Canadian Natural Resources Minister Joe Oliver said last week it was time to add more diversity to an energy sector that relies almost exclusively on the United States. New drilling technologies for shale have translated to major gains in U.S. oil and natural gas production, which itself translates to a U.S. economy that relies less on imports to meet its energy demands. That's forced Oliver to stand up and take notice. He told the audience at an energy conference in New York his country has the resources necessary to help meet the growing energy demands across the world. Five years after TransCanada first proposed its Keystone XL oil pipeline, Oliver's comments suggest North American market dynamics may be different for Canada.
"Canada has the resources in place to meet its own needs and the growing energy demands of global markets," he said. "We are aggressively working to enhance Canada’s position as a stable, secure and environmentally responsible energy supplier to North America and the world." (Related Article: Canada Ramps up Pipeline Plans)
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Back home in Calgary, he said diversity in the Canadian export market was necessary because virtually all of its oil and natural gas exports head to the United States. Production momentum there, he said, means Canada's influence as an energy partner is starting to wane. ( Continue… )
American political conservatives like to say that their strategy of tax cuts all the time is designed to "starve the beast." The "beast," of course, refers to government, and "starving" it means reducing its revenues through tax cuts in order to spur corresponding cuts in spending. They liken their strategy to reigning in a profligate child by reducing his or her allowance.
Whatever one believes about the efficacy of this strategy, it is now being employed in surprising ways in a new field by unexpected people. The brilliant symbolism of opposing the Keystone XL pipeline is intended to highlight the need to address the causes of climate change by reducing our use of carbon-based fuels. The reasoning in this case is that stopping the pipeline would prevent the increased exploitation of what opponents call the "carbon bomb" of the Alberta tar sands. Stopping the Keystone XL would supposedly prevent the companies controlling the tar sands from having access to oil markets. In effect, activists are trying to starve the fossil-fuel-consuming beast that is the global economy.
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If this is the goal, then this strategy must be labeled an instant failure. The tar sands oil companies are already exploring alternate routes for shipping synthetic crude derived from tar sands via other proposed pipelines. One such pipeline, Energy East, would move oil from western Canada to eastern Canada, finally ending the bizarre situation in which Canada, one of the world's largest oil exporters, must import close to 40 percent of its oil needs. The country currently lacks sufficient pipeline capacity to bring oil from western Canada where it's found to eastern Canada where it's mostly consumed. ( Continue… )
Libya has produced a fraction of its oil output throughout the summer. Unrest in Egypt has spread fears of disruption to oil transit routes. The threat of a US strike on Syria has largely subsided, but not without first inflating the price of oil.
Two years ago, a similar global landscape spurred world leaders to tap emergency oil reserves to stem ballooning fuel costs. Today, gas prices are the lowest they've been in months, and the question of tapping strategic reserves isn't even on the table. The global oil market isn't what it used to be, and that's working in consumers' favor.
"We’re better able to tolerate these supply disruptions because Saudi Arabia is producing more oil and so is the US," says Chris Lafakis, senior economist at Moody's Analytics. What's more, he adds, the 2011 Libyan revolution led to a sharp and unexpected drop in global supply. This time around, the change has been more gradual. ( Continue… )
High electricity costs didn't stop German voters from reelecting a leader who has moved the country along an ambitious and costly path toward a post-carbon future.
German Chancellor Angela Merkel was voted in for a third term Sunday, quieting critics who say she has pushed too hard for clean energy at the expense of everyday consumers. Germany's energy transition, or Energiewende, is widely popular among Germans, which has made it difficult for opposing parties to challenge Chancellor Merkel on energy policy.
It's highly likely the chancellor will continue to push for a transition away from nuclear and fossil fuel power, but even Merkel admits something must be done about ballooning energy costs. What she does or doesn't do to rein in those costs will depend on German politics and European economics.
"There is definitely no turning back," said Mihaela Carstei, deputy director for the energy and environment program at the Atlantic Council, a global think tank based in Washington. "There is a deep cultural difference in Germany where they do see renewables and carbon-free energy being their future." ( Continue… )
The rules are most relevant for the coal industry, whose only hope for compliance rests on the fate of a promising, but expensive and early-stage technology: carbon capture and storage (CCS).
Finding a way to capture and store power plant carbon emissions underground on a commercial scale isn't exactly easy. But the real challenge comes not in technical innovation, but in finding market demand.
"The technology [is] not rocket science," said Howard Herzog, a senior research engineer who specializes in CCS technologies at the Massachusetts Institute of Technology's Energy Initiative in Cambridge, Mass. "A lot has been around for a long time and used in other fields. It works; it’s just a matter of setting up the right incentives to bring it into the marketplace." ( Continue… )
Colorado is currently experiencing some of the worst flooding it has ever seen, and as one of the most densely fracked areas in the United States, people are now beginning to worry about the stability of those fracking sites and wells, many of which have been completely covered by the floodwater.
Photos and video footage continues to be published online showing evidence of flooded fracking sites still in operation, toppled or displaced condensate tanks (which hold waste fracking fluid), smaller tanks and barrels floating in the waters, and leaking unknown fluids, and various pieces of drilling debris scattered throughout the state.
According to the Huffington Post, the historic floods affecting Colorado have already taken the lives of eight people with hundreds more still missing. It has destroyed, or damaged nearly 20,000 homes, 50 bridges, and forced more than 10,000 people to evacuate the region. Only now, as the state officials begin to make plans to rebuild, will the scale of the impact on the fracking industry be revealed. (Related article: How the Shale Boom has Effected the US Economy)
Cliff Willmeng, an anti-fracking activist and spokesman for East Boulder County United, explained that there are“hundreds, if not thousands, of wells underwater right now and we have no idea what those wells are leaking. It’s very clear they are leaking into the floodwaters, though.” ( Continue… )
The Lower Tertiary is considered by many to be the final frontier of oil exploration in the Gulf of Mexico, where, until recently, production was forecast to decline. The post-dinosaur era geological formation was originally thought to be devoid of oil, but recent exploration has proven otherwise.
This turnaround began in 1996, when Robert Ryan, then a geologist with Texaco, pursued a hunch about an ultra-deep water geological play. For a fuller accounting of this story, Edward Klump recently wrote a fantastic, in-depth piece for Bloomberg News on the history of this development. (Related Article: Nigeria becoming World’s 1st Failed Petrostate?)
In 1996, four companies—Texaco, Royal Dutch Shell, Amoco, and Mobil— came together to drill an experimental, ultra-deep water well in the Gulf of Mexico. Known as BAHA, the well was 7,625 feet deep, deeper than any that had been previously attempted. Unfortunately, both BAHA 1 (1996) and BAHA 2 (2001) came up dry. Normally, dry wells would deter future drilling, but the success of the BAHA projects was in proving that a massive trove of oil existed where no one thought possible in the Lower Tertiary—we just needed the technology to get to it economically.
The first oil sourced from the Lower Tertiary began flowing in mid-2010 from the Perdido project, the world’s deepest offshore facility jointly owned by Shell, Chevron, and BP. Production stalled shortly after start-up, however, as deep water drilling was shut down in the wake of BP’s Deepwater Horizon disaster. Over 4 million barrels of oil spilled, $40 billion in clean up costs, and an incalculable loss of public trust later, oil companies are pushing ahead once again. ( Continue… )
The record $19 billion fine levied against Chevron Corporation by a court in Ecuador for contaminating the Amazon rainforest takes a new twist as a New York court hears a case of fraud against the high-profile lawyer who helped Ecuador win its 2011 judgment.
In a legal battle that has continued for two decades, the case against Chevron in Ecuador was led by New York lawyer Steven R. Donziger, who is now the target of another lawsuit alleging misconduct and fraud. Donziger was allegedly caught on video on the sidelines of filming for the documentary film “Crude” conceding that evidence had been fabricated to win the ruling in the Ecuador court.
And now we’re seeing previous Donziger devotees abandoning the cause, and the embattled lawyer as it becomes clearer that the New York court favors Chevron in the case.
Tesla Motors has made a name for itself rethinking what powers our cars. Now they're taking on who – or rather, what – drives them.
The luxury electric carmaker has joined the race to build a car that drives itself. Autonomous transport promises greater convenience and safety than the human-operated vehicles of today. It also has the potential to dramatically reduce the amount of energy consumed in the transportation – the second most energy-intensive sector behind electric power in the US.
The move puts Tesla in competition with another Silicon Valley giant, Google, which has been working on driverless cars for at least three years.
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“With both Google and car companies working in this area, I think it will be doable," Mark Campbell, a professor of mechanical and aerospace engineering at Cornell University who leads a research group on autonomous systems, said in an e-mailed statement. "I would imagine that the starting points are places with longer car commutes and laws that have been tackled, like California, whereas places like New York City will be harder because GPS coverage is more challenging with the tall buildings.”
The engineering of driverless cars is complex – mechanically, legally, and politically. The utopian vision of a seamless, accident-free autonomous transport network won't arrive for a long time, if ever at all. Even Tesla Motors chief executive Elon Musk – no stranger to big, bold ideas – concedes it's difficult.
“My opinion is it’s a bridge too far to go to fully autonomous cars,” Mr Musk said in an interview with the Financial Times. “It’s incredibly hard to get the last few per cent [of miles driven]."
But automating 90 percent of miles driven is possible within three years, Musk said, declining to offer specific details on Tesla's plans. ( Continue… )
An esoteric federal agency is emerging as a new and unlikely flash point in the debate over America’s energy mix.
Ron Binz, President Obama's pick to head the Federal Energy Regulatory Commission (FERC), has drawn scrutiny from energy groups and lawmakers wary of his public proclivity for renewable energy. As FERC commissioner, Mr. Binz would regulate the interstate transmission of electricity, natural gas, and oil. It's an increasingly important role as debates over pipelines, exports, and grid infrastructure dominate the energy industry.
Special interests have further elevated what has traditionally been a low-profile, highly-technical position, transforming yet another presidential appointment into an outsize struggle between partisan interests.
"You have Tom Steyer on the left and the Koch brothers on the right generating the pros and cons on the FERC nominee," said Marc Spitzer, a former FERC commissioner, referring to the billionaire environmentalist and the oil-wealthy siblings. Both groups reportedly have financial ties to either side of the Binz debate.
"Is [politicization of presidential appointments] the new normal?" asked Mr. Spitzer, who is currently a partner at Washington-based Steptoe & Johnson LLP. "I think it’s sad, but the fact is that politics have changed in this country." ( Continue… )