Until recently Tunisia was considered to be a minor league and relatively underexplored venue in Africa’s rapidly expanding oil & gas scene. This situation has quickly changed with new bid rounds and forced relinquishments creating an opportunity for new companies to come in.
Major American E & P companies like Shell have jumped at the opportunity to acquire ground that had been dominated for decades with little to no work conducted, mostly by European State oil & gas companies in this former French protectorate. For the first time major spending has been committed to test Tunisian basins which are arguably equally prolific as those in neighbouring environments with more work performed, such as Libya.
Tunisia is now in focus for investors because exploration is increasing within the producing Pelagian Basin, which leads us to ask the following questions:
Should Tunisia now be on energy investors watch list?
Is Shell just the start of “big oil” making inroads into the country? And which are the plays that people should be watching? ( Continue… )
Current U.S. energy policy is, in fact, a hodgepodge of disconnected policies designed for specific constituencies with no coherent goal. The country has subsidies for fossil fuels, subsidies for nuclear power, subsidies for wind and solar, and subsidies for insulating and retrofitting buildings. We also have energy standards for some appliances and miles per gallon standards for automobiles.
What never gets asked and answered definitively in the policy debate is this: What should our ultimate goal be and when should we aim to achieve it? The first part of the question has elicited so many answers from so many constituencies that I may not be able to represent them all here. But here is an attempt to categorize the main lines of thinking concerning the country’s energy goals:
- Seek the cheapest price for energy with the implication that environmental consequences should not be tallied as part of the cost.
- Complete a transition to renewable energy as quickly as possible while drastically reducing the burning of fossil fuels.
- Replace all fossil fuel energy with nuclear power.
- Develop all sources of energy to make sure we have enough at reasonable prices. This is often called the “all-of-the-above strategy.”
Goal 1 is really the argument put forth by the fossil fuel industry and therefore a defense of the status quo. Goal 2 is the dream of every climate change activist and clean-tech executive. Goal 3 seemed to be gaining some momentum before the accident at Japan’s Fukushima Daiichi nuclear plant dashed hopes for a widespread nuclear renaissance.
Goal 4 is being touted by my congressman who heads the U.S. House Committee on Energy and Commerce, and it is the policy of Obama administration. The so-called all-of-the-above strategy is the de facto energy policy of the United States, and the one which I described above as a hodgepodge of disconnected policies designed for specific constituencies with no coherent goal. ( Continue… )
When the Italian authorities seized $1.7 billion in mafia-linked assets this week, many were surprised to see learn that the renewable energy industry is apparently becoming a favorite playground for the underworld.
The assets seized included 43 wind and solar energy companies, along with 66 bank accounts linked to mafiosa Vito Nicastri—also now known as the “Lord of the Wind”.
This came as a surprise only to those who haven’t been following the renewable energy industry in Europe closely. In 2010, Italian authorities froze Nicastri’s assets after an investigation turned up evidence that the Mafia was actually using renewable energy projects to launder money.
Nicastri, 57, is a colorful figure who has been linked to the “godfather” of Cosa Nostra, the Sicilian Mafia, Matteo Messino Denaro. (Related article: Italian Anti-Mafia Police Seize €1.3 Billion from the King of Alternative Energy) ( Continue… )
The IRS issued an important piece of guidance related to clean energy finance this week. It is the annual inflation adjustment for the Production Tax Credit (PTC) and it increased the credit from 2.2 to 2.3 cents per kWh for full qualifying energy property like wind and geothermal, while the partial credit for sources like open-loop biomass and incremental hydro remained at 1.1 cents per kWh (also adjusted were the inflation factors for Indian and refined coal).
More important is what is still missing – despite widespread expectation for a first quarter release, the long awaited rules on how to determine the start of construction for purposes of determining what projects will be PTC eligible at the end of 2013 still have not been issued.
When the PTC was extended as part of the fiscal cliff deal during the holidays there was an important change in the method for determining whether a project would qualify for the credit. Historically, the qualification of property was based on the date the property was placed in service (and it’s worth noting that this rule is actually somewhat vague and the application sometimes very nuanced). Now, qualification is based on when construction for the facility begins. As long as construction starts before year-end, property is eligible for the credit.
The problem, and the new rules will address this – no one is exactly sure what it means to begin construction. There are some obvious assumptions that can be made, but at the edges, such as where a developer is contracting for facility components, the final vision or location of a project is not completely fixed, or instances where an adequate financial commitment is made to begin construction, the rules for qualification will be vital. Developers, vendors and especially investors are waiting for clarity before making key project decisions. While some projects are moving, this overhanging uncertainty has slowed countless projects. ( Continue… )
Energy savings mean savings for tax day 2013.
Congress extended federal tax credits for energy efficiency in early January. That means homeowners can earn as much as $500 per year for investments in energy-saving windows, water heaters, air conditioners, and a host of other home improvements.
"Rest assured, if you’re doing something that’s uniquely beneficial for the environment, there's likely a tax credit there," says Mark Steber, chief tax officer at Jackson Hewitt Tax Service, a tax-return preparation firm headquartered in Parsippany, N.J.
The savings aren't enormous, but they're easy to come by. Energy-efficient appliances are more prevalent than ever, and many homeowners may own more than they even realize. ( Continue… )
It is said that the market climbs a wall of worries, and there is much to worry about globally: European Bank debt crisis that never seems to be resolved though the Euro higher ups always declare victory after each eruption; the U.S. debt crisis just gets larger every day; the U.S. housing market, is it in recovery mode or exactly how does one define a recovery?; Europe is in recession; U.S. GDP is on life support.
I could go on, as the macro list of worries rolls along, but let's look at the immediate data. Crude supplies rose again this week by 2.7 MM barrels (bbl) higher than analysts expected - 0.2 MM bbl. Gasoline supplies declined less than expected, distillates fell more than expected, and refineries ran a bit more than expected as more refineries return from winter maintenance and begin to gear up for summer gasoline production.
However, gasoline demand has begun to slide from its earlier higher demand in the beginning of the year from last year; over the four-weeks ending in March of this year demand declined slightly from the comparable period last year, and this as the weather begins to moderate.
More surprising, though it should not be, is that the WTI-Brent differential has collapsed from over $20/bbl as recently as the end of February to between $13.00 and $14.00/bbl. Since the beginning of the year WTI has increased 3% in price while Brent has fallen by a like amount, and the WTI-Brent spread has narrowed by 34%. Why? Well earlier this year Brent production was constrained due to pipeline issues that are now resolved and we are seeing more Brent supplies and that coupled with Europe deepening in recession is weighing on its price. ( Continue… )
Californians support coal despite LA plan to ban it (Sponsor content)
Clean coal technology enjoys majority support among California voters. It is especially interesting that this support is broad-based, encompassing majorities of Republican, Democratic and voters declining to state a party affiliation. Given that the most important issues to California voters are “jobs and the economy”, voter sentiment that the state’s energy policies have made it less competitive should be a red flag to Sacramento legislators.
In a recent survey of California voters, nearly 57% answered yes when they were asked “Do you support or oppose developing new clean coal power plants in California?”
When asked the question, “Do you think that California’s energy policies have made the state more or less competitive?”, more than 43% answered yes. And particularly telling is the fact that nearly one-quarter of California voters (24.7%) feel that the state’s energy policies have made the state far less competitive.
These numbers are in stark contrast to comments recently made by Los Angeles Mayor Antonio Villaraigosa when he announced that the city will become the only city in America that won’t get any electricity from coal by the year 2025. ( Continue… )
Before the departure of former Chief Executive Lord Browne in 2007, BP (NYSE: BP) invested heavily in alternative energy projects as part of its ‘Beyond Petroleum’ strategy. Since then the British energy company has abandoned this strategy, in favour of a higher focus on oil and gas, where it believes greater margins exist.
It exited the wind sector in Europe, and then near the end of last year announced that it would also sell its solar business. The final nail in the coffin to their original renewable energy plan is delivered by their announcement to now sell all US wind farm assets.
A company statement read: “BP has decided to market for sale our US wind energy business as part of a continuing effort to become a more focused oil and gas company and re-position the company for sustainable growth into the future. For BP, this effort represents another example of prudent and active management of our global portfolio, consistent with our pledge to unlock more value for shareholders.” (Related article: Has Belgium Cracked the Problem of Storing Wind Power Electricity?)
Whilst the sale is part of the strategy to focus on the core oil and gas business, it also forms part of the program to raise $38 billion from assets sales in order to cover the costs that BP is facing from the fallout of the 2010 Deepwater Horizon spill in the Gulf of Mexico. ( Continue… )
As President Obama travels to San Francisco to attend two fundraisers Wednesday – one hosted by an anti-Keystone billionaire, the other by an oil heir – environmental activists are stepping up their campaign to convince the president that the Keystone XL oil pipeline is a bad idea.
So far, they haven't convinced the broader public. Two-thirds of Americans support the construction of the Keystone XL pipeline, according to a new Pew survey. The oil and gas industry says Tuesday's poll is an encouraging show of support for the pipeline, which would transport energy-intensive crude from Canadian tar sands (also known as oil sands) to refineries in Texas.
"The Pew poll is a reflection of the growing public support for KXL," wrote Sabrina Fang, a spokeswoman for the American Petroleum Institute, in an e-mail. "The majority of the American people want KXL to be built because it will create thousands of jobs and enhance our nation’s energy security."
Critics challenge Keystone's economic benefits, saying the pipeline would create few permanent jobs and be used to export oil out of the US. The State Department's most recent review concluded the project would potentially support 42,100 annual jobs over a one- to two-year construction period and 35 permanent jobs. ( Continue… )
The not-so-distant future of driving will be first increasingly semi-autonomous and then fully automated, as technology to build self-driving cars gains traction, promising both safer driving and lighter-weight vehicles that save on gas.
The development of advanced driver assistance systems (ADAS) will first see some seemingly innocuous changes in the way we drive—from autonomous driving in traffic jams, parking and lane-changing assistance on highways and pedestrian detection cameras to predictive emergency braking. Essentially, the first semi-autonomous steps will free up hands to so a bit of illegal texting on mobile phones and keep us alert to avoid traffic accidents.
Audi's ADAS is getting increasingly personalized, with advanced systems taking into account how an individual driver operates, assessing his or her driving patterns and driving history. (Related article: Clarifying the Clean Energy Innovation v Deployment Debate)
In its parking assistance, Audi is working to be able not only to alert a driver to available parking spots in congested urban areas, but also to add a Big Brother element that would let a driver know when someone else’s parking meter has expired so they can have the car ticketed.
And if you aren’t paying attention, this advanced human-machine interface technology will snap you back into focus. When that fails, an adaptive cruise-control (ACC) system could be put into effect to keep drivers safe. ( Continue… )