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Energy Voices: Insights on the future of fuel and power

Monitor staff and guest contributors offer a mix of news, analysis, and commentary on energy and resource issues emerging across the globe.

A seagull flies past wind turbines at Thanet Offshore Wind Farm off the Kent coast in southern England. Offshore wind production is particularly attractive because winds tend to blow harder and more consistently off the coasts. (Stefan Wermuth/Reuters/File)

US opens first bid for offshore wind energy

By Correspondent / 06.04.13

The race to harness the power of North Atlantic winds is on.

On Tuesday the Interior Department unveiled plans for the nation's first auction of offshore wind leases. It's more good news for the US wind industry, which installed a record amount of capacity in 2012, and received a one-year extension on the federal tax credits driving much of the industry's growth. 

The opening of federal waters to competitively bid wind projects is an important step in diversifying the industry beyond onshore projects. Offshore production is particularly attractive because winds tend to blow harder and more consistently off the coasts. Offshore turbines also tend to be closer to cities and other high-demand areas, which cuts down on transmission costs.

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Deepwater Wind, a Rhode Island-based offshore wind developer, is among at least nine energy companies aiming to set up shop in the prime real estate off the coast of Rhode Island and Massachusetts. The two areas, comprising 164,750 acres or just slightly larger than the city of Chicago, are the first to be competitively bid under the government's program. They have an expected output capacity of 3,395 megawatts,  enough to power 1 million homes, according to the Interior Department.  ( Continue… )

A train enters a depot along the Burlington Northern Santa Fe rail line outside of Williston, N.D. Oil companies are turning to rail deliveries as North American oil production overwhelms existing pipeline capacity. (Shannon Stapleton/Reuters/File)

Rail vs. pipeline: How should we ship oil?

By Daniel J. GraeberGuest blogger / 06.04.13

More than 97,000 rail carloads of crude oil were delivered in the United States during the first quarter of the year. That's 20 percent more than the fourth quarter of 2012 and 166 percent more than during the same period last year. Rail shipments of grain, metallic ores and minerals declined, however. Oil companies are moving more of their oil by rail because pipeline capacity can't keep up with North American production gains. Last week, a pipeline planned from Texas to California was shelved because of the lack of shipper interest, though for rail, there's been relative surge in crude oil traffic. It remains to be seen if that can be sustained, however.

The Association of American Railroads said 97,135 carloads of crude oil traveled by rail in the United States during the first quarter of the year. That amounts to about 68 million barrels of oil over the course of four months. For the week ending May 25, rail shipments overall were down more than 3 percent compared to the same time last year. Grain deliveries were down 21.8 percent and metallic ores and minerals were down more than 10 percent when compared to last year. (Related article: “Peak Rail” – Has the Crude Shipping Train Left the Station?)

Oil companies are turning to rail deliveries as North American oil production overwhelms existing pipeline capacity. Provided the U.S. government approves Keystone XL, it will be at least two more years before 830,000 barrels of oil per day in extra pipeline capacity comes on stream for U.S. refiners. In Canadaopposition to the Northern Gateway pipeline from the provincial government in British Columbia means an uncertain future for the 525,000 bpd project planned by Enbridge.  ( Continue… )

Employees spray water to cool down oil tanks at a PetroChina oil storage facility in Suijing, Sichuan Province, China. China National Petroleum Co. said it's finished work on six oil storage tanks on a tiny island off the western coast of Myanmar. (Stringer/Reuters/File)

China boosts oil presence in turbulent Myanmar

By Daniel J. GraeberGuest blogger / 06.03.13

China's national oil company said it's finished building six new oil storage tanks on a tiny island off the coast of Myanmar. More work is planned there in terms of pipeline infrastructure as China tries to get around busy shipping lanes. Investments in Myanmar have increased in response to a series of democratic reforms that began with general elections in 2010. Human rights groups worry the international community is doling out the rewards too soon. Myanmar President Thein Sein scrapped a controversial dam in 2010 and the government has since backed transparency initiatives, however. Though religious violence has continued in Myanmar, it's possible the country is developing as a viable investment opportunity.

China National Petroleum Co. said it's finished work on six oil storage tanks on a tiny island off the western coast of Myanmar. Oil and natural gas pipelines there could help China tap into more energy reserves from the Middle East and Africa. OPEC, in its monthly report for May, said "a large portion" of the growth in world oil demand is expected from China. Pipelines from offshore Myanmar could deliver as much as 440,000 barrels of oil per day and 12 billion cubic meters of natural gas per year to mainland China. (Related article: North Korean "Insanity" Part of Geopolitical Game)

Afghanistan is a better place to do business than Myanmar, according to a recent report on transparency from Resource Watch Institute. The report said Myanmar was one of the countries that haven't disclosed "any meaningful information about the extractive sector," adding mismanagement in extractive industries feeds government corruption. Last year, the United States started easing some sanctions on Myanmar in response to political reforms and the European Union followed suit earlier this year. Human rights groups contend that it was those sanctions that brought about reforms in the first place, saying it's too early to start handing out rewards to Myanmar.  ( Continue… )

A Nissan Leaf electric car is seen at Darcars Nissan in Rockville, Md., Monday. The Nissan Leaf had its second-best month of US sales yet. (Gary Cameron/Reuters)

Nissan Leaf races ahead of Chevy Volt in May

By Correspondent / 06.03.13

Electric car sales hummed along in May amid a solid month for the auto industry.

Small, fuel-efficient cars and family-friendly minivans tend to do well this time of year, as drivers plan road trips for the upcoming summer driving season. But the surprise story this year was May's strong full-size pickup truck sales – not exactly a sign an endorsement of efficiency and alternative fuels.

"Looking at this month's reports, you're going to see the complete opposite of hybrids or electrics," said Jessica Caldwell, a senior analyst at Edmunds.com. The electric car "is not going to be the growth market for the month that people are talking about."

RECOMMENDED: Car logos quiz

But electric cars held their own in May. The Nissan Leaf continued its dominance over the Chevy Volt, and luxury electric carmaker Tesla Motors continued to make its presence known. Meanwhile, Better Place, an Israeli company specializing in battery-swapping for electric cars, bit the dust late last week. ( Continue… )

Indian workers walk past solar panels at the Gujarat Solar Park about 155 miles from Ahmadabad, India. Financing of emerging technologies is one of the most significant business challenges the energy sector faces. (Ajit Solanki/AP/File)

How will businesses finance the future of energy?

By Richard T. StuebiGuest blogger / 06.01.13

In April, the Advanced Energy Economy Institute (AEEI) released the synthesis of a survey of executives in the advanced energy sector conducted by PA Consulting to suggest priorities for U.S. energy policy.

The report, Accelerating Advanced Energy in America, outlined business challenges and policy challenges thwarting the growth of the advanced energy sector, in order to identify policy improvements that could overcome these challenges.

The most significant business challenges identified were:  financing of emerging technologies, scaling technologies from development to commercialization, declining electricity prices (primarily owing to the natural gas boom), and recruiting a qualified and skilled workforce.

The most significant policy challenges identified were:  regulatory/policy uncertainty, “static definitions” of technologies qualifying for support, inadequate R&D support, and politicization of advanced energy.  ( Continue… )

Transmission lines cross properties near Offerle, Kan. It’s a great time to be talking about energy, Styles writes, as it has been for the last nine years. (Travis Morisse/The Hutchinson News/AP/File)

'All of the above' – What does that really mean?

By Geoffrey StylesGuest blogger / 05.30.13

An Oft-Used Energy Slogan

Last week, Real Clear Politics and API hosted an energy summit in Washington, DC entitled, “Fueling America’s Future”. It was intended to provide a quick overview of most of the key technologies and issues associated with an all-of-the-above energy strategy for the United States. Going through the highlights of the webcast gives me an opportunity to introduce my point of view to a new audience at Energy Trends Insider. I’d sum that up as “All of the Above”, with asterisks for the proportions and situations that make sense.

This slogan, at least in the manner in which it has been espoused by politicians in both parties, has attracted fair criticism for being overly bland and safe. I suspect that critique reflects a general sense that our energy mix has always been composed of all of the above, or all of the technologies that were sufficiently proven and economic to contribute at scale at any point in time. However, as both our technology options and choice criteria expand, our understanding of the evolving energy mix is hampered by metrics and assumptions that are overdue to be revisited.

The summit’s first panel examined the technologies of the mix, in a “lightning-round” format of five minutes apiece. The panel covered oil, natural gas, coal, nuclear and renewables, led by wind power.  ( Continue… )

Berkshire Hathaway Chairman and CEO Warren Buffett mingles with shareholders in Omaha, Neb. Mr. Buffett is making his next big bet on energy in a fitting place, Las Vegas, with the acquisition of NV Energy. (Nati Harnik/AP/File)

Warren Buffett bets $5.6 billion on Nevada energy

By Correspondent / 05.30.13

One of the world's most successful investors is making his next big bet in a fitting place: Las Vegas.

Warren Buffett's Berkshire Hathaway announced late Wednesday it will pay $5.6 billion to acquire NV Energy – the company that keeps the lights on in the casino capital and other parts of the state. Nevada's largest utility will join MidAmerican Energy Holdings, Berkshire's energy subsidiary, in the largest acquisition of a US power company since last July when Duke Energy bought Progress Energy for $17.8 billion.

It's a relatively safe investment. Because of their monopoly on the local market, utilities typically promise steady growth. Mr. Buffett himself quipped at a meeting of US state regulators in 2006 that utilities aren't a way to get rich, but a way to "stay rich."

Renewables are a big part of the acquisition. NV Energy will contribute 1 gigawatt in wind, solar, and geothermal to MidAmerican, which is a big investor in government-financed solar plants and is currently working to meet Nevada's requirement that utilities derive at least 25 percent of their energy from renewables. That's good news for a state short on oil and gas, but with big potential for wind, solar, and geothermal.  ( Continue… )

Fencing used for construction of the Central Subway obscures Apple's flagship retail store in San Francisco, Calif. The hiring of former EPA administrator Lisa Jackson is part of Apple's push to position themselves as environmentally-friendly consumers of clean energy. (Robert Galbraith/Reuters/File)

Apple taps former EPA head Lisa Jackson for clean-energy boost

By Correspondent / 05.29.13

A former member of President Obama's energy and environment team is headed to Silicon Valley.

As part of its effort to position itself as a clean-energy leader, Apple is hiring former EPA administrator Lisa Jackson as its vice president for environmental initiatives. Apple CEO Tim Cook announced the high-profile hire Tuesday at a technology conference in Rancho Palos Verdes, Calif.

“Apple has shown how innovation can drive real progress by removing toxics from its products, incorporating renewable energy in its data center plans, and continually raising the bar for energy efficiency in the electronics industry,” Ms. Jackson told Politico in an e-mail. “I look forward to helping support and promote these efforts, as well as leading new ones in the future aimed at protecting the environment.”

Google, Facebook, and other high-tech firms have made similar efforts to 'green' their operations, largely in response to criticism of energy-draining data centers and the use of toxic substances in consumer electronics.  ( Continue… )

A sign for the ExxonMobil Torerance Refinery is shown in Torrance, Calif. Exxon has announced that while it wasn’t throwing in the towel, it would be forced to restructure its algae biofuels research. (Reed Saxon/AP/File)

Exxon’s $100 million algae biofuel investment comes up short

By Jen AlicGuest blogger / 05.29.13

Exxon Mobil Corp. (NYSE: XOM) is cutting its losses on algae biofuels after investing over $100 million only to find that it couldn’t achieve commercial viability.

Earlier this week, Exxon announced that while it wasn’t throwing in the towel, it would be forced to restructure its algae research with partner California-based Synthetic Genomics Inc (SGI).

When the two launched their algae-derived biofuels program in 2009, Exxon planned to invest around $600 million with the goal of developing algae fuels within 10 years. (Related article: Investment Boost for Next Generation Biodiesel Project)

But it’s been more complicated than expected, and after $100 million down the drain, it has become clear that much more research—and at least another decade and half—are needed.  ( Continue… )

Surfers walk along a beach near the San Onofre nuclear power plant in San Onofre, Calif. The plant closed in January 2012 after a radioactive leak led to the discovery of wear in tubing that carries radioactive water. (Grant Hindsley/AP/File)

Senator Boxer calls for probe on California nuclear plant

By Correspondent / 05.28.13

The operator of a California nuclear plant is under fire from a US senator for allegedly misrepresenting the nature of an equipment upgrade that resulted in a small radioactive leak at the plant last year.

It's another blow to Southern California Edison (SCE), which has worked to reopen the closed San Onofre Nuclear Generating Station for over a year. The fallout has cost the company more than $553 million and drawn attacks from environmentalists who say the plant is inherently unsafe.

On Tuesday, Sen. Barbara Boxer (D) of California released a private company letter she says is evidence of the company intentionally misleading regulators in order to avoid an extensive safety review of upgrades to San Onofre. She has called on the Justice Department to investigate.

"Given this new information, it is clear to me that in order for this nuclear plant to even be considered for a restart in the future all investigations must be completed and a full license amendment and public hearing process must be required," Ms. Boxer said in a statement Tuesday. "This is simply a common sense approach."  ( Continue… )

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