Fortifying The Gulf of Mexico  

Rigzone has a report on preparations for the coming hurricane season in the Gulf of Mexico.

Still bloodied from last year's hurricane season, the energy industry is building up its defenses in the Gulf of Mexico for another round with Mother Nature.

Hurricane season begins Thursday, and federal officials report that 22 percent of crude oil production and 13 percent of natural gas production in the Gulf is still derailed.

Consumers are going into storm season with gasoline costs already approaching the prices seen after Hurricanes Katrina and Rita wrecked rigs and closed refineries. So if the Gulf is hit again with hurricanes, prices could be pushed even higher.

Though it's impossible to "hurricane-proof" a platform or pipeline, people in the industry appear to be hellbent on trying to do a better job at prepping for the upcoming storm season than they did last year.

They are looking for ways to reduce the enormous amount of lost production that occurred last year and which set off spikes in energy prices.

Companies are scrambling to lock in contracts for tug and helicopter services, and squirrel away extra valves, meters and piping needed to make fast post-hurricane repairs.

Dave Roberts at Grist gloomily notes that "Peak oil will not help us in the climate change fight" (in spite of the fact that the real solutions to both are the same - unfortunately peak oil has a medium term anti-solution - coal - which means accelerated global warming).

On Oikos, David Jeffrey wisely and succinctly diagnoses the problem:

It seems to me that the current international negotiations about climate change are the ultimate prisoner's dilemma. It is in each nation's best (economic) interests to have each other country do something about limiting greenhouse gas emissions, but not do something themselves.

This is equally wise and equally succinct:

To speculate about the way forward, the glimmers of hope seem to me to be:

* National action will become less important as local, state and regional governments and communities take bolder measures;
* International aid will be increasingly targeted at clean energy, helping to restrain emissions growth in developing countries;
* There will be modest technological advances which help decouple economic growth from emissions growth.

This, however, I do not agree with:

But ultimately I think our biggest saviour may just be peak oil. ... At current [oil price] levels, a whole range of alternative energy sources become commercially viable.

I've said it before, I'll say it again: Peak oil is not going to vouchsafe clean-energy outcomes. Peak oil's primary short-term effect will be to sharply increase demand for coal. Coal to make electricity. Coal to make ethanol. Coal to make heating oil and diesel. Coal, coal, coal.

It might solve the energy-supply problem, but as far as global warming is concerned, coal is death.

Australia, of course, may as well be called coal country. Anglo American and Shell are now looking at building a coal to liquids plant in the Victorian brown coalfields. This plant also got a mention in Brian Toohey's weekend column in the Financial Review ("Nuclear cause runs out of steam") which panned the prospect of nuclear energy (of course, as its the AFR there were 3 pro-nuclear articles scattered through the rest of the paper) and instead promoted efficiency and conservation, geothermal power (though GeoDynamics doesn't seem to be making much progress lately) and IGCC coal fired plants.

Prospects for the vast brown coal resources in Victoria's Latrobe Valley to host a $5 billion synthetic diesel and electricity project have soared.

Anglo-Dutch oil major Shell has thrown its money and technology behind the project, the Monash energy project near Traralgon, in a global alliance with the project promoter, South Africa's Anglo American.

Shell and Anglo have formed the alliance to pursue "clean" coal conversion energy opportunities and have nominated the Monash project as their leading candidate.

Formation of the alliance comes ahead of an expected mid-year decision to first build a $300 million to $400 million demonstration unit for the Monash project, one that is promoted as being clean because carbon dioxide emissions are to be captured for injection into exhausted Bass Strait gas reservoirs.

The demonstration plant would help to commercialise technology that would produce low-emissions diesel and electricity from brown coal, with Anglo holding a brown coal exploration licence that sits next to the conventional Loy Yang power station and that straddles the Hyland Highway, 200 kilometres east of Melbourne.

If the process proves viable, a $5 billion energy complex could be built within a decade. Its diesel and other liquids production of more than 60,000 barrels a day would be bigger than the fast-falling liquids production from the ExxonMobil/BHP Billiton Bass Strait oil and gasfields of 50,000 barrels a day.

Back to Dave from Grist, he had an excellent article recently at TomPaine on the alt fuels distraction.

In the next 50 years, give or take, those of us in the United States will face two challenges. We must wean ourselves off of oil and we must cut our carbon-dioxide emissions by around 60 percent. Either would be difficult in isolation; together, well ... imagine patting your head and rubbing your belly at the same time, only with trillions of dollars and millions of lives at stake. And with one arm tied behind your back.

What's the best way to meet these challenges? If you were the proverbial Martian, visiting our planet to dispassionately assess our options, what would you find most promising?

Would it be nuclear power? "Clean coal"? Ethanol? You'd only decide on those options if you happen to be an uncommonly gullible Martian (or one in the pay of big industry—but more on that later).

Substantially increasing the amount of electricity we get from nuclear power would mean building dozens of expensive new plants, none of which would be completed for at least 10 years. Each would be a huge risk for investors and virtually uninsurable without government assistance—and once it had run its course, would cost a fortune to decommission. Each would produce tons of waste—when we don't even know what to do with the waste we already have—and each would produce fissile material that could fall into the wrong hands. By some estimates, the CO2 emitted in the full lifecycle of a nuclear plant—taking into account the oil burned mining, transporting and processing uranium, not to mention constructing the plants themselves—would be only a third less than that released by a coal-fired plant.

Burning coal releases CO2. To avoid climate catastrophe, "clean coal" plants would have to sequester their CO2 emissions underground. This technology is speculative, untested and at least 10 years out.

...

Our Martian would probably suggest we focus first on reducing our energy use—and might be delighted to discover several simple, at-hand ways to do so. Some low-hanging fruit: boost energy efficiency standards for cars, appliances, industrial equipment and buildings. Institute "feebates," which would tax the purchase of fuel-inefficient vehicles and apply the revenue to rebates on fuel-efficient vehicles. Mandate that all government purchases—of vehicles, buildings, appliances, or anything else—be tied to strict energy-efficiency requirements. Pass a federal renewable portfolio standard, mandating that the feds get a certain percentage of their energy from renewable sources.

And if our Martian wanted to get a little bit more ambitious, he might emphasize these broader policy and technological initiatives:

• Quit subsidizing fossil-fuel industries. Period.

• Impose a gas or carbon tax. It would put uniform pressure on the market to reduce oil consumption, without favoring any particular alternative. (The impact on low-income Americans could be offset with reduced payroll taxes.)

• Encourage density by reversing land-use policies at all levels of government that subsidize road-building and sprawl at the expense of compact, walkable, mixed-use communities served by effective public transportation.

• Drop perverse agricultural subsidies that overwhelmingly favor petro-heavy industrial agriculture and long-distance food transport at the expense of organic farms and local food systems.

• Scrap electricity-market regulations that virtually mandate centralized power production at large, inefficient plants (by some estimates, up to two-thirds of energy is wasted en route to end users); instead, encourage decentralized production from small-scale, site-appropriate sources.

...

Finally and most significantly: it's the money, stupid. Scratch the surface of each of the elite's favored alternatives and you'll find an industry with political connections and the financial clout to shape public dialogue. The Nuclear Energy Institute, an industry front group, has openly established an organization designed to push pro-nuclear talking points into the public sphere—it's already paid off in the form of an influential op-ed in The Washington Post . Ethanol has even more friends. Legislators from agricultural states love it; corn brokers like Archer Daniels Midland love it; automakers who want their products to look greener love it; the oil companies that will eventually own and run ethanol refineries and stations love it. And coal—well, even kids love coal!

The Herald today has a mildly surprising report titled "High-rise residents big energy guzzlers". My initial response was "no way" - apartments have to be a lot more energy efficient than air conditioned McMansions out in the burbs.

When I considered the amount of energy wasted in common areas (certainly my building has a heap of bright, non compact fluorescent, lights burning 24 hours a day plus a lift which no doubt chugs through the power too, not to mention electronically operated doors, security cameras etc etc - so maybe the balance is closer than I realised).

I would bet apartment dwellers are much more likely to use public transport and less likely to own cars though.

FLAT dwellers are the city's biggest energy guzzlers, says an official study that casts doubts over whether the State Government should review its policy to increase energy-saving targets for high-rise apartment blocks.

The Minister for Planning, Frank Sartor, is expected to announce within a fortnight whether the Government will heed calls from the building industry for the target not to be lifted from July 1.

The Herald revealed this month that the Government was reviewing its plan to force developers of new housing to improve energy efficiency - by 40 per cent, instead of the current target of 20 per cent for flats and 25 per cent for houses - as part of the BASIX scheme.

While the industry is happy for the house target to be increased, it says lifting the apartments target would push the price of units too high because it costs more to install energy-saving measures in flats.

But environmental groups and urban planners say units must be included in energy- and water-saving efforts because they will make up two-thirds of the city's new housing in the next 25 years.

Their conviction is strengthened by a Department of Planning and EnergyAustralia study that shows high-rise buildings emit more greenhouse gases per dwelling and per person than smaller blocks of flats, townhouses or detached homes.

High-rise apartment blocks emit 10.4 tonnes of carbon dioxide a year, compared with nine tonnes for detached homes and 5.1 tonnes for townhouses.

When divided by the average number of residents in different types of housing, flat-dwellers came out the highest energy offenders - 5.4 tonnes of greenhouse gases a person, compared with 2.9 tonnes for residents of detached homes.

The report, published on the department's website, says electrically heated swimming pools and inefficient lighting and ventilation systems in common areas were found in many of the apartment blocks audited.

"With more thoughtful selection of common area technologies, many high-rise buildings could enjoy large energy and greenhouse savings," it said.

The director of the Total Environment Centre, Jeff Angel, said developers should spend less on apartments' fit-outs rather than scrimp on energy-saving measures.

He also encouraged the use of cogeneration plants in new apartment blocks, which work by taking the heat created by a power generator and using it for extra energy supply.

The Herald also has a report on a UN plan for China and India to slash their energy use. Why the world's biggest energy consumer wasn't mentioned is something of a mystery.

The three-nation report, led by the World Bank and the UN Environment Program, said many banks had overlooked chances to boost their profits by lending to help businesses cut energy waste while oil prices hover at around $US70 a barrel.

"Cutting energy waste is the cheapest, easiest, fastest way to solve many energy problems, improve the environment and enhance both energy security and economic development," said Robert Taylor, a World Bank energy specialist who led the study.

Cost-effective retrofits in buildings and factories could reduce energy use by at least 25 per cent in China, India and Brazil, it said of the four-year study. The conclusions were likely also to be true of other developing nations.

Cutting energy waste would save hundreds of millions of dollars, cut noxious air pollution and reduce emissions of greenhouse gases released by burning fossil fuels such as oil, coal and natural gas.

China, India and Brazil are home to almost 2.6 billion people, about 40 per cent of the world's population. Their energy use and emissions from fossil fuels, widely blamed for global warming, are set to double by 2030.

Many scientists say that rising temperatures could wreak havoc with the climate, bringing more heatwaves, floods, desertification and a gradual rise in world sea levels.

Measures to offset waste include retrofits for buildings and factories, such as higher efficiency lighting or air conditioning systems, better boilers or waste heat recovery systems.

Bloomberg reports that GE is forecasting a big jump in sales to China this year based on increased demand for clean(er) engines and wind turbines.

As a side note, I've been given a large number of compact fluorescent globes over the past year or so - some bright spark worked out that RECS credits could be obtained by handing out energy efficient devices, so there are stalls set up in the mall next to my office handing out globes (and water efficient shower heads) on a regular basis.

The main problem with these traditionally has been the office style feel of the fluorescent light they emit, which isn't all that pleasant, even if you have an energy efficiency obsession like me. The latest batch were GE's "Entice - warm white" (this isn't product placement, just a genuine observation - I'm sure GE does plenty of evil things as well as good things), which seem to produce light with similar characteristics to an ordinary incandescent globe - much easier on the eyes and pleasant to look at. I've got to say their marketing is rubbish though, as I was going to adorn this with a picture but I can't even find a reference to the product online, let alone a decent snapshot - the viridian business wave still has a long way to go it seems...

``Our business could double again in China in the next four or five years,'' Immelt said after signing an agreement to help China meet environmental targets.

Immelt is tapping China, which has six of the world's 10 most polluted cities, to expand sales of products such as wind turbines and fuel-efficient locomotives that cut emissions. China will spend 1.5 trillion yuan ($186 billion) in the next 15 years to increase renewable energy use to 15 percent of total supply, the government said in November.

GE's clean technology agreement with China covers conversion of coal to gas, wind energy, jet engines that have lower- emissions and use less fuel, power-efficient railway locomotives and water desalination.

...

All of GE's energy-related divisions are expanding, driven by alternative sources such as wind turbines, John Krenicki, chief executive officer of GE Energy, said in an April 5 interview.

Some analysts expect GE to benefit from environmental concerns about burning fossil fuels, along with rising prices for oil and natural gas. ``The global push to reduce fossil fuel-derived electricity with alternatives such as wind, solar, coal gasification and nuclear power should benefit GE,'' New York-based Citigroup analyst Jeffrey Sprague wrote in a March note.

The World Bank says six of the world's 10 most-polluted cities are in China and estimates environmental damage and health problems cost the world's fastest-growing major economy more than $54 billion a year. General Electric is the world's second-biggest company by market value, behind Exxon Mobil Corp.

China received the first shipment of liquefied natural gas, a cleaner-burning alternative to the coal that powers as much as 70 percent of the nation's energy needs, from Australia's North West Shelf last week. The North West Shelf Venture will supply China more than 3.3 million metric tons, or 50 cargoes, of LNG annually under a 25-year, A$25 billion ($18 billion) agreement.

I noticed today that peak oil prophet T Boone Pickens made US$1.4 billion last year (nice work if you can get it) - obviously being ahead of the peak oil curve has been more than a little lucrative for some.

James Simons earned an estimated $US1.5billion ($2billion) in 2005, the most of any hedge-fund manager, followed by Boone Pickens at $US1.4billion, according to Institutional Investor's Alpha magazine. The average pay of the top 26 earners rose 45per cent in 2005 to $US363million, the magazine said.

Hedge funds returned 9.2per cent last year, double the Standard & Poor's 500Index and about the same as in 2004, according to Chicago-based Hedge Fund Research. "At the moment it is absolutely a paradise for the greedy folks who run these things," said John Gutfreund, former chief executive officer of Salomon Brothers and president of Gutfreund & Co in New York.

The impending merger of the ASX and the SFE leaves Australia with a lack of choice in markets to trade on. A new contender is about to be set up though - the guy behind it all doesn't exactly sound like your stereotypical pillar of the financial sector though.

Unconventional, creative and hailed as a brilliant strategist, Brian Price is behind a deal to establish a new derivatives exchange, writes Matt O'Sullivan.

Brian Price knows a lot about greed and revenge.

He thrived amid the "gangland warfare and manic chaos" of the trading floor of the Sydney Futures Exchange in the 1980s.

He wrote about it in the original story for Robert Connolly's 2001 film, The Bank, the tale of a young market trader who seeks revenge for the repossession of his father's farm.

Now the hedge funds manager and "market-risk strategist" for some of this country's richest individuals is behind a deal to establish a commodities and energy derivatives exchange for the Asian region in Sydney.

...

The prospect of a new exchange has received a lukewarm response from some market participants, who point to the collapse of the Australian Derivatives Exchange after just 11 weeks of operation in 2001.

But Price rebuffs this. "They tried to build the Panama Canal once and 100,000 people died, and they came back 20 years later and built it," he says. "Ours is a different business model, a different strategy, a different time."

Advances in front-end technology — notably broadband whereby markets can be accessed from home — have opened the door to a wide range of investors. "Computer technology has made it phenomenally more achievable," he says. "I can't think of any businesses in the world that have changed this substantially."

Price, born in Canada, is a veteran of the derivatives market. He was there at the beginning when in 1984 he first walked into the chaos of the SFE's trading room floor for Trans City Holdings.

In 1989, Price left the floor to establish Standard Options, effectively a hedge fund that would later become Iron Mountain.

But he's not your typical corporate type. He'd favour a counter meal at a pub near his office over a long business lunch, and it's no surprise that a man who describes himself as a "moderate socialist" lists the Gaza Strip, the West Bank, Colombia and Rwanda as places he has visited because "that is where humanity really is".

TreeHugger reports that "An Inconvenient Truth" is off to a good start at the box office.

We don't expect a film based on a slide presentation to outdo Hollywood summer blockbusters at the box office, but we're happy to see that An Inconvenient Truth is doing very well so far: "On Wednesday an inconvenient truth was the #11 movie in the country despite being in only 4 theaters, earning $78,994 ($19,749/theater). The #10 movie was showing at 1,265 theaters, earning 117,000, or $92/theater."

With all the media attention surrounding the movie comes the inevitable ad hominem attacks by industry hitmen who can't seem to touch the science so they attack the messenger. This is followed by all the armchair climate "experts" who think they can argue against the scientific consensus and the real experts because they've seen a 1-hour special on TV or heard somewhere that it was just a warming cycle.

For some reason, these people seem to think that the thousands of people who spent almost every day of their lives for decades learning about, studying and experimenting on the subject haven't tested and rejected these theories (by using the peer-reviewed scientific method, something that, unfortunately, isn't imposed on "experts" from industry-backed think tanks when they write articles, do interviews, speak on the radio, cherry pick facts that seem to support their claims, etc).

Are there many possible causes to global warming? Sure. It could be a natural warming cycle, or have something to do with the sun, or whatever.

But it isn't a faith issue. You don't get to pick the most convenient explanation and then reinforce that belief by looking for other people or groups that have been saying the same thing.

It's a scientific issue. We need to look at the empirical data. The people who are doing that are climate scientists (and scientists from other domains as well), and they tell us that the problem is caused by the billions of barrels of oil, the billions of tons of coal and the billions of cubic meters of natural gas that we've been burning since the industrial revolution. They might not have the big marketing and PR budgets that their opponents have, and it's hard to convince people with nuanced and cautious explanations filled with jargon (much easier to cut through the information-overload with one-liners like "It's a hoax! A natural warming cycle! Carry on..."), but nobody on this planet is better equipped than them to study this problem, so if we don't listen to them, we might as well be rolling dices.

The Washington Post has a very long look at the climate skeptics in "The Tempest", part of their special on "The Threat of Climate Change" (they also have a special on oil and gas prices just so they have something for everyone).

Let us be honest about the intellectual culture of America in general: It has become almost impossible to have an intelligent discussion about anything.

Everything is a war now. This is the age of lethal verbal combat, where even scientific issues involving measurements and molecules are somehow supernaturally polarizing. The controversy about global warming resides all too perfectly at the collision point of environmentalism and free market capitalism. It's bound to be not only politicized but twisted, mangled and beaten senseless in the process. The divisive nature of global warming isn't helped by the fact that the most powerful global-warming skeptic (at least by reputation) is President Bush, and the loudest warnings come from Al Gore.

Human beings may be large of brain, but they are social animals, too, like wolves, and are prone to behave in packs. So when something like climate change comes up, the first thing people want to know is, whose side are you on? All those climatic variables and uncertainties and probabilities and "forcings" and "feedback loops," those cans of worms that Bill Gray talks about, get boiled down to their essence. Are you with us or against us?

Somehow Hitler keeps popping into the discussion. Gore draws a parallel between fighting global warming and fighting the Nazis. Novelist Michael Crichton, in State of Fear , ends with an appendix comparing the theory of global warming to the theory of eugenics -- the belief, prominently promoted by Nazis, that the gene pool of the human species was degenerating due to higher reproductive rates of "inferior" people. Both, he contends, are examples of junk science, supported by intellectual elites who will later conveniently forget they signed on to such craziness.

And Gray has no governor on his rhetoric. At one point during our meeting in Colorado he blurts out, "Gore believed in global warming almost as much as Hitler believed there was something wrong with the Jews."

When I opine that he is incendiary, he answers: "Yes, I am incendiary. But the other side is just as incendiary. The etiquette of science has long ago been thrown out the window."

In a media-saturated world, it's hard to get anyone's attention without cranking the volume. Time magazine recently declared that Earth looks like a planet that is sick (cover headline: "Be Worried. Be Very Worried"). Vanity Fair published a "worst-case scenario" photo illustration of Manhattan drowned by an 80-foot sea-level rise, the skyscrapers poking up from what has become part of the Atlantic Ocean. That's not inconceivable over the course of many centuries, but the scientific consensus (IPCC, 2001) is that by 2100 sea level will have risen somewhere between three and 34 inches from its 1990 level.

The news media -- always infatuated with doom (were it not for the obvious ramifications for ratings and circulation, the media would love to cover the End of the World) -- struggle to resist the most calamitous-sounding climate scenarios. Consider the January 2005 survey of thousands of climate change models that showed a very wide range of possibilities. One model at the very extreme had a worst-case-scenario warming of 11 degrees Celsius -- which is nearly 20 degrees Fahrenheit.

"The world is likely to heat up by an average of 11ºC by the end of the century, the biggest-ever study of global warming showed yesterday," the London Evening Standard reported online. This would cause "a surge in sea levels threatening the lives of billions of people."

Wrong, but whatever.

The skeptics feed on alarmism. They love any sign that global warming is a case of mass hysteria. Someone like Myron Ebell, an analyst at CEI, freely admits that, as an advocate in a politicized battle, he tries to make "the best case against alarmism." Everyone, on both sides, is arguing like a lawyer these days, he says. "What is going on right now is a desperate last-ditch Battle of the Bulge type effort by the forces of darkness, which is relying heavily on the lockstep/groupthink scientific community."

The president's science adviser, John Marburger, thinks the politicized debate has made it almost impossible to talk sensibly about the issue. "There seems to be the general feeling that somehow the administration doesn't feel that climate change is happening," he says. "That's completely wrong." The administration just doesn't think the problem can be solved with the "magic wand" of regulation.

Marburger recently declined to go on "60 Minutes" to address allegations that federal scientists were being muzzled and government reports rewritten by the White House to minimize concerns about global warming. "In general the public discourse on this has gotten completely off the track, and we're never going to straighten it out on '60 Minutes,'" Marburger says.

This issue forces Americans to sort through a great deal of science, technology and economics, all of it saturated in divisive politics. Many Americans haven't really tuned in. A Gallup poll in March showed that global warming is far down the list of concerns among Americans -- even when asked to rank their environmental worries. More Americans were worried about damage to the ozone layer. No doubt some people have the two issues confused. Both involve air, and emissions of some kind, and some worrisome global effect. But the ozone issue, while hardly solved, has at least been seriously addressed with a global ban on chlorofluorocarbons (CFCs).

Climate change takes place on time scales of decades and centuries. In a 24-hour information society, it is hard to keep the year 2100 in mind. But these changes are happening at a geologically rapid pace. For roughly the past 10,000 years, since the end of the last Ice Age, human beings have enjoyed a relatively stable, comfortable "interglacial" period, during which they've invented everything from agriculture to moon rockets. Nomadic bands of hunters and gatherers have given way to more than 6 billion people, largely urbanized and energy-hungry. Pressure on ecosystems is immense. Biologists warn of a "sixth extinction" -- the sixth mass extinction of species since the rise of multicellular organisms about 600 million years ago. The most recent mass extinction, 65 million years ago, was apparently caused by a mountain-size object striking Earth. Human civilization, in this view, is like an asteroid hitting the planet.

The expansion of human civilization is an experiment on a global scale: What happens when a species obtains not only intelligence but technology? Do intelligent, technological species tend to survive for a long time -- or bring their environment crashing down around them?

Back to TreeHugger, they also have a review of a documentary on the ANWR called "Oil On Ice".

We've just watched Oil On Ice, an excellent documentary about the Arctic Wildlife Refuge (a topic we've covered in the past), why it's important to protect it and why it doesn't make much sense to go drill for oil there. The film covers 4 main issues: Communities that live in the area, the wild lands of the Refuge, the wildlife (and what a wildlife!) and energy. W

e quite enjoyed the discussions about solutions and the explanations about how some common sense investments in current technologies could improve our energy efficiency significantly (after all, it's easier to use less energy than to find new one) and save a lot more oil than could ever come out of Alaska. It also shows some of the effects of global warming on the arctic ("global weirding", as Lovins call it) and debunks some claims by Exxon about the Exxon Valdez oil spill. The DVD features bonus interviews with Carl Pope of the Sierra Club and Amory Lovins of the Rocky Mountain Institute.

As I've thrown in a number of links to articles on modern video games in recent days, here is some more grist for the mill - Nuclear dispute is basis for Iranian computer game and Baghdad, USA.

And to close, I'm happy to note that the 100,000th visitor here has passed by today - glad to see so many people found my rantings of interest (well, except for those who came here via Google and felt entirely unsatisfied with what they found)...