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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.

President Barack Obama shakes hands as he leaves after the ceremonial swearing-in during the 57th Presidential Inauguration in Washington, Monday. The promise of sustainable energy sources, the president said in his inauguration 2013 address, "will lend meaning to the creed our fathers once declared." (Evan Vucci/AP/Pool)

Inauguration 2013 speech: Obama puts energy, climate change in spotlight (+video)

By Correspondent / 01.21.13

In his Inauguration 2013 address Monday, President Obama may have satisfied some of those who say energy and environment issues are too-often overshadowed by the crisis du jour.  

Climate change was not far behind the Inauguration 2013 speech's top-billed issues of economic collapse, a decade of war, and the debate over health care. Roughly a thousand words in, Obama made a long-term case for energy innovation, and was unequivocal in positing environmental protection as a mandate set forth by the nation's founding fathers.

"We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity," Obama said. "We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations."

The president singled out climate-change skeptics, and critics who oppose investment of taxpayer dollars in private, clean-energy companies.   ( Continue… )

An employee of Indonesia's state-owned oil company Pertamina walks past oil drums at the company's main depot in north Jakarta, Indonesia in this December 2004 file photo. The US may end up producing more total hydrocarbons than Saudi Arabia soon, Alic writes, but not crude oil, which is what really counts. (Dadang Tri/Reuters/File)

Energy politics: Who really leads the world in oil?

By Jen AlicGuest blogger / 01.21.13

Iran is one of the world’s top fuel oil exporters, despite sanctions; the US is poised to overtake Saudi Arabia in terms of “hydrocarbon” production; Pakistan has enough oil to become a second Dubai …

It’s a propaganda race to see who can come out on top—at least in the media. Muddling through media reports that are definitively political along an East-West divide can be confusing. So let’s look at it without the political compass. 

Last month, the US mainstream media barraged us with simplistic reports about how the US will soon be producing more oil than Saudi Arabia—making America the world’s top producer. Left out of this story was the fact that the math was a bit skewed: the US may end up producing more total hydrocarbons than Saudi Arabia soon (say, by 2020), but not crude oil, which is what really counts.

This month, Iran joins the campaign with its own missive, courtesy of state-run media, PressTV. Iran claims to be among the world’s biggest exporters of fuel oil despite Western sanctions. (Related Article: Oil Industry Cycles Offer Good Investment Opportunities( Continue… )

Company executives look at thin-film solar panels developed by MiaSole before a press conference held at the headquarters of Hanergy Group in Beijing, China, in this January 2013 file photo. Visible cleantech failures are distinctly unhelpful, Stuebi writes. (Alexander F. Yuan/AP/File)

The right way to fail in cleantech

By Richard T. StuebiGuest blogger / 01.20.13

The transition to cleantech – some would call it a revolution – inevitably entails change, which implies risk.  In turn, this implies that some things will fail.

We’ve already seen more than a few failures, and we’ll no doubt see many more.

As long as the successes outweigh the failures, that’s all that ultimately matters.  Indeed, sometimes failure actually enables later successes.

As Thomas Edison has been quoted, “I have not failed.  I’ve just found 10,000 ways that won’t work.”  And, then finally — ta-da! — he discovered an approach that worked for the incandescent lightbulb, thereby changing the world forever.

But, sometimes failures can get in the way of success – particularly, if they’re the wrong kind of failures.  ( Continue… )

In this December 2012 photo, the sun sets behind an oil pump jack and the Rocky Mountains near Fredrick, Colo. High oil prices tend to lead to unemployment, Tverberg writes, and high unemployment tends to lead to higher government expenditures and lower government revenue. (Ed Andrieski/AP/File)

Will oil troubles push the US into a severe recession?

By Gail TverbergGuest blogger / 01.19.13

We have been hearing a lot about escaping the fiscal cliff, but our problem isn’t solved. The fixes to date have been partial and temporary. There are many painful decisions ahead. Based on what I can see, the most likely outcome is that the US economy will enter a severe recession by the end of 2013.

My expectation is that credit markets are likely see increased defaults, as workers find their wages squeezed by higher Social Security taxes, and as government programs are cut back. Credit is likely to decrease in availability and become higher-priced. It is quite possible that credit problems will adversely affect the international trade system. Stock markets will tend to perform poorly. The Federal Reserve will try to intervene in credit markets, but if the US government is one of the defaulters (at least temporarily), it may not be able to completely fix the situation.

Less credit will tend to hold down prices of goods and services. Fewer people will be working, though, so even at reduced prices, many people will find discretionary items such as larger homes, new cars, and restaurant meals to be unaffordable. Thus, once the recession is in force, car sales are likely to drop, and prices of resale homes will again decline.

Oil prices may temporarily drop. This price decrease, together with a drop in credit availability, is likely to lead to a reduction in drilling in high-priced locations, such as US oil shale (tight oil) plays.  ( Continue… )

An official carries a main battery that was removed from an All Nippon Airways Boeing 787 in Takamatsu, western Japan, Thursday. There is significant risk in launching a technology in newer battery chemistry, Dikeman writes. (Kyodo News/AP photo )

Boeing 787 battery fires underscore complexity of energy storage technology

By Neal DikemanGuest blogger / 01.18.13

Energy storage is still the rage in cleantech.  But after the collapse of A123 and Beacon, and the spectacular failure on the Fisker Karma in its Consumer Reports tests, fire  in Hawaii with Xtreme Power’s lead acid grid storage system and with NGK’s sodium sulphur system, and now battery problems grounding the Boeing Dreamliners, investors in batteries are again divided into the jaded camp, and the koolaid drinker camp.   Not a perjorative, just reality.  New batteries and energy storage is still one of the juiciest promised lands in energy.  And still undeniably hard.  Basically, investors are relearning lessons we learned a decade ago.

Batteries are just hard.  Investing in them is hard.  Commercialization of batteries is hard. So why is it so difficult to make money in new battery technology?

Above and beyond the numbers, there are a number of commonalities related to the commercialization and venture financing life cycle of battery technologies that seem to differ to some degree from other venture investments in IT or even other energy technologies.  Having looked at probably 100+ deals over the years, and on the back of an deep study we did a couple of years ago on benchmarking valuations in energy storage, here’s our take on the why.

Timing – Battery technology commercializations have historically tended to be one of the slower commercialization cycles from lab stage to market.  Startups and investors in batteries have a long history of underestimating both the development cycle, capital required, and the commercialization cycle, as well as underestimating the competitiveness of the market.  ( Continue… )

Smith County deputies chase back Keystone XL pipeline protestors near Winona, Texas, in this December 2012 file photo. Production in the Canadian oil sands continues to increase, Holland writes, while the blocking of the Keystone XL pipeline has led to some very unpredictable outcomes. (Sarah A. Miller/The Tyler Morning Telegraph/AP/File)

Keystone XL pipeline: Could blocking it be bad for the environment?

By Andrew HollandGuest blogger / 01.18.13

Background

A year ago, President Obama, under pressure from a deadline set by House Republicans, rejected the application of TransCanada for the Keystone XL pipeline that would pump Canadian crude from Alberta to the American gulf coast.

With a new decision on the Keystone XL pipeline due in the first quarter of 2013, according to the State Department — a  date that may slip according to some observers — it is useful to assess the actual effects of not building the Keystone pipeline on Canadian oil production and North American energy markets. (Read More:  Obama Under Increasing Pressure to Make Keystone XL Decision)

Stopping the Keystone XL pipeline was touted as a big win for environmentalists, who had set their sights on Keystone XL as a big target. As Bill McKibben often quotes NASA scientist James Hansen, using the entire resources of Canada’s oil sands would mean “game over for the climate.” Once complete, Keystone XL would have a capacity of up to 1.1 million barrels of diluted bitumen per day – 54% of Canada’s total bitumen production (note: bitumen is the crude product from production in the oil sands).  So, for groups like McKibben’s 350.org, the goal of stopping the pipeline was to slow and eventually stop the exploitation of Canada’s tar sands. The thought was that if environmentalists could stop the building of the Keystone pipeline, they could prevent Canada from having a market for their oil, and thereby production would slow and eventually stop.

Oil Sands Production Continues to Increase

In 2011, I wrote that “the balance of evidence shows that permitting the Keystone XL pipeline will not be good for American energy security, economic stability, or environmental sustainability.” For me, the risks of climate change are a clear threat to national security, and deserve action sooner rather than later. It should be clear that we can either pay now to reduce emissions, or we pay later in the form of dangerous weather, rising seas, and threats to our security.  One year later, however, the evidence so far shows that production in the oil sands continue to increase, while the blocking of Keystone has led to some very unpredictable outcomes.  ( Continue… )

In this December 2012 photo, one of the region's thousands of oil pumps sits in the foreground of the new Westside Parkway under construction in Bakersfield, Calif. Graeber writes that the emergence of the US as a global oil leader adds virtually nothing to stimulate the nation's economy, according to OPEC. (Tracie Cone/AP/File)

OPEC forecasts record US oil supply growth in 2013

By Daniel J. GraeberGuest blogger / 01.17.13

The Organization of Petroleum Exporting Countries in its report for January said the United States in 2013 may post the highest oil supply increase among non-member states. U.S. oil production should increase by 490,000 barrels of oil per day this year to reach an average of 10.4 million bpd. OPEC said much of the production increase should come from more drilling in the Gulf of Mexico and the oil boom under way in North Dakota. Production from member states Iran, Iraq and Saudi Arabia, meanwhile, declined. Riyadh said recently it wasn't trying to manipulate the commodities market and, given the downbeat assessment of the U.S. economy, it may be congressional leaders that eventually face the ultimate blame for economic woes despite the oil boom.

OPEC in its January report said it expected U.S. oil supply to increase in 2013.  This sentiment was supported by increased drilling in the Gulf of Mexico. Oil supply levels in North Dakota, meanwhile, continued to set records while onshore production in Texas showed what the cartel said was "healthy growth." U.S. oil supply in 2013 is expected to increase by nearly 5 percent to 10.44 million bpd, which OPEC said was the highest projected increase for non-member states.(Related Article: Peak Oil and the Future - What Can we Expect in 2013)

For OPEC members, overall crude oil production was down more than 1.5 percent from November figures to settle at 30.37 million bpd in December. The cartel said production fell in Iraq, Iran and Saudi Arabia.  Riyadh had defendedallegations it was trying to manipulate commodity markets when it cut its own crude oil production by nearly 5 percent. The oil-rich kingdom has kept markets stabilized in the past, mostly recently when Libya was shut out of the oil markets by war. But given the increase in production from non-OPEC members, and following reports from Citigroup the kingdom may become a net importer, Riyadh may simply be making room for emerging oil majors like the United States. ( Continue… )

Richard Caperton, the director of clean energy investment at the Center for American Progress, speaks about his vision for a bipartisan clean-energy policy at a roundtable in Washington hosted by the Monitor.

Clean energy: a 'politically popular' solution to climate change

By Monitor staff / 01.16.13

As part of an ongoing series of conversations about building America's energy future, the Monitor hosted a roundtable discussion in Washington on Dec. 12, 2012 with several clean-energy experts. The video below is an excerpt from panelist Richard Caperton, the director of clean energy investment at the Center for American Progress, a Washington-based progressive educational institute. Mr. Caperton speaks about his vision for a bipartisan clean-energy policy in America. The discussion was sponsored by Areva, a Paris-based energy company.

Bob Lutz, retired General Motors executive, talks to Thomas Edison as part of a hologram presentation at the 2013 Detroit auto show. The stunt underscored the automakers' panache for head-turning displays, and hinted at the less-flashy innovations taking place under the hoods. (Jessica J. Trevino/Detroit Free Press/AP)

Detroit auto show: the future of energy-efficient cars and trucks (+video)

By Correspondent / 01.16.13

The Detroit auto show is rife with attention-grabbing displays, but they rarely involve time travel.

VIA Motors seemed to at the Detroit auto show Monday when it featured Thomas Edison – portrayed by an actor in holographic form – lending wisdom to Bob Lutz, retired General Motors executive and a driving force behind the Chevy Volt electric car.

"Now it's your turn to share the light," the projected electric light-bulb pioneer told Mr. Lutz in an exchange that preluded the unveiling of VIA's latest line of converted-electric trucks, vans and SUVs. 

The stunt underscored the automakers' panache for head-turning displays, and hinted at the less-flashy innovations taking place under the hoods. The heart of the Detroit auto show may be automotive eye-candy, but some automakers highlighted new approaches to energy use in an industry that consumes a lot of it.

For VIA, fleet vehicles – those used as taxis, buses, and by large companies – were a target of energy savings. The company has developed an extended-range electric cargo van that it expects will achieve 100 miles per gallon with near zero emissions.   ( Continue… )

This April 2012 file photo shows an oil rig used in drilling in Turkana County, Kenya. All eyes are on Kenya in 2013, according to Oilprice.com, to see how quickly the country can develop oil discoveries into production. (Njuwa Maina/Reuters/File)

Is Kenya the future of oil?

By James StaffordGuest blogger / 01.15.13

Kenya has become the hottest oil and gas venue in East Africa since big discoveries were made in the country’s virgin oilfields last April. All eyes are on Kenya in 2013 to see how quickly--and economically they can develop those discoveries into production.

Nairobi based Taipan Resources Inc. (TPN-TSXV; TAIPF-PINK) is the 4th largest acreage owner in Kenya, and is getting ready to carry out seismic on Block 2B. They recently attracted Maxwell Birley as CEO. Mr. Birley has been instrumental in discovering more than 2 billion barrels of oil equivalent in his 30-year career—much of it in Africa and Asia.

In an exclusive interview with Oilprice.com, Taipan CEO Maxwell Birley discusses:

•    Why Kenya is the hottest venue in East Africa

•    Why 2013 will be a stellar year for Kenya
•    Why the regulatory environment remains attractive
•    Why Kenya outranks its neighbours
•    Why infrastructure will be in place in time for commercial activity
•    Why this venue is good for the juniors
•    Why the Somalia security risk remains low
•    What Taipan is really chasing

Oilprice.com: There were some major discoveries in Kenya last year. Could you give me some colour on these discoveries that has the market thinking Kenya is now one of the hottest exploration spots on earth?  ( Continue… )

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