric vehicles in the United States in 2012.
The automaker will begin selling a small plug-in electric "commuter car" and a mid-sized or larger plug-in hybrid vehicle, Honda Motor America said.
The report, titled “Who Wins the Peak? The Battle of Solar, Storage and Smart Grid to Fill Peak Demand,” assesses the potential roles of demand response, solar and energy storage in satisfying peak demand. It also details the widely different costs and production profiles of each technology, and their comparative capacity factors, which is the ratio of actual power output over a given period versus total possible output during that period.
“As the cost of energy storage declines, it will help make wind, solar and other intermittent renewables more viable sources of cheap dispatchable power during peak periods,” said Ted Sullivan, a Senior Analyst with Lux Research and the report’s lead author. “Combined with demand response, these technologies could address the top third of the peak demand curve and reduce the need to keep gas-fired turbines on standby.”
ROCKLAND, Maine (NEWS CENTER) -- Matt Simmons says midcoast Maine can become the Silicon Valley of ocean energy - and he wants to make it happen.
It is a pitiful moment in world affairs when poorer countries such as Montenegro and Sierra Leone donate more money to a renewable energy project than the United States.
The meagre contributions – a paltry $137 for both nations – still amount to $137 more than developed countries such as the US, Japan, Switzerland and Australia have donated thus far to the International Renewable Energy Agency (Irena).
Neither major party has a viable policy for preparing Australia for peak oil, or even for much more expensive fossil fuels. A price on carbon would go some way to addressing the situation, but massive government investment in renewable energy and transport infrastructure will also be required. But, in the wake of the Coalition's successful campaign against the CPRS and Labor's insulation programs, it may be a long time before a Liberal or Labor government will be prepared to promise another ambitious infrastructure program for renewable energy.
In a new book, "Empires of Food," journalist Andrew Rimas and Leeds University agricultural researcher Evan Fraser examine civilizations from Mesopotamia to Rome to Great Britain. They argue that every empire was made possible by agriculture, and that when those agricultural systems failed, the empires they supported failed with them.
Fraser and Rimas worry that the food system in place today is built around nitrogen-based fertilizers that require petroleum to create, as well as good weather that's graced the world since the dust bowl. If fuel prices go up again, or if the weather gets worse, they say, we could see our food empire unravel as well.
Going off-the-grid in rural areas needs to be, if it has any worldchanging aspirations, a part of improving that situation. That means, it needs to be based in thoughts about how it can help address systemic problems, especially in the United States where rural areas seem to suffer from a few major structural problems that make them less resilient than they deserve to be, and far less sustainable than some of us would like to think. Here are five examples of some of those major challenges in need of systemic solutions:
The state, facing a ballot initiative to roll back its landmark climate change law, has pushed back a $63 million fee to pay for the legislation until after the November elections.
MORRIS TWP. — One sign at a rally opposing the state's cap and trade program described the sentiment of the participants there: "A 'green economy' means less green in your pocket."
WASHINGTON – Senate efforts to pass an energy bill with carbon controls appeared in doubt Tuesday as leaders said they still lack the needed votes.
LONDON (Reuters) - The Kyoto Protocol's clean development mechanism (CDM) may end from 2013 unless the world can agree and put into force a new round of carbon emissions targets before then, a U.N. paper has said.
Steven Chu puts his department's money where his mouth is, instructing Energy Department offices to install "cool" white roofs.
Report: More than One Out of Three U.S. Counties Face Water Shortages Due to Climate Change: Greatest Risks Seen in 14 States: AZ, AR, CA, CO, FL, ID, KS, MS, MT, NE, NV, NM, OK and TX
WASHINGTON - More than 1,100 U.S. counties -- a full one-third of all counties in the lower 48 states -- now face higher risks of water shortages by mid-century as the result of global warming, and more than 400 of these counties will be at extremely high risk for water shortages, based on estimates from a new report by Tetra Tech for the Natural Resources Defense Council (NRDC).