As NATO officials warned of Russia's continued military presence along Ukraine's eastern border Wednesday, Secretary of State John Kerry was in Brussels condemning another kind of force Moscow wields in Europe.
Russia's decades-old dominance of European energy markets has long concerned Western leaders, who view the lack of supply diversity as a security threat. The Ukraine crisis, which stems from a history of natural-gas disputes between Russia and Ukraine, has invigorated long-standing efforts to reduce oil and gas consumption and find alternative suppliers.
Mr. Kerry met with his European counterpart Catherine Ashton in Brussels Wednesday to reaffirm US support for those efforts, and condemned the use of energy as a weapon. Some have called on the US to respond to Russia in kind by expanding US oil and gas exports to Europe. But the Obama administration is unlikely to make a flashy show of any energy weapon in the short term.
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"No nation should use energy to stymie a people’s aspirations," Kerry said Wednesday. "It should not be used as a weapon. It’s in the interest of all of us to be able to have adequate energy supplies critical to our economies, critical to our security, critical to the prosperity of our people." ( Continue… )
It's about to get a lot more expensive for Ukrainians to heat their homes and power their factories. That might be a good thing.
The price industrial consumers pay for domestic natural gas in Ukraine will rise nearly 30 percent starting Tuesday, according to the Ukrainian government. Meanwhile, Russia's state-owned gas company said Tuesday it will also raise the price of the gas it sells to Ukraine starting this quarter – by 40 percent.
Those are painful propositions for Ukrainian consumers, particularly for low-income populations who have come to rely on government-subsidized gas. It could erode some public support during a delicate, transitional time in Ukraine. But the price hikes are long overdue, analysts say, and necessary for Ukraine to assert its energy independence from Russia.
Cheap Russian natural gas, combined with a corrupt energy market at home, have long kept Ukraine dependent on Moscow for energy, instead of developing its own domestic supplies. By boosting the price of its own gas, Ukraine's interim government hopes to make the country's energy use more efficient, and incentivize investment in its significant oil and gas resources. The decision by Russia to raise the price of its gas will only accelerate Ukraine's efforts to diversify its energy mix.
Energy sector reforms were a key part of an agreement signed last week between Ukraine and the International Monetary Fund (IMF) to loan the financially unstable nation up to $18 billion in aid from the West. Boosting domestic Ukrainian gas prices will help meet the IMF's terms, and elevated Russian gas prices will make Ukraine less likely to commit to tenuous, long-term deals with Moscow and more likely to look elsewhere for new sources of supply. ( Continue… )
The national average price for a gallon of regular unleaded gasoline for Monday is the highest it's been since Sept. 11. Demand may increase along with the price at the pump for April, though a short-term plateau may be within site, AAA said.
Michael Green, a spokesman for AAA, told Oilprice demand for gasoline is expected to increase as a long winter starts to ease across much of the country.
"Given how cold it had been earlier in the year, it would not be surprising to see pent-up demand result in significant gasoline consumption in the coming weeks," he said. (Related Article: Relief in Sight for Gasoline Prices, AAA says) ( Continue… )
It's a good era to be in air conditioner sales.
Warming climates and especially the rise of a global middle class are going to send new populations in search of artificial cooling. That's one conclusion of an expansive new report issued Monday by the Intergovernmental Panel on Climate Change (IPCC), a United Nations scientific panel that periodically reviews the scientific basis for climate change.
The impacts and vulnerabilities associated with climate change "are already occurring on all continents and across the oceans," according to the report, but governments, companies, and communities are implementing plans to adapt to warming climates, rising sea levels, and changes in precipitation.
“Understanding that climate change is a challenge in managing risk opens a wide range of opportunities for integrating adaptation with economic and social development and with initiatives to limit future warming," Chris Field, co-chair of the group responsible for Monday's report, said in a statement. "We definitely face challenges, but understanding those challenges and tackling them creatively can make climate-change adaptation an important way to help build a more vibrant world in the near-term and beyond.” ( Continue… )
What might Putin’s actions in Crimea mean for Kazakhstan, where foreign investors since 2005 have poured more than $170 billion in FDI into the country, primarily in the energy sector? In 2013 Kazakhstan’s oil production surged to roughly 1.64 million barrels per day. Kazakhstan has three percent of the world’s raw materials, with nearly 40 billion barrels of oil reserves and two percent of global production.
The wild card is the Eurasian Customs Union (ECU), founded in 2005 binding Belarus, Russia and Kazakhstan, which is due to be replaced by the Eurasian Economic Union (EEU) on 1 January 2015. The Russian-dominated union will potentially control one-third of the world’s proven natural gas reserves. Putin’s EEU Eurasian integration vision is widely perceived as an ideological alternative to the EU, “Soviet Union lite.” Ukraine had under Ukrainian President Viktor Yanukovich been negotiating to join the EEU. In an indication of the EEU’s importance to Putin despite rising tensions with Ukraine, which increased after Yanukovich fled to Russia on 22 February, on 5 March Putin convened a snap summit in Moscow. There the Belarusian president Aleksandr Lukashenko and Kazakh president Nursultan Nazarbayev reaffirmed their support for signing a treaty establishing the EEU to supercede the ECU by May 2014 at the latest, in less than two months. Sixteen days later, Putin signed legislation formally annexing Crimea, leading the U.S., EU and other nations to begin imposing sanctions.
Should these sanctions come to include Russian energy exports, the Kazakhs will suffer collateral damage via their Caspian Pipeline Consortium (CPC) Tengiz CPC Blend pipeline export shipments to Russia’s Black Sea terminal at Iuzhnaia Ozerreevka near Novorossiisk, which make up roughly 45% of the pipeline’s throughput. In a sign of potential cost to Russia and Kazakhstan, CPC reported that exports hit a monthly high in February due to expansion of the pipeline’s capacity, rising to 909,694 barrels per day from 744,454 bpd in January. In 2013 CPC exports rose to 32.7 million tons in 2013 from 2012 throughput of 31.8 million tons, and CPC plans to expand the pipeline's capacity to 48 million this year. If sanctions are imposed, then the CPC consortium members, Russian state-owned pipeline monopoly Transneft, the state of Kazakhstan, U.S. oil company Chevron and Russia's LUKOIL will all suffer. ( Continue… )
Diversifying European oil and gas imports is no small task, but if Moscow’s Crimean incursion leads to a tit-for-tat escalation in sanctions in energy, Russia faces a far more difficult time finding new customers than Europe does finding new suppliers. Because energy is central to Russia’s economy, this imbalance makes energy sanctions against Russia – unimaginable only a few months ago – a tenable diplomatic tool for Europe and the United States.
Western leaders have been slow to make an aggressive show of power with this newfound energy leverage. They are unlikely to do so by placing sweeping curbs on Russian energy trade, analysts tell Monitor Global Outlook, unless Moscow further destabilizes the situation.
“[I]f Russia does not stop at Crimea, I suspect tough economic sanctions [would be implemented], especially from Washington,” András Jenei, head of the energy workshop at Budapest-based Centre for Fair Political Analysis, writes in an e-mail. “This can freeze all the oil and gas upstream cooperation between Russian and American companies (e.g. ExxonMobil, Halliburton, Rosneft etc.) which can practically freeze … Russian oil and gas R&D activity especially on the front of unconventional hydrocarbons.” ( Continue… )
Could the U.S. unleash a flood of oil from the strategic petroleum reserve that would drive down prices in order to punish Russia? While the idea has been kicked around over the last few weeks – most recently by George Soros – it has also been dismissed as not a serious option. Some say the impact of an oil sale, if it actually succeeded in lower prices, would be temporary. Saudi Arabia could cut back on production to keep oil prices at their current levels. Others decried the idea as contrary to the objective of the SPR, which has been setup to be used only in cases of emergency.
However, over at Quartz, Steve LeVine wrote an interesting article about the possibility of a coordinated response between the U.S. and Saudi Arabia that could have a much broader impact on oil markets. President Obama is, after all, meeting with the Saudi King on March 28. Ukraine is certainly going to come up in their discussions – his time in Europe was dominated by coordinating a response to Russia, despite the original intention of the trip to discuss nuclear security. (Related Article: Showdown in Ukraine: Putin’s Quest for Ports, Oil, Pipelines and Gas)
LeVine argues that it is possible that the U.S. could sustain a sale of 500,000 to 750,000 barrels of oil per day from the SPR. If the U.S. coordinated with the Saudis to ensure that they did not cut back production – indeed, they could even step up production from 9.7 million bpd – the greater supplies could slash prices almost immediately. Russia gets about 70% of its export revenue from oil and gas, so even a modest drop would be a significant blow. A former Ford and Carter administration official believes a U.S. SPR release could lower oil prices by $12 per barrel, potentially costing Russia $40 billion in lost revenue. ( Continue… )
Tesla Motors (TSLA) has a three-layered, military-grade, aluminum-titanium solution for its battery-fire problem.
A federal investigation largely absolved Tesla Friday of any serious defects in the design of its Model S electric car batteries, three of which caught fire after hitting debris in the span of two months last year. But, just to be sure, the California-based electric carmaker has elevated the car's ground clearance and added a triple underbody shield to existing protection, which it hopes will bring the risk of another fire down to "virtually zero."
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Electric carmakers have little margin for error with a technology that – fairly or not – has a reputation for flammability and limited mass-market appeal. Tesla has had enormous success in avoiding the pitfalls of other plug-in vehicles, building a car adored by most its drivers and many in the automotive industry. Even in the rare instances that it has hit snags – such as last year's battery fires – the Model S has protected its occupants from any serious injuries and shown little sign of long-term, systemic flaws. ( Continue… )
April may have the been the “cruelest month” for T.S. Eliot, but March may hold that claim for the Japanese and American nuclear industries, where two high-profile accidents – Fukushima and Three Mile Island – have etched themselves in collective memory and distrust (read more here and here).
Such accidents could become a thing of the past if the nuclear industry can wean itself off of uranium and embrace thorium, which is more abundant, less melt-prone, and therefore safer to use. China last week announced it was going to speed up its research and development of "fourth generation" so-called molten salt reactors that can run on thorium. It aims to have one operational in 10 years instead of 25 years – what those in the industry call the nuclear-power equivalent of a moonshot. If it succeeds, nuclear power would become more efficient, cheaper, and safer than today’s uranium-based reactors. It would also produce less nuclear waste.
“If China is building molten salt reactors, it will be a push in the right direction for all other nations not to be left behind,” says David LeBlanc, a molten-salt reactor expert with Terrestrial Energy in Canada, in an interview. “China is starting from scratch, however, and while it can certainly accelerate its program, it won’t happen overnight.”
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India and, to a lesser extent, Canada are also pursuing the technology. The United States is working with national agencies to bolster Chinese research, so its embrace of thorium technology will depend in part on Chinese success. But the US still relies on second-generation light-water, solid-fuel reactors that operate, on average, at more than 90 percent capacity. Georgia-based Southern Company and South Carolina-based SCANA are building third-generation light-water reactors that are more efficient and safer. But most of those plants are going up in China and India. ( Continue… )
Before Fukushima and before Chernobyl, the world got its first nuclear-power scare – the one at Three Mile Island 35 years ago Saturday that is indelibly etched in global consciousness and the one that remains an impediment to a nuclear renaissance.
On March 28, 1979, the alarm began – and in some corners, it has never ceased.
Around 4 a.m., a valve malfunctioned and Unit 2 suffered a loss of primary coolant, which caused a partial core meltdown. By 7 a.m., Harrisburg, just a few miles upriver, and the surrounding Pennsylvania countryside were awaking to a panic about a "hydrogen bubble" that could explode.
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For five frightful days, area residents were kept on edge as the facility’s owner, Metropolitan Edison, made reassuring comments only to backtrack later with more dire news. Areas as far as 300 miles away from Harrisburg were advised they might need to evacuate. Even Pennsylvania's governor complained that he was unable to get answers. ( Continue… )