[Editor's note: This piece was updated on Feb. 28, 2013 to change "synthetic oil" to "synthetic crude oil" in the third paragraph.]
The Keystone XL pipeline has garnered support from the governor of Nebraska, more than half the US Senate and – as of Monday – the Business Roundtable, a group of prominent business leaders.
The pipeline would increase domestic production and give Canada open access to world energy markets, the association of chief executive officers of leading US companies said in a report Monday.
Although major business leaders support the pipeline, it's not so clear that they would invest in it. The Keystone XL pipeline, which would carry synthetic crude oil from Canada's tar sands to Texas refineries, is vulnerable to a downturn in oil prices. The crude it carries has smaller profit margins than conventional oil or even so-called tight oil from shale formations.
So while those tar sands (also known as oil sands) make money at current prices, it's outlook is more iffy if oil prices fell – or if a big carbon tax was enacted. ( Continue… )
The past is coming back to haunt the site, as last week Washington governor Jay Inslee characterized news about a major leak of highly toxic sludge from a single-wall storage tank at the Hanford Nuclear Reservation as a “perfect radioactive storm.”
The Hanford Nuclear Reservation currently houses 149 single-wall nuclear waste storage tanks, along with 28 newer tanks with double walls. They contain residue from decades of refining plutonium for nuclear weapons, roughly 56 million gallons of highly radioactive waste in aged and corroded underground storage tanks. Since World War II, Hanford Nuclear Reservation facilities have leached roughly one million gallons of radioactive waste has leached into the surrounding soil and groundwater beside the Columbia River, with specialists estimating that the newly discovered leak may be adding an additional 150-300 gallons a year, though no one knows when it began. In 1989 the Department of Energy assumed responsibility for safely disposing of this waste, which threatens to leak into the bordering Columbia River and affect downstream industry, habitat and human health. (Related article: Who will Pay for Nuclear Power Plant Cleanup?)
The news could not come at a worse time, as Washington mandatory budget cuts could impact any response. ( Continue… )
At a petroleum conference held some years ago, at the dawn of the shale rush, Richard Nehring, an industry veteran, was asked whether shale gas was “just a band-aid.”
“I hope not,” Mr. Nehring laughed. “Because we need a tourniquet!”
In 2000, the experts were unanimous: American oil and gas production was in terminal decline. By 2015, it was said, we’d need 10 supertankers a day, carrying 12 million barrels of crude, plus 10 billion cubic feet of liquefied natural gas.
Since 2005, however, this scarcity meme has been toppled. Domestic oil and gas production has grown 35 percent in seven years. Natural gas production is at record highs, and oil production has climbed almost 2 million barrels a day, faster here than anywhere on the planet.
The combination of horizontal drilling, hydraulic fracturing, 3D seismic surveys, and other gee-wizardry has produced a near-miracle, which has left experts confounded, politicians exuberant, and journalists suffering from hyperbole. ( Continue… )
EPA regulations a looming blow to Arizona economy (Sponsor content)
Last month we mentioned a story regarding the Navajo Generating Station that stated that EPA regulations that would require adding new emissions controls to the plant would cost $1.1 billion and would only marginally reduce the plants portion of haze in the area.
It was reported yesterday that Arizona’s economy could soon be feeling the effects of higher electricity rates under regulations recently announced by the EPA, a group of state lawmakers were told on Monday.
According to the White Mountain Independent, “In a rare joint committee hearing chaired by Senator Gail Griffin (R-Hereford), members of the Senate Government and Environment Committee and the House Energy, Environment, and Natural Resources Committee, chaired by Representative Frank Pratt (R-Casa Grande) heard testimony from state air quality regulators, utility officials, a hospital executive, union representative, and the Director of the Navajo Nation Environmental Protection Agency, all of whom agreed that new regulations announced by the EPA could have a significant, negative impact on Arizona’s economy and its ability to attract and create new jobs.”
“This is a non-partisan issue that has alarmed Republicans and Democrats alike,” Senator Griffin said. “Regardless of how one feels about the EPA, there is nothing logical about requiring Arizona residents to pay a billion dollars for regulations that make virtually no improvement in visibility and have nothing to do with public health.”
This is just further evidence that the EPA continues to ignore the damage that its new regulations are causing to the U.S. economy and to states that depend on coal for jobs and affordable electricity.
The Electric Highway
The New York Times reporter John Broder recently published his account of an East Coast road trip he took with the Tesla Model S electric vehicle (EV). It marked an important development: Tesla has opened two new public “supercharging” stations some 200 miles apart in Delaware and Connecticut that can fully replenish the Model S battery in an hour and potentially provide consumers the ability to drive the well-traveled Interstate 95 corridor at near-zero carbon emissions. Unfortunately, Broder’s test results came up short, showing the limitations of existing EV technology, the need for more innovation, and the division of opinions on how the United States should decarbonize transportation. (Read More: Putting Some Emphasis on Electric Vehicle Charging Technology)
The set-up was simple: Broder was to travel from Washington D.C. to Milford, Connecticut in the souped-up Model S. But according to Broder, he faced a host of inconveniences as the Model S fell short of its projected 300 mile range, resulting in the car losing charge mid-drive and the need to re-route to find additional charging stations. Since then, he and Tesla CEO Elon Musk have traded accusatory statements, (Musk, Broder, Musk,Broder), with even the New York Times Public Editor chiming in with an investigation.
The back and forth ignited a mini-Internet firestorm. The Atlantic Wire, for example, heavily scrutinized Musk’s rebuttal while Chelsea Sexton at Wired defended Tesla by characterizing EVs as being different from gas cars and thus deserving of different expectations. “The day-to-day experience EVs offer is so much better than gas cars for 95% of driving. Long-distance road trips are among the last 5% of usage scenarios,” Sexton writes, before concluding that “it’s ridiculous to expect EVs to deliver the same experience as the incumbent product.”
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This final point really gets to the heart of the debate. Ultimately, the Tesla vs. Broder spat is a proxy for the debate on how to best decarbonize the transportation sector. ( Continue… )
Ray Connor, the head of Boeing Commercial Airplanes will lead a team to Washington D.C. where they'll present specific proposals they believe will prevent lithium-ion batteries in Dreamliners from overheating. (Read More: 787 Battery Safety 'Must Be Reconsidered': NTSB)
At the same time, sources say the Boeing plan also calls for modifications to the 787 battery compartment that will limit or contain any damage done by batteries that may overheat or catch fire.
The Boeing plan calls for ensuring the safety of Dreamliners with several design changes, according to sources. Boeing believes the proposed remedies will add another level of prevention of battery fires and protecting the plane in case the lithium-ion batteries get too hot. (Read More: Boeing Close to Battery Fix; Union Talks Resume) ( Continue… )
Next month will determine the eventual fate of the Falkland Islands—and the 1.4 billion barrels of oil so far discovered there—when a referendum on self-determination is held.
In the run-up to that referendum, Argentina has stepped up the rhetoric, most recently with the Argentine Foreign Minister claiming that within 20 years, the Falkland Islands will be entirely under Argentina’s control.
UK Foreign Secretary William Hague has responded by calling this a counterproductive “fantasy”. Hague says the government of Argentine President Cristina Fernandez de Kirchner has refused diplomatic dialogue and chosen instead a path of “bullying”.
“We shall never negotiate about the sovereignty of the islands, unless the islanders wish it,” Hague said. ( Continue… )
Recent conversations with UK and European environmentalists lead me to think opposition to natural gas is not as monolithic, and that being so, as powerful as some fear, hope or believe depending on your point of view. We’ve seen several hints of that in the press, most tellingly a positive piece in the UK Guardian this weekend. I would also commend both sides of the Economist debate on shale, recently concluded to a virtual dead heat.
The natural gas industry fears opposition. Too many companies are not being pro-active in promoting their product. Counter productively, some proponents of natural gas fall into the trap of thinking the natural gas revolution is a battle. It needs civilised discussion on all sides. This is especially so outside the United States, where natural gas resources belong to everyone via state control or ownership. Common ownership makes onshore gas different, but not worse, and in several ways it could provide an advantage. Accessing resources - or not - is a discussion for all stakeholders.
Coal, nuclear and Russia, amongst several others, hope that gas opponents, who they would often oppose themselves, will be able to stop or fatally delay shale gas in Europe. They could never be seen to be so crass as to have commercial interest themselves, but remain perfectly happy for other opponents to achieve their ends.
Both governments and the investment community, supposedly disinterested but often invested financially if not emotionally in other solutions, are influenced to believe shale gas is so problematic it can have no immediate or near term effect. ( Continue… )
Many of the civilian nuclear power plants built in the US. and Western Europe during the halcyon days of the Eisenhower administration are coming to the end of their operational lives as their operating licenses expire.
The looming deadlines leave their operators with two stark choices – apply for a license extension beyond the original forty years, or decommission.
A bad choice, however you look at it. For a license extension, aging NPPs must upgrade, while decommissioning raises the primordial question sidestepped since the dawn of the civilian nuclear age – what to do with the radioactive debris? (Related article: Why is Iran Going Nuclear?)
The British imbroglio.
The predicted cost of decommissioning Sellafield nuclear facility in Cumbria, Britain’s largest nuclear complex, is now estimated at an eye-watering $104.3 billion over the next three decades, a figure that inexorably year by year continues to rise and represents over $1,546 for every man, woman and child in the British Isles. ( Continue… )
US crude oil production is expected to rise by 815,000 barrels per day in 2013, according to the US Energy Information Administration (EIA). That's the largest increase in annual output since the US started producing crude oil commercially in 1859, and it would bring this year's total output to 7.25 million barrels per day.
That's a lot of oil. The catch is that much of the boom is the result of so-called "tight" oil. Having tapped much of the country's "conventional" sources, energy companies have developed new drilling techniques to open up oil and gas resources previously thought unattainable.
It's why a rock formation in North Dakota called the Bakken Shale is suddenly ground zero for US oil production. In 2012, the Williston Basin, which includes the Bakken Shale formation, produced 720,000 barrels of oil per day. That's expected to rise to 950,000 barrels per day in 2013 and 1.13 million in 2014.
Those kinds of numbers wouldn't be possible if it weren't for a controversial method of drilling called hydraulic fracturing, or "fracking." Large volumes of fluid are propelled at high pressures into rock formations to open them up for production. The water-intensive technique has raised environmental concerns over the chemicals added to the water, and questions about what to do with the resulting waste water. ( Continue… )