The State Oil Company of the Azerbaijan Republic (SOCAR) has taken part in the European Gas Conference held in Vienna. Head of the SOCAR Austria Office Gulmirza Javadov delivered a report on increasing role of the oil and gas industry in Azerbaijan.
The conference agenda included issues of European gas supply security, new alternative energy sources and transport potential, Russia's role in providing Europe with gas, and the Caspian region in the context of European energy security.
During his address, Javadov noted Azerbaijan's increasing role in the context of regional and global energy security, as well as the successes achieved by the republic in this field.
Meanwhile, the White Stream, Nabucco, ITGI and TAP project managers noted the significance of the concept of the South Corridor for the EU.
The conference was held on Jan. 25-28. It was attended by Austrian Federal Minister for Economy R. Mitterlehner, former German Foreign Minister J. Fischer, Turkish Deputy Energy Minister S. Cimen, Russian State Duma Deputy Chairman V. Yazev, Secretary General of the Energy Charter, A. Mernier and others.
Source: http://en.trend.az
Monday, January 31, 2011
Sunday, January 30, 2011
Thompson Questions President’s Commitment to Energy Security, Job Creation
WASHINGTON, DC – On Wednesday, Representative Glenn ‘GT’ Thompson participated in two of the first congressional oversight hearings of the 112th Congress under the new Republican-led majority. Thompson’s first hearing with the House Education & Workforce Committee, entitled “State of the American Workforce,” focused on the Administration’s efforts to grow the economy and support job creation. Among the witnesses was Governor Bob McDonnell of Virginia.
Thompson questioned Governor McDonnell with regard to the Administration’s unilateral move to cancel offshore oil and gas production following the Deepwater Horizon Incident in the Gulf of Mexico. The proposed lease sale for energy producing areas of the Outer Continental Shelf (OCS) off the state of Virginia was abruptly withdrawn by the federal government following the Gulf oil spill, despite a previous announcement by the Administration to move forward with the planned sale.
Governor McDonnell suggested that Virginia did not play a role in the decision to discontinue the planned lease sale. Although, according to McDonnell, the Secretary of Interior did contact him by phone an hour before the President acted to cancel the action. McDonnell commented, “I didn’t think we ought to give up and write off an entire industry that could create tremendous capital investment in jobs at this time in America, and that I was very disappointed.” Thompson expressed his support for the Governor’s position and went on to outline the long-history of the oil and gas industry’s ability to positively coexist with the commercial fishing, shipping, recreation and tourism industries, and military operations off America’s coastline.
Later in the day, the House Natural Resources Committee, a new appointment for Thompson, held an oversight hearing of the President’s National Commission on the BP Deepwater Horizon Oil Spill. Thompson highlighted how America’s energy and workforce needs are inextricably linked, and how the Administration’s policies, before and since the Deepwater tragedy, have lacked coherence, increased our dependence on foreign oil and increased our energy costs including the price of gasoline. Following completion of the oversight proceedings, Thompson offered the following statement:
“The Administration’s actions contradict the President’s commitment to energy security during the State of the Union Address. The Deepwater spill was a terrible tragedy, but it should not be used by the Obama Administration as an excuse to constrain America’s domestic energy production and force further job losses. This will raise energy prices, undermine our nation’s path to a long-term, sustainable energy plan and stifle the American workforce. The families of the Fifth District and across the country rely on steady paying industry jobs and access to an affordable energy supply, and we’ll continue to ensure the White House’s actions live up to their rhetoric. It’s time to work together and find commonsense solutions to our nation’s economic and energy needs.”
Source: http://gantdaily.com
Thompson questioned Governor McDonnell with regard to the Administration’s unilateral move to cancel offshore oil and gas production following the Deepwater Horizon Incident in the Gulf of Mexico. The proposed lease sale for energy producing areas of the Outer Continental Shelf (OCS) off the state of Virginia was abruptly withdrawn by the federal government following the Gulf oil spill, despite a previous announcement by the Administration to move forward with the planned sale.
Governor McDonnell suggested that Virginia did not play a role in the decision to discontinue the planned lease sale. Although, according to McDonnell, the Secretary of Interior did contact him by phone an hour before the President acted to cancel the action. McDonnell commented, “I didn’t think we ought to give up and write off an entire industry that could create tremendous capital investment in jobs at this time in America, and that I was very disappointed.” Thompson expressed his support for the Governor’s position and went on to outline the long-history of the oil and gas industry’s ability to positively coexist with the commercial fishing, shipping, recreation and tourism industries, and military operations off America’s coastline.
Later in the day, the House Natural Resources Committee, a new appointment for Thompson, held an oversight hearing of the President’s National Commission on the BP Deepwater Horizon Oil Spill. Thompson highlighted how America’s energy and workforce needs are inextricably linked, and how the Administration’s policies, before and since the Deepwater tragedy, have lacked coherence, increased our dependence on foreign oil and increased our energy costs including the price of gasoline. Following completion of the oversight proceedings, Thompson offered the following statement:
“The Administration’s actions contradict the President’s commitment to energy security during the State of the Union Address. The Deepwater spill was a terrible tragedy, but it should not be used by the Obama Administration as an excuse to constrain America’s domestic energy production and force further job losses. This will raise energy prices, undermine our nation’s path to a long-term, sustainable energy plan and stifle the American workforce. The families of the Fifth District and across the country rely on steady paying industry jobs and access to an affordable energy supply, and we’ll continue to ensure the White House’s actions live up to their rhetoric. It’s time to work together and find commonsense solutions to our nation’s economic and energy needs.”
Source: http://gantdaily.com
Thursday, January 27, 2011
Russian Ministry: Security of Energy Infrastructure Paramount
The Russian Energy Ministry is demanding that companies in the fuel and energy sector reinforce security at sites with important fuel and energy infrastructure.
The ministry wants access points of entry to such sites to be made stronger in the wake of the terrorist bombing at the Domodedovo airport on January 24, 2011.
A telegram with the new instructions was signed by Energy Minister Sergey Shmatko and sent to the leaders of all fuel and energy facilities, the Energy Ministry press office reported.
Source: http://www.oilandgaseurasia.com
The ministry wants access points of entry to such sites to be made stronger in the wake of the terrorist bombing at the Domodedovo airport on January 24, 2011.
A telegram with the new instructions was signed by Energy Minister Sergey Shmatko and sent to the leaders of all fuel and energy facilities, the Energy Ministry press office reported.
Source: http://www.oilandgaseurasia.com
Wednesday, January 26, 2011
North Sea opening good for energy security
PARIS, Jan. 26 (UPI) -- The opening of the Gjoa oil and gas field in the Norwegian waters of the North Sea will enhance European energy security, an industry executive said.
Norwegian Petroleum and Energy Minister Terje Riis-Johansen officially opened the North Sea oil and gas field for business during a ceremony with energy leaders.
Gerard Mestrallet, the chairman and chief executive officer at GDF Suez, said the move is a boost for long-term energy security in the region.
"Gjoa will enhance the security of supply of Europe and act as a hub in the Norwegian North Sea for future gas and oil developments," he said in a statement.
The field holds an estimated 82 million barrels of oil and 1.4 trillion cubic feet of natural gas. GDF Suez said the field could produce oil and gas for 15 years, though installations are designed to last for 30 years.
The Gjoa platform uses electricity from the mainland, meaning the amount of carbon dioxide emissions avoided is about the same as taking 100,000 cars off the road, GDF Suez said.
Source: http://www.upi.com
Norwegian Petroleum and Energy Minister Terje Riis-Johansen officially opened the North Sea oil and gas field for business during a ceremony with energy leaders.
Gerard Mestrallet, the chairman and chief executive officer at GDF Suez, said the move is a boost for long-term energy security in the region.
"Gjoa will enhance the security of supply of Europe and act as a hub in the Norwegian North Sea for future gas and oil developments," he said in a statement.
The field holds an estimated 82 million barrels of oil and 1.4 trillion cubic feet of natural gas. GDF Suez said the field could produce oil and gas for 15 years, though installations are designed to last for 30 years.
The Gjoa platform uses electricity from the mainland, meaning the amount of carbon dioxide emissions avoided is about the same as taking 100,000 cars off the road, GDF Suez said.
Source: http://www.upi.com
Tuesday, January 25, 2011
Energy independence, security topic of conference
NEW PALTZ –The US Air Force is the federal government’s largest user of energy consuming $6 billion worth annually.
Air Force Deputy Assistant Secretary for Energy, said Dr. Kevin Geiss, laid out the plans to establish that military branch in a position of energy security. He delivered his remarks Monday during a conference at SUNY New Paltz organized by The Solar Energy Consortium for over 200 of the area’s top CEOs of solar energy.
Eighty percent of the Air Force’s energy usage comes in the form of liquid fuels used for transportation of goods and equipment, he said.
“We’re trying to address our efficiencies in our buildings and facilities as well as coming up with entrepreneurial and new ideas for aviation so that we can cut down on how much fuel we use for all the mobility we have.”
According to Dr. Geiss, the Air Force is also the government’s largest purchaser of renewable energy and therefore private sector companies specializing in renewable energies, specifically solar, are an important ally because it is through them that the Air Force will agree to purchase renewable energy to power their applicable operations.
Congressman Maurice Hinchey spoke at Monday’s conference about the importance of this type of partnership and getting the U.S. Military on a track to energy security.
Source: http://www.midhudsonnews.com
Air Force Deputy Assistant Secretary for Energy, said Dr. Kevin Geiss, laid out the plans to establish that military branch in a position of energy security. He delivered his remarks Monday during a conference at SUNY New Paltz organized by The Solar Energy Consortium for over 200 of the area’s top CEOs of solar energy.
Eighty percent of the Air Force’s energy usage comes in the form of liquid fuels used for transportation of goods and equipment, he said.
“We’re trying to address our efficiencies in our buildings and facilities as well as coming up with entrepreneurial and new ideas for aviation so that we can cut down on how much fuel we use for all the mobility we have.”
According to Dr. Geiss, the Air Force is also the government’s largest purchaser of renewable energy and therefore private sector companies specializing in renewable energies, specifically solar, are an important ally because it is through them that the Air Force will agree to purchase renewable energy to power their applicable operations.
Congressman Maurice Hinchey spoke at Monday’s conference about the importance of this type of partnership and getting the U.S. Military on a track to energy security.
Source: http://www.midhudsonnews.com
Monday, January 24, 2011
Petrol rationing looms
A report by the Lean Economy Connection in association with the 20 MP strong All Party Parliamentary Group on Peak Oil (APPGOPO) has warned that rationing will be needed to deal with energy shortages as well as helping us achieve our green targets.
The report, ‘TEQs (Tradable Energy Quotas): A Policy Framework for Peak Oil and Climate Change‘ cites the International Agency’s 2008 World Energy Outlook statement that ‘current global trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially’.
It also refers to the Industry Taskforce on Peak Oil and Energy Security’s report ‘The Oil Crunch’, which concluded that global oil production will be unlikely to grow after 2013. With Ofgems warnings in 2010 of shortages and breaks in supply.
The report’s favoured instrument for dealing with the imminent shortages as well as combating carbon emissions is the use of Tradable Energy Quotas (TEQ). And the time-scale of before 2020 seems to be the call.
TEQs are put forward as the solution in that they ‘ … would reduce our reliance on fossil fuels fast, guarantee that we meet our agreed emissions obligations and empower communities to address the challenges of our times, allowing us to move into a happier, thriving future‘.
A form of TEQs are used already in the EU with the Emissions Trading Scheme (ETS), which covers about 12,000 large facilities. But this latest report wants to extend this principle across the country for use by individuals and organisations alike. When you buy fuel you surrender some of your quota, your ration. That includes all types of fuel from domestic to transport.
The ‘people’ would get about 40% of the quotas by entitlement, with the total emissions allowed each year being set by the Committee on Climate Change. The outline procedure is shown here.
John Hemming MP, chairman of the APPGOPO, said: “What is needed is an intelligent response both to climate change and to fuel depletion. We therefore welcome the model set out in the Lean Economy Connection’s report, which addresses both sides of the problem. It is the first coherent proposal to attempt to do this, and it merits close attention.”
This complex and unworkable set-up has the throw away line that ‘The number of occasions on which individuals actually purchase energy is quite limited – perhaps eight times a year for utilities, although it could rise to some thirty times a year for individuals with cars – and most TEQs transactions are done by card and direct debit.’
As the quotas are tradable they can be sold on and profit made. So that those that need to travel more have to buy more quotas. Those that work from home can make a tidy profits one supposes. How about allowances for children? Will those in prison and hospital get a quota?
Although the Department of Energy and Climate Change has said there are ‘no plans to implement such a scheme‘ just look at the choice of words. Why not just say we aren’t going to ration fuel?
Can you even begin to imagine the fraud, spivvery, mis-allocation, crime, forgery and corruption a scheme such as this would attract?
Source: http://www.economicvoice.com
The report, ‘TEQs (Tradable Energy Quotas): A Policy Framework for Peak Oil and Climate Change‘ cites the International Agency’s 2008 World Energy Outlook statement that ‘current global trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially’.
It also refers to the Industry Taskforce on Peak Oil and Energy Security’s report ‘The Oil Crunch’, which concluded that global oil production will be unlikely to grow after 2013. With Ofgems warnings in 2010 of shortages and breaks in supply.
The report’s favoured instrument for dealing with the imminent shortages as well as combating carbon emissions is the use of Tradable Energy Quotas (TEQ). And the time-scale of before 2020 seems to be the call.
TEQs are put forward as the solution in that they ‘ … would reduce our reliance on fossil fuels fast, guarantee that we meet our agreed emissions obligations and empower communities to address the challenges of our times, allowing us to move into a happier, thriving future‘.
A form of TEQs are used already in the EU with the Emissions Trading Scheme (ETS), which covers about 12,000 large facilities. But this latest report wants to extend this principle across the country for use by individuals and organisations alike. When you buy fuel you surrender some of your quota, your ration. That includes all types of fuel from domestic to transport.
The ‘people’ would get about 40% of the quotas by entitlement, with the total emissions allowed each year being set by the Committee on Climate Change. The outline procedure is shown here.
John Hemming MP, chairman of the APPGOPO, said: “What is needed is an intelligent response both to climate change and to fuel depletion. We therefore welcome the model set out in the Lean Economy Connection’s report, which addresses both sides of the problem. It is the first coherent proposal to attempt to do this, and it merits close attention.”
This complex and unworkable set-up has the throw away line that ‘The number of occasions on which individuals actually purchase energy is quite limited – perhaps eight times a year for utilities, although it could rise to some thirty times a year for individuals with cars – and most TEQs transactions are done by card and direct debit.’
As the quotas are tradable they can be sold on and profit made. So that those that need to travel more have to buy more quotas. Those that work from home can make a tidy profits one supposes. How about allowances for children? Will those in prison and hospital get a quota?
Although the Department of Energy and Climate Change has said there are ‘no plans to implement such a scheme‘ just look at the choice of words. Why not just say we aren’t going to ration fuel?
Can you even begin to imagine the fraud, spivvery, mis-allocation, crime, forgery and corruption a scheme such as this would attract?
Source: http://www.economicvoice.com
Friday, January 21, 2011
Energy security a journey of 1000 miles
The deeper you delve into the proposed vision of a smart, clean-energy grid — much less a supergrid — the more daunting the task appears. Looking into the future is like working your way through a set of matryoshka dolls, never quite sure where it will all end.
Still, as the Chinese proverb says, a journey of a thousand miles begins with a single step. And there are some good steps forward being taken in the smart-grid space these days.
Some energy companies, for example, seem well on their way to meeting smart-metering and energy-management targets. In the UK, electricity supplier Opus Energy recently announced it had installed a total of 12,000 smart meters and expects to outfit 20 per cent of its customers with the meters this spring. The company says that puts its well ahead of the government’s 2014 deadline for smart-metering maximum-demand users.
Meanwhile, a group of 10 countries — the UK, Ireland, Sweden, Denmark, Germany, the Netherlands, Luxembourg, France, Norway and Belgium — is backing plans for a North Seas supergrid that would link renewable energy sources across a wide swath. The idea behind the plan is to eliminate some of the problems with intermittent clean-energy sources by broadening the offshore electricity grid’s reach. In theory, if British winds are producing lots of energy when local demand is low, the surplus electricity could be transmitted all the way to Norway, where it could be used to pump water at hydropower plants. That stored hydropower energy could then be sent back to the UK when local demand goes up but the wind isn’t blowing.
It’s still early in the process, of course. For now, the supergrid organisation’s goals are primarily to identify policy considerations, scenarios and cost assessments. The actual work of building the supergrid remains farther out.
There’s no question that just maintaining the grid we have, never mind building new transmission lines and smart interconnections, will be a costly, time-consuming proposition. Will it be worth it, though? Undoubtedly yes … not only in terms of greater amounts of usable renewables but in more resilience of the system overall. Besides, there are a lot of efficiencies we can wring out of the grid we have today, if we only choose to. As Nick Milne-Home, president of 1E Inc., put it, “The smart grid exists today in very small islands. The challenge is to link them.”
Or to lift out those ever-smaller matryoshkas, one doll at a time.
Source: http://www.greenbang.com
Still, as the Chinese proverb says, a journey of a thousand miles begins with a single step. And there are some good steps forward being taken in the smart-grid space these days.
Some energy companies, for example, seem well on their way to meeting smart-metering and energy-management targets. In the UK, electricity supplier Opus Energy recently announced it had installed a total of 12,000 smart meters and expects to outfit 20 per cent of its customers with the meters this spring. The company says that puts its well ahead of the government’s 2014 deadline for smart-metering maximum-demand users.
Meanwhile, a group of 10 countries — the UK, Ireland, Sweden, Denmark, Germany, the Netherlands, Luxembourg, France, Norway and Belgium — is backing plans for a North Seas supergrid that would link renewable energy sources across a wide swath. The idea behind the plan is to eliminate some of the problems with intermittent clean-energy sources by broadening the offshore electricity grid’s reach. In theory, if British winds are producing lots of energy when local demand is low, the surplus electricity could be transmitted all the way to Norway, where it could be used to pump water at hydropower plants. That stored hydropower energy could then be sent back to the UK when local demand goes up but the wind isn’t blowing.
It’s still early in the process, of course. For now, the supergrid organisation’s goals are primarily to identify policy considerations, scenarios and cost assessments. The actual work of building the supergrid remains farther out.
There’s no question that just maintaining the grid we have, never mind building new transmission lines and smart interconnections, will be a costly, time-consuming proposition. Will it be worth it, though? Undoubtedly yes … not only in terms of greater amounts of usable renewables but in more resilience of the system overall. Besides, there are a lot of efficiencies we can wring out of the grid we have today, if we only choose to. As Nick Milne-Home, president of 1E Inc., put it, “The smart grid exists today in very small islands. The challenge is to link them.”
Or to lift out those ever-smaller matryoshkas, one doll at a time.
Source: http://www.greenbang.com
Thursday, January 20, 2011
Renewable energy policies 'paying dividends in energy security'
It has been announced at the Irish Renewable Energy Summit renewable energy use in Ireland is growing by an average of 15% a year in the second half of the last decade.
Prof. J.Owen Lewis, CEO of the Sustainable Energy Authority of Ireland (SEAI) noted the significant progress made in renewable energy deployment in Ireland.
Prof. Owen said: "Significant progress is being made in developing and harnessing of the country’s natural energy resources. It is important to point out that our existing success in renewable energy is already having a direct impact on the competitiveness of the Irish economy, through enhanced price stability and improved security of energy supply."
Prof. Lewis said that ocean technologies show strong promise.
He said: "In the next few years, clean energy will be a highly prized commodity across the world. Ireland has the resource in abundance, and while there are many substantial challenges to developing the technologies and finding ways to capture and move and control this energy cheaply, there are powerful incentives to address these issues.
"This emphasises the need for a commitment to a long term strategy to decarbonise our energy supply."
The Proffessor noted that energy prices in Ireland for both gas and electricity have decreased "bringing Ireland into line with the European Union average".
He said: "The key factor driving energy prices in Ireland is fossil fuel commodity prices and our vulnerability lies in our continued high dependence on these fuels. Oil and gas prices will continue to be volatile, leading to further uncertainty.
"The clear way out of this uncertainty is to move away from our dependence on imported fuels and seriously exploit our indigenous renewable resources, in parallel with transforming the efficiency with which energy is used in Ireland. Achieving our long-term ambitions for renewable energy will be crucial to the future well being of Irish society."
Source: http://www.irishexaminer.com
Prof. J.Owen Lewis, CEO of the Sustainable Energy Authority of Ireland (SEAI) noted the significant progress made in renewable energy deployment in Ireland.
Prof. Owen said: "Significant progress is being made in developing and harnessing of the country’s natural energy resources. It is important to point out that our existing success in renewable energy is already having a direct impact on the competitiveness of the Irish economy, through enhanced price stability and improved security of energy supply."
Prof. Lewis said that ocean technologies show strong promise.
He said: "In the next few years, clean energy will be a highly prized commodity across the world. Ireland has the resource in abundance, and while there are many substantial challenges to developing the technologies and finding ways to capture and move and control this energy cheaply, there are powerful incentives to address these issues.
"This emphasises the need for a commitment to a long term strategy to decarbonise our energy supply."
The Proffessor noted that energy prices in Ireland for both gas and electricity have decreased "bringing Ireland into line with the European Union average".
He said: "The key factor driving energy prices in Ireland is fossil fuel commodity prices and our vulnerability lies in our continued high dependence on these fuels. Oil and gas prices will continue to be volatile, leading to further uncertainty.
"The clear way out of this uncertainty is to move away from our dependence on imported fuels and seriously exploit our indigenous renewable resources, in parallel with transforming the efficiency with which energy is used in Ireland. Achieving our long-term ambitions for renewable energy will be crucial to the future well being of Irish society."
Source: http://www.irishexaminer.com
Wednesday, January 19, 2011
Rosier Outlook for U.S. Energy Security, But China Should Worry
The debate about the dependence of the U.S. on energy imports from unfriendly regions like Venezuela or the Middle East seems to have a certain fatalism these days. The natural assumption is that the problem is intractable and destined to get worse.
However, 20-year projections from U.K. energy giant BP make surprisingly optimistic reading for American energy worriers. BP’s well respected economists predict that U.S. dependency on foreign oil and gas has already peaked and will have declined substantially by 2030.
In their view, it’s China that should be fretting. If BP is correct, Asia’s economic powerhouse could be importing 80% of its oil and 40% of its natural gas within 20 years, a much more parlous position than the country is currently in.
According to BP’s long-term internal projections, released to the public for the first time Wednesday, U.S. oil and gas import dependency peaked in 2005 and is set to steadily decline over the next two decades. By 2030, it will be importing around half its oil, down from 60% currently, and will be entirely self sufficient in natural gas, BP says.
“Import dependency in the U.S. is likely to fall to levels not seen since the 1990s because of improved fuel efficiency and the increased share of biofuels,” said BP’s report.
The internal combustion engine will remain dominant, but U.S. road fuel consumption should decline steadily, as car manufacturers make incremental efficiency improvements and consumers choose smaller vehicles, said BP’s Chief Economist Christof Ruehl.
At the same time biofuels production, mostly corn or sugarcane ethanol produced in the U.S. and Brazil, is expected to more than quadruple to 6.7 million barrels a day by 2030. “For the first time, non-fossil fuels will be major sources of supply growth,” said Ruehl.
BP expects the shale gas revolution that has already transformed the U.S. natural gas market to continue apace. By 2020, U.S. natural gas imports could fall close to zero and by 2030 the country may well be shipping cargoes of liquefied natural gas elsewhere, Ruehl said.
In contrast, China, which imported 54% of its oil and 13% of its gas in 2010, will see import dependency soar. By 2030, BP projects that the country will import 80% of its oil and 40% of its gas. Ten years ago, China was importing just 25% of its oil and no natural gas, so this will be a jarring transformation.
These figures go a long way to explain why state-controlled Chinese companies are on a multi-billion dollar spending spree, snapping up foreign companies in every corner of the world so it can exert greater influence on the international oil and gas flows on which it will be so dependent.
But these acquisitions can only go so far. Even assuming, as BP does, that China’s economic growth becomes far less energy intensive after 2020, the country still faces a big energy problem.
“The scale of China’s energy requirements is such that it has an impact on global energy markets, and prices. Energy prices (or supplies) could indeed become a temporary constraint on growth,” said BP.
For the U.S., this data is perhaps one small sign that predictions of the country’s inexorable slide against an unstoppable China are premature.
Source: http://blogs.wsj.com
However, 20-year projections from U.K. energy giant BP make surprisingly optimistic reading for American energy worriers. BP’s well respected economists predict that U.S. dependency on foreign oil and gas has already peaked and will have declined substantially by 2030.
In their view, it’s China that should be fretting. If BP is correct, Asia’s economic powerhouse could be importing 80% of its oil and 40% of its natural gas within 20 years, a much more parlous position than the country is currently in.
According to BP’s long-term internal projections, released to the public for the first time Wednesday, U.S. oil and gas import dependency peaked in 2005 and is set to steadily decline over the next two decades. By 2030, it will be importing around half its oil, down from 60% currently, and will be entirely self sufficient in natural gas, BP says.
“Import dependency in the U.S. is likely to fall to levels not seen since the 1990s because of improved fuel efficiency and the increased share of biofuels,” said BP’s report.
The internal combustion engine will remain dominant, but U.S. road fuel consumption should decline steadily, as car manufacturers make incremental efficiency improvements and consumers choose smaller vehicles, said BP’s Chief Economist Christof Ruehl.
At the same time biofuels production, mostly corn or sugarcane ethanol produced in the U.S. and Brazil, is expected to more than quadruple to 6.7 million barrels a day by 2030. “For the first time, non-fossil fuels will be major sources of supply growth,” said Ruehl.
BP expects the shale gas revolution that has already transformed the U.S. natural gas market to continue apace. By 2020, U.S. natural gas imports could fall close to zero and by 2030 the country may well be shipping cargoes of liquefied natural gas elsewhere, Ruehl said.
In contrast, China, which imported 54% of its oil and 13% of its gas in 2010, will see import dependency soar. By 2030, BP projects that the country will import 80% of its oil and 40% of its gas. Ten years ago, China was importing just 25% of its oil and no natural gas, so this will be a jarring transformation.
These figures go a long way to explain why state-controlled Chinese companies are on a multi-billion dollar spending spree, snapping up foreign companies in every corner of the world so it can exert greater influence on the international oil and gas flows on which it will be so dependent.
But these acquisitions can only go so far. Even assuming, as BP does, that China’s economic growth becomes far less energy intensive after 2020, the country still faces a big energy problem.
“The scale of China’s energy requirements is such that it has an impact on global energy markets, and prices. Energy prices (or supplies) could indeed become a temporary constraint on growth,” said BP.
For the U.S., this data is perhaps one small sign that predictions of the country’s inexorable slide against an unstoppable China are premature.
Source: http://blogs.wsj.com
Tuesday, January 18, 2011
Report calls for energy rationing within the decade
Fuel and energy rationing will be needed before 2020, according to a new parliamentary report that is proposing a system to make sure people have fair and equal access to energy while helping the Government meet its 80 per cent carbon emission reduction by 2050.
The Lean Economy Connection report, entitled 'Tradable Energy Quotas’ was commissioned by the All Party Parliamentary Group on Peak Oil and concludes that the value of carbon savings now warrants the use of Tradable Energy Quotas (TEQs). It proposes that all adults should receive energy credits in the rationing system.
The UK Industry Taskforce on Peak Oil and Energy Security has already said peak oil may be reached by 2015. Peak oil is the point when global oil production is at its highest and future production will have to plateau or reduce.
How the rationing system would work
Using the TEQs system would guarantee people had equal access to energy, and they would be able to sell additional credits if they had more than necessary. Businesses would bid weekly for energy units, which would also generate money to fund the system.
Unlike a carbon taxing system, people would not charged for their emissions, so would not have to pay more money in an economy that is already strained.
Commenting on the release of the report, published today, John Hemming MP, chairman of the All Party Parliamentary Group on Peak Oil, said: "What is needed is an intelligent response both to climate change and to fuel depletion. We therefore welcome the model set out in the Lean Economy Connection’s report, which addresses both sides of the problem. It is the first coherent proposal to attempt to do this, and it merits close attention."
Emissions reduction goals
It is unlikely that emissions reduction goals will be met if TEQs aren’t used, according to the report.
"TEQs is the kind of approach we will need if we are to mobilise the infrastructure of a zero-carbon future fast, under pressure. It would increase the chances of working our way through the grim times to renaissance-through-resilience," Jeremy Leggett, chairman of Solarcentury added.
Energy security
The system would help the UK manage should energy scarcities arise in the future while also maintaining the market and mitigating fuel poverty.
Shaun Chamberlin, director of the Lean Economy Connection and co-author of the report, asked that the Government shift its focus away from research and onto ways to implement ways to reduce carbon emissions should rationing become necessary.
Source: http://www.greenwisebusiness.co.uk
The Lean Economy Connection report, entitled 'Tradable Energy Quotas’ was commissioned by the All Party Parliamentary Group on Peak Oil and concludes that the value of carbon savings now warrants the use of Tradable Energy Quotas (TEQs). It proposes that all adults should receive energy credits in the rationing system.
The UK Industry Taskforce on Peak Oil and Energy Security has already said peak oil may be reached by 2015. Peak oil is the point when global oil production is at its highest and future production will have to plateau or reduce.
How the rationing system would work
Using the TEQs system would guarantee people had equal access to energy, and they would be able to sell additional credits if they had more than necessary. Businesses would bid weekly for energy units, which would also generate money to fund the system.
Unlike a carbon taxing system, people would not charged for their emissions, so would not have to pay more money in an economy that is already strained.
Commenting on the release of the report, published today, John Hemming MP, chairman of the All Party Parliamentary Group on Peak Oil, said: "What is needed is an intelligent response both to climate change and to fuel depletion. We therefore welcome the model set out in the Lean Economy Connection’s report, which addresses both sides of the problem. It is the first coherent proposal to attempt to do this, and it merits close attention."
Emissions reduction goals
It is unlikely that emissions reduction goals will be met if TEQs aren’t used, according to the report.
"TEQs is the kind of approach we will need if we are to mobilise the infrastructure of a zero-carbon future fast, under pressure. It would increase the chances of working our way through the grim times to renaissance-through-resilience," Jeremy Leggett, chairman of Solarcentury added.
Energy security
The system would help the UK manage should energy scarcities arise in the future while also maintaining the market and mitigating fuel poverty.
Shaun Chamberlin, director of the Lean Economy Connection and co-author of the report, asked that the Government shift its focus away from research and onto ways to implement ways to reduce carbon emissions should rationing become necessary.
Source: http://www.greenwisebusiness.co.uk
Monday, January 17, 2011
Opec unlikely to boost oil output despite soaring price
The Opec oil producers' group has signalled that it is unlikely to boost output, despite the price of crude nearing $100 a barrel.
The United Arab Emirates' oil minister said he was not concerned about $100 oil, echoing comments from other Opec members Iran, Venezuela and Algeria.
"There is no shortage of oil, the market is well supplied," said Mohammed bin Dhaen al-Hamli.
But the International Energy Agency said oil's price rise was "alarming".
There was speculation that the members of Opec, which accounts for more than 40% of global oil output, might hold an emergency meeting soon to discuss the rapid increase in the price of crude.
However, with several Opec members appearing to be at ease with the price rise, a meeting looks increasingly unlikely.
Although the higher price earns Opec members greater revenues, the organisation is also aware that it could choke off global economic recovery. An output increase would help to cool prices.
Brent crude was trading at almost $98 a barrel on Monday, nearing a 27-month high.
Nobuo Tanaka, head of the International Energy Agency, an adviser to 28 industrialised countries, said the "alarming" rise in the oil price would be damaging.
"We are concerned about the speed of the rising oil price, which can harm the growth of economies. If the current price continues, it will have a negative impact," Mr Tanaka said.
But Venezuela's Energy Minister, Rafael Ramirez, described the price of $100 a barrel as "fair value".
He told the Reuters news agency: "We don't think [the price rise] impedes the recovery of the global economy. Venezuela does not consider that an extraordinary or emergency Opec meeting is necessary."
Source: http://www.bbc.co.uk
The United Arab Emirates' oil minister said he was not concerned about $100 oil, echoing comments from other Opec members Iran, Venezuela and Algeria.
"There is no shortage of oil, the market is well supplied," said Mohammed bin Dhaen al-Hamli.
But the International Energy Agency said oil's price rise was "alarming".
There was speculation that the members of Opec, which accounts for more than 40% of global oil output, might hold an emergency meeting soon to discuss the rapid increase in the price of crude.
However, with several Opec members appearing to be at ease with the price rise, a meeting looks increasingly unlikely.
Although the higher price earns Opec members greater revenues, the organisation is also aware that it could choke off global economic recovery. An output increase would help to cool prices.
Brent crude was trading at almost $98 a barrel on Monday, nearing a 27-month high.
Nobuo Tanaka, head of the International Energy Agency, an adviser to 28 industrialised countries, said the "alarming" rise in the oil price would be damaging.
"We are concerned about the speed of the rising oil price, which can harm the growth of economies. If the current price continues, it will have a negative impact," Mr Tanaka said.
But Venezuela's Energy Minister, Rafael Ramirez, described the price of $100 a barrel as "fair value".
He told the Reuters news agency: "We don't think [the price rise] impedes the recovery of the global economy. Venezuela does not consider that an extraordinary or emergency Opec meeting is necessary."
Source: http://www.bbc.co.uk
Friday, January 14, 2011
Carbon sequestration: capture technology faces a more hostile environment
Of all the “clean energy” technologies, carbon capture and storage is the one most closely linked to views of the threat presented by global warming.
Nuclear, wind and solar power, biofuels and new reserves of natural gas, can all be presented as contributions to energy security, hedges against global shortages of fossil fuel created by soaring demand in emerging economies.
Capturing the carbon dioxide emissions created by burning coal, liquefying them, pumping them under the ground and then ensuring they stay there for thousands of years, will be done only if politicians are sufficiently alarmed by the risk of climate change to put in place the policy framework to make it happen.
That makes carbon capture particularly vulnerable to a shift in political opinion, which in many countries over the past year has moved away from curbing greenhouse gas emissions towards a focus on economic growth and jobs.
As Dominic Cook, carbon capture and storage (CCS) group manager at Parsons Brinckerhoff, the strategic and engineering consultancy, points out: “It is rare for any company to commit to CCS purely on a commercial basis.”
He adds: “The main driver will be when you get a carbon price high enough to incentivise companies to capture and store, rather than pay to emit.”
Yet in spite of the more hostile conditions facing CCS, there are still about two dozen development projects around the world that are making real progress.
Ken Humphreys, the chief executive of FutureGen, a $1.3bn US carbon capture project under development in Illinois, says it is still important to develop CCS capability, to safeguard the long-term future of coal-fired power generation.
“While the political environment certainly is changing, we see a need to develop and prove out the technology, so that whatever happens in the US and internationally, we have the option of rolling out CCS if that is the way we want to go.”
Officially, ambitions for the technology are unchanged. At the end of 2008 Steven Chu, the US energy secretary, said CCS technology could be ready for commercial deployment by the end of this decade. A paper published by his department in January 2011 reiterated that target, saying “first generation CO2 capture technologies” should be ready for commercial deployment by 2020.
And while some of the planned demonstration projects in the US have faced obstacles, the Department of Energy lists seven, backed by the government’s Clean Coal Power Initiative, that are expected to begin operation starting in 2014.
FutureGen, backed by a consortium of 10 energy and coal companies including Peabody, Rio Tinto, Xstrata and Eon, has redrawn its project to cut its budget from a previously estimated $2bn-plus, and its power output from 244 megawatts to about 140MW.
Nevertheless, the group is still pushing ahead with its plan. “We made significant adjustments to the project structure, to make sure we can be on line in late 2015 or early 2016, and on a reasonable budget,” Mr Humphreys says. The US government is supporting the project with a $1bn grant, roughly three-quarters of its cost.
Keith White, general manager of global gasification products at GE Energy, says that before the global recession governments were prepared to spend much more on supporting technology.
In the US, he says, companies have had “to reset their expectations, but we are hopeful”.
In the UK, the government’s ambitions to become a leading developer of carbon capture and storage technology suffered a setback just before Christmas when Powerfuel, which is developing the country’s first commercial scale clean coal power plant, went into administration.
KPMG, the administrator, said at the time the company needed a new owner with deeper pockets in order to fund the large amount of capital needed up front for the project.
The company also fell foul of regulatory change when the Department of Energy and Climate Change decided that it would fund only post-combustion plants that strip carbon dioxide out of a power station’s exhaust after the coal is burnt. Powerfuel’s proposed plant relies on pre-combustion technology.
Mr White of GE, which is supplying the gas power turbines for Powerfuel’s project, says “it would be a shame to see it dissolve at this point”. He argues government incentives for CCS technology are important and that “without strong government action” more such projects will falter.
The UK government’s competition to award £1bn ($1.6bn) to one company to build Britain’s first CCS plant has so far not identified a winner despite having been launched in 2007.
Today, only one of the four original contestants, a consortium led by Scottish Power, remains but has yet to be named the winner. Eon, the German utility, pulled out in the autumn saying the market was “not conducive”.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, an industry body, says while he remains “optimistic” for the prospects of CCS in the UK compared with the rest of the world, there is “still a long way to go to put in place the right support mechanisms”.
Nevertheless, Mr Cook highlights one positive development recently. “There is a push to get the rules for CCS in the [UN] Clean Development Mechanism finalised by December 2011. One of the concerns is that while it can be argued that the developed world has a moral duty to lead on CCS development, the bulk of the technology is likely going to be implemented in the developing economies and the CDM will provide a route to funds,” he says.
Source: http://www.ft.com
Nuclear, wind and solar power, biofuels and new reserves of natural gas, can all be presented as contributions to energy security, hedges against global shortages of fossil fuel created by soaring demand in emerging economies.
Capturing the carbon dioxide emissions created by burning coal, liquefying them, pumping them under the ground and then ensuring they stay there for thousands of years, will be done only if politicians are sufficiently alarmed by the risk of climate change to put in place the policy framework to make it happen.
That makes carbon capture particularly vulnerable to a shift in political opinion, which in many countries over the past year has moved away from curbing greenhouse gas emissions towards a focus on economic growth and jobs.
As Dominic Cook, carbon capture and storage (CCS) group manager at Parsons Brinckerhoff, the strategic and engineering consultancy, points out: “It is rare for any company to commit to CCS purely on a commercial basis.”
He adds: “The main driver will be when you get a carbon price high enough to incentivise companies to capture and store, rather than pay to emit.”
Yet in spite of the more hostile conditions facing CCS, there are still about two dozen development projects around the world that are making real progress.
Ken Humphreys, the chief executive of FutureGen, a $1.3bn US carbon capture project under development in Illinois, says it is still important to develop CCS capability, to safeguard the long-term future of coal-fired power generation.
“While the political environment certainly is changing, we see a need to develop and prove out the technology, so that whatever happens in the US and internationally, we have the option of rolling out CCS if that is the way we want to go.”
Officially, ambitions for the technology are unchanged. At the end of 2008 Steven Chu, the US energy secretary, said CCS technology could be ready for commercial deployment by the end of this decade. A paper published by his department in January 2011 reiterated that target, saying “first generation CO2 capture technologies” should be ready for commercial deployment by 2020.
And while some of the planned demonstration projects in the US have faced obstacles, the Department of Energy lists seven, backed by the government’s Clean Coal Power Initiative, that are expected to begin operation starting in 2014.
FutureGen, backed by a consortium of 10 energy and coal companies including Peabody, Rio Tinto, Xstrata and Eon, has redrawn its project to cut its budget from a previously estimated $2bn-plus, and its power output from 244 megawatts to about 140MW.
Nevertheless, the group is still pushing ahead with its plan. “We made significant adjustments to the project structure, to make sure we can be on line in late 2015 or early 2016, and on a reasonable budget,” Mr Humphreys says. The US government is supporting the project with a $1bn grant, roughly three-quarters of its cost.
Keith White, general manager of global gasification products at GE Energy, says that before the global recession governments were prepared to spend much more on supporting technology.
In the US, he says, companies have had “to reset their expectations, but we are hopeful”.
In the UK, the government’s ambitions to become a leading developer of carbon capture and storage technology suffered a setback just before Christmas when Powerfuel, which is developing the country’s first commercial scale clean coal power plant, went into administration.
KPMG, the administrator, said at the time the company needed a new owner with deeper pockets in order to fund the large amount of capital needed up front for the project.
The company also fell foul of regulatory change when the Department of Energy and Climate Change decided that it would fund only post-combustion plants that strip carbon dioxide out of a power station’s exhaust after the coal is burnt. Powerfuel’s proposed plant relies on pre-combustion technology.
Mr White of GE, which is supplying the gas power turbines for Powerfuel’s project, says “it would be a shame to see it dissolve at this point”. He argues government incentives for CCS technology are important and that “without strong government action” more such projects will falter.
The UK government’s competition to award £1bn ($1.6bn) to one company to build Britain’s first CCS plant has so far not identified a winner despite having been launched in 2007.
Today, only one of the four original contestants, a consortium led by Scottish Power, remains but has yet to be named the winner. Eon, the German utility, pulled out in the autumn saying the market was “not conducive”.
Jeff Chapman, chief executive of the Carbon Capture and Storage Association, an industry body, says while he remains “optimistic” for the prospects of CCS in the UK compared with the rest of the world, there is “still a long way to go to put in place the right support mechanisms”.
Nevertheless, Mr Cook highlights one positive development recently. “There is a push to get the rules for CCS in the [UN] Clean Development Mechanism finalised by December 2011. One of the concerns is that while it can be argued that the developed world has a moral duty to lead on CCS development, the bulk of the technology is likely going to be implemented in the developing economies and the CDM will provide a route to funds,” he says.
Source: http://www.ft.com
Thursday, January 13, 2011
Investors Beware: Hidden Dangers of Increasing U.S. Dependence on Canadian Oil Sands
Canada is the biggest supplier of oil imports to the United States. Increasingly, those imports come from its vast reserves of oil sands. Is the growing U.S. dependence on Canadian oil sands a win-win deal for both countries, crucial for U.S. energy security, and a source of jobs and economic growth, as American Petroleum Institute President Jack Gerard claims? Is the development of Canadian oil sands "the most destructive project on earth", as a Canadian environmental report calls it? What pitfalls for policy makers and investors lie hidden in the heated rhetoric coming from both sides in the oil sands debate?
The debate places much emphasis on how just dirty or clean oil from the Canadian sands is compared with the alternatives. Detractors prefer to call them "tar sands" to project an image that is as dirty as possible. (Both "oil sands" and "tar sands" are popular terms; purists prefer "bituminous sands.") They cite data showing that greenhouse gas (GHG) emissions for a barrel of oil from Canadian sands run from three to as much as seven times as high as from a barrel of conventional Texas crude. Oil sand supporters cite different numbers that indicate only 5 to 15 percent more GHG emissions from the sands than from conventional oil.
Surprisingly, the widely differing numbers do not come from competing scientific teams. Instead, both sides draw on the same studies, like this one from the National Energy Technology Laboratory of the U.S. Department of Energy. A closer look at the underlying data shows that two factors account for the gap between the "clean" and "dirty" numbers for oil sands.
One is whether GHG emissions are measured on a "well-to-tank" basis or a "well-to-wheels" basis. Most of the extra GHG emissions for oil sands come from the energy-intensive process of getting the gunky bitumen out of the ground, upgrading it to refinery quality, and then refining it. That is the well-to-tank part. Subsequent highway use of the fuel, regardless of its source, produces the bulk of GHG emissions for the whole well-to-wheels fuel cycle. As a matter of simple arithmetic, then, moving from a well-to-tank measure to a well-to-wheels measure makes oil sands look relatively less dirty.
The second source of the gap between the clean and dirty numbers lies in what oil sands are compared to. Oil sands detractors like to use U.S. domestic crude as the basis for comparison. On a well-to-tank basis, DOE data show that production of diesel fuel from Canadian sands emits two and a half times more GHG than the average for diesel from domestic crude. But domestic crude is a poor basis for comparison. We use all our domestic crude first; after that, we have to go out and import the rest. The decision to use more or less oil from Canadian sands means importing correspondingly less or more from other sources. It turns out that almost all U.S. oil imports are low quality, heavy, or high in sulfur, meaning more emissions from extraction and refining. Long-distance transportation adds more emissions. All things considered, then, it appears that oil from Canadian sands is about 10 percent dirtier than crude from Nigeria (8 percent of imports) and 42 percent dirtier than oil from Mexico (12 percent of imports) on a well-to-tank basis. The gap is even less on a well-to-wheels basis.
So what do we really learn from parsing the DOE emissions data? We learn that although oil from Canadian sands is dirtier than average, no oil is really clean. As far as GHG emissions are concerned, what really matters is the total quantity of oil that is used. Where it comes from makes some difference, but a fairly small one.
Our discussion of the environmental impact of Canadian oil sand development would be incomplete if it stopped with the GHG issue. There are also major adverse effects on the local environment. One big issue is land reclamation. Much of the bitumen is recovered by surface mining, which leaves a moonlike landscape in place of the original boreal forests and wetlands. Water is another issue. Both surface and subsurface extraction of bitumen use vast quantities of fresh water and leave behind huge storage ponds full of toxic tailings. Candice Beaumont, an industry supporter who thinks oil sands may help delay "peak oil," describes the situation this way: "If a bird flies over a river near the oil sands, the bird dies just from flying over the river. It's that toxic. They are just dumping all the waste into the waterways. If you did that in the U.S. you would be in jail." (She discounts environmental impacts on the grounds that few people live in the main mining areas.)
Canadian authorities, to their credit, require that producers restore the land and water, and deposit funds in escrow to ensure that they do so. However, critics question the adequacy of the regulations. They point out that restoration technology is poorly demonstrated--very little land and none of the most toxic tailing ponds have actually been restored as yet. Furthermore, they argue that the required escrow deposits are not adequate to protect against potential disasters like a major wastewater spill.
Because environmental concerns cannot be entirely dismissed, oil sands supporters play the national security card. As the American Petroleum Institute's Jane Van Ryan puts it, "Every barrel imported from Canada could replace one from a less secure source, adding to our energy security and benefiting our economy." To evaluate the energy security argument, we have to think both about the nature of the oil security threat and that of the global oil market.
One aspect of the security threat is logistical. If, say, a civil war cut off supplies from Nigeria, the United States would have to scramble to find alternative sources. Contracts would have to be renegotiated. Tankers would have to be rerouted. Refineries would have to be reconfigured to handle a different type of crude. Even if those adjustments were eased by releasing oil from the strategic petroleum reserve, there would be short-term costs.
A second aspect of the security threat comes from oil price volatility. Oil is an import into virtually everything produced in the economy, and a major component of the cost of living. Sharp spikes in oil prices caused by war, politics, natural disasters, or industrial accidents send shockwaves through the whole economy.
A third security concern is who ends up pocketing the vast revenues generated by high oil prices. It has become a cliche to point out that not all oil producers are among America's closest friends. At worst, oil money funds authoritarian governments, the weapons programs of hostile states, and terrorism.
What could be better, then, than to replace oil from unstable countries like Nigeria with oil from friendly, democratic, and near-by Canada? It sounds good, but when you think about it, the security benefits are less than they seem. Again, consider a hypothetical Nigerian civil war. How much would it matter if, before the war started, Canadian output had expanded by enough that the United States was no longer an importer of Nigerian crude? It would not matter very much, because the global oil market operates as a single pool. Oil prices everywhere would spike as other countries scrambled to replace Nigerian oil. The dictators, hostile arms programs, and terrorist training centers we worry about would still get their inflow of new money. The U.S. economy would still be set back by higher import costs, unless, perhaps, our friendly neighbors to the north generously agreed to keep selling us oil at the low, pre-crisis price. True, there would still be logistical benefits to a short pipeline link with a stable Canada compared with a long sea route to a volatile Nigeria, but those would be of a second order of magnitude. For national security, as for the environment, the biggest part of the threat lies in excessive total consumption of oil, not in the specific sources from which that oil comes.
The preceding discussion of environmental and security issues reveals the hidden pitfalls of growing U.S. dependence on Canadian oil sands.
The pitfall for U.S. policy makers is that stable and abundant Canadian supplies will serve as an excuse to avoid the hard work of implementing a rational energy policy. Such a policy would be one that accounted for the full cost of every unit of energy from every source, new and old, and imposed those costs on the end user through higher prices. Meanwhile, Canadian policy makers would hopefully make sure that producers were pricing in the full costs of contingent liabilities from land reclamation and wastewater spills. A well-coordinated set of policies would place appropriate charges against all forms of energy, but oil from Canadian sands would take one of the biggest hits. Yes, such a policy would substantially increase end-user energy prices in the United States, but once the transition was complete, the economy would be strengthened, not weakened. As I have argued elsewhere, the one thing the country definitely cannot afford is "affordable energy."
The pitfall for investors is that putting money into the development of Canadian oil sands amounts to a bet that both the United States and Canada will, for the foreseeable future, remain committed to pro-producer policies that are non-rational from the point of view of broader national interests. True, that is not a completely stupid bet. Oil has a strong lobby on both sides of the border, and both governments are currently committed to further oil-sand development. But that might change.
It would be a mistake for investors to fool themselves with the arguments their own lobbyists are using to underplay the environmental impact of oil-sand development and overplay its national security benefits. Experience shows that a crisis can quickly shift public sentiment, and when that happens, politicians tend to run for cover. A generation ago, Chernobyl and Three Mile Island shifted sentiment against nuclear power. Last summer, BP's blowout in the Gulf of Mexico did the same for offshore drilling. A dramatic climate event like an ice-free summer on the Arctic Ocean or a burst dam on a big Alberta tailings pond could do the same for Canadian oil sands. At such moments policy can shift quickly from irrationally permissive to irrationally restrictive. Investors beware.
Source: http://oilprice.com
The debate places much emphasis on how just dirty or clean oil from the Canadian sands is compared with the alternatives. Detractors prefer to call them "tar sands" to project an image that is as dirty as possible. (Both "oil sands" and "tar sands" are popular terms; purists prefer "bituminous sands.") They cite data showing that greenhouse gas (GHG) emissions for a barrel of oil from Canadian sands run from three to as much as seven times as high as from a barrel of conventional Texas crude. Oil sand supporters cite different numbers that indicate only 5 to 15 percent more GHG emissions from the sands than from conventional oil.
Surprisingly, the widely differing numbers do not come from competing scientific teams. Instead, both sides draw on the same studies, like this one from the National Energy Technology Laboratory of the U.S. Department of Energy. A closer look at the underlying data shows that two factors account for the gap between the "clean" and "dirty" numbers for oil sands.
One is whether GHG emissions are measured on a "well-to-tank" basis or a "well-to-wheels" basis. Most of the extra GHG emissions for oil sands come from the energy-intensive process of getting the gunky bitumen out of the ground, upgrading it to refinery quality, and then refining it. That is the well-to-tank part. Subsequent highway use of the fuel, regardless of its source, produces the bulk of GHG emissions for the whole well-to-wheels fuel cycle. As a matter of simple arithmetic, then, moving from a well-to-tank measure to a well-to-wheels measure makes oil sands look relatively less dirty.
The second source of the gap between the clean and dirty numbers lies in what oil sands are compared to. Oil sands detractors like to use U.S. domestic crude as the basis for comparison. On a well-to-tank basis, DOE data show that production of diesel fuel from Canadian sands emits two and a half times more GHG than the average for diesel from domestic crude. But domestic crude is a poor basis for comparison. We use all our domestic crude first; after that, we have to go out and import the rest. The decision to use more or less oil from Canadian sands means importing correspondingly less or more from other sources. It turns out that almost all U.S. oil imports are low quality, heavy, or high in sulfur, meaning more emissions from extraction and refining. Long-distance transportation adds more emissions. All things considered, then, it appears that oil from Canadian sands is about 10 percent dirtier than crude from Nigeria (8 percent of imports) and 42 percent dirtier than oil from Mexico (12 percent of imports) on a well-to-tank basis. The gap is even less on a well-to-wheels basis.
So what do we really learn from parsing the DOE emissions data? We learn that although oil from Canadian sands is dirtier than average, no oil is really clean. As far as GHG emissions are concerned, what really matters is the total quantity of oil that is used. Where it comes from makes some difference, but a fairly small one.
Our discussion of the environmental impact of Canadian oil sand development would be incomplete if it stopped with the GHG issue. There are also major adverse effects on the local environment. One big issue is land reclamation. Much of the bitumen is recovered by surface mining, which leaves a moonlike landscape in place of the original boreal forests and wetlands. Water is another issue. Both surface and subsurface extraction of bitumen use vast quantities of fresh water and leave behind huge storage ponds full of toxic tailings. Candice Beaumont, an industry supporter who thinks oil sands may help delay "peak oil," describes the situation this way: "If a bird flies over a river near the oil sands, the bird dies just from flying over the river. It's that toxic. They are just dumping all the waste into the waterways. If you did that in the U.S. you would be in jail." (She discounts environmental impacts on the grounds that few people live in the main mining areas.)
Canadian authorities, to their credit, require that producers restore the land and water, and deposit funds in escrow to ensure that they do so. However, critics question the adequacy of the regulations. They point out that restoration technology is poorly demonstrated--very little land and none of the most toxic tailing ponds have actually been restored as yet. Furthermore, they argue that the required escrow deposits are not adequate to protect against potential disasters like a major wastewater spill.
Because environmental concerns cannot be entirely dismissed, oil sands supporters play the national security card. As the American Petroleum Institute's Jane Van Ryan puts it, "Every barrel imported from Canada could replace one from a less secure source, adding to our energy security and benefiting our economy." To evaluate the energy security argument, we have to think both about the nature of the oil security threat and that of the global oil market.
One aspect of the security threat is logistical. If, say, a civil war cut off supplies from Nigeria, the United States would have to scramble to find alternative sources. Contracts would have to be renegotiated. Tankers would have to be rerouted. Refineries would have to be reconfigured to handle a different type of crude. Even if those adjustments were eased by releasing oil from the strategic petroleum reserve, there would be short-term costs.
A second aspect of the security threat comes from oil price volatility. Oil is an import into virtually everything produced in the economy, and a major component of the cost of living. Sharp spikes in oil prices caused by war, politics, natural disasters, or industrial accidents send shockwaves through the whole economy.
A third security concern is who ends up pocketing the vast revenues generated by high oil prices. It has become a cliche to point out that not all oil producers are among America's closest friends. At worst, oil money funds authoritarian governments, the weapons programs of hostile states, and terrorism.
What could be better, then, than to replace oil from unstable countries like Nigeria with oil from friendly, democratic, and near-by Canada? It sounds good, but when you think about it, the security benefits are less than they seem. Again, consider a hypothetical Nigerian civil war. How much would it matter if, before the war started, Canadian output had expanded by enough that the United States was no longer an importer of Nigerian crude? It would not matter very much, because the global oil market operates as a single pool. Oil prices everywhere would spike as other countries scrambled to replace Nigerian oil. The dictators, hostile arms programs, and terrorist training centers we worry about would still get their inflow of new money. The U.S. economy would still be set back by higher import costs, unless, perhaps, our friendly neighbors to the north generously agreed to keep selling us oil at the low, pre-crisis price. True, there would still be logistical benefits to a short pipeline link with a stable Canada compared with a long sea route to a volatile Nigeria, but those would be of a second order of magnitude. For national security, as for the environment, the biggest part of the threat lies in excessive total consumption of oil, not in the specific sources from which that oil comes.
The preceding discussion of environmental and security issues reveals the hidden pitfalls of growing U.S. dependence on Canadian oil sands.
The pitfall for U.S. policy makers is that stable and abundant Canadian supplies will serve as an excuse to avoid the hard work of implementing a rational energy policy. Such a policy would be one that accounted for the full cost of every unit of energy from every source, new and old, and imposed those costs on the end user through higher prices. Meanwhile, Canadian policy makers would hopefully make sure that producers were pricing in the full costs of contingent liabilities from land reclamation and wastewater spills. A well-coordinated set of policies would place appropriate charges against all forms of energy, but oil from Canadian sands would take one of the biggest hits. Yes, such a policy would substantially increase end-user energy prices in the United States, but once the transition was complete, the economy would be strengthened, not weakened. As I have argued elsewhere, the one thing the country definitely cannot afford is "affordable energy."
The pitfall for investors is that putting money into the development of Canadian oil sands amounts to a bet that both the United States and Canada will, for the foreseeable future, remain committed to pro-producer policies that are non-rational from the point of view of broader national interests. True, that is not a completely stupid bet. Oil has a strong lobby on both sides of the border, and both governments are currently committed to further oil-sand development. But that might change.
It would be a mistake for investors to fool themselves with the arguments their own lobbyists are using to underplay the environmental impact of oil-sand development and overplay its national security benefits. Experience shows that a crisis can quickly shift public sentiment, and when that happens, politicians tend to run for cover. A generation ago, Chernobyl and Three Mile Island shifted sentiment against nuclear power. Last summer, BP's blowout in the Gulf of Mexico did the same for offshore drilling. A dramatic climate event like an ice-free summer on the Arctic Ocean or a burst dam on a big Alberta tailings pond could do the same for Canadian oil sands. At such moments policy can shift quickly from irrationally permissive to irrationally restrictive. Investors beware.
Source: http://oilprice.com
Wednesday, January 12, 2011
Predicting the future of energy
It pays to consider every option where energy is involved. In fact, it’s vital that all possible paths are explored. Which is exactly what is happening, says Andrew Cave.
Nobody has a crystal ball to predict developments in energy sources, consumption patterns and policy by 2050.
Yet it is possible to develop credible potential scenarios highlighting choices that need to be made about our future in a carbon-constrained world.
Shell has done exactly that, producing two potential scenarios that may develop from mushrooming energy demand from globalisation and rapid population growth, diminishing conventional oil and gas resources and environmental stresses from climate change.
The first, called Scramble, reflects a focus on national energy security, with immediate pressures driving country decision makers to focus on securing near-future energy supply for themselves and their allies.
Policymakers therefore pay little attention to more efficient energy use until supplies are tight, while greenhouse gas emissions go effectively unaddressed unless major climate shocks occur.
National government attention falls on supply levers that can easily be pulled, including the negotiation of bilateral government deals between energy producers and energy consumers and incentives for local resource development. Coal, biofuels and renewable energy become much more significant, with the global coal industry doubling in size between 2000 and 2025 and biomass representing 15 per cent of primary energy by 2050.
However, energy efficiency and other policies to do with energy demand are not addressed meaningfully until the supply stresses become too serious for the market to cope with.
Then an overall energy supply crisis results and governments react with draconian domestic price rises or personal mobility restrictions, resulting in a global economic slowdown by 2020.
The turnaround to healthy economic growth takes a decade, with locally developed biofuels, wind and thermal solar energy eventually stimulating innovation. However, by then it is clear that a new international approach to energy security and climate change mitigation is needed.
The world is 20 years behind where it would have been had it set up such a system by 2015. In addition, nations are likely to face expensive consequences beyond 2050.
Blueprints, Shell’s other scenario, paints a more collaborative picture in which local actions begin to address the challenges of economic development, energy security and environmental pollution.
Alliances in developed and emerging nations lead to parallel responses to supply, demand and climate change stresses, starting with a replacement for the Kyoto Protocol, which expires in 2012.
CO2 prices strengthen – helped by a new pricing mechanism and trading scheme – energy efficiency improves, the emergence of mass-market electric vehicles is accelerated and the rate of growth of atmospheric CO2 is constrained.
The US responds to pressure by promising to reach European minimum fuel economy standards for cars by 2020, while China and India secure agreements to facilitate technology transfer and investment in energy-efficient plants in exchange for taking part in international frameworks.
Increasingly aligned approaches to CO2 management in the US, China, India, Japan and Europe pave the way for carbon capture and storage to become a reality after 2020.
By 2050, economic growth no longer relies on an increase in the use of fossil fuels. The world is increasingly one of electrons, rather than molecules, with electric vehicles becoming the norm and power generation from renewable energy sources growing rapidly.
Almost 90 per cent of coal and gas-fired power stations in OECD counties and 50 per cent elsewhere are equipped with carbon capture and storage technologies, reducing overall CO2 emissions by 15 to 20 per cent, compared to what would otherwise have happened.
By 2055, the US and the EU are using an average of 33 per cent less energy per capita than today while Chinese energy has peaked.
Neither scenario is ideal or comfortable.
However, acknowledging their potential can be the first stage of developing a road map to answer the problems that the Age of Energy poses over the next 40 years.
Source: Telegraph
www.telegraph.co.uk
Nobody has a crystal ball to predict developments in energy sources, consumption patterns and policy by 2050.
Yet it is possible to develop credible potential scenarios highlighting choices that need to be made about our future in a carbon-constrained world.
Shell has done exactly that, producing two potential scenarios that may develop from mushrooming energy demand from globalisation and rapid population growth, diminishing conventional oil and gas resources and environmental stresses from climate change.
The first, called Scramble, reflects a focus on national energy security, with immediate pressures driving country decision makers to focus on securing near-future energy supply for themselves and their allies.
Policymakers therefore pay little attention to more efficient energy use until supplies are tight, while greenhouse gas emissions go effectively unaddressed unless major climate shocks occur.
National government attention falls on supply levers that can easily be pulled, including the negotiation of bilateral government deals between energy producers and energy consumers and incentives for local resource development. Coal, biofuels and renewable energy become much more significant, with the global coal industry doubling in size between 2000 and 2025 and biomass representing 15 per cent of primary energy by 2050.
However, energy efficiency and other policies to do with energy demand are not addressed meaningfully until the supply stresses become too serious for the market to cope with.
Then an overall energy supply crisis results and governments react with draconian domestic price rises or personal mobility restrictions, resulting in a global economic slowdown by 2020.
The turnaround to healthy economic growth takes a decade, with locally developed biofuels, wind and thermal solar energy eventually stimulating innovation. However, by then it is clear that a new international approach to energy security and climate change mitigation is needed.
The world is 20 years behind where it would have been had it set up such a system by 2015. In addition, nations are likely to face expensive consequences beyond 2050.
Blueprints, Shell’s other scenario, paints a more collaborative picture in which local actions begin to address the challenges of economic development, energy security and environmental pollution.
Alliances in developed and emerging nations lead to parallel responses to supply, demand and climate change stresses, starting with a replacement for the Kyoto Protocol, which expires in 2012.
CO2 prices strengthen – helped by a new pricing mechanism and trading scheme – energy efficiency improves, the emergence of mass-market electric vehicles is accelerated and the rate of growth of atmospheric CO2 is constrained.
The US responds to pressure by promising to reach European minimum fuel economy standards for cars by 2020, while China and India secure agreements to facilitate technology transfer and investment in energy-efficient plants in exchange for taking part in international frameworks.
Increasingly aligned approaches to CO2 management in the US, China, India, Japan and Europe pave the way for carbon capture and storage to become a reality after 2020.
By 2050, economic growth no longer relies on an increase in the use of fossil fuels. The world is increasingly one of electrons, rather than molecules, with electric vehicles becoming the norm and power generation from renewable energy sources growing rapidly.
Almost 90 per cent of coal and gas-fired power stations in OECD counties and 50 per cent elsewhere are equipped with carbon capture and storage technologies, reducing overall CO2 emissions by 15 to 20 per cent, compared to what would otherwise have happened.
By 2055, the US and the EU are using an average of 33 per cent less energy per capita than today while Chinese energy has peaked.
Neither scenario is ideal or comfortable.
However, acknowledging their potential can be the first stage of developing a road map to answer the problems that the Age of Energy poses over the next 40 years.
Source: Telegraph
www.telegraph.co.uk
Tuesday, January 11, 2011
London, Beijing target low-carbon growth
LONDON, Jan. 11 (UPI) -- Joint green economic ventures between the Chinese and British governments will support energy security for both countries, a climate secretary said.
British Energy Secretary Chris Huhne welcomed a Chinese delegation to London to sign a memorandum of understanding to promote a low-carbon economy at the provincial level in China.
"Making green growth a reality for both countries will be crucial for prosperity, the environment and for our energy security," Huhne said in a statement.
London is looking for alternative and renewable energy resources as conventional energy sources in the North Sea start to run dry. China is one of the world's leading energy consumers and emitters of harmful greenhouse gases.
Both sides, under the memorandum, will exchange expertise on low-carbon planning and emissions accounting and trading.
Initially, the joint effort will work on low-carbon policies in the Chinese provinces of Chongqing, Guangdong and Hubei.
"Today's agreement demonstrates that the U.K. and China want to accelerate this shift to low carbon and are committed to greater collaboration on energy markets and low carbon technology," said Huhne.
Source: www.upi.com
British Energy Secretary Chris Huhne welcomed a Chinese delegation to London to sign a memorandum of understanding to promote a low-carbon economy at the provincial level in China.
"Making green growth a reality for both countries will be crucial for prosperity, the environment and for our energy security," Huhne said in a statement.
London is looking for alternative and renewable energy resources as conventional energy sources in the North Sea start to run dry. China is one of the world's leading energy consumers and emitters of harmful greenhouse gases.
Both sides, under the memorandum, will exchange expertise on low-carbon planning and emissions accounting and trading.
Initially, the joint effort will work on low-carbon policies in the Chinese provinces of Chongqing, Guangdong and Hubei.
"Today's agreement demonstrates that the U.K. and China want to accelerate this shift to low carbon and are committed to greater collaboration on energy markets and low carbon technology," said Huhne.
Source: www.upi.com
Monday, January 10, 2011
Political analyst: Azerbaijan plays a certain role in ensuring Europe's energy security
Azerbaijan plays a certain role in ensuring Europe's energy security rather than the issue of providing the house of European Commission President Jose Manuel Barroso with gas, chairman of the Center for Political Innovation and Technologies Mubariz Ahmadoglu told Trend.
"Azerbaijan's role in ensuring energy security of Europe could rise significantly. At present, a single, strong attitude of Europe to Azerbaijan is required particularly to the settlement of Nagorno Karabakh conflict," he said.
He said that Armenia compares the term "peaceful settlement of the Nagorno Karabakh conflict" and "non-settlement of the Nagorno-Karabakh conflict".
"The European Commission has one position towards Azerbaijan, while the EU president Herman van Rompuy and high representative for EU foreign policy Catherine Ashton have another. The European Parliament has another position towards Azerbaijan. It differs from the previous two positions. The participation in ensuring energy security of Europe will implicitly mean the participation in strengthening the Armenian separatists. Are the Europeans so weak from the philosophical, moral, geopolitical and economic point of view that their fate is being discussed in Nagorno-Karabakh? " he said.
He said that the main slogan of observers from the Netherlands, the Czech Republic, Slovakia and Poland in the unrecognized parliamentary elections of the separatists in Nagorno-Karabakh related to the fate of Europe in the Nagorno-Karabakh.
There are "supporters of the thesis" about the unique geographical position of Armenia in all European societies. The geographical position of Armenia, located on the edge of the South Caucasus region, has no transit or communication significance. In this case, "a unique geographical position" stipulates the fact that Armenia is surrounded by non-Christian countries. Sargsyan's thesis that Armenia is the last outpost of Christianity in the East more strengthens this notion, he said.
He said that seeing the weakening of their lies about the Nagorno-Karabakh in the U.S., Russia and France, Armenians have chosen the EU as a space for their bluff to give real results.
"The EU President and High Representative for EU foreign policy, Catherine Ashton's dealing with religious activity more encourages the Armenians to achieve success in this direction. It is strange but both supporters and opponents of transporting Azerbaijani energy resources to the West play a role in enhancing the instrument of pressure on Azerbaijan called Armenia", he further said.
Source: http://en.trend.az
"Azerbaijan's role in ensuring energy security of Europe could rise significantly. At present, a single, strong attitude of Europe to Azerbaijan is required particularly to the settlement of Nagorno Karabakh conflict," he said.
He said that Armenia compares the term "peaceful settlement of the Nagorno Karabakh conflict" and "non-settlement of the Nagorno-Karabakh conflict".
"The European Commission has one position towards Azerbaijan, while the EU president Herman van Rompuy and high representative for EU foreign policy Catherine Ashton have another. The European Parliament has another position towards Azerbaijan. It differs from the previous two positions. The participation in ensuring energy security of Europe will implicitly mean the participation in strengthening the Armenian separatists. Are the Europeans so weak from the philosophical, moral, geopolitical and economic point of view that their fate is being discussed in Nagorno-Karabakh? " he said.
He said that the main slogan of observers from the Netherlands, the Czech Republic, Slovakia and Poland in the unrecognized parliamentary elections of the separatists in Nagorno-Karabakh related to the fate of Europe in the Nagorno-Karabakh.
There are "supporters of the thesis" about the unique geographical position of Armenia in all European societies. The geographical position of Armenia, located on the edge of the South Caucasus region, has no transit or communication significance. In this case, "a unique geographical position" stipulates the fact that Armenia is surrounded by non-Christian countries. Sargsyan's thesis that Armenia is the last outpost of Christianity in the East more strengthens this notion, he said.
He said that seeing the weakening of their lies about the Nagorno-Karabakh in the U.S., Russia and France, Armenians have chosen the EU as a space for their bluff to give real results.
"The EU President and High Representative for EU foreign policy, Catherine Ashton's dealing with religious activity more encourages the Armenians to achieve success in this direction. It is strange but both supporters and opponents of transporting Azerbaijani energy resources to the West play a role in enhancing the instrument of pressure on Azerbaijan called Armenia", he further said.
Source: http://en.trend.az
Sunday, January 9, 2011
Scots-Chinese deal as Vice Premier Li Keqiang visits UK
Scotland and China have sealed a major green energy deal, as Chinese Vice Premier Li Keqiang began a four-day visit to the UK.
The agreement, worth $10m (£6.4m), will see technology pioneered in Scotland used at a new renewable energy conversion plant in China.
Confirmation of the deal came as Mr Li and his delegation arrived in Edinburgh for the first day of his visit.
The vice premier is also meeting Prime Minister David Cameron in London.
The visit has a focus on promoting trade and political links with the UK and other European nations.
Mr Li - widely tipped to become the next Chinese premier - will also meet key UK government figures in London, including Deputy Prime Minister Nick Clegg, Chancellor George Osborne and Foreign Secretary William Hague.
Scottish First Minister Alex Salmond said the licensing deal was reached between Sino-Scots firm Shanghai Huanuan Boiler and Vessel Co/Cochran and Scotland-based engineers W2E Engineering, which specialises in generating electricity from domestic refuse.
Mr Salmond, who has led several trade missions to China over the past two years, said the visit was vital for building economic growth, especially in renewable energy.
"China already has the largest deployment of on-shore renewable technology, and Scotland is a world-leader in pioneering the technology and application of clean, green energy," he said.
"This announcement is another positive step forward in strengthening Sino-Scottish links and confirming Scotland's reputation as a global leader in the development of renewable energy."
Shanghai Huanuan chairman Dong Ping added: "This agreement will see the creation of new green power stations built in Scotland and in China and this will generate sustainable renewable energy at a reduced cost for our global customers."
On the first day of the trip, Mr Li held talks with Scottish Secretary Michael Moore and is also visiting the renewable energy firm Pelamis Wave Power.
Mr Moore described the meeting as "very constructive", adding: "China and the UK are key partners in growth for the future.
"There are a huge number of economic opportunities which exist between China and Scotland and I am keen to see us take advantage of our excellent trading links and create new routes to market in the near future."
Mr Li is also due to deliver a speech at a China-Britain British Council banquet, ahead of his return to Beijing on Wednesday.
The vice premier's stay in the UK comes after a three-day visit to Spain, where he signed $7.5bn (£4.8bn, 5.7bn euros) in trade deals.
Mr Li also reaffirmed his country would buy Spanish government bonds, despite the recent crisis of market confidence over eurozone debt.
China has already made several Scottish trade agreements, including a deal requiring all "Scotch Whisky" sold in China to have been made in Scotland.
Anne MacColl, of the economic agency Scottish Development International, said Scotland was in a strong position to contribute to many of China's key aims, which also included life sciences, financial services and academic connections.
Source: BBC
www.bbc.co.uk
The agreement, worth $10m (£6.4m), will see technology pioneered in Scotland used at a new renewable energy conversion plant in China.
Confirmation of the deal came as Mr Li and his delegation arrived in Edinburgh for the first day of his visit.
The vice premier is also meeting Prime Minister David Cameron in London.
The visit has a focus on promoting trade and political links with the UK and other European nations.
Mr Li - widely tipped to become the next Chinese premier - will also meet key UK government figures in London, including Deputy Prime Minister Nick Clegg, Chancellor George Osborne and Foreign Secretary William Hague.
Scottish First Minister Alex Salmond said the licensing deal was reached between Sino-Scots firm Shanghai Huanuan Boiler and Vessel Co/Cochran and Scotland-based engineers W2E Engineering, which specialises in generating electricity from domestic refuse.
Mr Salmond, who has led several trade missions to China over the past two years, said the visit was vital for building economic growth, especially in renewable energy.
"China already has the largest deployment of on-shore renewable technology, and Scotland is a world-leader in pioneering the technology and application of clean, green energy," he said.
"This announcement is another positive step forward in strengthening Sino-Scottish links and confirming Scotland's reputation as a global leader in the development of renewable energy."
Shanghai Huanuan chairman Dong Ping added: "This agreement will see the creation of new green power stations built in Scotland and in China and this will generate sustainable renewable energy at a reduced cost for our global customers."
On the first day of the trip, Mr Li held talks with Scottish Secretary Michael Moore and is also visiting the renewable energy firm Pelamis Wave Power.
Mr Moore described the meeting as "very constructive", adding: "China and the UK are key partners in growth for the future.
"There are a huge number of economic opportunities which exist between China and Scotland and I am keen to see us take advantage of our excellent trading links and create new routes to market in the near future."
Mr Li is also due to deliver a speech at a China-Britain British Council banquet, ahead of his return to Beijing on Wednesday.
The vice premier's stay in the UK comes after a three-day visit to Spain, where he signed $7.5bn (£4.8bn, 5.7bn euros) in trade deals.
Mr Li also reaffirmed his country would buy Spanish government bonds, despite the recent crisis of market confidence over eurozone debt.
China has already made several Scottish trade agreements, including a deal requiring all "Scotch Whisky" sold in China to have been made in Scotland.
Anne MacColl, of the economic agency Scottish Development International, said Scotland was in a strong position to contribute to many of China's key aims, which also included life sciences, financial services and academic connections.
Source: BBC
www.bbc.co.uk
Thursday, January 6, 2011
Deep water oil drilling ban rejected
A committee of MPs has opposed any freeze on deep water drilling for oil in the UK's seas, warning such a move would undermine the country's energy security.
The powerful energy and climate change committee raised doubt over whether equipment to tackle a similar environmental disaster would be adequate in the harsh conditions West of Shetland.
In the inhospitable seas near the Island, the Government is looking in a bid to secure future fuel reserves for Britain. The area holds much deeper and more hazardous waters than the relatively shallow North Sea.
More than forty wells are likely to be drilled in search of gas to ease the country's looming energy shortage. And a lack of clarity over liability laws could leave the UK taxpayer picking up the bill for a major oil spill offshore, a report by the committee in the wake of the Gulf of Mexico oil disaster warned.
The MPs launched their inquiry to examine the implications of the explosion on BP's Deepwater Horizon rig 50 miles off the Louisiana coast which killed 11 workers and left millions of barrels of oil pouring into the sea. A committee of MPs have rejected such a move warning it would undermine the UK's energy security.
They raised doubts over whether equipment used to tackle oil spills would be adequate in the harsh conditions West of Shetland. The committee urged the health and safety executive to consider making equipment to seal a drill pipe a requirement on all UK deep water rigs.
The committee's chairman Tim Yeo said: "A moratorium on deep water drilling off the west coast of Shetland would undermine the UK's energy security and isn't necessary."
But he said: "The harsh and windy conditions in the North Sea would make an oil spill off the coast of Shetland very difficult to contain or clean up.
"Safety regulations on drilling in the UK are already tougher than they were in the Gulf of Mexico, but oil companies mustn't use that as an excuse for complacency."
The report said the conditions to the west of Shetland were far more difficult than those experienced by teams tackling the spill in the Gulf of Mexico.
And green campaigners renewed their call for a moratorium on deep water drilling in UK waters, amid concerns over the environmental threats of deep sea drilling and the UK's reliance on fossil fuels,
John Sauven, executive director of Greenpeace which has launched a legal bid to halt the granting of new drilling licences, said: "This report lists all the reasons why a ban on deep sea drilling makes sense and then ignores its own findings.
"The oil companies have no idea how they would deal with a major spill off the coast of the UK but apparently we're supposed to trust them until they come up with an adequate plan."
Dan Barlow, head of policy at WWF Scotland, said: "This report highlights that the current UK oil drilling framework falls short of providing the necessary safeguards to protect Scotland's marine environment in the event of an oil spill.
"Given the environmental imperative to end our addiction with oil, the focus of our energy policy must be on making a renewable revolution a reality.
"Pursuing new oil would undermine the leadership role this country has built on tackling climate change and progressing toward a low carbon economy."
But the Government welcomed the report's conclusion that a moratorium was unwarranted.
Energy Minister Charles Hendry said: "We looked at our regime and increased inspections immediately after Deepwater Horizon and plan a further review once US reports and the detailed analysis of the factors which caused the Gulf of Mexico incident are available."
He added: "As we move towards a less carbon intensive future, oil and gas are set to remain a key part of our energy system for years to come and it is vital that we search for and produce the UK's own resources as safely as possible."
Meanwhile a report into the Deepwater Horizon explosion blamed systematic industry failures. A US presidential commission blamed failures to appreciate risk and said a fundamental mistake by BP was failing to exercise proper caution.
The spill has cost BP billions of collars and led to the departure of their chief executive.
Source: http://news.stv.tv
The powerful energy and climate change committee raised doubt over whether equipment to tackle a similar environmental disaster would be adequate in the harsh conditions West of Shetland.
In the inhospitable seas near the Island, the Government is looking in a bid to secure future fuel reserves for Britain. The area holds much deeper and more hazardous waters than the relatively shallow North Sea.
More than forty wells are likely to be drilled in search of gas to ease the country's looming energy shortage. And a lack of clarity over liability laws could leave the UK taxpayer picking up the bill for a major oil spill offshore, a report by the committee in the wake of the Gulf of Mexico oil disaster warned.
The MPs launched their inquiry to examine the implications of the explosion on BP's Deepwater Horizon rig 50 miles off the Louisiana coast which killed 11 workers and left millions of barrels of oil pouring into the sea. A committee of MPs have rejected such a move warning it would undermine the UK's energy security.
They raised doubts over whether equipment used to tackle oil spills would be adequate in the harsh conditions West of Shetland. The committee urged the health and safety executive to consider making equipment to seal a drill pipe a requirement on all UK deep water rigs.
The committee's chairman Tim Yeo said: "A moratorium on deep water drilling off the west coast of Shetland would undermine the UK's energy security and isn't necessary."
But he said: "The harsh and windy conditions in the North Sea would make an oil spill off the coast of Shetland very difficult to contain or clean up.
"Safety regulations on drilling in the UK are already tougher than they were in the Gulf of Mexico, but oil companies mustn't use that as an excuse for complacency."
The report said the conditions to the west of Shetland were far more difficult than those experienced by teams tackling the spill in the Gulf of Mexico.
And green campaigners renewed their call for a moratorium on deep water drilling in UK waters, amid concerns over the environmental threats of deep sea drilling and the UK's reliance on fossil fuels,
John Sauven, executive director of Greenpeace which has launched a legal bid to halt the granting of new drilling licences, said: "This report lists all the reasons why a ban on deep sea drilling makes sense and then ignores its own findings.
"The oil companies have no idea how they would deal with a major spill off the coast of the UK but apparently we're supposed to trust them until they come up with an adequate plan."
Dan Barlow, head of policy at WWF Scotland, said: "This report highlights that the current UK oil drilling framework falls short of providing the necessary safeguards to protect Scotland's marine environment in the event of an oil spill.
"Given the environmental imperative to end our addiction with oil, the focus of our energy policy must be on making a renewable revolution a reality.
"Pursuing new oil would undermine the leadership role this country has built on tackling climate change and progressing toward a low carbon economy."
But the Government welcomed the report's conclusion that a moratorium was unwarranted.
Energy Minister Charles Hendry said: "We looked at our regime and increased inspections immediately after Deepwater Horizon and plan a further review once US reports and the detailed analysis of the factors which caused the Gulf of Mexico incident are available."
He added: "As we move towards a less carbon intensive future, oil and gas are set to remain a key part of our energy system for years to come and it is vital that we search for and produce the UK's own resources as safely as possible."
Meanwhile a report into the Deepwater Horizon explosion blamed systematic industry failures. A US presidential commission blamed failures to appreciate risk and said a fundamental mistake by BP was failing to exercise proper caution.
The spill has cost BP billions of collars and led to the departure of their chief executive.
Source: http://news.stv.tv
Wednesday, January 5, 2011
China nuclear breakthrough 'boosts energy security'
By succeeding in reprocessing spent nuclear fuel in an experimental reactor, China has made an important technological step forward in ensuring its long-term energy security, experts say.
The feat by the China National Nuclear Corporation -- announced Monday with much fanfare on state television -- has already been achieved by other nations, and it remains to be seen whether it can be done on an industrial scale.
But the successful reuse of irradiated nuclear fuel, developed at a CNNC plant in the country's remote northwest, is likely to be key in China's efforts to diversify its energy mix, especially away from highly-polluting coal.
The work by CNNC "is a crucial step towards resolving the raw materials problem faced by the nuclear industry (in China), one already tackled by the other main nuclear powers," Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University, told AFP.
The report was scant on details about the so-called Chinese "breakthrough", but said it would help extend the lifespan of Beijing's proven uranium deposits to 3,000 years, from the current forecast of 50-70 years.
CNNC general manager Sun Qin said in the report that China had joined a "minority of countries" to have a complete nuclear fuel cycle. France and Russia are among the nations already reprocessing nuclear fuel.
A Beijing-based Western expert on nuclear technology, who asked not to be named, told AFP that while earlier tests involved non-radioactive products, China had "moved on to active tests with fissile, radioactive material".
China currently has 13 nuclear reactors and has given the green light to plans for 34 others, 26 of which are already under construction, People's Daily -- the official mouthpiece of the ruling Communist party -- said Tuesday.
Beijing has stepped up investment in nuclear power in an effort to slash its world-leading carbon emissions and scale down the nation's heavy reliance on coal, which accounts for 70 percent of its energy needs.
China, which overtook Japan in mid-2010 to become the world's second-largest economy, is the world's biggest energy consumer, according to the International Energy Agency.
It aims to get 15 percent of its power from renewable sources by 2020.
It wants to increase nuclear power capacity to 112 gigawatts by 2020, which would account for about seven percent of the country's total installed power capacity, state press reports have said.
The government said previously the target was 70 gigawatts.
China currently produces around 750 tonnes of uranium a year but annual demand could rise to 20,000 tonnes a year by 2020, according to state media.
CNNC is developing a uranium mine in the poor west African country of Niger, which produced its first barrel of ore last week.
In order for China to greatly increase the amount of power generated from its existing uranium stocks, it would have to develop the capability to use nearly all of the non-fissile uranium-238.
That can be achieved by rapid neutron reactors, which France expects to see come on-stream in about 2040 -- and which one expert hinted was the path being taken by CNNC.
"China has made a concrete breakthrough in the development of fourth generation, rapid neutron nuclear technology," Ye Qizhen, an expert at the Chinese Academy of Engineering, told the China Business News after the announcement.
Lin said recycled nuclear fuel can be used by the third-generation reactors, such as the ones developed by France's Areva and US-based Westinghouse Electric, and being built in China.
But he noted that so far, nuclear fuel reprocessing in China is still in the experimental phase.
"For now, we don't know if new technical problems will crop up in the transition to (industrial) production," he said.
Source: www.bangkokpost.com
The feat by the China National Nuclear Corporation -- announced Monday with much fanfare on state television -- has already been achieved by other nations, and it remains to be seen whether it can be done on an industrial scale.
But the successful reuse of irradiated nuclear fuel, developed at a CNNC plant in the country's remote northwest, is likely to be key in China's efforts to diversify its energy mix, especially away from highly-polluting coal.
The work by CNNC "is a crucial step towards resolving the raw materials problem faced by the nuclear industry (in China), one already tackled by the other main nuclear powers," Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University, told AFP.
The report was scant on details about the so-called Chinese "breakthrough", but said it would help extend the lifespan of Beijing's proven uranium deposits to 3,000 years, from the current forecast of 50-70 years.
CNNC general manager Sun Qin said in the report that China had joined a "minority of countries" to have a complete nuclear fuel cycle. France and Russia are among the nations already reprocessing nuclear fuel.
A Beijing-based Western expert on nuclear technology, who asked not to be named, told AFP that while earlier tests involved non-radioactive products, China had "moved on to active tests with fissile, radioactive material".
China currently has 13 nuclear reactors and has given the green light to plans for 34 others, 26 of which are already under construction, People's Daily -- the official mouthpiece of the ruling Communist party -- said Tuesday.
Beijing has stepped up investment in nuclear power in an effort to slash its world-leading carbon emissions and scale down the nation's heavy reliance on coal, which accounts for 70 percent of its energy needs.
China, which overtook Japan in mid-2010 to become the world's second-largest economy, is the world's biggest energy consumer, according to the International Energy Agency.
It aims to get 15 percent of its power from renewable sources by 2020.
It wants to increase nuclear power capacity to 112 gigawatts by 2020, which would account for about seven percent of the country's total installed power capacity, state press reports have said.
The government said previously the target was 70 gigawatts.
China currently produces around 750 tonnes of uranium a year but annual demand could rise to 20,000 tonnes a year by 2020, according to state media.
CNNC is developing a uranium mine in the poor west African country of Niger, which produced its first barrel of ore last week.
In order for China to greatly increase the amount of power generated from its existing uranium stocks, it would have to develop the capability to use nearly all of the non-fissile uranium-238.
That can be achieved by rapid neutron reactors, which France expects to see come on-stream in about 2040 -- and which one expert hinted was the path being taken by CNNC.
"China has made a concrete breakthrough in the development of fourth generation, rapid neutron nuclear technology," Ye Qizhen, an expert at the Chinese Academy of Engineering, told the China Business News after the announcement.
Lin said recycled nuclear fuel can be used by the third-generation reactors, such as the ones developed by France's Areva and US-based Westinghouse Electric, and being built in China.
But he noted that so far, nuclear fuel reprocessing in China is still in the experimental phase.
"For now, we don't know if new technical problems will crop up in the transition to (industrial) production," he said.
Source: www.bangkokpost.com
Tuesday, January 4, 2011
Why gas costs more--and is more profitable--out West
FORTUNE -- In the cutthroat fuel industry, some refiners are pulling ahead by taking advantage of a quirk in the United States gasoline market. Gas prices in the U.S. fluctuate with the global, volatile oil market, but gasoline prices within the country are far from uniform. Part of that is because the Western market requires a different, more expensive mixture than the gasoline sold in states near the Gulf of Mexico.
The premium on gasoline on the West Coast was fueled by a series events starting with a smog problem in California and ending with a handful of companies creating a tight market for clean-burning gasoline. California mandates more eco-friendly fuel, and other states in the West are starting to follow suit. This means that companies who have been selling to that market only expect the profit margin on Western gas to grow.
For example, Fortune rated one company, Western Refining (WNR, Fortune 500), which has access to the Western gasoline market, one of the best performing stocks in 2010. Western Refining reported a third-quarter net income of $6.9 million for 2010, compared to its net loss of $4.8 million in the same period of 2009.
The company succeeded for several reasons. It shed underperforming facilities in the East. Out West, "we had two of the most profitable refineries on a gross margin basis," Western Refining CEO Jeff Stevens explained at a symposium in December. That's partially because the company fine-tuned its cost structure at those refineries and because the cost of oil is increasing again. But the high premium for gasoline out West certainly helped.
Western Refining is one of a limited number of refineries have the capacity to make the specific mixture required for clean fuel. That means that these refineries can charge more for their product. "You're essentially creating a segmented market-you're limiting the amount of suppliers that can compete," says Frank Wolak, a Professor of Commodity Price Studies in Stanford's Economics Department.
Californians have been buying expensive gas for decades. The state had terrible smog problems in the 1990's and was forced to reduce air pollution after the Environmental Protection Agency passed the Clean Air Act. Since then, California has had to buy gasoline that produces fewer pollutants than fuel sold in the rest of the country.
Only a small number of refineries switched to produce that kind of gasoline. In a report on the high price of California gasoline in 2004, Wolak wrote that six refiners own more than 90 percent of the refining capacity in the state. Now, he says the same set of refineries dictates the market.
Western Refining is one of them, and it's in a good position to benefit from new demand for clean-burning gasoline. The company has two major refineries: one in El Paso in west Texas, and the other in Gallup, New Mexico near the four corners. The Gallup refinery distributes to cities including Phoenix and Tucson that are starting to buy cleaner burning gasoline.
The cities are responding to the EPA, which declared back in 1997 that the Phoenix Metropolitan area fell short of the National Air Quality Standards, then demanded that the state come up with a plan to fix it. In 2004, the EPA approved Arizona's plan, called the Arizona Cleaner Burning Gasoline program.
Now, the Arizona gasoline market pulls in the same profits for refiners as California, Western Refining CEO Stevens says. He expects the trend to continue.
"Looking forward we're seeing that the West coast continues to remain-- particularly on the gasoline side--really the strongest market," Western Refining's Stevens said at the symposium.
The market will stay profitable for the foreseeable future, Wolak says, because the few refineries that produce the cleaner gasoline mixture will keep control without much competition. "If you had a national market among all the refineries, that would become much more difficult."
He also says that while it might make sense environmentally, a national market for clean burning gas won't happen for a while, if ever. Meanwhile, refiners can continue to meet the needs of state governments demanding cleaner-burning fuel, and keep pocketing the premium.
Source: CNN
http://money.cnn.com
The premium on gasoline on the West Coast was fueled by a series events starting with a smog problem in California and ending with a handful of companies creating a tight market for clean-burning gasoline. California mandates more eco-friendly fuel, and other states in the West are starting to follow suit. This means that companies who have been selling to that market only expect the profit margin on Western gas to grow.
For example, Fortune rated one company, Western Refining (WNR, Fortune 500), which has access to the Western gasoline market, one of the best performing stocks in 2010. Western Refining reported a third-quarter net income of $6.9 million for 2010, compared to its net loss of $4.8 million in the same period of 2009.
The company succeeded for several reasons. It shed underperforming facilities in the East. Out West, "we had two of the most profitable refineries on a gross margin basis," Western Refining CEO Jeff Stevens explained at a symposium in December. That's partially because the company fine-tuned its cost structure at those refineries and because the cost of oil is increasing again. But the high premium for gasoline out West certainly helped.
Western Refining is one of a limited number of refineries have the capacity to make the specific mixture required for clean fuel. That means that these refineries can charge more for their product. "You're essentially creating a segmented market-you're limiting the amount of suppliers that can compete," says Frank Wolak, a Professor of Commodity Price Studies in Stanford's Economics Department.
Californians have been buying expensive gas for decades. The state had terrible smog problems in the 1990's and was forced to reduce air pollution after the Environmental Protection Agency passed the Clean Air Act. Since then, California has had to buy gasoline that produces fewer pollutants than fuel sold in the rest of the country.
Only a small number of refineries switched to produce that kind of gasoline. In a report on the high price of California gasoline in 2004, Wolak wrote that six refiners own more than 90 percent of the refining capacity in the state. Now, he says the same set of refineries dictates the market.
Western Refining is one of them, and it's in a good position to benefit from new demand for clean-burning gasoline. The company has two major refineries: one in El Paso in west Texas, and the other in Gallup, New Mexico near the four corners. The Gallup refinery distributes to cities including Phoenix and Tucson that are starting to buy cleaner burning gasoline.
The cities are responding to the EPA, which declared back in 1997 that the Phoenix Metropolitan area fell short of the National Air Quality Standards, then demanded that the state come up with a plan to fix it. In 2004, the EPA approved Arizona's plan, called the Arizona Cleaner Burning Gasoline program.
Now, the Arizona gasoline market pulls in the same profits for refiners as California, Western Refining CEO Stevens says. He expects the trend to continue.
"Looking forward we're seeing that the West coast continues to remain-- particularly on the gasoline side--really the strongest market," Western Refining's Stevens said at the symposium.
The market will stay profitable for the foreseeable future, Wolak says, because the few refineries that produce the cleaner gasoline mixture will keep control without much competition. "If you had a national market among all the refineries, that would become much more difficult."
He also says that while it might make sense environmentally, a national market for clean burning gas won't happen for a while, if ever. Meanwhile, refiners can continue to meet the needs of state governments demanding cleaner-burning fuel, and keep pocketing the premium.
Source: CNN
http://money.cnn.com
Monday, January 3, 2011
Inefficient 100W light bulbs banned in California
New regulations have come into force in California requiring light bulb manufacturers to produce more energy-efficient products.
The new standard actually comes as part of the federal Energy Independence and Security Act, which was signed into law by President George W Bush in 2007.
The rest of the country will adopt the standard on January 1, 2012, but California has been given the authority to begin a year early.
Designed to reduce energy use and associated pollution, while improving US energy security, the new standard requires that 100-watt bulbs made on or after January 1, 2011, must use 28% less energy, while providing the same amount of light. Effectively, this means 100W bulbs being replaced by 72W bulbs that are just as bright.
The California Energy Commission said that the new standard would avoid the sale of around 10.5 million inefficient 100W light bulbs in California during 2011, saving consumers $35.6 million in lower electricity bills.
Reducing energy use in California also results in improved environmental quality by avoiding the construction of new power plants and air pollution from burning fossil fuels, the Commission said.
The inefficiency in standard incandescent light bulbs comes because about 90% of the electricity used by the bulbs is converted into heat, rather than visible light.
More efficient halogen, compact fluorescent bulbs (CFL) or light-emitting diode (LED) bulbs work to convert more of their power into light.
The Commission said the new standard was technology neutral, allowing consumers to choose among a variety of high-performance products for their replacement lighting. Additionally, it does not affect the existing supply of incandescent light bulbs stocked in retail stores or incandescent light bulbs already in use.
Source: www.brighterenergy.org
The new standard actually comes as part of the federal Energy Independence and Security Act, which was signed into law by President George W Bush in 2007.
The rest of the country will adopt the standard on January 1, 2012, but California has been given the authority to begin a year early.
Designed to reduce energy use and associated pollution, while improving US energy security, the new standard requires that 100-watt bulbs made on or after January 1, 2011, must use 28% less energy, while providing the same amount of light. Effectively, this means 100W bulbs being replaced by 72W bulbs that are just as bright.
The California Energy Commission said that the new standard would avoid the sale of around 10.5 million inefficient 100W light bulbs in California during 2011, saving consumers $35.6 million in lower electricity bills.
Reducing energy use in California also results in improved environmental quality by avoiding the construction of new power plants and air pollution from burning fossil fuels, the Commission said.
The inefficiency in standard incandescent light bulbs comes because about 90% of the electricity used by the bulbs is converted into heat, rather than visible light.
More efficient halogen, compact fluorescent bulbs (CFL) or light-emitting diode (LED) bulbs work to convert more of their power into light.
The Commission said the new standard was technology neutral, allowing consumers to choose among a variety of high-performance products for their replacement lighting. Additionally, it does not affect the existing supply of incandescent light bulbs stocked in retail stores or incandescent light bulbs already in use.
Source: www.brighterenergy.org
Saturday, January 1, 2011
Restart for nuclear plants
RICHMOND, Va. -- Two years ago, the promise of a new day loomed for the U.S. nuclear energy industry. Both presidential candidates supported to varying degrees an expanded role for nuclear power, as each vowed to reduce America's reliance on foreign oil and its greenhouse gas emissions.
John McCain proposed building 45 new nuclear reactors by 2030 and 100 over a longer period. While Barack Obama was less robust in his enthusiasm for nuclear power, he readily admitted more reactors would be necessary to meet his energy security and pollution-reduction goals.
And a year after beating McCain, President Obama indeed announced more than $8 billion in federal loan guarantees to construct the first two new nuclear reactors in the United States in more than 30 years. Both would be in Georgia and owned by Southern Company, with one coming online in 2016 and the other a year later.
Obama also proposed in his 2011 budget an additional $36 billion in loan guarantees to supplement an existing $18.5 billion. In the just-passed spending bill, however, he got only $8 billion, about a quarter of his request. No doubt that more than $26 billion in U.S.-backed financial support can move off the drawing boards a number of new plants, creating tens of thousands of new jobs and producing emissions-free power.
But will it? Today there are 104 nuclear reactors operating in 31 states, with 33 reactors being in the Nuclear Regulatory Commission's Region II, which covers the Southeast. North Carolina has five. However, only two or three additional reactors nationwide have a reasonable chance of being built over the next decade.
Plans to construct nuclear reactors in more than a half-dozen states, mostly across the South, have been delayed or canceled due to various bottom-line factors - escalating construction costs, a drop in electricity usage due to the recession, the competitive price natural gas, the inability of their owners to obtain from state regulators a good enough return on their big investments or a combination of the above.
The latest plant to hit trouble is in Maryland, where a joint-venture between Baltimore-based Constellation Energy and French-owned EDF has broken apart. The trans-Atlantic alliance had proposed building a reactor alongside the two Constellation already operates at Calvert Cliffs. Recently, though, Constellation determined the terms for $7.5 billion in federal loan guarantees were not in its best interest. EDF is searching for another U.S. partner.
That so many proposed nuclear plants have been temporarily or permanently shelved, and with the once promising Calvert Cliffs project now up in the air, the industry - the market - is telling Washington and state capitals that corrective action is needed.
Energy Secretary Steven Chu gets it. A few weeks ago he acknowledged that nuclear power would have to be part of any "clean energy standard," especially in the Southeast where renewables like wind are less abundant. Overall, Chu would like 25 percent of the nation's energy to be produced from low- or no-emissions sources by 2025, with that doubling by 2050.
To bring a new reactor online requires a great deal of capital. The design, construction and permit-granting process is expensive and time-consuming. The going rate is $7-9 billion, and it takes nearly a decade to go from concept to ribbon-cutting.
It is likely that the new Congress will push for changes. The loan guarantee program, which has been slow to process applications, will receive bipartisan scrutiny. There may be efforts to dramatically reshape it in the form of a "clean energy bank." Sen. Jeff Bingaman, D-N.M., has proposed creating an independent Clean Energy Deployment Administration to finance emerging low-carbon technologies, including nuclear.
Industry stamina can be maximized if risk is minimized. That means Washington must craft loan guarantees with terms that cushion against economic variables unpredictable enough to even scuttle reactors on the verge of groundbreaking. It means that federal and state environmental and other regulatory processes must be shortened to reduce the billions in upfront reserves needed to bolster a new project. And it means sheathing political swords in the name of a more secure energy future based at least in part on a reliable, emissions-free source.
New political winds are blowing through Washington and in state capitals across the country. Despite an uncertain partisan divide, the need for scores of new reactors is one issue where there should be common ground. Obama has demonstrated his willingness, the new Congress certainly can, and new governors and state legislatures must.
Source: www.newsobserver.com
John McCain proposed building 45 new nuclear reactors by 2030 and 100 over a longer period. While Barack Obama was less robust in his enthusiasm for nuclear power, he readily admitted more reactors would be necessary to meet his energy security and pollution-reduction goals.
And a year after beating McCain, President Obama indeed announced more than $8 billion in federal loan guarantees to construct the first two new nuclear reactors in the United States in more than 30 years. Both would be in Georgia and owned by Southern Company, with one coming online in 2016 and the other a year later.
Obama also proposed in his 2011 budget an additional $36 billion in loan guarantees to supplement an existing $18.5 billion. In the just-passed spending bill, however, he got only $8 billion, about a quarter of his request. No doubt that more than $26 billion in U.S.-backed financial support can move off the drawing boards a number of new plants, creating tens of thousands of new jobs and producing emissions-free power.
But will it? Today there are 104 nuclear reactors operating in 31 states, with 33 reactors being in the Nuclear Regulatory Commission's Region II, which covers the Southeast. North Carolina has five. However, only two or three additional reactors nationwide have a reasonable chance of being built over the next decade.
Plans to construct nuclear reactors in more than a half-dozen states, mostly across the South, have been delayed or canceled due to various bottom-line factors - escalating construction costs, a drop in electricity usage due to the recession, the competitive price natural gas, the inability of their owners to obtain from state regulators a good enough return on their big investments or a combination of the above.
The latest plant to hit trouble is in Maryland, where a joint-venture between Baltimore-based Constellation Energy and French-owned EDF has broken apart. The trans-Atlantic alliance had proposed building a reactor alongside the two Constellation already operates at Calvert Cliffs. Recently, though, Constellation determined the terms for $7.5 billion in federal loan guarantees were not in its best interest. EDF is searching for another U.S. partner.
That so many proposed nuclear plants have been temporarily or permanently shelved, and with the once promising Calvert Cliffs project now up in the air, the industry - the market - is telling Washington and state capitals that corrective action is needed.
Energy Secretary Steven Chu gets it. A few weeks ago he acknowledged that nuclear power would have to be part of any "clean energy standard," especially in the Southeast where renewables like wind are less abundant. Overall, Chu would like 25 percent of the nation's energy to be produced from low- or no-emissions sources by 2025, with that doubling by 2050.
To bring a new reactor online requires a great deal of capital. The design, construction and permit-granting process is expensive and time-consuming. The going rate is $7-9 billion, and it takes nearly a decade to go from concept to ribbon-cutting.
It is likely that the new Congress will push for changes. The loan guarantee program, which has been slow to process applications, will receive bipartisan scrutiny. There may be efforts to dramatically reshape it in the form of a "clean energy bank." Sen. Jeff Bingaman, D-N.M., has proposed creating an independent Clean Energy Deployment Administration to finance emerging low-carbon technologies, including nuclear.
Industry stamina can be maximized if risk is minimized. That means Washington must craft loan guarantees with terms that cushion against economic variables unpredictable enough to even scuttle reactors on the verge of groundbreaking. It means that federal and state environmental and other regulatory processes must be shortened to reduce the billions in upfront reserves needed to bolster a new project. And it means sheathing political swords in the name of a more secure energy future based at least in part on a reliable, emissions-free source.
New political winds are blowing through Washington and in state capitals across the country. Despite an uncertain partisan divide, the need for scores of new reactors is one issue where there should be common ground. Obama has demonstrated his willingness, the new Congress certainly can, and new governors and state legislatures must.
Source: www.newsobserver.com
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