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… )
A diverse fuel mix for electricity benefits consumers (Sponsor content)
The New York Times recently reported that “Electricity prices in New England have been four to eight times higher than normal in the last few weeks, as the region’s extreme reliance on natural gas for power supplies has collided with a surge in demand for heating.”
And it’s no surprise that the Energy Information Administration (EIA) forecasts that our demand for electricitywill continue to rise. To meet that demand, we’re going to need all of our available domestic energy resources. That means natural gas, nuclear, hydro and other renewables like wind and solar and especially coal.
The article went on to point out, “It is certainly true that a region like New England that relies on a single fuel source like natural gas for the bulk of its power does leave itself open for more disruptions than a region with a more diverse fuel mix,” said Jay Apt, executive director of the Electricity Industry Center at Carnegie Mellon University in Pittsburgh. “It’s not a knock against natural gas; it’s a knock against a single fuel source.”
The American Public Power Association has warned since 2010 that demand is outpacing the delivery capacity of gas infrastructure. At coal plants, “you can look out the window and see that 60-day supply of your fuel,” said Joe Nipper, the group’s senior vice president of government relations. But gas plants tend to deliver fuel just as it is needed.
According to the article, “Additionally, experts say that the natural gas market and the electric market mesh poorly, because while the electric market runs around the clock, the gas market closes down at night.”
Ultimately, the facts remain: We need all of our domestic energy resources to create a balanced fuel portfolio and satisfy our growing demand for electricity. Coal is reliable and generates the baseload electricity needed to supply the electricity American homes and businesses depend on, no matter what the current demands may be.
Militants in Iraq targeted a 16-inch fuel oil pipeline from the country's largest refinery last weekend. The attack forced the country to ship fuel oil by road through the northern Ninawa province. The province gets all of its fuel oil from the damaged pipeline, which the country's Oil Ministry said could take several days to fix. The bombing coincided with a spate of bombings in and around Shiite neighborhoods in Baghdad, for which al-Qaida claimed responsibility. OPEC, in its latest market report, said oil production in Iraq has declined. With violence on the rise, it may be only a matter of time before international oil companies lose their stomach for post-war Iraq.
Oil Ministry spokesman Asim Jihad confirmed that saboteurs attacked the 16-inch pipeline that transports fuel oil from the Baji refinery. The Baji facility can process as much as 25,000 barrels of crude oil into diesel and gasoline per day. A similar attack in 2011 forced Iraq to import fuel from neighboring countries and Jihad said it would likely be several days before the pipeline was repaired. (Related article: Super Majors Need to Step Up Their Oil Game)
The attack on the pipeline coincided with a string of bombings that rocked Shiite neighborhoods in and around Baghdad during the weekend. Al-Qaida's Islamic State of Iraq claimed responsibility for attacks that left at least 28 people dead. ISIsaid the attacks were an act of "revenge for alleged criminal acts by the Shiite-led government in Sunnis areas of the capital."
A protest movement against Iraqi Prime Minister Nouri al-Maliki has evolved in Sunni-dominated Anbar province. During the height of the U.S.-led invasion, the provincial capital Fallujah was the seat of the insurgency. Last week, Human Rights Watch called on Baghdad to investigate the January police shooting deaths of nine civilians demonstrating against Maliki's government in Anbar's capital. ( Continue… )
[Editor's note: A paragraph in the original was removed to avoid giving the impression that stopping the pipeline would have no effect on tar-sands producers.]
Tens of thousands of protesters marched on Washington Sunday, in what organizers say was the largest climate rally in US history. They had varying agendas but unified on one point: Blocking construction of the Keystone XL pipeline.
“When you are in a hole, stop digging,” Bill McKibben, cofounder of the environmentalist group 350.org,, told the crowd gathered on the National Mall. “Above all, stop the Keystone [XL] pipeline. The president can do that with a single stroke of a pen, and it would make him the first world leader to veto a project because of climate change.”
As a symbol of what's wrong with America's (and the world's) oil-dependent ways, Keystone XL is a useful adversary. It would take the oil derivative from Alberta's tar sands (an especially energy-intensive process), transport it through the Great Plains, and down to Gulf Coast refineries. It's a concrete target for environmentalists, clean-energy supporters, and climate activists to rally around. There are potential spills that worry landowners near the pipeline. Keystone XL poses an immediate threat in a way that melting glaciers in the Arctic or rising temperatures globally never have. ( Continue… )
It isn’t often that the world’s working stiffs get a chance to fleece rich investors. But that’s essentially what has happened as a result of the vast overinvestment in natural gas drilling in the United States. That overinvestment has led to a glut which last April pushed the price of U.S. natural gas down to $1.82 per thousand cubic feet (mcf), a level not seen since 2001.
Investors have essentially subsidized natural gas through huge loss-making investments, creating an oversupply that has sent prices significantly below the average cost of new production. That means consumers get cheap natural gas while investors kick themselves for not realizing that they were buying into a flawed concept—one that oil and gas consultant Art Berman has called “an improbable business model that has no barriers to entry except access to capital, that provides a source of cheap and abundant gas, and that somehow also allows for great profit.”
The conventional wisdom is that prices are likely to stabilize between $3 and $4 per mcf and stay there for the rest of the decade as the natural gas drilling juggernaut continues. There just one problem with this outlook. The juggernaut has most definitely NOT continued.
Investors who helped to fuel the boom included hedge funds, wealthy individuals and institutional investors, all of whom chipped in a lot of money to finance the drilling of individual wells for what turned out to be meager payouts. None are eager to get burned that badly again. ( Continue… )
First shale gas came for coal. Then it came for nuclear as we’ve seen not only future but existing plants are being taken off line in the US recently. Tomorrow, even the eternal debate about UK nuclear power will be blamed on shale. It sometimes seems that the only thing people know about shale gas is that they hate it.
Nuclear power is something the green movement in the UK were all against so many years ago, but now almost only the Friends of the Earth are left as opponents. Much of the rest of the glowing green movement is more pragmatic. This new practicality is still absent in the European debate about natural gas, the only technology that actually delivers significantly lower emissions instead of endlessly talking about them.
Meanwhile, shale gas and oil is delivering another victory to the Green movement, not that we’ll get any credit. Shale gas is the Rodney Dangerfield energy source.
Even before that evil fracking came to pass, the green movement was united, or as united as it was likely to get, over what was often called, and quite rightly in my opinion, extreme energy. Extreme energy was almost always oil. he objection was accessing oil in pristine environments and the top two targets have been oil in the Arctic offshore and Canadian Tar Sands. ( Continue… )
Europe’s Emissions Cap
Recently, there have been a spate of articles in the press saying that Europe’s increasing imports of coal undermines their leadership on climate and their ‘green’ credentials.
This shows a fundamental misunderstanding of the European Emissions Trading Scheme (ETS) in particular, and the nature of a market-based emissions cap (AKA cap-and-trade) system in general.
Granted, the ETS is an imperfect cap because it only covers about 45% of total emissions in the EU – most notably it does not include emissions from home heating or automobile transportation. Importantly, though, it does cover major industrial emitters and utility-scale electricity production, which are the major users of coal. (Read More: Global Carbon Dioxide Emissions — Facts and Figures)
However, the articles continually say things like this, in Friday’s Washington Post: “Green-friendly Europe has a dirty secret: It is burning a lot more coal.” The schadenfreude exhibited in these articles is unrelated to Europe’s actual record on climate policy.
The truth is that Europe is well below their targeted emissions levels, set both in UN negotiations and in their own Brussels-based policies. They are on their way to meeting their 2020 goals of reducing emissions by 20% below 1990 levels. Partially, they are meeting these goals because reduced economic growth has resulted in reduced emissions. But – in a parallel universe in which the euro crisis never happened and the EU had enjoyed a five year run of strong economic growth, the ETS would have ensured that they would still meet their target. That is because, for the 45% of the emissions covered by the ETS, it would be illegal to emit at a rate higher than the cap. ( Continue… )