Drumbeat: November 15, 2010
Posted by Leanan on November 15, 2010 - 10:05am
Petrobras aims to be the world's largest oil producer as soon as 2015, according to the Brazilian energy group's chief financial officer.
A series of huge recent "pre-salt" finds off the coast of Brazil have transformed the fortunes of the company and catapulted Brazil into one of the world's leading energy and economic powerhouses.
In one of his first interviews with a British newspaper, Almir Guilherme Barbassa told the Guardian that Petrobras would be one of the biggest beneficiaries of new legislation that will grant the company a minimum 30% stake in each new discovery and will also be the lead operator in all new projects.
It means that "Big Oil" – companies such as BP, Shell and ExxonMobil – will have to play second fiddle to Petrobras for access to Brazil's vast reserves.
WASHINGTON -(Dow Jones)- The U.S. Interior Department appears likely to cancel a March 2011 lease-sale in which energy companies would have bid for the right to explore for oil and natural gas in the Gulf of Mexico, according to lobbying groups that represent the oil and gas industry.
Industry groups believe the Interior Department might have to cancel "Sale 216" in the central Gulf of Mexico because it recently started to conduct an environmental review of the sale and this kind of review could take about six months to be completed.
(Reuters) - Enterprise Products Partners said on Monday that its Independence natural gas platform in the Gulf of Mexico was shut over the weekend for scheduled maintenance.
"There's some scheduled maintenance going on at the hub. Work began over the weekend, and it's projected to last about five days," company spokesman Rick Rainey said.
The International Energy Agency, IEA, was formed by the OECD nations to monitor the global energy market. Every year it publishes data and analysis on energy in its World Energy Outlook (WEO) report. In "The Oil Market Outlook" section of this year's report (WEO 2010) is a new subheading "A peak at the future?". This shows that the IEA is thinking about "Peak Oil".
6. Will oil continue to move higher in the face of possible peak oil?
The imminent arrival of peak oil, or the point in time when the maximum rate of worldwide petroleum extraction has been reached and enters into a continuous decline, has long been regarded as a fringe theory. As oil prices have crept up in recent years, the concept has gradually entered the mainstream--and now the International Energy Agency, an intergovernmental organization that offers energy analysis to 28 countries, has announced that peak oil passed us by in 2006. There is nowhere for our oil supply to go but down. So what do we do?
I'm sure I haven’t yet come to grips with the views expressed by commenters on my last post about economics and peak oil, but here is another paper on economics, Hubbert’s Peak, and peak oil. In short the authors model resource extraction scenarios in the manner that economists sometimes do, and conclude that the timing of the peak production will be determined by “above the ground” factors such as cost of production, oil prices and political constraints on access to resources rather than “below the ground” geological factors.
With Thanksgiving just around the corner, the price of gasoline is marching toward the high of the year.
The national average for a gallon of unleaded regular gasoline on Monday was just 3 cents shy $2.92 a gallon, the high back in May. Analysts expect more upward price creep before the long holiday weekend starts next Wednesday.
Scientists from Royal Holloway, University of London and The Spanish Research Council have revealed a new model that explains what happens as the continents thin as well as helping to more accurately predict the location of hydrocarbons such as oil and gas.
The scientists offer a new way to prospect and discover oil and gas.
Billionaire oil investor T. Boone Pickens bought shares of BP Plc, the owner of the well that caused the biggest offshore U.S. crude spill in history, and sold his holdings in Transocean Ltd., which owned the drilling rig that exploded, according to a regulatory filing.
HARRISBURG, Pa. — Petroleum services giant Halliburton Co. said Monday it has begun publicly disclosing the identity of chemicals in solutions it makes to be pumped into the ground by Pennsylvania's booming natural gas industry.
A new Halliburton website provides information on the chemicals the company says are in its three most commonly used solutions in the state, where drilling crews are rushing to exploit the Marcellus Shale, the biggest known deposit of natural gas in the nation.
LAGOS, Nigeria -(Dow Jones)- Eight crew members were kidnapped from an Exxon Mobil Corp. (XOM) facility in Nigeria late Sunday, a person close to the situation said on Monday evening.
The kidnapped crew were all Nigerian, the person told Dow Jones Newswires. It wasn't immediately clear if other crew members were at the facility at the time of the attack.
The mine is the centerpiece of China's drive to invest in Afghanistan, a country trying to get its economy off the ground while still mired in war. Beijing's $3.5 billion stake in the mine — the largest foreign investment in Afghanistan by far — gets its foot in the door for future deals to exploit Afghanistan's largely untapped mineral wealth, including iron, gold, and cobalt. The Afghan government stands to reap a potential $1.2 billion a year in revenues from the mine, as well as the creation of much-needed jobs.
General Electric’s announcement that it will switch to battery power for half its huge sales and service fleet comes as good news for proponents of electric propulsion.
Today is the 12th annual America Recycles Day, aimed at encouraging people to dump less trash in landfills.
TALLAHASSEE, Fla. – The Environmental Protection Agency has set legal limits for farm and urban runoff polluting waterways in Florida, the first time the federal agency has set standards for a state.
The EPA set the limits Monday after it settled a lawsuit with environmental groups last year. The numeric limits on runoff are designed to reduce pollution from sewage treatment plants and runoff choking lakes, rivers and other Florida waters with algae blooms.
The End of Cheap Oil: 'Peak oil' hit in 2006. The 'post-peak' world clearly does not imply the End of the World. But it does imply an extremely volatile one, whose dynamics will be difficult to predict
The implications of the International Energy Agency’s (IEA) new report, World Energy Outlook 2010, are stark. Its 25-year “New Policies Scenario” projects that it is most probable that conventional crude oil production “never regains its all-time peak of 70 million barrels per day reached in 2006.” In this scenario, crude oil production is most likely to stay on a plateau of around 68-69 million barrels per day.
So there you have it. We are now, in all likelihood, living in a “post-peak” world.
The IEA states in no uncertain time that Peak Oil is inevitable, but the timing of the peak will be determined by a combination of government policy and the strength of demand in addition to the more commonly discussed issue of resource constraints. It sees crude oil output hitting an "undulating plateau of around 68-69mbpd by 2020", while total oil production including unconventional oil and natural gas liquids is expected to peak at around 96mbpd after 2035, under the "new policies scenario".
The IEA appears to shy away from the wider implications of this shift, such as the potential for the much higher costs associated with unconventional oil production to reduce the amount of net energy represented by oil output, which could actually fall despite an apparent increase in volumes and act as a brake on the world economy. It cautions that "if governments do nothing or little more than at present, then demand will continue to increase, supply costs will rise, the economic burden of oil use will grow, vulnerability to supply disruptions will increase and the global environment will suffer serious damage".
While many energy analysts are predicting a sharp increase in oil prices in the coming months as a worldwide economic recovery takes hold and demand from China and India increases, Saudi Arabia says it will work to mitigate that rise. Saudi Prince Turki Al Faisal Al Saud says his country has the capacity to play that role for some decades to come.
In his speech to energy industry representatives and academics at the Baker Institute for Public Policy at Rice University, Prince Turki Al Faisal Al Saud emphasized his nation's commitment to a stable oil market. He said the Kingdom of Saudi Arabia's ample oil reserves of over 264 billion proven barrels give it the power to offset sharp increases in demand.
"As the demand for oil continues to rise, especially in China and India, the kingdom has every intention of meeting that demand," said the prince.
Oil rebounded from its biggest decline in more than three weeks amid speculation that economic indicators from Japan and the U.S. will signal increasing demand for fuel.
Crude rose as much as 0.8 percent, following a 3.3 percent drop on Nov. 12, after a report showed gross domestic product in Japan grew more than forecast in the third quarter as consumer spending increased. U.S. data to be published today will probably show October retail sales rose for a fourth month, according to a Bloomberg survey of analysts.
The highest Asian naphtha prices in two years are poised to spur an almost threefold increase in shipments from Europe as demand for petrochemicals in China soars and the country suffers fuel shortages.
Russia's Gazprom, supplier of a quarter of Europe's gas, trimmed its outlook for 2010 gas production by nearly 1% today as weak economies cut demand for the fuel.
Diesel supply shortage has recently emerged in China, and is quickly aggravating and spreading throughout the country. Behind the shortage lie in a string of evolving elements in diesel demand and supply, and essentially the inherent irrationality of the institution, industrial structure and pricing mechanism in the country.
STX OSV Holdings Ltd., the biggest maker of oil-rig support vessels, plans to double capacity in Brazil as Petroleo Brasileiro SA works through the world’s largest oil-exploration investment plan.
SAN FRANCISCO — Increased scrutiny of how natural gas pipelines are being inspected in California has revealed that the state has only a small group of inspectors to check 110,000 miles of gas pipelines, mobile home park systems and propane distributors across the state.
The government, which holds 79 percent of Indian Oil, plans to sell a 10 percent stake as part of an asset-sale program aimed at cutting the budget deficit. The refiner will also offer shares equivalent to a similar stake to reduce debt as it builds a new refinery and looks for possible ventures overseas.
Schlumberger, the world's biggest oil services company, has promised the US government it will pull out of Iran when its existing work contracts expire.
That will not be until at least 2013, but is still viewed by US officials as a significant win in the campaign to pressure Tehran over its nuclear programme.
E.ON AG is likely to focus on selling power grids as it divests 15 billion euros ($20 billion) of assets, luring pension funds hunting for the steady, inflation-protected returns electricity lines offer.
HOUSTON (Reuters) – By the standards of recent financial scandals, Stephanie Rae Roqumore's alleged $6.8 million natural gas trading scam may be small potatoes, but it raises some big questions.Also:
How could a lone natural gas trader in Houston dupe some of the world's biggest energy companies for eight years, despite a veritable forest of red flags? After all, the overhaul of trading rules and credit practices in the wake of Enron's collapse was supposed to make it tougher, if not impossible, to perpetuate such a fraud.
LAGOS (AFP) – Gunmen attacked an offshore facility operated by US oil giant Exxon Mobil off the coast of southern Nigeria at the weekend, the company said Monday.
The Nigerian subsidiary of Exxon Mobil said one of its offshore facilities "was boarded by unknown armed persons in the evening of Sunday," but gave no further details.
Banking, agriculture, tourism, energy, construction and steel production have all been affected by the government's decision to intervene in private ownership over the past year. Banco Santander received $1bn (£620m) compensation. Others are still waiting.
But whereas in the heady days of widespread nationalisation in Venezuela, between 2005 and 2007, Mr Chavez was focusing on what he called "strategic sectors" of the economy, such as telecommunications and oil production, now the targets are more diverse.
HOUSTON — As oil spewed from the BP well in the Gulf of Mexico last summer, so did ideas on how to stop it and clean it up.
BP received about 123,000 ideas, 80,000 of which had to do with plugging the leak and 43,000 on ways to clean up the oil. The ideas came in crayon from 9-year-old boys, in shaky handwriting from 90-year-old men and from scientists, inventors and engineers — even actor Kevin Costner.
The hot battery maker has a balance sheet problem -- lots of inventory of expensive EV batteries. It looks like the adoption curve for electric vehicles is flatter than anyone thought.
NEW YORK (CNNMoney) -- General Motors will unveil a hybrid version of its popular Buick LaCrosse sedan this week at the Los Angeles Auto Show. But don't expect GM to call it a hybrid.
The new car, which uses a 4-cylinder engine and a lithium-ion battery pack, is expected to get 37 miles-per-gallon on the highway and 25 mpg in the city. Compared to the current 4-cylinder LaCrosse, the hybrid will provide roughly 25% to 30% better fuel economy.
AMMAN - A public-private sector committee on Sunday recommended reducing the special tax on hybrid cars from 55 per cent to 35 per cent.
A growing number of Mexicans — including many from the middle class — see bulletproofing their vehicles as a necessity and not a luxury.
Nader says the typical customer these days "is a regular guy that works, maybe he has a small business and he's been approached by criminals to steal his car."
"You'll see Hondas, small SUVs ... pickups," Nader said of some of the vehicles arriving at his business.
Reports of huge reserves of coal buried under the sands of the Thar desert in Sindh have surfaced from time to time. Now something is finally being done to draw benefit from this resource, taking a big step towards meeting an energy shortfall that threatens to cripple us.
ISLAMABAD: The International Monetary Fund (IMF) has said that it has not asked Pakistan to increase electricity tariff as this is something the country has to decide itself. “The IMF has only asked Pakistan to solve the issues related to the energy crisis in consultation with the World Bank and the IMF,” it said.
People have lost jobs and face more difficulty finding transportation in and out of the neighborhood, which is so remote that it has no bus service. At the same time, Montgomery County has cut funds for a taxi voucher program and an after-school program for kids.
Raised in affluent times and imbued with high expectations, the first Boomers now face the ironic prospect of longer yet crimped lives. Their homes and savings are worth less than a few years ago, and health care and energy cost more.
Peak oil deniers and advocates of abiogenic oil need to ponder why oil companies take so many risks to hunt for oil deep in the seas for poor and marginal results in oil supplies, all the while causing recurring ecological disasters, or engage in such environmentally-destructive projects as the Canadian oil sands -- one of the worst ecological projects in the entire world that is bound to destroy the boreal forest in an area the size of Florida, devour hundreds of million cubic meters of fresh water and 600 million cubic feet of natural gas every day, and dramatically increase the emissions of carbon dioxide while yielding a relatively low energy return on investment (EROI), or energy returned on energy invested (EROEI) -- that is, the amount of energy needed to produce energy. In other words, the world is using more and more energy to produce less and less of it at an ever faster-growing financial and environmental cost.
There are great advantages to production at scale, most notably in discounts to consumers. This is what keeps the economy moving. The advantages taper off, however, with limits like peak oil, climate change, water shortages, deforestation, species extinctions, etc. Eventually, there is an end to the discounts furnished by nature. We seem to have reached the point where many of the hidden costs to the biosphere are coming due at once.
This book should be considered a perfect foil for the pessimism of the Left, and an ideal primer for the economically illiterate. It would be an inspiring Christmas present for anyone floundering with notions of economic progress, who doubts man’s ability to respond to environmental problems, or for those worried by peak oil or climate change.
Since the peak of 2006, we have entered, without much knowledge of it, a post-peak world. Unconventional sources of oil and gas- such as tar sands, oil shale and natural gas liquids- are far more expensive to extract from the ground and to process into usable petroleum products, and are also environmentally problematic. This means that over the next decade, oil prices will be more expensive, driven mainly by the rapid industrial growth in China and India. For the two new Asian industrial giants, the demand is projected to grow, according to the IEA, by 36 percent by 2035. At this point the price of oil will be over $200 a barrel. By around 2015, the IAE projects that we could have oil price above $100 a barrel.
Lead found in some reusable grocery bags is raising concerns that the toxin could pose environmental or health concerns to consumers.
As the grandfather of modern conservative political thinking, Edmund Burke, put it: we are "temporary possessors or life renters" of this world and have a moral obligation not to squander our natural inheritance, lest we "leave to those who come after … a ruin instead of a habitation." Respect for the past and responsibility to future generations creates a duty to conserve our resources and protect the environment.
Approved by voters 53% to 47% on Nov. 2, it is aimed at multibillion-dollar statewide issues such as a per-barrel severance fee on oil and a cap-and-trade system for greenhouse gases. It's also aimed at local ordinances that add fees on cigarettes to pay for trash pickup and on alcohol to fund education and law enforcement programs.
Istanbul - Turkey is seeking a new partner in the construction of a nuclear power plant on the Black Sea coast after talks with South Korea broke down, Turkey's Energy Minister Taner Yildiz said Monday.
Turkey was now looking to start talks with Japan after balking at the conditions set out by South Korea for the construction of the plant, Anadolu news agency quoted Yildiz as saying.
ISLAMABAD: An energy-deficient Pakistan has entered into an agreement on $375 million wind power generation project to produce 150 megawatts of electricity by installing a plant close to Karachi, its largest industrial city.
Last year, this entrepreneur and civil servant completed the 450,000-euro (618,000-dollar) solar farm in a discarded family vineyard, some 90 kilometres (56 miles) from the capital.
Though barely enough to power the local water drill, it is already helping his family supplement their income by selling electricity to the national grid. Papathanassiou hopes to repay his bank loans and break even in 4-5 years.
With agriculture in Greece facing a bleak future from rising costs and falling produce prices, thousands of farmers now want to follow his example.
New Delhi: India needs to end the free supply of water to resolve a water crisis the country is facing, representatives from both the government and the private sector said at the World Economic Forum’s India Economic Summit in New Delhi on Sunday.
Planning Commission deputy chairman Montek Singh Ahluwalia said the water crisis was a more serious problem than the energy crisis.
In many areas of India water supply is dwindling quickly mainly due to the mismanagement of resources, structural inefficiencies and ineffective and unclear regulations.
Experts have said that the government must invest more in infrastructure and management. “The water demand (in India) will exceed supply by 40 per cent by 2030 if it’s just a business-as-usual scenario and if the government does not spend adequately on infrastructure,” said Bharat Sharma of the International Water Management Institute in an interview with Reuters. “You have little incentive to use the water efficiently.”
Moreover, industrial and human pollution have further entrenched this water supply crunch, rendering what water is available contaminated and unfit for washing or drinking, the main reason for India’s huge sanitation problem.
Sekitoleko says it would not take much additional outside assistance for North Korea to reach a basic level of self-sufficiency when it comes to food.
"If they can have the amount of fertilizer of 700k tons annually. If they can have the seeds - because until now, they do not have good high-tech seeds. And if they could have the fuel, plus the spare parts (for farm equipment) I'm sure they can produce enough food to feed their country," Sekitoleko states.
Most industrialized countries -- 19 of 22 surveyed by the Pew Research Center -- see global climate change as a serious or very serious problem. Brazilians show the most intense concern, with 85 percent calling climate change a very serious issue, followed by Turkey, Lebanon, South Korea and Mexico.
However, top greenhouse emitters China and the United States ranked near the bottom of the list in terms of the intensity of their concern about climate change, with 37 percent of U.S. respondents and 41 percent of Chinese considering it a very serious challenge. At the bottom of the list were Pakistan, at 22 percent, and Poland, 31 percent.
BEIJING (AFP) - The spread of consumerism among China's burgeoning middle class is behind the rapid growth of the Asian giant's environmental footprint, a conservation group said Monday.
Demand for construction, transport, goods and public services are the key factors behind ballooning carbon emissions, the World Wildlife Fund said in its annual "China Ecological Footprint" report.
In his paper titled: "Global Climate Change and Insurance Industry", emphasized that by the year 2050, the integrated assessment model predicted that between 6-30 per cent GDP might be lost to climate change, representing about USD100-450 billion, based on 1. 0 millimeter rise in sea level.
According to him, Nigeria is at high risks to low-lying extensive coastline that is highly populated with a heavy concentration of GDP, generating industry and infrastructure, with the northern parts of the country referred to as the Sahel region at risk of further desertification and droughts.
Yemen is grappling with an increasingly dry climate and a booming population. Harvests are shrinking as rainfall declines and groundwater dries up.
Farmers, 70 percent of the population, can no longer subsist on their own crops. Youths are flocking from the countryside to the cities in search of jobs to provide for their families.
“Food is not going from country to city here, but from city to country,” said Gerhard Lichtentaeler of the German development agency GTZ, adding water shortages had made it impossible to sustain farming in many areas. The water table is falling one to five meters a year due to over-extraction.
BAGHDAD (Reuters) -Frequent dust storms and scarce rains are stifling Iraq's efforts to revive a farming sector hit by decades of war, sanctions and isolation.
Wheat and rice production has suffered from a severe drought in the past two years, due in part to rising temperatures, along with a dearth of water in the Tigris and Euphrates rivers.
The U.N. Inter-Agency Information and Analysis Unit (IAU) says water levels in the two rivers -- Iraq's main water sources -- have dropped to less than a third of normal capacity.
Sea level is rising in relation to many of the world’s shorelines, and has been for decades. The main reason is that the volume of the ocean is increasing as a result of the melting of land ice and the warming of the sea itself. (Warm water expands, just as warm air does.)
Scientists once thought this volume increase had been going on, in fits and starts, for thousands of years. This widespread belief was often used as a debating point by climate-change skeptics, who argued that sea-level rise was nothing to worry about because it had existed throughout the history of human civilization.
But research in recent years has turned that notion on its head. The matter is not entirely settled, but some persuasive evidence points to the conclusion that the volume of the ocean was fairly stable for the last 2,000 years and began rising only recently, more or less in sync with industrialization. This is important because it suggests that sea level might be pretty sensitive to the greenhouse gases that humans are dumping into the atmosphere.