Freeport-McMoRan Copper & Gold Inc., one of the world’s largest copper producers, announced Wednesday it will purchase a pair of oil and gas companies in a deal totaling $20 billion.
The Phoenix-based mining company will pay $3.4 billion in cash to purchase its sister company, McMoRan Exploration Co., which was spun off from Freeport-McMoRan in the 1990s. Also, Plains Exploration, a Houston-based oil and gas company, will be acquired for about $6.9 billion in cash and stock. Freeport-McMoRan will assume an additional $11 billion in debt as part of the deal.
The move is the second attempt at diversification beyond metals for Freeport-McMoRan and a lifeline for McMoRan Exploration, which has been struggling to persuade investors that its clogged, ultra-deep oil well in the Gulf of Mexico will soon come online. McMoRan shares have fallen 46 percent in the past year and dropped 9.7 percent early Monday as the company announced the well was restricted by skin or formation damage.
"The transaction offers significant values to the [McMoRan] and [Plains Exploration] shareholders and will enable [Freeport-McMoRan] to build on these values through a much larger, well capitalized platform," James R. Moffett, chairman of the board of Freeport-McMoRan, said in a statement. ( Continue… )
Has Greek mythology taught us nothing?
The man who flew around the world in a hot air balloon now wants to make the same trip using only the power of the sun.
Bertrand Piccard – not Icarus – plans to make the trip in his Solar Impulse, a fragile-looking plane that weighs less than an SUV and is powered by the 12,000 solar cells that make up its overlong wings.
While it's not the first sun-powered plane, the Solar Impulse is unlike others in that its energy-efficient batteries allow the plane to soar even through dark night skies.
"These cells capture the energy of the sun and transform it into electricity," Mr. Piccard explained in an interview with 60 Minutes. "This electricity goes simultaneously to the engine and to the batteries. Then we reach the next sunrise, and we capture the sun again, and we can continue, theoretically forever." ( Continue… )
Move over flickering, fluorescent tubes. There's a new bulb in town.
Scientists at Wake Forest University in Winston-Salem, N.C., have designed a durable, plastic light that offers an efficient, buzz-free alternative to the mass lighting deplored by cubicle workers around the globe.
“People often complain that fluorescent lights bother their eyes, and the hum from the fluorescent tubes irritates anyone sitting at a desk underneath them,” David Carroll, the lead scientist behind the light's development, said in a statement. “The new lights we have created can cure both of those problems and more.”
The lighting uses layers of plastic packed with nanomaterials that glow when an electric current is introduced. It's called field-induced polymer electroluminescent (FIPEL) technology. Not only does it quietly project soft, white light, it's also shatterproof, low-temperature, and can be molded into almost any shape, the scientists say. ( Continue… )
With the 2012 presidential election behind him, President Barack Obama is under increasing pressure to make an official call on the Keystone XL project once and for all, even as protests around the country opposing the pipeline increase in their fervor.
Obama is facing pressure from all sides concerning the fate of the project, one that would see a pipeline stretch from Canada through the Midwestern United States in order to easily transport crude from Alberta’s oil sands to refineries in Texas.
On one side, politicians and other activists are pushing for approval of the $7 billion project, one that would ease domestic oil concerns while providing thousands of new jobs in an economy that is sorely lacking them. On the other side are environmentalists who are concerned about the damages caused by the extraction processes in the Canadian oil sands, making for a finished product that is called “dirty fuel” by those opposing the pipeline.
“The broader climate movement is absolutely looking at this administration’s Keystone XL decision as a really significant decision to signal that dirty fuels are not acceptable in the U.S.,” said Danielle Droitsch, a senior attorney with the Natural Resources Defense Council, a group that lobbies for ecological awareness in natural resource development. ( Continue… )
The United States’ fiscal cliff is very much related to several changes we have been going through recently, and will likely continue to experience:
- High oil prices (more than triple their level ten years ago). High oil prices cause people to cut back on discretionary spending, leading to layoffs in discretionary industries and debt defaults. Governments get less revenue in taxes at the same time they need to increase spending for unemployment benefits, bailing out banks, and stimulus funds. Result: financial problems for governments of oil importing countries, including many Eurozone countries and the United States.
- More free trade with Asian countries starting about 2001, when China joined the World Trade Organization. This change sent many jobs to Asia, and also holds down wages in US industries that compete with companies using overseas labor.
- Lots of baby boomers becoming eligible for Medicare and Social Security, starting about 2011. This is a problem because taxes, in practice, need to cover the cost of benefits on a cash flow basis, which is the way US handles its financial accounting. As a practical matter, this is the way the world economy works as well–the goods and services used today are created by today’s workers, with resources pulled out of the ground today. Carryovers in terms of goods are very limited–mostly a little grain.
- A health care industry that is able to charge fees that are increasingly out of line with the wages of common workers.
None of these issues looks likely to improve in the near future, suggesting that we are encountering a long-term problem that is only likely to get worse.
In this post, I provide charts showing that if the US funding problem is fixed through higher taxes on individuals (including proprietors), the needed fix would require additional taxes averaging approximately 15% of each person’s wages. If oil production remains relatively flat, as it has since 2005, additional tax increases even above this level will likely be needed later, as higher oil prices lead to more layoffs, and more need for government spending. ( Continue… )
The International Energy Agency made headlines in November when it published a report predicting the US would become the world's leading oil producer by 2020 and almost self-sufficient in energy by 2035. But there's a key part that's been largely overlooked, says Fatih Birol, chief economist at the IEA, in an interview with The Christian Science Monitor. Almost half of the US improvement will come through energy efficiency. Here are edited excerpts from the interview:
Question: The term “energy independence” is used frequently by policymakers, notably during the most recent US presidential campaign. How do you define the term?
Answer: When we look at the future, oil and gas import dependency is set to increase everywhere in the world except for one country, which is the United States. We expect that the US will be a net natural gas exporter very soon and oil import dependency will go down substantially. For example, the US was, until recently, importing a significant chunk of its oil from the Middle East, and we expect that very soon the US may not need to import any from the Middle East.
The giant steps the United States made in terms of self-sufficiency, or energy independence, is not only the result of the substantial growth in oil production, but also as a result of the recently introduced fuel-efficiency standards [for cars and light trucks]. And when we look at our numbers, we think about 55 percent of the success goes to the production growth and 45 percent on the consumption side, pushing demand down. So therefore, for reducing import dependency, you need to push to increase production as the US did, but government policies are also crucial.
Q: Is it plausible for a nation to aspire to be completely self-sufficient in energy? ( Continue… )
I, along with my editor Sam Avro, recently conducted a broad-ranging interview with John Hofmeister, former President of Shell Oil and currently the head of Citizens for Affordable Energy, a non-profit group whose aim is to promote sound U.S. energy security solutions for the nation. Previous interview with Mr. Hofmeister were:
In the current installment, he outlines his ideas for what would constitute a sound plan of attack on climate change.
Global Warming Debate is Settled — With a Twist
I began by asking Mr. Hofmeister whether he agreed that the debate on global warming is over. He responded that he is not a scientist or climatologist, but said that once a critical mass of public officials has determined that something is a problem, then the debate is effectively settled. He also agrees that humans create significant waste, and that if this waste is cleaned up, that would address the climate change issue: ( Continue… )
2012 has earned a spot on a very uncool top ten list.
The year the Mayans predicted would be the world's last will go down in history as at least one of the hottest, according to a provisional statement released Wednesday by the UN's World Meteorological Organization.
"Climate change is taking place before our eyes and will continue to do so as a result of the concentrations of greenhouse gases in the atmosphere, which have risen constantly and again reached new records,” said WMO Secretary-General Michel Jarraud in the statement.
The year started out with lower-than-normal temperatures, thanks to La Niña's cooling affect, the WMO reported. When the meteorological phenomenon faded in April, rising sea surface temperatures swept across the tropical Pacific Ocean, allowing for the neutral-to-warm conditions that have persisted since.
The warming waters have led to unprecedented melting of polar ice sheets. On Sept. 16, the Arctic ice level measured 3.41 million square kilometers – its lowest since the start of satellite records, according to the WMO.
"The alarming rate of its melt this year highlighted the far-reaching changes taking place on Earth’s oceans and biosphere," Mr. Jarraud noted.
It's at least the second ominous climate change report attendees have stomached in the conference's opening week. On Tuesday the UN's Environment Programme warned melting permafrost could spew gigatonnes of additional carbon dioxide into the Earth's atmosphere.
Whether or not the reports of rising temperatures will light a fire under negotiators' remains to be seen. Past global climate change conferences have been criticized for accomplishing little in terms of meaningful policy commitments, and many are skeptical that this year's meeting will be any different.
"Any progress this year will likely be decidedly small," wrote Kate Sheppard in Mother Jones on Thursday, "but that's okay, too, since setting the hurdles low might mean negotiators can actually clear them."
Petroleos Mexicanos (PEMEX), the fourth-largest oil producer in the world, has announced that it has discovered a crude oil deposit that could provide as much as 1 billion barrels by the time exploration and extraction is complete.
More than 500 million barrels are estimated to lie beneath the original well site, dubbed Navegante 1, at a depth of nearly 4 miles, with another 500 million barrels expected to lie in surrounding areas. PEMEX, a state-run oil firm, has already spent more than $10 billion in exploration efforts, culminating in this, the largest solid-ground crude discovery made in the country in the past 10 years. (Read More: How Much Oil is Left in the World?)
That same $10 billion has also gone towards offshore exploration, leading to two other major reserve discoveries in the Gulf of Mexico over the past few months; combined, these three new reserves promise to add nearly 30 billion barrels to world reserves. The offshore discoveries, made via PEMEX ultra-deep wells Trion-1 and Supremus-1, ended a drought for the firm that saw them come up short in the drilling of their last 22 wells, and the company’s perseverance was praised by Mexican president Felipe Calderon.
“PEMEX has steered itself toward investments in exploration, and it’s showing results,” said Calderon in an official statement. ( Continue… )
A natural gas explosion in Springfield, Mass., injured more than 20 people and damaged 42 buildings.
The blast late last Friday blew out windows, scattered bricks for blocks, ripped through walls, and flattened some buildings altogether. Officials are still searching for the exact cause. But the debris-scattered, head-scratching aftermath of a natural gas explosion is not an unfamiliar scene.
An intentional gas leak is a prime suspect in a massive explosion that killed two and ruined homes in an Indianapolis neighborhood earlier this month. In October, a natural gas explosion destroyed a home in Castle Rock, Colo., and sent a family of five to the hospital.
These are dramatic examples of what the pipeline industry calls "significant pipeline incidents," which are usually lower-level accidents that nevertheless happen with alarming frequency. Every four days, the United States experiences three such incidents. ( Continue… )