Drumbeat: May 4, 2012
Posted by Leanan on May 4, 2012 - 10:41am
RIO DE JANEIRO — Brazil is deploying more than 8,500 troops to the far reaches of the Amazon rain forest this month in an operation aimed at cracking down on drug smuggling, gold mining and illegal deforestation, officials said.
The troop mobilization sends a clear message ahead of the United Nations Conference on Sustainable Development, which is scheduled to take place here in June, that Brazil is taking steps to assert greater control over its porous frontiers in the Amazon. Soldiers are being sent to border areas near Venezuela, Suriname, French Guiana and Guyana.
“The Amazon is Brazil’s No. 1 priority from a strategic viewpoint, given its importance to humanity as a source of water, biodiversity and food production,” Gen. Eduardo Dias da Costa Villas Boas, chief of the Amazon Military Command, said in a telephone interview.
LONDON (Reuters) - Oil fell to three-month lows of under $115 per barrel on Friday ahead of a U.S. payrolls report and was set for its steepest weekly fall since December due to concerns over the health of the global economy and easing fears over supply disruption.
The jobs data will help investors gauge the outlook for demand growth in the world's biggest oil consumer amid renewed worries its recovery may be faltering. Businesses outside the farm sector are expected to have added 170,000 jobs last month, according to a Reuters survey.
PARIS (Reuters) - Oil supply will be more than sufficient to meet demand this year and beyond, OPEC's Secretary General said on Thursday, but added the price of fuel is being driven higher by speculation.
"There has been no shortage of oil in the market. Producers have been able to meet consumer needs," Abdullah al-Badri told an energy conference. "We also see this as being the case for the rest of 2012 and the foreseeable future."
LONDON (Reuters) - British gas prices firmed on Friday as the pipe linking Britain and Belgium flipped to import mode to cover domestic supply shortages, and planned maintenance in Norway next week raised the likelihood of further cutbacks.
North Sea gas output turned lower compared with Thursday's average and imports from the Netherlands also fell, somewhat counter-balanced by another rise in Norwegian deliveries.
(Reuters) - Russian government approved an increase in mineral extraction tax (MET) for Gazprom to 582 roubles ($19.82) per 1,000 cubic metres of gas starting from Jan. 1, 2013, a Finance Ministry official said on Wednesday.
NEW DELHI (Reuters) - India's coal ministry has proposed setting up a sovereign wealth fund to buy coal assets abroad, Coal Minister Sriprakash Jaiswal said on Friday.
Coal accounts for more than half of India's power generation and will be required for 85 percent of the 76,000 megawatts additional capacity targeted in the next five years.
India’s quest for natural resources to power its growing economy and compete with China has met the enemy: Its own red tape.
Thwarted by lengthy bureaucratic delays for approvals, Indian state companies have lost out on or walked away from at least seven purchases of overseas coal and mining assets in the last two years, data compiled by Bloomberg show. They have completed just a single overseas deal between them in that time.
MUMBAI: India's government has asked energy giant Reliance Industries to pay a US$1.25 billion penalty for a fall in gas production from its main oil fields, a company executive said on Friday.
The government and investors have been concerned for months over Reliance's declining gas output from its main D6 fields in the Krishna-Godavari basin off the coast of eastern India.
(Reuters) - The cost of Royal Dutch Shell (RDSa.L) and PetroChina's 0857.K Australian joint venture LNG may rise as much as 50 percent from initial estimates, which could force the companies to delay development, a source close to the project said on Friday.
Moscow (Platts) - Russia's Gazprom Thursday said it is considering the construction of a gas pipeline to Japan as well as higher LNG supplies to its Asian neighbor.
Representatives of Gazprom and the Japanese parliament discussed gas cooperation at a meeting held Thursday, a Gazprom statement said.
ASHGABAT, Turkmenistan (AP) - Senior officials in Turkmenistan say the energy-rich Central Asian nation plans to sign a natural gas sales agreement with Afghanistan, Pakistan and India this month.
The deal would mark a decisive move toward construction of a pipeline crossing the four nations that backers hope will meet energy demands across the region.
Indonesia’s first floating storage and re-gasification unit (FSRU) is expected to commence gas delivery to state electricity company PT Perusahaan Listrik Negara’s (PLN) Muara Karang power plant on May 15.
SANAA, Yemen – Salman Abdul Salam has lived on University Square in Sanaa for more than a year in protest. He hasn't had a job since graduating from college two years ago. His clothes are worn, and he says he's too poor to marry his girlfriend.
But the departure of longtime dictator Ali Abdullah Saleh has him feeling determined.
"We are not finished yet," said Salam, 25. "This revolution will continue until Saleh is tried and Yemen is passed over to civilian hands."
VIENNA (Reuters) - Iran said on Friday it will never suspend its uranium enrichment programme and sees no reason to close the Fordow underground site, making clear Tehran's red lines in nuclear talks with world powers later this month.
Last month a senior U.S. official said the United States and its allies would demand that Iran halt higher-grade enrichment and immediately close the Fordow facility at talks over Tehran's nuclear standoff with the West.
India's two biggest importers of crude oil from Iran will cut shipments from the Islamic republic by at least 15 percent this financial year due to US pressure, a report has said.
Washington has been seeking to shut down Iran's oil trade to put pressure on the Persian Gulf nation to abandon its disputed nuclear programme.
Zhuhai Zhenrong Co., the Chinese company censured by the U.S. in January for trading with Iran, provisionally hired an oil tanker to carry fuel oil from the Persian Gulf nation, shipping data showed.
Europe’s oil embargo on Iran is having unforeseen consequences in the shipping market, making it almost impossible to determine if vessels are using fuel that violates the sanctions.
Supplies from Iran are a “vital blending component” to make ship fuel, known as bunkers, according to Barclays Capital. The nation accounted for about 8 percent of bunkers exported last year to Asia, the largest market, and about a third of the supply at Fujairah in the United Arab Emirates, the Middle East’s biggest refueling port, Barclays estimates.
LONDON (Reuters) - West African pirates have freed a gasoline tanker that was hijacked at the end of April and contact was reestablished with the crew early this morning, the ship's owner told Reuters on Friday.
The vessel is believed to have been hijacked for its cargo of gasoline, worth millions of dollars.
"We believe that was the purpose. Some of the cargo has been stolen," said Nick Fell, a spokesman for BW Maritime.
Faced with increasing political obstacles to oil and natural gas exploration in many countries around the world, the oil industry is focusing again on the United States. The industry is using the deceitful promise of energy independence to cajole Americans and their policymakers into relaxing environmental regulations and opening protected public lands and restricted offshore areas to drilling.
Peak Oil can be defined at least four ways, but one way is simple: Peak Oil is when supplies and stocks are tight enough, relative to demand, to make price slides short and price hikes long. This will continue until and unless the economy tilts into recession through market forces, or by policy decision in response to either external or internal shocks.
"I'm not a doomer, but I do think the issue of Peak Oil is real," Hales went on. "You need good ideas from smart people. Kunstler is controversial and sometimes bombastic, but he has some good ideas. He's not right on everything. But he's got some good ideas."
Enbridge Gas New Brunswick is asking the courts to overturn new regulations under the provincial Gas Distribution Act.
Otherwise, the company could lose more than $9.7 million a year and be forced to cuts its staff in half and reduce services in the province, it claims in documents file with the Court of Queen’s Bench.
WASHINGTON - Will the world be tapping methane hydrates deep in the permafrost and off the edges of continents decades from now? Part of the answer will rest with research in Alaska.
A day after the Department of Energy announced the results of a test at Prudhoe Bay that resulted in a steady flow of natural gas, researchers stressed that this was among many tests to come. The test was the first use of carbon dioxide to extract natural gas. It also was the longest test of methane hydrate extraction: 30 days.
TransCanada Corp. has applied for a U.S. presidential permit for a portion of its Keystone XL pipeline from the Canadian border to Steele City, Nebraska.
Chesapeake Energy Corp. Chief Executive Officer Aubrey McClendon is banking his turnaround of the industry’s biggest debtor on a rebound in natural-gas prices that no Wall Street analysts tracked by Bloomberg expect will happen.
A day after directors said they’ll strip him of the chairman’s role as they investigate potential conflicts of interest in his personal finances, McClendon laid out a plan to shrink a $12.6 billion debt pile, cut costs and remake the second-biggest U.S. gas producer into an oil company. At the core of his plan is a rebound in gas by 2014 to $5 per thousand cubic feet, more than double today’s level.
In two decades, Chesapeake — which describes itself as “America’s Champion of Natural Gas” — has grown from a handful of employees into the nation’s second largest natural gas producer (after Exxon Mobil), with 10,000 workers drilling vast tracts of land, and over $11 billion in revenue last year. But the company has been buffeted lately due to the dramatic decline in natural gas prices thanks to the discovery of huge fields of shale gas, which have flooded the market with supply. Natural gas prices have dropped 50% in the last year, recently hitting their lowest point since 2001, though they’ve edged up lately. Chesapeake Energy shares have fallen by 36% over the past year. In February, the company said that its revenues would fall over $2 billion short of expenses this year.
But while other producers have started to curtail production to ease the glut of gas on the market, Chesapeake increased production 18% in the first quarter even as the price as plummeted, according to The Wall Street Journal. That’s consistent with a massive bet that McClendon has engineered for Chesapeake that natural gas prices will go up, as Christopher Helman described in a Forbes profile of the CEO from last October.
As chairman and CEO of Chesapeake Energy Corp, Aubrey McClendon has been a powerhouse in the vast U.S. natural gas market, directing the company's multibillion dollar energy-trading operation and setting output targets for America's second-largest producer.
Behind the scenes, a Reuters investigation has found, McClendon also ran a lucrative business on the side: a $200 million hedge fund that traded in the same commodities Chesapeake produces.
NEW ORLEANS – A former BP drilling engineer was indicted Wednesday on charges he deleted text messages that indicated the company's blown-out Gulf of Mexico well was spewing far more crude than BP was telling the public.
Vexed by declining revenue, officials of the Niagara Falls water utility seized on a new moneymaking idea last year: treat toxic waste from natural-gas drilling at its sewage-treatment plant once hydrofracking gets under way in New York State.
Accepting the waste would both offset the drop in revenue and help keep water rates down for customers in the economically strapped region, they reasoned.
But the thought of having fracking fluids trucked into the city, treated and discharged into the Niagara River frightened local residents, many of whom still recall the Love Canal environmental crisis of the 1970s. In a unanimous vote, the Niagara Falls City Council blocked the plan this spring by banning the treatment, transport, storage and disposal of drilling fluids within city limits.
New York already deals with waste from about 6,800 active vertical and horizontal gas wells upstate. Although these wells require just a fraction of the water that would be needed for fracking in the Marcellus, they still produce waste that needs to go somewhere.
Officials with the New York Department of Environmental Conservation say that in 2010, New York’s gas wells produced more than 23 million gallons of waste, 17 million of which stayed in New York. Most of it went to sewage treatment plants or was used for de-icing roads.
Romania's new left-leaning government has pledged a moratorium on shale gas exploration and will review a controversial Canadian plan to build Europe's largest open-cast gold mine.
Fracking techniques have been around since the end of World War II. Why then suddenly is the world going gaga over shale gas hydraulic fracking? One answer is that the record high oil and gas prices of the recent few years have made inefficient processes such as extracting oil from Canada’s tar sands or the costly fracking profitable. The second reason is the advance of various horizontal underground drilling techniques that allow companies like Schlumberger to enter a large shale rock formation and inject substances to “free” the trapped gas.
But the real reason for the recent explosion of fracking in the country where it has most been applied, the United States, is the passage of legislation in 2005 by the US Congress that exempts the oil industry’s hydraulic fracking activity from regulatory supervision by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act. The oil and gas industry is the only industry in America that is allowed by EPA to inject known hazardous materials -- unchecked -- directly into or adjacent to underground drinking water supplies.6
According to an Ipsos Reid survey, two-thirds of Canadians believe the country can increase its oil and gas production without seriously harming the environment.
The poll, conducted on behalf of the Canadian Chamber of Commerce and released Thursday, also shows that Canadians living in different regions are split on Canada’s rise as a major energy producer.
A trial to assign blame and damages that could total tens of billions of dollars for the 2010 Gulf of Mexico oil spill has been put off until January, in a setback for the U.S. government, which wanted to try its case this summer.
Steve Inskeep talks to Steve Coll about his new book, Private Empire: ExxonMobil and American Power. In it, Coll delves into the business model of one of the country's largest and most profitable corporations. He explores how the Exxon Valdez oil spill in 1989 shaped the culture at the company for years to come.
OSAKA, Japan — Barring an unexpected turnaround, Japan on Saturday will become a nuclear-free nation for the first time in more than four decades, at least temporarily.
Japan’s leaders have made increasingly desperate attempts in recent months to avoid just such a scenario, trying to restart plants shut for routine maintenance and kept that way while they tried to convince a skittish public that the reactors were safe in the wake of last year’s nuclear catastrophe. But the government has run up against a crippling public distrust that recently found a powerful voice in local leaders who are orchestrating a rare challenge to Tokyo’s centralized power.
TOKYO — The Fukushima crisis is eroding years of Japanese efforts to reduce greenhouse gas emissions blamed for global warming, as power plants running on oil and natural gas fill the electricity gap left by now-shuttered nuclear reactors.
WASHINGTON — Two states with large amounts of military and civilian nuclear waste told a federal court panel on Wednesday that the Nuclear Regulatory Commission was flouting the law by declining to decide whether the Nevada desert is a suitable burial spot — even if the Obama administration says the storage plan is dead.
Yucca Mountain was chosen by Congress as the repository site in 1987. Its chief backers were senators from other states that were also under consideration as waste sites, including Texas and Washington. Nevada, lacking allies, could not stop it.
The initial choice had a thin veneer of science to it – Yucca was one of several sites under consideration mostly because it was remote and the government already owned it. Further scientific and engineering work, though, exposed substantial problems with the site.
The major airlines have been paring service for much of the last decade. But their cutbacks accelerated three years ago as carriers merged, fuel prices spiked and the recession reduced demand for seats. Even after the economy started to recover and passengers came back, the big airlines did not restore many of their flights, particularly on routes to small airports, as they sought to bolster their profits.
The strategy has squeezed the regional airlines, whose purpose is to ferry passengers on behalf of the major airlines and provide the backbone of air service to the nation’s small airports. Three regional carriers have filed for bankruptcy protection since 2010, including Pinnacle Airlines in April.
So while airports in large metropolitan areas like New York, Chicago and Atlanta have emerged relatively unscathed from these changes, the smaller cities have borne the brunt.
PARIS — Air France-KLM posted a net loss of €368 million ($483 million) in the first quarter of the year, saying Friday that high fuel costs and a continued drop in cargo cut into its profits.
With fuel prices now showing signs of hitting their peak are U.S. car buyers shifting focus from the high-mileage models that were quickly gaining ground earlier this year?
That’s one possible conclusion based on data collected by the University of Michigan showing that the fuel economy of the average new vehicle purchased in the U.S. last month dipped slightly from March, when fuel prices seemed to be rising that just about every other day.
Following years of torrid growth, the Chinese auto market suffered a rare, but very slight, downturn earlier this year. But, according to analysts at J.D. Power and Associates, that swoon did not affect the luxury car market, where sales plowed ahead.
On Friday, if all goes well, a sleek spaceship-like catamaran will glide into Hercule Harbor in Monaco after a remarkable 19-month journey around the globe.
Since it set sail from Monaco in September 2010, the Turanor PlanetSolar, the world’s largest solar-powered boat has crossed the Atlantic and the Pacific, passed through the Panama and Suez canals and stopped in Miami; Cancún, Mexico; Brisbane, Australia; Singapore; Abu Dhabi and many places in between.
NEW YORK (CNNMoney) -- First Solar, a maker of photovoltaic panels that announced a massive restructuring last month, reported a quarterly loss of $5.20 on Thursday.
BRUSSELS (Reuters) - Senior European Union officials failed on Wednesday to agree on how to measure the full climate impact of biofuels, prolonging uncertainty in a debate that threatens to wipe out large parts of Europe's biodiesel industry.
The talks followed warnings from scientists that using biodiesel made from European rapeseed and imported palm oil and soybeans does nothing to prevent climate change and could actually accelerate it.
Most analysts agree that we are rapidly approaching “peak oil,” the point when the volume of global oil production begins to decline. In response, Farm Bill programs have promoted a shift to liquid “biofuels” and “biomass” energy derived from farms. The Renewable Fuels Standard of the Energy Independence and Security Act of 2007, for instance, boosted the country’s ethanol production by mandating that up to 36 billion gallons be blended into gasoline by 2022. But taxpayers have been investing in this industry for decades via corn subsidies, import tariffs, tax credits for every gallon of ethanol blended with gasoline, loan guarantees, construction cost-shares, and gas pump upgrades. For politicians and lobbyists, ethanol became a sacred cow, untouchable, because of the belief that these public investments would 1) support farmers, 2) reduce dependence on foreign oil (currently about 60 percent of U.S. oil consumption), 3) cut greenhouse gas emissions, and 4) strengthen national defense.
Officials said the proposed rules, designed to save space in landfills and reduce emissions of gases that trap heat in the atmosphere, will make Massachusetts the first state with such a comprehensive prohibition on commercial food waste.
Their immediate goal is to divert a third of the nearly 1.4 million tons of organic waste produced every year in Massachusetts from landfills by the end of the decade. Instead, it would go to composting sites and a new generation of specially designed plants that convert waste into energy, heat, and fertilizer.
Around the world every night, one in seven people go to bed hungry—that's almost one billion people. People are hungry not because there isn't enough food produced but because our food system is broken. In fact, 80% of the world's hungry are directly involved in food production.
The auditor was James DiIorio, and he gave Jensen Farms a 96% score, and a "superior" grade. On the front page of his audit at the farm, DiIorio wrote a note saying "no anti-microbial solution" was being used to clean the melons.
Dr. Trevor Suslow, one of the nation's top experts on growing and harvesting melons safely, was shocked to see that on the audit at Jensen Farms.
"Having antimicrobials in any wash water, particular the primary or the very first step, is absolutely essential, and therefore as soon as one hears that that's not present, that's an instant red flag," Suslow said. The removal of an antimicrobial would be cause for an auditor or inspector to shut down an entire operation, he said.
"What I would expect from an auditor," Suslow said, "is that they would walk into the facility, look at the wash and dry lines, know that they weren't using an antimicrobial, and just say: 'The audit's done. You have to stop your operation. We can't continue.'"
Had Willy Wonka had been fascinated by industrial ecology instead of cocoa beans, his factory may have looked something like The Plant, Chicago’s first entirely self-sustaining "vertical farm."
The Plant occupies a former meatpacking plant and slaughterhouse in the Union Stock Yards, transforming a huge brick building that once specialized in bringing red meat to the masses into a green space all about urban farming without waste. The interior looks like something straight out of a scientific-environmental fantasy.
Britain’s Energy Minister Greg Barker is leading a delegation of companies ranging from Rolls-Royce Holdings Plc to Jupiter Asset Management Ltd. to the U.S. to identify business opportunities relating to low-carbon energy.
BANGKOK (Reuters) - Five months after the worst floods in half a century, the Thai capital is facing a heat wave with temperatures at three-decade highs, stoking debate over chaotic urban planning that blights many of Southeast Asia's overcrowded capitals.
The daily average high in Bangkok in April was 40.1 Celsius (104.2 Fahrenheit), the Meteorological Department says, prompting warnings from authorities for residents to be alert for heat-related ailments.
Critics say the heat has been exacerbated by poor urban planning in the fast-growing city of 12 million people - from a thinning of trees by city workers, often to accommodate electrical power lines, to heat-trapping building designs and a small number of parks.
BRUSSELS (IPS) - Major publicly traded U.S. corporations, including Dow Chemical, ConocoPhillips, Chevron and Cabot Corporation, have secured multi-million-dollar dubious carbon credits to compensate for their greenhouse gas emissions in Europe, as revealed in this investigative report.Dow scored the largest purchase volumes. The Michigan-headquartered giant owns dozens of CO2-venting plants producing plastics and chemicals in Germany, the Netherlands, Belgium, Spain and Poland. Altogether, those plants ranked 21st among the top 100 European buyers of certified emissions reduction certificates (CERs) that originated from questionable projects.
Earth-observing systems operated by the United States have entered a steep decline, imperiling the nation’s monitoring of weather, natural disasters and climate change, a report from the National Research Council warned Wednesday. Long-running and new missions are frequently delayed, lost or canceled because of budget cuts, launching failures, disorganization and changes in mission design and scope, the report said.
The plans that these countries are putting into place aren’t perfect, of course, and they’ll require work and oversight to become reality. But unlike the U.S. Congress, the governments of these countries are making progress, and overcoming similar obstacles to the ones America faces. Countries like Mexico and South Korea produce huge amounts of greenhouse gas, just like the United States, and it’s difficult for business to see a different way. In South Korea, industries that will have to change their ways under a cap-and-trade system fought against the proposal, just as they did here.
Sea-level rises are unlikely to be as high as worst-case scenarios have forecasted, suggests new research which shows that Greenland's glaciers are slipping into the sea more slowly than was previously thought. But the scientists warned that ice loss still sped up by 30% and is driving rises in sea levels that endanger low-lying coasts around the world.
Global warming in Europe this century will mostly affect Scandinavia and the Mediterranean basin, the European Environment Agency warned on Thursday.
"The highest warming is projected over the eastern Scandinavia, and southern and south-eastern Europe," experts at the agency said in comment accompanying a series of maps posted on the agency's website.
The world may have found a sticking plaster, at least, to peak oil with rising production of offshore crude, onshore tight oil, shale gas and tar sands, but increased output of such fossil fuels conflicts with the goal of limiting climate change.
Renewable energy grew faster in percent consumption than any other energy source in 2010, but only from a lower base: in absolute terms, growth was dwarfed ten-fold each by coal and natural gas, and five-fold by oil, show data from the energy firm BP.