Drumbeat: July 8, 2011
Posted by Leanan on July 8, 2011 - 10:55am
ZURICH (Reuters) - Royal Dutch Shell Plc will produce more gas than oil from 2012, Chief Executive Peter Voser was quoted as saying on Friday.
"The future belongs to gas. The known reserves will last for 250 years. Gas power plants complement renewable energies perfectly because power production can be adjusted to demand," Voser told Swiss newspaper Finanz und Wirtschaft.
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States fell by one this week to 873, after two straight weeks of gains, data from oil services firm Baker Hughes showed on Friday.
The gas-directed rig count is hovering just above the 16-month low of 866 hit seven weeks ago, as companies cut back on natural gas drilling in the face of weak prices.
Horizontal rigs -- the type most often used to extract oil or gas from shale -- were unchanged at 1,073, the firm said.
(Reuters) - Russia will cut its oil export duty to ward off stagnation in its Soviet-era production base, but Prime Minister Vladimir Putin's long-expected announcement was coupled with strong pressure on refiners to produce more fuel.
Russia is pumping at peak levels after an annual record of 505 million tonnes (just over 10 million barrels per day) last year, but older fields are getting tapped out and incentives are needed to stimulate production.
"Last year Russia became the world's top oil producer," Putin said. "This is exactly the level of crude which allows us to cover our own needs as well as export requirements. This year we expect 508-509 million tonnes."
A Japanese consortium including Mitsubishi Corp. has begun talks with a major Canadian energy company to jointly build a large plant on Canada's Pacific coast to export shale gas to Japan.
It would be the first time for shale gas produced in Canada to be exported to Japan.
The plans being jointly studied by major companies such as Mitsubishi Corp., Tokyo Gas Co. and Osaka Gas Co. to build a large liquefied natural gas plant on the Pacific coast of Canada to tap shale gas are aimed at ensuring a stable supply of natural gas, global demand for which is rising sharply.
Reflecting moves to lessen dependence on nuclear-based electric power, shale gas has become an increasingly important source of energy worldwide. Production has been growing especially fast in North America.
NEW ORLEANS — BP is arguing that most victims of last year’s Gulf oil spill should not get any more payouts for future losses because the hardest-hit areas are recovering and the economy is growing.
FUKUOKA--An employee of a Kyushu Electric Power Co. subsidiary blew the whistle on a recent deception in which the utility ordered employees of its offices and subsidiaries to send e-mails supporting the restart of two nuclear reactors to a meeting for local residents, the Japanese Communist Party said.
(Reuters) - Italy's booming solar power market is expected to grow nearly four times to 30 gigawatts of capacity by 2020 as part of incentive-driven efforts to fight climate change, the head of Italy's top utility said.
Amid the debate over raising the nation's debt limit comes a vote in Congress on ... light bulbs.
The U.S. House is going to try next week to block the federal government's transition from traditional incandescent light bulbs to more energy-efficient options. The vote could come as early as Monday.
Greensboro-based VolvobizWatch Trucks said that its New River Valley manufacturing plant in Dublin, Va. has reduced its energy intensity levels by roughly 30 percent within a one-year period. The reduction means that Volvo has become the first company to meet a 10-year challenge set by the U.S. Department of Energy.
Some 1.3 million people have been driven off the UK's roads this year as a result of rising motoring costs, according to new research.
The staggering figure, released by Sainsbury's Car Insurance, suggests one in 30 drivers have given up their cars over the past 12 months.
The report found the average car owner is now spending around £1,720 annually to fuel their vehicle - a rise of almost 23% year-on-year.
Now massive sections of the interstate, including almost all of them near major cities, have reached the end of their useful life; the interstates were designed to last 20 or 30 years, but now some areas are pushing 50 years and handling far more traffic than their planners anticipated. But as we reach into our wallets, we run into our generation’s big dilemma: We’re nearly broke.
When you go to the pump, every gallon of gasoline you buy includes 18.4 cents for the federal government, plus whatever your particular state charges in taxes. The federal money is collected by the Treasury Department, which puts it into the Highway Trust Fund (HTF). Since the trust fund’s creation in 1956, the gas tax has only been raised three times: to 9 cents per gallon in 1982, to 14.1 cents in 1990, and to 18.4 cents in 1993.
By dampening volatility in oil markets, it's possible for the SPR to make the long term depletion of oil obvious. Careful management of the SPR to maintain a very slowly increasing price point would aid in the transition to alternatives.
When you are the wealthy and powerful leader of a petro-state, what gets you up in the morning? Saving your job -- which has occupied Saudi King Abdullah on and off -- can be motivational. But when you have $130 billion to throw around for such purposes, it still goes only so far. The same with fun missile strikes at a neighbor, the one-time preoccupation of Saddam Hussain -- you can aim at only so many targets before it gets old.
Germany's clean, nuclear-free future may have a difficult birth.
Chancellor Angela Merkel's government claimed to be "ushering in the age of renewables" as German MPs passed legislation this week to phase out nuclear power by 2022 – but the basic arithmetic of the energy-switch policy suggests the country will struggle to fill the hole left by nuclear power.
China's economy has enjoyed robust growth for the past three decades and transformed into the world's second-largest economy. Nevertheless, China faces obstacles on its path to greater prosperity. The country struggles with electricity power shortages and underdevelopment in rural areas, particularly in northwest China.
Accordingly, China's National Development and Reform Commission and the National Energy Administration have pledged their whole-hearted support for the establishment of an energy "golden zone" to connect the energy-abundant region of Yulin City in North Shaanxi Province, Ordos in southwestern Inner Mongolia and the Ningdong energy and chemical base in the Ningxia Hui Autonomous Region.
MOSCOW -(Dow Jones)- Russian oil companies have failed to live up to their obligations to modernize the refining sector, the country's Prime Minister Vladimir Putin said Friday.
"I say with regret that most of our companies haven't met their responsibilities to increase the depth of oil processing, even though they have taken full advantage of tax breaks from the government," Putin told oil industry executives and energy officials at a meeting in Kirishi in Northwestern Russia.
ISLAMABAD: The government has decided to enact stricter policies towards those involved in stealing electricity, with the water and power ministry proposing jail terms of up to one year and fines of up to Rs500,000.
KARACHI - Public anger is growing at the Pakistan government's failure to ensure adequate power supplies for industrial and private use, with two people killed and more than 30 wounded by police this week when a crowd of about 8,000 marched towards Chashma Nuclear Power Plant in Mianwali, Punjab province.
Power cuts were also a factor in protests in the industrial center of Karachi this week that have left at least 35 people dead. Karachi is facing 10 hours of power outages a day, severely damaging industrial output and undermining economic growth. The shortages of electricity and gas have forced hundreds of units to shut down in the textile district of Faisalabad, in Punjab
Qatar, the holder of the world's third-biggest gas reserves, is steadily lining up long-term international buyers for its lucrative export.
Its latest coup is a two-decade agreement signed with Argentina last week to supply 5 million tonnes of liquefied natural gas (LNG) a year, equal to more than 15 per cent of that country's natural gas demand. It follows deals with the UK, Japan and other major consumers.
SANAA, Yemen — President Ali Abdullah Saleh's supporters have opened fire, killing at least 11 people across Yemen after their leader's first television appearance since his injury last month.
Hospital officials say most of Friday's shooting was in celebration of Saleh's TV address the previous evening but it's unclear if all the deaths were accidental.
The Agriculture Department has exempted a genetically engineered grass from federal regulation, a decision that some critics say could portend a loosening in oversight of biotech crops.
During the past century, world economic growth has depended largely on ever-expanding use of hydrocarbon energy sources: oil for transportation, coal and natural gas for electricity generation, oil and gas for agricultural production. It is no exaggeration to say that the health of the global economy currently hinges on increasing rates of production of these fuels. However, oil, gas, and coal are non-renewable resources that are typically extracted using the “low-hanging fruit” principle. That is, large concentrations of high-quality and easily accessed fuels tend to be depleted first. Thus, while the world is in no danger of running out of hydrocarbon energy sources anytime soon, oil, gas, and coal extraction efforts are increasingly directed toward low-quality, hard-to-produce fuels that require higher up-front investment and entail increasing environmental costs and risks.
These trends are easily demonstrated in the case of oil.
I was reading through the Executive Summary of the World Economic Forum’s Global Risks 2011 this afternoon (as you do) and the chart on page 3 (see above) caught my eye (click on it to enlarge it). In it, the authors set out all the risks they see in the world on a matrix which positions the various risks by their perceived impact on the global economy and by the perceived likelihood of their happening. What you might expect to be at the top, given recent media reports, would be the threat of terrorism or perhaps some hideous computer virus that knocks out nuclear power station. But no. There at the top, leading the pack, are climate change, ‘extreme energy price volatility’ and fiscal crises.
In late May, The City broke with some 350 years of protocol and announced the establishment of the Green Investment Bank, the first ever public bank in the UK. With an initial £3 billion, GIB will invest in clean energy technology, with the goal of lessening the country's reliance on fossil fuel and developing technologies to keep the UK competitive in the economies of the future.
We are all going to be poor in the decades and centuries to come. Yes, I’m including today’s rich in that; the stark folly that leads today’s privileged classes to think they can prosper while gutting the society that alone guarantees them their wealth and status is nothing new, and will bring about the usual consequences in due time. Voluntarily embracing poverty in advance may seem like a strange tactic to take, at a time when a great many people will be clinging to every scrap of claim to the fading wealth of the industrial age, but it has certain important advantages. First, it offers a chance to get competent at getting by on less before sheer necessity forces the issue; second, it sidesteps the rising spiral of struggle that’s waiting for all those who commit themselves to holding on to an industrial-age standard of living; third, as I’ve already pointed out, buying cheap used items frees up money that can then be applied to something more useful.
The neo-liberal global economic system is on its deathbed, and Israel may soon have to provide for all of its own food and fuel needs, instead of trading for them with other countries, says a senior Israel agronomist. Dr. Elaine Soloway of the Arava Institute for Environmental Studies at Kibbutz Ketura says that the main cause for the collapse of international markets and subsequent retooling of Israeli industry to produce almost all necessities locally will be the end of the age of cheap fossil fuels.
"The idea that everybody's going to produce specialties, and them fly them around all over the world, that's going to be history," Soloway insists. "Raising vegetables and shipping them to places that are up to their eyeballs in water doesn't make any sense. We are selling our water cheaply to the Dutch, who are drowning," she says, referring to the large amounts of water necessary to grow vegetables, which are then exported. "The Dutch have to put up greenhouses, and we have to stop selling them peppers."
I had one such argument with Everette DeGolyer just after World War II. he insisted that we were going to be desperately short of oil by 1956. I remember saying: ‘De, that prediction has been made almost since the beginning of the oil industry. Are you sure that you are right this time?’
He said he was sure, and I suggested we wait until 1956 and find out. In that year, we had oil running out of our ears, and I said, ‘De, what happened?’ He responded that some unforeseen things occurred, and I remember asking, ‘Isn’t it always that way?’
I have come to the conclusion it is always that way.
If you are a regular reader, you know that from time to time I write about things that appear to be tangentially related to CRM -- at best. My favorite alternative to straight ahead research and reporting on CRM is a strange sounding thing called "peak oil."
For those of you not familiar with the idea, peak oil refers to a not-so-hypothetical ceiling on how much oil we can coax out of the ground daily. Indirectly, it also refers to the fact that we have not found nearly enough oil to replenish supplies we are consuming, and we never will. There's only so much of it. While there is undoubtedly oil left in the ground to be exploited, there isn't enough in part because global demand and consumption keeps rising. That leaves a gap that now goes unfilled daily.
A Greens senator has warned of "savage" petrol price increases regardless of any government attempt to shield motorists from the carbon tax.
Prime Minister Julia Gillard is trying to ease concerns about carbon pricing by saying households, tradespeople and small businesses using light commercial vehicles will be exempted from the tax on fuel.
But speaking at a public transport conference in Canberra this week, Senator Scott Ludlam told attendees the impact of a carbon tax on petrol prices “fades into insignificance” when considering the role of peak oil.
Crude oil dropped, paring a second weekly gain, after the U.S. added fewer jobs than forecast in June and the unemployment rate climbed, damping optimism for the economic rebound and fuel demand growth.
Futures fell as much as 2.3 percent after the Labor Department said U.S. employers added the fewest workers in nine months and the unemployment rate rose to 9.2 percent, the highest level this year. The premium of London’s Brent oil over New York crude rose above $20 for the first time since June 15.
Millions of British Gas customers are to face higher utility bills after the company said it is putting up the price of both gas and electricity.
Gas prices will rise by an average of 18% and electricity bills by an average of 16%.
It’s all speculation over the future of the commodities market.
But Goldman Sachs Group is predicting a significant upturn.
And they’re particularly bullish when it comes to crude oil.
HANOI - Petrovietnam and its partners may buy $1.5 billion in Vietnamese oil assets in the contentious South China Sea from ConocoPhillips to help protect Hanoi's territorial claims, the chief executive of the state oil group said.
Vietnam and the Philippines have protested against aggressive action by China in the resource-rich area, which covers the world's busiest sea lanes and straddles oil-and-gas deposits. It is also rich in fishing grounds.
OAO Gazprom may be seeking an advance payment of as much as $40 billion against future deliveries of gas to China, Vedomosti reported, citing unidentified people close to the Russian gas export monopoly and Russia’s government.
The secession of Sudan’s oil-rich southern region tomorrow may rekindle unrest over soaring prices and stoke violence in outlying regions against President Umar al-Bashir’s northern government in Khartoum.
“Austerity measures are likely to fuel discontent,” Jean- Baptiste Gallopin, the Control Risks associate analyst on the Middle East & North Africa, said in a phone interview from London. “Bashir is in a very tricky position.”
Only a few months ago, Khairat El- shater was languishing in an Egyptian prison, put there by the Hosni Mubarak regime. Many of his businesses were shuttered.
Now the deputy general guide, or No. 2 leader, of the Muslim Brotherhood, Egypt’s dominant political-Islamic group, El-shater shuttles between meetings at one of his once-closed offices in a grimy building in Cairo’s Nasr City district. His visitors include bankers and investors from the U.S. to Australia, Bloomberg Businessweek reports in its July 11 edition.
CAIRO (AP) — Egyptians held one of their biggest protests in months as tens of thousands took to the streets in Cairo and other cities on Friday to demand justice for victims of Hosni Mubarak's regime and press the country's new military rulers for a clear plan on transition to democracy.
There is growing frustration among Egyptians that little has changed five months after the 18-day uprising forced the former president to step down on Feb. 11. There has also been confusion over what comes next, with some demanding the military push back parliamentary elections that it set for September.
KARACHI, Pakistan (AP) — Security forces were ordered to shoot gunmen on sight Friday in Pakistan's largest city, as four days of violence left at least 71 people dead and prompted political leaders to call for a day of mourning that shut businesses and kept public traffic off the roads.
This week's violent spate in Karachi was among the worst this year for a city that has long been a hotbed of ethnic, sectarian and political tensions. At least 34 people died on Thursday alone, when gunmen strafed buses and went on shooting sprees in several neighborhoods.
Ghana’s Jubilee oil field may reach peak production in August or September, a month later than planned, after boosting output to as much as 80,000 barrels a day since the start of this month, according to Tullow Oil Plc (TLW), the field’s operator.
Kosmos Energy Ltd. said damage to Transocean Ltd. (RIG)’s Marianas rig may delay drilling of a well off Ghana’s coast.
A force majeure notice was delivered to the government of Ghana and Ghana National Petroleum Corp. after an anchor- handling accident damaged the rig, Dallas-based Kosmos said today in a statement. The Marianas was scheduled to arrive July 10 for drilling, Kosmos said.
SHANGHAI (AP) — China's ocean administration has ordered oil companies operating offshore wells to assess risks of accidents following two spills off its east coast in a field operated by American energy giant ConocoPhillips.
HARRISBURG, Pa. (AP) — Pennsylvania environmental regulators have agreed to take more precautions before they approve certain permits for oil and natural-gas drilling sites where well construction poses a pollution threat to some of the state's highest-quality waterways.
The state Department of Environmental Protection agreed to the measures to settle a complaint by the Chesapeake Bay Foundation first filed in 2009 that also asserted the agency had approved three deficient permit applications.
Auburn, N.Y. — The city of Auburn is banning natural gas-drilling wastewater from its treatment plant.
City councilors voted Thursday to stop the city’s practice of accepting the chemical-laced wastewater from hydraulic fracturing of gas wells. The city has been under pressure from the Cayuga Anti-Fracking Alliance to enact the ban.
BILLINGS, Mont. (AP) — The state of Montana has cut its ties to a joint Exxon Mobil-government command post overseeing an oil spill along the Yellowstone river, after the state's Democratic governor said the group was defying state open government laws by denying public access.
The move underscores mounting tensions between the state and the world's largest energy company over its handling of pipeline rupture that spewed tens of thousands of gallons of oil into the scenic river.
BILLINGS, Mont. (UPI) -- Exxon Mobil said it discovered two "isolated spots of oil" more than 20 miles from the site of a spill on the Yellowstone River.
TOKYO (Reuters) - A power company in western Japan delayed on Friday the restart of an idled nuclear reactor as confusion spreads over the safety of nuclear power and the future course of the country's energy policy.
Shikoku Electric Power Co said it will delay the planned July 10 restart of one of its reactors, because it didn't think the public would accept it. The firm has no idea when it will restart the unit, a spokesman also said.
TOKYO (Reuters) - Two months of baking heat will test Japan's resolve to wean itself off nuclear power and show whether an energy-saving drive set off by meltdowns at the Fukushima plant will bring lasting efficiency gains the way the 1970s oil crisis did.
There are some signs that there is no going back to the pre-March 11 status quo as businesses and consumers change behavior in ways that will last beyond the summer electricity crunch.
Japan may have no nuclear reactors running by May next year should the round of tests announced by the government this week cause further delays to restarting units idled for maintenance, a Bloomberg survey shows.
MINNEAPOLIS - Federal regulators have renewed the operating licenses for the Prairie Island nuclear power plant for another 20 years, Xcel Energy Inc. announced Tuesday.
The utility also said it plans to invest at least $500 million in the plant near Red Wing through 2015, and even more if the Nuclear Regulatory Commission approves an increase in generating capacity at the plant, which the company plans to apply for later this year.
Shutting down the Indian Point nuclear power plant would lead to significantly dirtier air and higher electric bills for New York City residents, according to a report commissioned by the city that is circulating among state officials in Albany.
PARIS (Reuters) - France raised the possibility for the first time of pulling out of nuclear power although its energy minister stressed on Friday that this was just one of many scenarios, not the one favoured by the government.
United Arab Emirates (AP) - African governments should consider investing in renewable energies like wind, solar and hydro power to help feed the continent's growing energy demands and combat threats of climate change, the head of a new international energy agency said Friday.
Investment in renewable energy last year amounted to a record 211 billion dollars, a rise of 32 percent over 2009 and 540 percent over 2004, a UN-backed report said on Thursday.
China, investing 48.9 billion dollars, up 28 percent, accounted for more than a fifth of the total, marking a year in which developing countries for the first time outstripped rich economies in renewables investment, it said.
More than 200 million jellyfish, known here as “Meduzot,” have been attacking Israel, and there is not much anyone can do about it. The jellyfish are an invasive species called Rhopilema Nomadica that originally migrated from the Red Sea.
They're coming here for one reason: They have few natural enemies lurking in these waters. The sea turtle is one such enemy, but massive construction along the Israeli coastline has devastated the turtle nesting habitat, leaving a paradise for the jellyfish.
Dr. Dror Angel, who works at the Department of Maritime Civilization at the University of Haifa, says the problem of jellyfish is only increasing. "People bathing get stung, and for the fishermen it's a disaster, they catch them in their nets. And of course the electric plants suffer as well.”
WASHINGTON — The Energy Department plans to provide a $105 million loan guarantee for the expansion of an ethanol factory in Emmetsburg, Iowa, that intends to make motor fuel from corncobs, leaves and husks.
U.S. corn supplies may be smaller than expected this year, according to analysts including Morgan Stanley’s Hussein Allidina who were surprised by a government forecast for the second-highest planted acreage since 1944.
Any other year, the ethanol industry would have declared a defeat, not a victory.
Developing economies will be “hammered” as declining water supply adds to problems confronting farmers who are already struggling to meet food demand, pushing prices even higher, said CH2M Hill Cos.
Countries in short supply of water including China will continue to boost food imports, draining resources in some of the largest agricultural producers including the U.S. and Brazil, said Lee McIntire, chairman and chief executive officer. The company provides services from treating waste water and building irrigation systems to cleaning up nuclear sites.
"Small groceries are part of the critical infrastructure of rural communities," along with post offices and schools, he says. "When one of those goes, it really does begin to have a domino effect."
Would you like to see your plump, homegrown organic radishes blush crimson on a bed of sea salt in a sweet little restaurant? Interested in sharing your extra lemons with locally owned businesses?
Community organizer and hyper-locavore Doug Reil is creating a new program that may be perfect for you.
Albany Garden to Table, a fledgling Albany Edible Initiative, hopes to provide independent, locally owned restaurants and other institutions in the city with organic produce, courtesy of backyard gardens.
Even Michael Pollan, who I admire a lot in many ways, is guilty of selling us the idea that food must be fancy and complex. Consider the last meal in _The Omnivore's Dilemma_ the one that he describes "fully paid for" - the one he produces himself. He ultimately concludes that the truly sustainable and homegrown meal isn't viable, it can't be done every day. But what was his meal? Roasted, hunted wild boar. Ummm.... On the other hand, you can make and eat a salad with a varying cast of greens and vegetables with some hardboiled eggs tossed in it with not a lot of effort. Yes, it takes some infrastructure work and attention - but the idea that the home produced meal must be complex, elaborate and ultimately a failure is part of a larger narrative that says that cooking and growing food are just too damned hard.
A casual glance at the greylynn2030 website paints a convivial picture of vegetarian cooking, marmalade making, movie screenings, sewing groups, craft events, meditation evenings, community gardens and farmers' markets. So far, so Grey Lynn.
But, as part of the international Transition Towns movement, this group's focus is firmly fixed on aims considerably more serious than its gentle timetable of events suggests.
An indication that greed reflects the perception rather than the reality of scarcity is that rich people tend to be less generous than poor people. In my experience, poor people quite often lend or give each other small sums that, proportionally speaking, would be the equivalent of half a rich person’s net worth. Extensive research backs up this observation. A large 2002 survey by Independent Sector, a nonprofit research organization, found that Americans making less than $25,000 gave 4.2 percent of their income to charity, as opposed to 2.7 percent for people making over $100,000. More recently, Paul Piff, a social psychologist at University of California–Berkeley, found that “lower-income people were more generous, charitable, trusting and helpful to others than were those with more wealth.” Piff found that when research subjects were given money to anonymously distribute between themselves and a partner (who would never know their identity), their generosity correlated inversely to their socioeconomic status.
While it is tempting to conclude from this that greedy people become wealthy, an equally plausible interpretation is that wealth makes people greedy. Why would this be? In a context of abundance greed is silly; only in a context of scarcity is it rational. The wealthy perceive scarcity where there is none. They also worry more than anybody else about money. Could it be that money itself causes the perception of scarcity? Could it be that money, nearly synonymous with security, ironically brings the opposite? The answer to both these questions is yes. On the individual level, rich people have a lot more “invested” in their money and are less able to let go of it. (To let go easily reflects an attitude of abundance.) On the systemic level, as we shall see, scarcity is also built in to money, a direct result of the way it is created and circulated.
The EPA’s tough new air pollution regulations will force scores of older, dirty, inefficient plants to shut down. Those that remain open must dramatically clean up their emissions. The Environmental Protection Agency hopes these and other measures will improve air quality across 27 states.
Studies indicate that the new Environmental Protection Agency rule expanding controls on coal-fired power plants would save up more lives than are lost on the highways annually. Is that worth $1 billion a year?
Canada has announced that they will be conducting large-scale exercises in the Arctic. NATO also announced claims on the Arctic. What can you say about the militarization of the Arctic?
Acting Director - General of Nigerian Institute of Social and Economic Research (NISER), Prof Femi Olokesusi has raised the alarm that about two million Lagos residents risk being submerged by the Atlantic Ocean.
Olokesusi in a paper titled, Lagos: The Challenges and Opportunities of an Emerging African Mega - City, who cited the ocean surge as part of the challenges of Lagos as a mega city however advocated policy consistency and strong political will in making Lagos mega city a reality.
Global warming will threaten Britain's security by triggering wars, food shortages and mass migration, Energy Minister Chris Huhne warned today.
Although the UK may escape the worst physical impacts of rising temperatures and sea levels, the UK will still be exposed to 'alarming and shocking' consequences of climate change elsewhere, he said.