Drumbeat: February 14, 2011
Posted by Leanan on February 14, 2011 - 10:19am
WASHINGTON — The Obama administration’s 2012 budget proposal will include a request for money to help develop small “modular” reactors that would be owned by a utility and would supply electricity to a government lab, people involved in the effort say.
The department is hoping for $500 million over five years, half of the estimated cost to complete two designs and secure the Nuclear Regulatory Commission’s approval. The reactors would be built almost entirely in a factory and trucked to a site like modular homes.
NEW YORK—The Electric Reliability Council of Texas, the grid operator that serves 85% of the power demand in the state, said Monday that widespread outages seen across the state on Feb. 2 were caused by unusually cold weather that froze equipment at power plants.
"It is something we have never experienced before," Ercot Chief Executive Trip Doggett said about the number of plants that tripped offline at once. There were "dramatically more" plants shut at one time than ever seen on the grid and rolling outages helped prevent a statewide blackout that could have lasted at least 50 hours.
MOSCOW (Reuters) Gazprom, Russia's top energy firm, said on Monday it agreed to cut gas prices in its long-term contracts for some European clients in 2010 on the back of sagging demand and low spot prices.
It also said it agreed to include a spot price element into its long-term contracts with some European companies, while raising take-or-pay obligations on some who received concessions.
(Reuters) - Planned energy-saving measures to reduce electricity voltages and save hydroelectric reservoir waters should not affect copper mines in south-central Chile, Mining and Energy Minister Laurence Golborne said on Monday.
THE Department of Energy (DOE) wants government’s remaining power barges to be privatized only if they are to be used in Mindanao.
Energy Secretary Jose Rene Almendras said this would allow the region, which relies on hydroelectric power plants for half of its requirements, to secure its electricity in anticipation of low water levels in the summer months.
Enbridge Inc. ENB-T is going ahead with a $560-million expansion of its Bakken pipelines, adding 145,000 barrels per day of new capacity from one of North America’s fastest-growing oil producing regions, the company said Monday.
Enbridge will expand its North Dakota and Saskatchewan pipeline systems in order to handle rising oil output from the Bakken field, which spans the Canadian province of Saskatchewan, and the U.S. states of Montana and North Dakota.
One of the most worrying issues that I’ve been introduced to since I started this position at IFandP is that of peak oil and resource depletion. Much of the discussion seems to revolve around the precise date at which we might hit peak oil. However, as many have pointed out what matters more is the point at which the total net energy we obtain from fossil fuels starts to decline. The situation is compounded by the issue of climate change, which will also act to accelerate the amount of free energy available to society, given the increased need to mitigate its effects and sequester carbon. This rings particularly true once you consider the complete storage of global CO2 emissions from fossil fuels would require an infrastructure of comparable size to that of the current oil and gas industry.
Around 2004, others were also casting doubts on Saudi oil capacity. The most high-profile was the late Matthew Simmons, a US investment banker, who argued in his book Twilight in the Desert that the Saudis were facing serious technical problems in their fields.
The then Bank of Montreal analyst Don Coxe opined that "the kingdom's decline rate will be among the world's fastest as this decade wanes". Paul Roberts, a resources journalist, focused on alleged problems at the Saudis' largest field, Ghawar, in his book The End of Oil.
The writings of the three men were littered with elementary technical errors and misunderstandings of the industry that a professional could easily have corrected. Nor did they present much evidence, beyond cherry-picked anecdotes of ordinary problems that are faced and solved every day in oilfields around the world.
(CBS/AP) QUITO, Ecuador - An Ecuadorean judge ruled Monday that Chevron Corp. was responsible for oil contamination in a wide swath of Ecuador's northern jungle and fined it at least $8 billion, the plaintiffs' lead attorney told The Associated Press.
Chevron said it would appeal and called the ruling "illegitimate and unenforceable" in a news release.
The herring that have recently flooded into San Francisco Bay in dense schools have surprised fishermen and ecologists, who doubted that the generation of the silvery fish that was spawned during a devastating oil spill three years ago would survive.
NEW ORLEANS — President Barack Obama vowed during a White House speech last June that the $20 billion he helped coax out of BP for an oil spill compensation fund would take care of victims "as quickly, as fairly and as transparently as possible."
Eight months later, that's not how things look to many people along the Gulf Coast.
The White House continued efforts today to beef up investment in nuclear and renewable energy technologies in its $29.5 billion fiscal 2012 spending request for the Department of Energy.
The clean-tech increases would come at the expense of fossil energy spending, including the perennial request to eliminate billions in tax incentives for the oil and gas industry.
In a speech at the Conservative Political Action Conference, the annual gathering of conservative activists, Newt Gingrich, the former House speaker, called last week for a radical shift in national energy and environmental policy, including the total dismantling of the Environmental Protection Agency, the relaxation of coal mining regulations and quick approval for offshore drilling projects in the Arctic.
The reaction from some conservative commentators was swift and harsh. “Intellectually incoherent,” said Myron Ebell, the director of energy and global warming policy at the Competitive Enterprise Institute. “Asinine,” a blogger for the American Spectator opined.
BRUSSELS — Connie Hedegaard embodies the way the European Commission would like to be perceived in the 21st century.
Ms. Hedegaard, 50, leads the commission’s efforts on climate change, an issue with global resonance, and she is a confident and telegenic communicator, helping dislodge the commission’s image as a haven for graying politicians who settle fights over fish quotas.
HONG KONG — It is weather with global breadbasket implications.
Even as senior Chinese officials exhort local officials to do everything possible to cope with a severe drought in the country’s wheat belt, the government is trying to reassure the public that food prices will not rise.
China’s drought-control headquarters posted a statement on its Web site on Sunday that described conditions as “grim” across a wide area of the wheat belt in Northern China and called for emergency irrigation efforts.
Kurt Cobb is a Kalamazoo-based author and columnist who focuses on energy and the environment, and he's the author of a brand new novel called Prelude. It's about the secrets and treachery surrounding the arrival of peak oil.
"Peak oil is the point at which the worldwide production reaches its highest level that it will ever reach and thereafter it begins an irreversible decline," Cobb says. "It's a reality in the United States where peak oil occurred in 1970."
The price of oil is once again daily in the news. The Western Europe benchmark Brent crude has hovered near $100 / barrel for much of the last month, and the IEA is again warning of the burden of oil consumption. Is this a harbinger of things to come, or a mere statistical blip in a market that is "well supplied"? How will events play out in oil markets in the coming year or two?
Certainly, oil prices have surged on the back on strong demand, of which some is structural, and some transient. The northern hemisphere has seen a strikingly cold winter, leading to increased heating oil usage. And the global economy is recovering from a deep recession, with demand bouncing off the recessionary trough. These are, to an extent, passing events. But in many respects, increased prices fundamentally reflect an oil demand that is increasing faster than supply.
Chinese companies are paying a heavy price to participate in North America's natural-gas boom in a bet on gaining vital new technology and access to a bountiful new source of energy.
Technological advances have opened up massive new gas fields in North America, creating opportunity for Asia's energy-hungry countries. The technology taps gas trapped in rock, called shale gas. Energy consulting firm Wood Mackenzie Ltd. estimates that potential U.S. shale-gas resources total 650 trillion cubic feet. By comparison, proved U.S. gas reserves at the end of 2009 totaled 244.7 trillion cubic feet, according to the BP Statistical Review.
TEHRAN — Iranian security forces fired tear gas in central Tehran on Monday to disperse opposition supporters marching in a banned rally inspired by popular uprisings in Egypt and Tunisia, a witness said.
"There are thousands of people marching ... not chanting slogans ... Security forces fired tear gas to disperse them near Imam Hossein square," said the witness.
Both sides in Iran are claiming the cause of the Egypt protests as their own: The opposition “Green Movement” heralds the protesters' push for democracy, while the Iranian government says their demonstrations follow in the footsteps of the 1979 revolution that overthrew the U.S.-backed shah and put the Shiite Muslim clergy in power.
This past week was supposedly the week of the game changer in the world of oil. Leaked U.S. diplomatic cables from Saudi Arabia called into question the ability of the globe's largest oil exporter to raise production to satisfy a world increasingly thirsty for petroleum. In the United States a technique called hydraulic fracturing--which has seemingly unlocked vast natural gas resources--will now be applied to oil trapped in shale deposits. Are these two developments really the so-called game changers they are claimed to be?
John Sfakianakis, chief analyst at Saudi Banque Fransi in Riyadh, said Saudi Aramco was unlikely to have risked exaggeration.
“I don’t think they want to risk being proven otherwise,” he said.
He said that Aramco provided its own money for most of its investment in search and exploration, and that as such, hedging numbers would be detrimental to its own interests.
As good as they are, I hope WikiLeaks cables will not become our reference for everything that goes around the world — including the evolution of the oil market.
The Lilongwe City Council (LCC) has refused the Human Rights Consultative Committee (HRCC) permission to stage a protest march this Monday against persistent fuel shortages in Malawi.
Austin City Council members this week will consider charging Austin electric car drivers $50 a year to boot up their batteries from any Austin Energy plug-in.
Phoenix Solar has been commissioned to build a 3.5 megawatt (MW) PV park for the Saudi Arabian Oil Company (Saudi Aramco). When complete, it will reportedly be Saudi Arabia's largest PV installation.
All forms of government in recent times find themselves in the same predicament: the mismanagement of contraction. Too many people and too many enterprises are competing for a contracting resource base. In many poor countries it expresses itself plainly as expensive food, or no food at all for some. The expensive food part of the story is already being felt in the wealthier countries, too, but the contraction expresses itself more in terms of money - many people do not have enough, or else much less than they were used to having, and at the same time the money that does circulate seems increasingly worthless. So we have the great debate over whether the contraction is deflationary or inflationary.
There will soon be seven billion people on the planet. By 2045 global population is projected to reach nine billion. Can the planet take the strain?
DUBAI, United Arab Emirates (AP) — Bahrain's security forces fired tear gas and rubber bullets to disperse anti-government protesters Monday in advance of plans to stage major rallies and bring the Arab reform wave to the Gulf for the first time.
The sporadic unrest since late Sunday underscores the sharply rising tensions in the tiny island kingdom — a strategic Western ally and home to the U.S. Navy's 5th Fleet.
Egypt’s ruling army council said it aims to hand power to a democratically elected government within six months, after almost three weeks of popular unrest ended 30 years of autocratic rule by President Hosni Mubarak.
The Supreme Council of the Armed Forces yesterday dissolved parliament, suspended the constitution and said it would rule until general elections take place. The council also formed a committee to introduce constitutional changes, according to a statement read on state television yesterday.
Two decades ago, Egypt consumed about half the oil it produced and exported the rest, about 450,000 barrels a day. Since then, however, its production has declined as its domestic energy consumption has increased, and today Egypt is a net importer of oil, based on data from the International Energy Agency.
That concerns those who believe in "peak oil," the theory that global crude production has hit its apex and is entering a state of persistent decline.
"Egypt is just a perfect case history of export math," said Jeffrey Brown, an independent petroleum geologist in Fort Worth who writes frequently on peak oil issues.
Oil extended gains in London and erased earlier losses in New York as protesters planned demonstrations in Middle Eastern oil-producing nations and after a report showed that China imported more crude.
Brent crude advanced as much as 0.9 percent as China, the world’s biggest energy consumer, increased net crude-oil imports to the highest in four months in January as demand for diesel to operate irrigation equipment in drought-stricken regions rose. Protestors plan a demonstration today in Iran, OPEC’s second- largest member, while Algerian opposition parties prepared a protest on Feb. 19 following a weekend clash with police.
(Reuters) - Brent crude oil LCOc1 jumped above the $100 a barrel mark on Jan. 31 for the first time since 2008, adding to pressure on the Organization of the Petroleum Exporting Countries to pump more oil.
Even U.S. crude CLc1, which is trading more than $15 below Brent, is slightly above the $70-$80 price range, which top oil exporter Saudi Arabia has said is the ideal for producers in need of returns on their investment and not so high as to damage the fragile economies of consumer countries.
OPEC has resisted calls to change formally its output policy and has said the market has plenty of oil.
Hedge funds raised bearish bets on natural gas to the highest level since December 2008 as the fuel plunged on speculation that seasonal inventories will reach near-record levels at the end of March.
Gasoline prices have been on the rise for months now. As the economy improves, demand has gone up. But aside from that, something unusual is happening with gasoline prices in the U.S. this winter: Prices are rising faster on the East and West Coasts than they are in the middle of the country.
Russia’s economy may expand next quarter at the quickest pace since 2008 as companies boost investment and higher oil prices help the government ramp up spending before national elections, Renaissance Capital said.
(Reuters) - Venezuela's state oil company PDVSA loses around $1.5 billion a year through domestic subsidies that make the South American OPEC member's gasoline the cheapest in the world, the energy minister said on Sunday.
At a cost of $0.03-0.04 per liter ($0.11-0.15 per gallon), most Venezuelans can fill their tank for under a dollar. And since deadly protests in Caracas in 1989, successive governments have been wary of changing the subsidy policy and hiking prices.
Liberalization of domestic industrial gas prices will bring an additional $24 billion income to Russian gas giant Gazprom in 2011-2013, the firm said on Monday.
Gazprom expects the income to be higher than the volume of mineral extraction tax which rose to 237 rubles per 1,000 cubic meters this year from 147 rubles levied in 2006. From 2012, the rate will increase to 251 rubles and to 265 rubles from 2013.
Liquefied natural gas output from Indonesia's Bontang plant is expected to fall by 6% this year due to lower supply of natural gas from a Total field, the plant's operator PT Badak NGL said today.
Dutch oil and chemicals storage company Vopak will build a liquefied petroleum gas terminal in Indonesia together with Chandra Asri Petrochemical for an investment of $150 million, the Indonesian player said.
Syrian Oil and Gas Minister Sufian Allaw and his Iraqi counterpart Abdul Kareem Luaibi held talks here Sunday on cooperation projects in oil and gas, Syrian official SANA news agency reported.
The talks focused on reopening the old Iraqi oil pipeline and enhancing cooperation between the two ministries to facilitate the purpose.
Iraq, seeking to rebuild its energy industry after years of conflict and scarce investment, will soon sign a delayed deal for the Akkas natural-gas field and review production-sharing contracts signed separately by the semi-autonomous Kurdish region, the country’s oil minister said.
Ecuadorean officials say they will temporarily block a potential multibillion-dollar judgment against Chevron Corp. for alleged environmental damages.
The Attorney General's Office says in a statement that Ecuador will obey the order from a U.S. federal judge in New York even though officials "do not agree" with it.
Lagos — The $30 million (N4.6 billion) promised by the oil and gas companies in Nigeria towards the training of some ex-militants in the Niger Delta has been rejected by the Federal Fovernment as it considers it too little in the effort to make the region free of restiveness. Some of the oil companies include: Agip, Shell, Chevron etc.
The head of shipping at Royal Dutch Shell has called on the Royal Navy to launch military action against new "pirate motherships" off Somalia that have captured two $200m oil tankers this month.
Just six months after BP stopped the oil that had been flowing into the Gulf of Mexico, a gusher of books about the spill has begun to wash ashore. The first wave includes three very different approaches to the disaster that riveted the nation most of last summer.
Given the impending reality of peak oil production in both the world overall and Saudi Arabia, the rulers know that the oil wealth is not to be squandered and that leaving some oil in the ground is as good of a strategy as any.
The stamp was issued in recognition of OPEC’s significant impact on its members and the world community during the past 50 years. The organisation has served as a bridge between producers and consumers, creating a forum for discussion on issues like fuel supplies in the long run as well as technology, trade and environment conservation.
THE rude health of the North Sea oil industry was revealed by news from corporate financier Simmons & Company that its Aberdeen office has conducted $11 billion (£6.9bn) of deals.
This was emphasised by an announcement by oil services company Production Services Network that it is hiring 100 more people.
(Reuters) - Russia's largest state-owned oil company, Rosneft discovered two new oil and gas deposits in Eastern Siberia, the producer said Monday on its web site.
Americans would like to pay less at the pump. But what would that take? How about another economic crash -- or perhaps you'd prefer an ecological one. However the next century shakes out, one thing's for sure: the ever-growing gap between world oil supplies and demand is making itself felt, and the longer it takes us to break our addiction, the more painful the coming decades will be.
Confidence provides strengths for a society, but only when coupled with clear vision. Unfortunately modern America too-often sees the future only in terms of doomsters’ pessimism and advocates’ optimism. Here we have a case study of the latter.
Ethanol derived from Brazilian sugar-cane offers the best hope of replacing oil as the world's main source of fuel when it runs out, according to Bob Dudley, BP's chief executive.
He said Brazilian ethanol is the "best type of renewable energy" and offers the possibility of an "ultrapotent fuel that could revolutionise the market".
BP is channelling its research into renewable fuels accordingly, with 40pc of its $1bn (£625m) annual spend in this area targeted at Brazilian ethanol, Mr Dudley told the weekly Brazilian news magazine Veja.
"There will obviously a time when the oil runs out and with this prospect on the horizon, we will use more renewable energy sources," he said.
India, which spent 1.7 billion rupees a day ($37 million) subsidizing fuels in 2010, could replace power produced from diesel with renewable sources at one-third the cost of generation, the World Bank said.
The country’s entire wind, biomass and small hydropower potential of 68,000 megawatts could be produced at 6 rupees a kilowatt-hour compared with the 18 rupees a kilowatt-hour cost of diesel generation, according to a World Bank report.
Suzlon Energy Ltd., the world’s third-biggest maker of wind turbines, plans to build a wind farm in Australia’s New South Wales state estimated to cost about A$390 million ($392 million), government filings show.
Chrysler Group LLC, the U.S. automaker operated by Fiat SpA, is exploring the possibility of adding compressed natural-gas powered engines to its Ram truck brand, a top executive said.
About six out of 10 consumers say they would look at a gas-electric hybrid when the time comes to replace their current vehicle, a USA TODAY/Gallup Poll has found.
Some 35% would "strongly consider" a hybrid; an additional 23% would "consider" it.
But while the results seem to indicate that hybrid gas savers are taking off, the results are at odds with what consumers actually are buying: only 4.3% of vehicles sold last year were hybrids, the Environmental Protection Agency reports.
RICHMOND -- Dominion Virginia Power proposed a pilot program Monday to offer time-of-day pricing options to encourage off-peak charging of electric vehicles.
If approved by the State Corporation Commission, the program would offer reduced rates for overnight charging and higher rates during peak times to Virginia drivers.
China, the world’s biggest electricity consumer, is figuring out how to capture a larger share of the solar-energy market without losing money.
The government will spend at least a year studying Europe’s system of paying above-market prices for solar power before deciding if there’s a better way to spur clean-energy plants across China, said Wu Dacheng, an adviser to national power regulators. The delay has stalled projects planned on Chinese soil by developers such as First Solar Inc. of the U.S.
Examine this picture closely. It is the scariest picture you will see in a long time. It is from the International Energy Agency’s World Energy Outlook 2010. The IEA is the energy policy research agency of the Organisation for Economic Cooperation and Development (OECD), which represents the interests of the major developed market economies. Apparently.
So what’s so scary about this picture? The growing light blue wedge representing “Crude oil: fields yet to be found” is real cause for concern. Eliminate that growing wedge, and we do not have much more than five years before overall supply starts to decline.
When people ask me, “Will the Long Emergency happen quickly or slowly?” I answer, “Yes.” When they ask, “Will it be like rolling down a bumpy hill or falling off a cliff?” my answer is “Yes.” My response usually draws laughter or a knowing smile, and then I proceed to explain what I mean as I intend to do in this article. Answering “yes” to such questions underscores the paradox that is at the core of both the questions—and the answers, and without which it will be absolutely, unequivocally impossible to navigate the Long Emergency.
So, in effect many farmers are too poor to make the investment that could pull them out of their poverty.
But there is a way out, argues Peter Frykman, the chief executive of Driptech, a start-up firm based in Mountain View, Calif.
His company sells simple drip irrigation systems in India for as little as 6,500 rupees ($144) for half an acre. Unlike the Jain system, the Driptech product does not have specialized pipes or an emitter that releases a measured quantity of water.
Is it possible to separate politics from the divisive issue of global warming?
That's the ambitious goal of filmmaker Peter Byck, a self-described liberal who says that support for green policies shouldn't depend on whether you believe in climate change.
In his new film, "Carbon Nation," Byck spells out a common ground -- that smarter green strategy can save money and give the world cleaner air and water, in addition to addressing global warming. The film will be shown at screenings throughout the country and released in May on DVD.
Europe could save €900bn (£762bn) and still hit its 2050 carbon reduction targets if it built fewer wind farms and more gas plants, a coalition of gas producers including Gazprom, Centrica and Qatar Petroleum has told the European commission.
The industry is lobbying against the possibility of the commission setting new renewable energy targets and phasing out the use of gas. Next month, it will publish a draft "road map" energy strategy to 2050.
MORE than $5.5 billion has been spent by federal governments during the past decade on climate change programs that are delivering only small reductions in greenhouse gas emissions.
An analysis of government schemes designed to cut emissions by direct spending or regulatory intervention reveals they have cost an average $168 for each tonne of carbon dioxide abated.
ACADEMICS from Heriot-Watt University's Institute of Petroleum Engineering have developed technology which identifies and seals leaks that could occur in carbon dioxide storage sites.
The development is designed for companies looking to develop geological carbon dioxide storage sites.
Ugandans are now in their hottest season with an average 30˚C of daily temperature. However, most of them are not sure whether the coldest months will come soon since everything regarding the environment has changed. Besides, unusually, night temperature has been increasing from time to time and water shortage is real in several areas.
As the Sahel region of West Africa is just coming out of what seems like a biting food crisis, Oxfam America points out that unfair product prices, climate change and outmoded agricultural practices conspire to foretell even more cases of hunger.
While the causal intertwining of climate change, food security and political upheaval may not be new to human civilization, recent world events have thrust the topic back to the center of public consciousness with a vengeance.
Rising global food prices - which some believe are caused in part by a rash of severe weather - are at least partly credited with tipping the scales of popular ire that ultimately toppled autocratic regimes in both Tunisia and Egypt in the past several weeks.
As the UN's Food and Agriculture Organization's Food Price Index hit an historic peak in January, protests against swollen prices seemed to erupt in concert across disparate corners of the developing world, echoing the food riots of 2008.
Global warming is most likely responsible, at least in part, for the rising frequency and severity of extreme weather events — like floods, storms and droughts — since warmer surface temperatures tend to produce more violent weather patterns, scientists say. And the damage these events have caused is a sign that the safety factors that engineers, architects and planners have previously built into structures are becoming inadequate for the changing climate.
Dikes, buildings and bridges are often built to withstand a “hundred-year storm” — an event so epic that there is a 1 percent chance it will happen in a given year. But what happens when 100-year storms are seen every 10 years, and 10-year storms become regular events? How many structures will reach their limits?