The sign for the ExxonMobil Torrance Refinery in Torrance, Calif., is displayed. ExxonMobil's stock price is near its all-time high, but it may be seriously undervalued, guest blogger Andrew Holland argues. (Reed Saxon/AP/File)
Oil companies near multi-year highs. Still undervalued.
I can hardly believe that I'm about to write this sentence: oil companies - some of the most highly valued companies in the world - may actually be undervalued on the stock markets. Let me explain.
As those of us who follow the energy industry know, the oil industry is undergoing a sea-change. Usually cited as the result of a combination of hydrofracking and horizontal drilling, there is a boom in oil production. It is doubtless that those technologies were important, but it is how they have been paired with information technology and seismic imaging that has completed the puzzle. The companies now know where to drill and what will come out, long before any steel goes in the ground.
The results speak for themselves; only five years ago, North Dakota was producing 172,000 barrels of oil per day, today it is producing 779,000 barrels per day - an almost 5-fold increase. Similar things are happening at previously obscure shale plays around the country.
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This is important to a company's valuation because in the past, oil companies were valued by the amount of reserves they have available. However, with this new suite of technologies, oil production has become more akin to advanced manufacturing. The companies apply skilled labor, scientific know-how, and large amounts of capital to a resource area that doesn't looks like a traditional oil field - and you get a valuable product out. Because of this, the oil majors should be treated more like manufacturing companies than resource extraction firms. Traditional oil drilling (as it is still practiced in most of the world) was like sticking a straw into a water balloon - you knew how much was in the balloon, and valued the company based off those estimates. ( Continue… )
The sun-powered Solar Impulse plane glides over the Golden Gate Bridge in San Francisco during a successful test flight Tuesday. Twelve thousand photovoltaic cells make up the 747-sized wingspan of the Solar Impulse. (Solar Impulse/AP)
Solar Impulse departs for first sun-powered flight across US
A solar-powered plane took off from an airfield near San Francisco early Friday morning, intent upon completing the first cross-country flight relying only on the power of the sun.
If you're picturing photovoltaics glistening on jumbo-jet wings, some curbing of enthusiasm is in order. Friday's landmark event is less a peek into the future of commercial flight than it is a dramatic endorsement of clean-energy technology.
"It is the first and only airplane that can fly day and night on solar power without any fuel," said Bertrand Piccard, a pilot of the so-called Solar Impulse, in a midflight interview via radio with CBS 5 News Phoenix.
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"It is possible because all the technologies we use are really energy-efficient technologies," Mr. Piccard added, his voice crackling through static as he soared 13,000 feet over Fresno, Calif., en route to Phoenix. "We want to promote these technologies." ( Continue… )
The Perry Nuclear Power Plant is shown on the shore of Lake Erie in North Perry, Ohio. Another aspect of potential nuclear power generation from the atom seems poised to take a giant leap forward, Daly writes, with potentially enormous implications for the entire issue of civilian nuclear power generation. (Mark Duncan/AP/File)
Is nuclear fusion power now possible?
On 26 April, the world largely yawned as a nuclear anniversary came and went.
Twenty-seven years ago, the Ukrainian SSR nuclear power plant at Chernobyl exploded, providing a severe test of the USSR’s General Secretary of the Communist Party Mihail Gorbachev’s policy of “glasnost” (“openness,”), which the sclerotic Soviet leadership signally failed, providing a less than candid drip feed of news about the magnitude of the disaster.
Nothing to see here, move along.
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Twenty-five years later, Tokyo Electric Power Co.’s six reactor Fukushima Daiichi NPP was decimated by a tsunami generated by the offshore Tohoku earthquake in the western Pacific, estimated at 9.0 on the Richter scale. ( Continue… )
The Nissan Leaf is shown at the New York International Auto Show in 2011. (Richard Drew/AP/File)
Suddenly, it's a three-car race for electric-powered dominance
The race for acceptance of electric vehicles has gone from a two-car competition to a three-car free-for-all.
For the second month in a row, the Nissan Leaf beat the Chevy Volt in sales and could soon take over in sales year to date. Now, luxury carmaker Tesla Motors is joining the fray. Even though sales of electric cars cooled in April, the appearance of Tesla is livening up the competition.
"It’s a neck-and-neck race for those three," said Alec Gutierrez, senior market analyst for Kelley Blue Book, in a telephone interview.
Leaf sales dip after a record month. Nissan sold 1,937 Leafs in April, a 423.5 percent increase from a year ago, but down from March 2013's record sale of 2,236 Leafs. March is always a strong month for Japanese manufacturers because it marks the close of their fiscal year, Mr. Gutierrez noted. So it's no surprise that Leaf sales growth would slow a bit in April, which is typically a slower month for the industry overall. ( Continue… )
A worker is seen at an oil exploration site in Bulisa district, northwest of Kampala, Uganda. (Tullow Oil Uganda/Reuters/Handout)
What determines energy abundance? Flow.
Okay, I'm going to give you the shortest course ever in energy abundance: Energy abundance depends entirely on the RATE of energy flow. Let me say it again: Energy abundance depends entirely on the RATE of energy flow.
Now, here is what it does NOT depend on: supposed, but often unverified, fossil fuel reserves in the ground; hypothetical, sketchy, guesstimated, undeveloped, undiscovered resources imagined to be in the ground by governments or by energy companies and often deceptively referred to as "reserves"*; claims about future technological breakthroughs; mere public relations puffery about abundance in the face of record high average oil prices.
Why is the rate of flow the key metric? Because in order to function the global economy depends entirely on continuous, high-quality energy inputs. We cannot shut down the world's electric generating plants for six months or even three months without crashing world society into a state of irretrievable chaos and decline. We cannot shut down the world's shipping fleet for even a few weeks without doing irreparable harm. Modern global society has become like a shark. It either keeps barreling forward or it dies.
Fossil fuels that are actually proven to be in the ground are by definition not currently being used, whatever we may consider their potential. Fossil fuels that are hypothetical and undiscovered by definition cannot be used. Technology is NOT energy. Technology runs ON energy. Energy first, then applied technology. The ancient Romans designed and built small steam engines and used them to animate children's toys. But, the Romans lacked the dense energy sources needed to make steam engines practical as a mode of transportation or of power for manufacturing. ( Continue… )
A sign hangs in the Verizon booth at the 2013 Consumer Electronics Show in Las Vegas. A new $100 million spending plan would be Verizon’s largest investment in clean energy to date. (Rick Wilking/Reuters/File)
Verizon to invest $100 million in clean energy
Verizon Communications Inc. (VZ) will spend $100 million to green up its facilities with solar panels and fuel cells, putting it in the big leagues with clean energy followers like Google and Yahoo.
The announcement, on Tuesday, will benefit California-based solar panel developer SunPower Corp. (SPWR), which will supply and install solar panels in over a dozen Verizon facilities across five US states.
The clean energy spending spree will also benefit Oregon-based fuel cell maker ClearEdge Power, which will supply and install hydrogen fuel cells at Verizon facilities in California, New Jersey and New York. (Related article: Could MLP’s be Embraced by the Renewable Energy Sector)
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Verizon says the $100 million price tag on its clean energy plan makes economic sense in the long run. ( Continue… )
Electrical salesman Dave Ehret of Sydney poses with an old-style incandescent light bulb (R) and a new energy-saving compact florescent bulb (L) at a warehouse in Sydney. (Will Burgess/Reuters/File)
Light bulbs and the pitfalls of 'green' marketing
Want more people to buy efficient light bulbs? Ditch the "eco-friendly" label.
That's one possible takeaway of a new study on the politics of energy efficiency. It's a reminder that the sharp debate over America's energy future doesn't reside solely in Congress but stretches all the way down to the aisles of the local hardware store. If manufacturers want to boost sales of an energy efficient appliance or other product, they should tout something other than its environmental benefits.
Otherwise, conservatives won't buy them.
"There’s an existing negative bias against these products," said Dara O'Rourke, an associate professor of environmental and labor policy at University of California, Berkeley, in a telephone interview. "Certain people view them, some rightly or wrongly, as working less well and costing more."
Even when the economic benefits are clear, politics can dampen purchases. ( Continue… )
Chinese paramilitary policemen march across Tiananmen Square on a hazy day in Beijing, China. A new report shows that China, the world's largest polluter, is also a major user of clean energy. (Andy Wong/AP/File)
China: World's largest polluter also leads clean-energy push
A new report by the Climate Commission of Australia, has admitted that whilst China remains the world’s largest polluting nation, it also leads the fight against climate change.
In fact China has made such efforts to reduce its emissions, and reduce growth in electricity demand, that it is far ahead of any targets it set itself, and is likely to curb its carbon emissions far sooner than expected.
The report states that China has become the “world’s renewable energy powerhouse,” due to a series of policies and plans that have encouraged renewable energy growth. In 2012, for the third year in a row it claimed the title of the world largest clean energy producer, with a massive 23 gigawatts of clean energy capacity. (Related article: Clean Economy Doesn’t Mean Cleaner World)
Between 2055 and 2012 China increased its wind generation capacity by nearly 50 times, adding an extra 36 percent in 2012 alone. China’s solar sector is also growing, increasing by 75% in 2012, and it is predicted to grow by a further 300 percent to over 21GW by 2015. ( Continue… )
A worker switches wellheads at the site of a natural gas hydraulic fracturing and extraction operation outside Rifle in western Colorado. After a frenzied four years of growth, a new study shows the oil and gas industry has experienced a dip in production and compensation this year. (Brennan Linsley/AP/File)
US oil and gas workers see pay fall. Sign of trouble for energy?
US energy may be booming. But for those who labor in its fields and on its rigs, pay is falling.
Average compensation for oil and gas workers in the United States was 4 percent last year than it was in 2011, according to Rigzone, an oil and gas industry news and job recruitment website. The decline comes as the industry itself begins to slow.
US drilling rig counts are down nearly 10 percent to 1,754 last week compared with a year ago, according to Baker Hughes, an oilfield service company.
The hiring frenzy, which peaked at an all-time high of 68,100 net new jobs in 2011, dropped by more than half in 2012, and is on track to add less than 20,000 workers this year. ( Continue… )
Firemen work at the scene of a strong blast in a building in the centre of Prague, Czech Republic, Monday. Serious natural gas pipeline incidents are relatively rare, but when they happen, the results can be catastrophic. (Stanislav Zbynek/CTK/AP)
Prague blast: How big a threat are natural gas explosions? (+video)
[Editor's note: This story has been updated.]
A powerful blast in central Prague early Monday shook the city and left 35 injured and at least two people missing. According to the Czech capital's mayor, it was the result of a leaky natural gas pipe.
A day earlier, an explosion probably linked to natural gas ripped through a five-story building in Reims, France, causing three fatalities and injuring 14 others. A methane gas blast last Monday at a wastewater treatment plant in Dexter, Mich., killed one worker and injured another.
Natural gas explosions offer a violent reminder of the extensive energy infrastructure beneath our feet. Although serious incidents are relatively rare, explosions are fairly common. When natural gas ignites, the results can be catastrophic. And as the United States increases its use of natural gas, the potential dangers expand.
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"These are low-probability but high-impact events," said Nathan Phillips, a professor at Boston University’s Department of Earth and Environment, "but we have to think seriously about those kinds of events." ( Continue… )
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