Esso reckons 20 more years of oil left in Bass Strait  

Posted by Big Gav in , , , , , , , , ,

While Australia's oil production seems to be past peak, existing fields like those in Bass Strait are still being squeezed for every last drop. The interesting thing about this report from the SMH is that Esso's (Exxon) ability to prolong the life of their Bass Strait fields is throwing the feasibility of Shell and Anglo American's coal to liquids plant in doubt.

SUCCESS in life extension work by Bass Strait operator Esso has prompted the ExxonMobil subsidiary to predict that the region still has more than 20 years left of oil production and more than 30 years of gas. A $400 million seismic data and infill drilling program, involving wells at the Kingfish, Bream, Halibut and Fortescue fields, is adding 30,000 barrels of crude oil to daily production, worth close to $1 billion a year on current prices.

But Esso's success has implications for the planned $5 billion Monash Energy coal-to-liquids project in the Latrobe Valley, a joint venture between Shell and Anglo American. The Monash project would turn brown coal into gas for further conversion into 60,000 barrels a year of synthetic diesel. A key element of the project is the separation of a concentrated stream of carbon dioxide for geosequestration. Without carbon capture and storage (CCS), the greenhouse gas emissions would be at unacceptable levels.

The potential for CCS in Bass Strait's reservoirs was the subject of a Federal Government-funded study by Monash that found there was massive storage capacity in depleted hydrocarbon reservoirs or in deeper geological structures. But success in the Esso infill program suggests that the implementation of CCS in Bass Strait could be further off than first thought, given the intention of draft legislation that existing oil and gas production not be affected by licences issued for CCS.

Monash countered that there was "still no new information to challenge the initial conclusion that hydrocarbon extraction and CCS can be entirely compatible activities in the Gippsland Basin [Bass Strait]".

A spokesman said it was great that Esso had obtained data that gave it that "level of confidence in the geology and economics of Bass Strait". "All stakeholders interested in developing CCS in Australia would welcome the opportunity to explore such data with the producers to further explore options for continued hydrocarbon extraction at the same time as CCS is developed," the spokesman said.

Meanwhile, the crude oil boost for the Bass Strait partnership of Esso and BHP Billiton means that the natural decline curve for production has flattened, allowing the Esso-managed fields to average total liquids production (oil, condensate and liquefied petroleum gas) of 127,000 barrels a day in 2006. While that is well short of the 500,000 barrels a day achieved in Bass Strait's heyday, it still ranks the area among Australia's biggest producers after 38 years of production in which 3.5 billion barrels of oil and 5 trillion cubic feet of gas have been produced.

ExxonMobil Australia chairman Mark Nolan said the infill drilling program had "significantly extended the life of the Bass Strait fields". "The results so far give us confidence that there is today more than 20 years left of oil production in Bass Strait," he said. "For example, the Kingfish field, Australia's largest-ever oil field, from which over 1 billion barrels of crude has been produced, continues to be one of our most important oil producers 40 years after its discovery."

He said that improvements in technology, particularly in processing of seismic data and drilling accuracy, were behind the infill drilling program's success.

Technology Review has an article on "Thin Film's Time in the Sun", noting that thin film technology is now challenging silicon panels at large-scale solar-power facilities.
The low manufacturing cost of photovoltaics that employ thin films of cadmium-telluride semiconductor have long been seen as having the potential for lifting solar power from its niche status as a very expensive power source, delivering less than a twentieth of 1 percent of U.S. electricity.

Now, after two decades in which cadmium-telluride technology was dogged by low power output and reliability problems, it's suddenly elbowing its way into renewable-energy markets and competing with today's dominant solar technology: silicon solar panels. The company behind this technology turnaround is Phoenix-based First Solar, which says that the technology could eventually be cost competitive with conventional fossil-fuel sources of electricity.

First Solar has racked up a string of large contracts and investments over the past year for its thin-film technology. First Solar closed a $400 million initial public offering in November and clinched a deal three months later to supply a 40-megawatt solar-panel farm in Germany that will be one of the world's largest. And earlier this month, the company revealed that it has signed long-term contracts with European and Canadian buyers to supply 685 megawatts of modules worth $1.28 billion. The latter figure is especially impressive considering that all the solar-module factories in the United States shipped less than 200 megawatts' worth of photovoltaics last year.

Ken Zweibel, who directed the U.S. National Renewable Energy Laboratory's (NREL) Thin Film Partnership Program for more than a decade, says that First Solar has "broken out of the pack" by simultaneously achieving low-cost mass production and respectable power output. Zweibel, who left NREL in January to launch his own thin-film company using similar technology, expects more improvement on both fronts. "Cadmium telluride has a clear route to cost competitiveness with conventional energy," he says.

Thin-film panels are produced by layering shallow coatings of semiconductor materials on sheets of glass, plastic, or metal--a seemingly simple concept that is hard to implement on a large scale. Cadmium-telluride panels in particular seemed finished five years ago when BP Solar, an arm of the London-based oil company, shut down what had been the largest cadmium-telluride commercialization effort.

BP Solar had opened a cadmium-telluride module plant in 1998 designed to make eight megawatts of modules per year, but it never exceeded one megawatt. Creating films to exacting specifications proved harder than expected. And the company was concerned about the product's image, given the use of the toxic heavy metal cadmium. And BP stumbled in the market when the efficiency with which its first commercial cadmium-telluride modules absorbed solar energy slipped from 8 percent efficiency to 6 percent after just a few weeks on rooftops.

First Solar, founded in 1999 from a predecessor startup called Solar Cells and with an infusion of $250 million from Walmart founder John Walton, kept on tweaking its manufacturing process. The company addressed concerns about the toxicity of cadmium by creating a recycling program guaranteed to take back panels at the end of their useful life. Company officials would not comment in advance of an earnings statement. But company documents say that it progressively ratcheted up production at its first plant in Perrysburg, OH, from a few hundred kilowatts of modules per year in the early years to 75 megawatts last year. First Solar now produces more than 100 megawatts' worth of panels per year, thanks to a new plant in Germany. ...

Tech Review also has an article titled "Plug-In Hybrids Get Green Grades", noting "plug-in cars are a plus for the environment, despite the fact that they would increase the demand for electricity" (as V2G means all sorts of smart grid benefits can be achieved).
Plug-in hybrids, which use electricity from the grid to replace gasoline for daily driving, would cut gas consumption and save commuters from high fuel prices. But some experts have been concerned that switching from gas to electricity, much of which is generated from fossil fuels, would actually significantly increase pollution in some parts of the country, as opposed to decreasing it.

A study released last week by the environmental group National Resources Defense Council (NRDC) and the largely utility-funded Electric Power Research Institute shows that plug-ins, once they're on the market, will significantly cut greenhouse gases. Across the country, the vehicles will on average also decrease other pollutants, but the impact in local areas will depend on the source of electricity.

In plug-in hybrids, a large battery pack that is recharged by plugging it in stores enough energy to power a car entirely, or almost entirely, with electricity for the first 40 miles or so of driving. For longer trips, the car reverts to conventional hybrid operation, relying largely on gasoline for power but improving efficiency: by storing energy from braking in the battery and using it for acceleration, for example.

The study shows that if plug-in hybrids are adopted widely in the United States, and if measures are taken to clean up power plants, by 2050, plug-in hybrids could reduce carbon-dioxide emissions by 612 million metric tons, or roughly 5 percent of the total U.S. emissions expected in that time frame, according to Marcus Sarofim, a researcher at MIT's Joint Program for the Science and Policy of Global Change. That's a significant amount, he says, considering that transportation accounts for only about a third of the total greenhouse-gas emissions.

But if plug-in hybrids account for only a small part of the total vehicle sales in 2050 (about 20 percent, compared with 80 percent in the first scenario), and if little is done to improve pollution from power plants, the vehicles will still reduce greenhouse emissions by about 163 metric tons, according to the study.

The WSJ Energy Roundup has an interesting post on Merrill Lynch’s Energy Efficiency Index, analysing which companies have the most to gain from improving efficiency of energy use.
Merrill Lynch announced a new Energy Efficiency Index, currently comprised of 40 companies, to identify industry sectors that it says should benefit from the growing drive to improve energy efficiency. “While there has been a clear shift of resources and investor attention into renewable energy, energy efficiency remains an area that is relatively under-explored,” said Asari Efiong, Merrill Lynch SRI/ Renewable Energy equity analyst. “We believe that energy efficiency represents a significant market opportunity for investors, as policy changes look set to force a structural shift in demand.”

Merrill analysts say they think the global manufacturing industry could improve its energy efficiency by between 18% to 26% overall, while cutting the sector’s CO2 emissions by 19-32%. The four sectors most exposed to this theme, according to Merrill, are the automotive industry, capital goods, semi-conductors and building materials.

Among the companies in the index are those with technologies that boost automotive fuel efficiency; building-insulation companies; power-semiconductor makers and efficient-lighting companies.

Jeff Vail is back with a new post on energy driven instability called "Losing Our Balance?". I never thought I'd see Jeff invoking the name of Jay Hanson (now lurking at "Killer Ape Peak Oil" rather than his old Dieoff haunt) - its also an incorrect attribution, as Jay was just parroting Richard Duncan's "Olduvai Cliff" theory (something I liked to throw in for doomerish kicks in my early peak oil blogging days until I decided to be a responsible citizen instead of a fear monger). Duncan always used to send JD off on some wild rants as I recall, and they were reasonably accurate ones.

Personally I don't see the grid failing in any developed nation anytime soon - in fact I envision a globe circling grid appearing a decade or two down the line (a marriage of the smart grid and global energy grid ideas, powered by massive renewable energy projects in the areas with the best solar, wind, geothermal and tidal energy resources).
nteresting times, indeed. Oil (WTI) closed within one penny of the all-time record closing price of $77.03 last Friday. The markets seem shaken, and suddenly people are realizing that the recent explosion of derivatives may have created as much hidden rigidity as resiliency in our financial markets (as I wrote about here).

Mexico continues to reveal how deep its problems run. After my article on Mexico Collapse sparked quite a conversation on this topic, the meme of Mexico collapse spread quickly (though I don't take credit for that--the situation speaks for itself). One little gem was PEMEX's announcement late Friday that they will probably be out of oil in seven years--out of oil, not just beginning to decline. Notice how this came out on Friday afternoon. This is when you issue a press release when you want to bury a story.

And electricity seems to be a growing problem, at least in the third world (and those areas that the US military has transformed into the same). It is interesting to note that Jay Hanson (of dieoff.org notoriety) has always predicted that it would be electricity, not oil, that would be the actual cause of collapse. This seems quite plausible to me, though I still think that it will be fundamentally driven by declining oil production, with the resulting electricity-grid problems being best understood as an "above ground factor" stemming from oil. Oil is driving metal theft to new highs, which impacts the viability of electrical grids everywhere. Oil and natural gas prices makes it more difficult to maintain fuels for peak-generating capacity. Oil prices breathe life into infrastructure insurgencies everywhere, which repeatedly target electrical grids for their high return on investment.

Take a look, for example, of what has happened to the electrical supply situation in Baghdad, despite the impending success (sarcasm) of the current "surge" by US military forces there:




Ryan Crocker, the U.S. ambassador to Iraq, told the Senate Foreign Relations Committee last week that Baghdad residents could count on only "an hour or two a day" of electricity.

Interestingly, John Robb has picked up on this crisis in electrical grids around the world as a possible point of development for Africa--their grids are becoming so unreliable that African communities have the opportunity to lead the world in innovating a mode of modern civilization without grid electricity, and possibly export any success that they may have to the rest of the world. While I don't see Africa finding a profitable export market for their brand of grid-free living (admittedly, that isn't actually what Robb was suggesting), I do agree with Robb's assessment that we need to learn to build resilient communities--I've written about that, as well. ...

The article John Robb refers to is this one from the NYT - "Toiling in the Dark: Africa’s Power Crisis".
It is not that Jacob Mwale minds irrigating the 11 acres of land he farms just east of Lusaka, Zambia’s capital. It is irrigating his 11 acres in the dead of night that angers him. Two or three times a week, the Mwale farm abruptly loses power, like the homes and businesses of some of Zambia’s 300,000 other electricity users. When the power returns, sometimes late in the evening, Mr. Mwale’s farmhands work overtime, watering the fields by moonlight. “If they shut down the whole day, I have to work nights, and pay extra,” Mr. Mwale, 39, grumbled. “It’s killing us.”

Power blackouts — “load shedding,” in utility jargon — are hardly novel in sub-Saharan Africa, where many electricity grids remain chewing-gum-and-baling-wire affairs. Even so, this year is different. Perhaps 25 of the 44 sub-Saharan nations face crippling electricity shortages, a power crisis that some experts call unprecedented.

The causes are manifold: strong economic growth in some places, economic collapse in others, war, poor planning, population booms, high oil prices and drought have combined to leave both industry and residents short of power when many need it most. “We’ve had no significant capital injection into generation and transmission, from either the private or public sectors, for 15, maybe 20 years,” said Lawrence Musaba, the manager of the Southern African Power Pool, a 12-nation consortium of electricity utilities at the continent’s tip.

The implications go beyond candlelight suppers and extra blankets on beds. The lack of reliable power has already begun to hamper the region’s development, clipping more than 2 percent off the annual growth rates of the worst-hit African economies, according to the World Bank. Some nations, like Ghana, have tried to deal with their power crises by leasing huge teams of gas generators, producing emergency power at exorbitant rates until power plants can be built.

In Nigeria, Angola and some other nations, virtually all businesses and many residents run private generators to supplement faltering public service, saddling economies with added costs and worsening pollution. “I’ve been on the 20th floor of an apartment building in Luanda, and there would be generators on all the verandas, with the racket, the fumes,” said Anton Eberhard, a former electricity regulator and an expert on power at the University of Cape Town. “And the lift isn’t working, because the main power supply is off.”

In normal times, South Africa’s muscular chain of power plants fills the gaps of its neighbors. But South Africa now could experience up to seven years of its own electricity shortages. Rolling blackouts blanketed parts of the country in January, and sporadic power failures have persisted since. The gravity of this year’s shortage is all the more apparent considering how little electricity sub-Saharan Africa has to begin with. Excluding South Africa, whose economy and power consumption dwarf other nations’, the region’s remaining 700 million citizens have access to roughly as much electricity as do the 38 million citizens of Poland.

Much goes to industry: a single aluminum smelter near Mozambique’s capital, Maputo, gobbles four times as much power as the entire rest of Mozambique. On average, the World Bank says, fewer than one in four sub-Saharan Africans are hooked to national electricity grids. Moreover, some grids are so poorly maintained that electricity suppliers get paid for as little as 60 percent of the power they generate. The rest is either stolen or lost in ill-maintained networks.

For decades, the region had enough generating capacity — and few enough customers — to tolerate such waste. No more: sub-Saharan nations are adding about a thousand megawatts of generating capacity each year, World Bank experts say, but need up to twice that to keep pace with demand.

Some governments privatized chunks of their power industry in the early 1990s when free-market solutions to public-sector problems were in vogue, leaving it unclear who is ultimately responsible for providing power. Other governments, as in South Africa, failed to build power plants that experts warned were needed. The government monopoly Eskom, the world’s fourth-largest power utility, was advised in a 1998 report that it would run short of power in 2007, but planning and financing problems — not all within the utility’s control — stalled upgrades. The forecast was actually optimistic: Eskom began running short in 2006.

Yet South Africa’s woes pale beside those of Nigeria, Africa’s most populous nation. Only 19 of 79 power plants work, the government said in April. Daily electricity output has plunged 60 percent from its peak, and blackouts cost the economy $1 billion a year, the Council for Renewable Energy in Nigeria says.

Poor management is but one problem. War has devastated the power grid in Congo, in Africa’s heart, and stalled plans to develop its vast hydroelectric potential. In Kenya, Tanzania, Uganda and parts of West Africa, drought has shrunk rivers and slashed the generating capacity of hydroelectric dams. Drought in Ghana, for example, has crippled gold and aluminum production and set off blackouts in Togo and Benin, which buy power from Ghana.

Once a major power exporter, Uganda now blacks out parts of its capital, Kampala, for as much as a day at a time and has leased two 50-megawatt generators, burning diesel at a time of record oil prices. The demand for hydropower in Uganda and its neighbors, with drought, is blamed by some for a steady reduction in the water level of Lake Victoria, Africa’s largest.

Uganda’s gas stations are now short of diesel for vehicles — in part, paradoxically, because power shortages are shutting down a pipeline from Kenya. News reports say the nation has spent enough on diesel-fueled power generation to build two hydroelectric dams.

Zambia, where power to customers like Mr. Mwale is rationed almost every day, is a template for such problems. Barely 20 percent of households are wired for power — only 3 percent in rural areas — but the Zambia Electricity Supply Company, known as Zesco, is signing up 10,000 new customers a year, said Christopher Nthala, the utility’s transmission director.

Now Zambia is getting a push: a global commodities boom has jolted its moribund metals industry to life. Investors are building two smelters, and doubling the capacity of another, to handle the boom in copper, nickel and other metals, taxing the nation’s power supply. “We’ve never seen this kind of growth before,” Mr. Nthala said.

Once the utility could make up shortfalls by buying power from other utilities in the Southern Africa Power Pool. But today, Mr. Nthala said, neighbors have little surplus to hand out. “Sometimes we get it,” he said. “Sometimes we don’t.” None of that mollifies customers, who say blackouts are so common that service in much of Lusaka has become totally unreliable.

Many power failures seem to hit Matero, a poor township that is home to maybe a million of Lusaka’s estimated three million residents. “Every day — it’s either in the morning, when people are going to work or preparing to cook, or in the evening, the prime time when I’m tired and I need to go home and listen to the news and cook my supper,” said Bishop Peter Ndhlovu, who leads the 250,000-member Bible Gospel Church, an evangelical movement.

Nighttime prayer meetings in his corrugated-roof chapel have been canceled. Bishop Ndhlovu and others say they lave lost refrigerators, televisions and DVD players to the utility’s blackouts and surges. Most of the township’s residents have adapted by turning away from their stoves and instead cooking outdoors, village-style, with homemade charcoal. “Charcoal is going very fast, because they’ve found out that Zesco is cutting power unpredictably,” the bishop said.

On Lusaka’s eastern outskirts, Mr. Mwale, the farmer, also has laid in a stock of charcoal — not to cook, but to warm his stock of newborn chicks, which must be kept at a constant 90 degrees for the three weeks after hatching. He said he worried about the environment. Charcoal production is a major contributor to deforestation in Zambia and nearby nations. But the alternative is to take a loss on his poultry business. “When they make a loss, they just raise their tariff,” he said of Zesco. “When I make a loss, I have to make it up myself. Is that fair?”

Zambia’s plan, like the plans of dozens of other nations, is to build its way out of the power crunch. Zesco plans $1.2 billion in generating upgrades and new capacity, financed mostly by China and India. South Africa plans more than $20 billion in upgrades; Congo is contemplating a hydroelectric station that by itself would increase capacity outside South Africa by 50 to 75 percent.

The World Bank says its financing of power projects in sub-Saharan Africa is ballooning, from $250 million five years ago to $660 million last year to $1 billion in 2007. But many plans remain just that. Issues like creditworthiness, lax regulation, domestic politics and the sheer difficulty of sending power over rundown grids to the customer make outside investments in power stations tougher than they appear, said Tore Horvei, the chief operating officer of CIC Energy Corporation, which is based in South Africa.

The best answer, most experts consulted agree, would be for nations to cooperate on regional power solutions. One or two large regional plants, they say, could supply power more cheaply and efficiently than dozens of smaller ones. But while that may be logical, Mr. Horvei said, “it’s very challenging in practice to do so.” “National pride and everything else comes in,” he added.

There is an alternative: saving energy. Namibia plans a wind farm on its southern coast, while in South Africa, Eskom has handed out five million fluorescent bulbs and 140,000 insulating blankets for water heaters, and has paid industrial customers to switch off equipment during periods of high demand.

I think its fair to say diesel based power generation is going to be a thing of the past in poor countries soon, and aid and development programs (and foreign investment) should focus on building a new distributed / renewables infrastructure - this could become a classic case of technology leapfrogging if handled correctly.

Moving on, TreeHugger has a post on "urbines" at Elephant and Castle (site of the world's ugliest traffic roundabout if I recall correctly).
Urbines. That's what World Architecture News labels urban wind turbines; neat neologism.

Ben Coleman of Hamiltons Architects says that to optimise power, "integrate turbines into the design of tall buildings in such a way that the contours of the building envelope focus wind on to the turbine blades, much like the casing around a gas or water turbine." They are doing this at Castle house, a 43 storey, 408 unit apartment building at Elephant and Castle in Southwark, London. "Three 9m wind turbines integrated into the top of the building are expected to generate sufficient power to drive the energy efficient lighting to the building, an integral part of the sustainable credentials for the building as a whole."



Links:

* Tom Whipple (Energy Bulletin) - Peak Oil Review - July 30th, 2007
* Trinidad and Tobago Express - Peak oil - expensive food
* SMH - Oil group slipping into the Kremlin ring
* AFP - Global warming doubles number of hurricanes, study finds
* Tim "Deltoid" Lambert (Crikey) - Joining the dots on The Daily Tele's anti-Gore story
* Technology Review - Saving Bangladesh from Global Warming
* Green Car Congress - Global Wind Power Capacity Increased Almost 26% in 2006
* Khaleej Times - Saudi Arabia to focus on renewable energy
* Green Car Congress - UD-Led Team Sets Solar Cell Efficiency Record of 42.8%; Joins DuPont on $100M Project
* BusinessWeek - Tesla: A Carmaker With Silicon Valley Spark
* Business 2.0 - The 50 Who Matter Now: Martin Eberhard
* After Gutenberg - UltraCapacitor E Bike
* Green Car Congress - Maxwell Ultracaps Cleared for Vehicle Applications in China
* PhysOrg - Renewable energy wrecks environment, scientist claims. Award for most laughable piece of nuclear industry propaganda ever goes to PhysOrg and the Rockefeller University - for a while I thought this was some obscure satire in The Onion. Cherry picking "facts" to make some bogus case isn't what academia is supposed to be about - this guy should get a job as a lobbyist.
* Crikey - The Haneef fiasco: It's the law stupid
* Swans - Iraq Now As I See It
* Huffington Post - Blowing Off the PR Pixie Dust While Waiting for Petraeus
* Technology Review - New report warns some nations imposing too many rules on Internet use. While others just do it a little more subtly (thankfully).
* Cryptogon - Zeitgeist
* Word Of The Day (Rigorous Intuition) - Egregore. For fans of weirdness only. Suspending disbelief for a moment, if egregores did exist, imagine the ones being created by the various doomer cults out there...

Tornado Power  

Posted by Big Gav in , , , , ,

Tyler Hamilton has a post on the "vortex engine" idea - "A new spin on clean energy: tornado power" at Clean Break which is pretty interesting.

I have a feature in today's Toronto Star about a retired engineer from Sarnia, Ontario, who has spent the past four decades of his life studying the possibility of creating man-made tornadoes from industrial waste heat so that their energy can be harnessed for clean electricity generation. More recently, Louis Michaud has formed a company called AVEtec Energy, filed and obtained patents, and has partnered up with the University of Western Ontario's wind-tunnel lab to study small prototypes and do computer simulations of his "vortex engine" process. He's also managed to raise some early research funding from the Ontario Centres of Excellence and now faces his biggest challenge yet: convincing private investors to fund a large-scale working pilot plant.

It may sound like a whacky, out-there idea, but the experts I spoke with for the feature don't doubt the technical possibility of creating a man-made tornado. After all, the principles of convection are pretty straightforward. Heat rises when you've got a certain temperature differential, and as it rises it swirls -- kind of the reverse of what you see when water goes down a drain. AVEtec's pitch might raise eyebrows, but many are taking it seriously. For example, its advisory board consists of climate experts from Oxford, Cambridge and MIT, including MIT professor and well-respected hurricane expert Kerry Emanuel.

Michaud envisions building a large cylindrical building 200 metres in diameter and about 50 meters high, and this structure would have an open top. Heated waste water from a power plant that would normally go to a cooling tower would instead be diverted to the vortex building and into 10 or more strategically located cooling cells, where fans would blow so the air could pick up the heat energy from the water. The hot air from the 10+ intake ducts are then pushed at an angle into the cylindrical building, where you see the beginnings of a whirlwind. As the hot air rises it gathers energy and creates a vortex that reaches higher and higher into the atmosphere. At a certain point the fans pushing the hot air into the vortex are turned off. The vortex, now hungry for more heated air, begins to suck in the air on its own. Suddenly, what were fans now become turbines that spin as the air is drawn in. The turbines are connected to generators that produce clean electricity as long as a constant source of waste heat is provided to feed the vortex, which at this point is a full-fledged tornado stretching into the troposphere.

Michaud calculates it would cost $60 million to build such a plant. But because it would be replacing the function of a cooling tower, that figure would be offset by up to $20 million. The end result, assuming it works and is safe, would be a 200 megawatt power station producing clean energy at less than half the cost of a coal plant. ...

Speaking of outside the box, Michaud says his vortex engines could help us directly manage climate change. He says there's no reason hundreds of his vortex engines couldn't be stationed in the ocean along the equator, where ocean water is warm enough to provide energy for creating a tornado. Why do this? Well, the greenhouse effect prevents heat that hits the earth's surface from radiating back into space, so Michaud argues that his vortex network would act like air conditioners that suck the hot air high into the atmosphere where the heat can more easily escape. All I can say is.... Wow!

This concept is similar in many ways to the solar tower idea being pursued in Australia. The idea there is that solar energy is collected passively on the ground in a kind of large sprawling greenhouse structure. The air within this greenhouse heats up and flows toward a large chimney in the centre. The air gathers speed as it rises through the chimney and a large turbine inside spins to generate electricity. The problem with this is that to get, say, the 200 megawatts that Michaud wants to produce from his vortex engine, you'd have to build a huge chimney that stretches a kilometre into the sky. The greenhouse on the surface would also need to be large. Both taking up a lot of space and very costly -- the economics don't work well. Michaud believes his vortex engine overcomes this problem because the vortex forms its own chimney of air, meaning one doesn't have to be constructed. Also, by creating a tornado you generate much more power that can be converted into electricity.

Tyler also has a "algae to biofuel" article out at The Toronto Star - "Putting the bite on C02". from a global warming point of view it is worth noting these emissions capture schemes are great but they don't sequester the carbon in any permanent way - they just let you get another round of energy generation from the carbon you burnt the first time.
Capturing carbon dioxide can be done in several ways, but the most unusual approach by far is to literally feed the greenhouse gas to CO2-hungry algae.

Several companies have attempted over the years to develop algae bioreactor systems that can be attached to coal- or natural gas-fired power plants or big industrial facilities. The idea is that CO2 emissions from these operations can be directed to an algae "farm," where the tiny organisms feast on the gas until they're fat enough to harvest.

The mature, oil-rich algae can then be processed into a number of products, such as biodiesel, ethanol, animal feed and a variety of plastics. So you end up with a double benefit: keeping CO2 from entering the atmosphere, and producing renewable products that can reduce the need for fossil fuels.

But like most dream technologies, CO2-to-algae-to-oil systems would be great if designing them didn't present so many challenges.

Last month, Cambridge, Mass.-based GreenFuel Technologies, a leading developer of algae-to-biofuel systems, found that a pilot system it had built in Arizona was growing algae so aggressively that it couldn't harvest them fast enough. As a result, the algae began to die.

The company also found out that the cost of its next-generation system was twice as much as it originally calculated, so it was forced to shut down the Arizona pilot and lay off nearly half of its staff.

This doesn't bode well for business. Power utilities, normally a conservative bunch, tend to shy away from any technology that isn't rock solid and risk free. They want to see more trial and less error.

As for a developing such systems for the Canadian market, experts say the cooler weather in Canada would make it difficult to keep the algae farms alive and productive year-round.

But never say never. The federal government announced in March that it was contributing $100,000 toward the first phase of a project to design microalgae systems with the potential to "capture up to 100 million tonnes of CO2 from industrial sources," the government said.

Not a huge contribution, but at least it kick-starts some serious research.

It's the first project under the newly created I-CAN Centre for the Conversion of Carbon Dioxide, which will be co-led by government research centres in Alberta, Saskatchewan, Manitoba and Quebec.

And earlier this month, a consortium of academics, scientists and businesses threw their hat into the algae pond, describing their collective goal of building a commercial "photo bioreactor" within three years and designing it for the needs of the Canadian market.

One company in that consortium is Ottawa-based Menova Energy Inc., which in other circles is known as a provider of solar hybrid systems that can provide both heat and electricity to schools, industrial facilities and other large buildings.

Another is Trident Exploration Corp., a natural gas exploration company looking at ways to reduce its CO2 emissions.

Menova president Dave Gerwing says Trident knew it was only a matter of time before the federal government began imposing penalties on CO2 emissions. Trident approached a number of companies looking for solutions, including GreenFuel Technologies, but it ended up teaming up with Menova last year.

So what does a solar company have to do with carbon sequestration in algae?

Gerwing, a determined engineer, says it's a combination of innovation and better economics. What Menova brings to the table that other companies don't is a combination of heat and light – both of which are crucial ingredients to algae cultivation.

Menova's Power-Spar system uses solar concentrators to focus the sun on photovoltaic solar cells, which produce electricity, and fluid-filled channels that capture the sun's heat. But the system goes one step further, capturing the sunlight and redirecting it where necessary through fibre-optic cables.

What this means is that an algae farm – or what Menova calls its "photo bioreactor" – can be designed in a way where heat and light are concentrated in a relatively more confined area, allowing for the high-density growth of algae without the need for acres and acres of land. ...

Renewable Energy Access reports that the wind power boom is driving up prices as manufacturers struggle to keep up with demand.
The wind industry is undergoing temporary growing pains similar to the silicon shortage experienced by the solar photovoltaic (PV) industry: there are simply not enough materials or manufacturing capacity to keep up with the increasing demand for wind turbines. The need for steel, copper, concrete and other materials has driven up project costs, restricted turbine supplies and created a difficult market for smaller wind developers.

But despite a two-and-a-half year stretch of materials shortages and rising costs, the global wind industry is experiencing steady growth worldwide and increased acceptance by utilities, governments and citizens.

"Between 2004 and 2005, the global wind turbine market experienced a rapid period of escalation...Within the span of just that year the global demand for wind turbine components and supply jumped to a new plateau and a new rate of growth," says Joshua Magee, senior analyst for Emerging Energy Research's (EER) North American Wind Advisory Group.

Much of that new demand was caused by the two-year extension of the production tax credit (PTC) in the U.S., which provided certainty for wind developers and encouraged a slew of new projects. In addition, China and India emerged as major players in the wind market, further straining supply of materials.

As the global market expanded rapidly starting at the end of 2004, the manufacturing capacity was not in place to handle demand. Since 2005, manufacturers have been playing catch-up and pumping out turbines as quickly as developers can put them into the ground. However, because it takes about 20 months to ramp up manufacturing capabilities, the cost increase and turbine shortage is not expected to level out until sometime in 2009, says Magee.

"Given that the global wind turbine industry is an inherently capital intensive industry, manufacturers have spent the last two years making the necessary investments to begin to regain parity with this new level of global demand," Magee says.

The point of parity couldn't come soon enough for some developers. Over the last two years, project costs have risen 50% in some cases, according to American Wind Energy Association Executive Director Randall Swisher. But the industry shouldn't be worried, says Swisher. The long-term economics of wind energy are still very attractive to utilities and their customers. While the price of fossil energies continues to rise, the cost of wind will always stay the same—free.

Links:

* FT - Uranium makes its first fall in price for more than four years. Japanese earthquake damages more than just nuclear power plants.

* Houston Chronicle - Filings against energy companies may point to a big shift. Regulators calling for large fines to be levied on Amaranth and Energy Transfer Partners for manipulating the US natural gas market.

* UPI - Analysis: Oil part of large Iraq conundrum. Still haven't handed over the oil. These mainstream press articles that are ignorant of both the history of Iraqi oil and the actual politics that are going on are demoralising from a "why can't we face reality and work out a better path forward" point of view.

* CounterPunch - Did Guerrillas Strike at the Heart of Mexico's Oil Industry? Bombing Pemex--Or Not?. Bart at EB comments "Background on the Mexican pipeline explosion from the left-wing CounterPunch. Looks as if there is more to the story than first meets the eye.".

* Janes - State Railway of Thailand to undertake ambitious development project. A pointer to the future - "the high increase in oil prices has caused everyone to think about how to shift the mode of transport to rail from road".

* Inside Greentech - Solel's new 553 MW solar thermal plant

* Grist - PG&E to buy 550 MW of concentrated solar from world's largest CS plant

* SMH - Blacktown goes green to beat the heat

* After Gutenberg - Fewer Mega-Joules to go the Same Distance and Suzuki Swift: Tiny, cheap and super fuel-efficient

* The Times - Jatropha: Poison plant could help to cure the planet. Interesting snippet - WA has banned the growing of jatropha.

* DeSmogBlog - Sorry Newsbusters, who's alarmist?. Orson Scott Card's science fiction is getting published in some odd places and the quality continues to deteriorate.

* Daily Mail - Sex for the motherland: Russian youths encouraged to procreate at camp. From a guy who is literally writing a book on "The New Cold War". The first bit of the article reminds me a lot of "Jesus Camp" - Russian fascists look a lot like American fascists to me, though the Russian opposition is a lot weaker than its US counterparts. The British really seem to be annoyed about Putin nationalising various BP and Shell energy projects.

* Greenpeace - Aviation industry takes five million people to court

* Pop!Tech - Stewart Brand

* Pop!Tech - Kevin Kelly

* The Onion - Study: Iraqis May Experience Sadness When Friends, Relatives Die

* The Oregonian - DeFazio chases secret terror-crisis plan

* Cryptogon - The Failed State and You: Iraq Offers a Preview of What’s Coming. This is one of Kevin's better diatribes - while I disagree with the whole "inevitable collapse" mindset, the point that some pro-collapsists are living in a fools paradise seems pretty sound.

Woodside Mission To Pluto Launched  

Posted by Big Gav in , , , , , ,

Woodside has managed to get their Pluto LNG project kicked off in record time, with development costs already looking much higher than originally anticipated due to labour and equipment shortages. The LNG train(s) will be at the Burrup (presumably close to the North West Shelf facility) and there is speculation that both the Gorgon and Browse developments may end up linking into this plant (though the Gorgon people are still resisting the idea).

More at egoli, The Age, Bloomberg, The West Australian, News.com and Oil Voice.

WOODSIDE Petroleum has committed itself to building one of the most expensive developments in the history of the Australian resources sector after its board gave the go-ahead for its $12 billion Pluto liquefied natural gas project on Friday. The final capital cost figure - on par with the original North-West Shelf development in the 1980s - was significantly higher than Woodside's earlier estimate of $6 billion to $10 million. "The costs are an eye-opener," Woodside chief executive Don Voelte admitted.

Woodside will initially build one production train based on a resource of 5 trillion cubic feet of gas in its Pluto and Xena fields. But it eventually plans to build up to two more trains and possibly a domestic gas facility to help improve the project's returns.

Some analysts questioned whether the first train would deliver a high return on the huge investment, but Mr Voelte said: "I don't spend $11 billion unless I get a damn good return on it." He was referring to the $11.2 billion investment announced on Friday in addition to $800 million that has already been spent on the project. Mr Voelte attributed the capital cost rise to a shortage of skilled labour and the rising cost of offshore equipment.

The first train will produce 4.3 million tonnes a year starting in late 2010, although it has a capacity to produce up to 4.8 million tonnes. Up to 3.75 million tonnes a year have already been contracted to Tokyo Gas and Kansai Electric on 15-year sales agreements. Mr Voelte said the remaining gas might be sold on the spot market. "We're already getting people knocking on our doors," he said. "Although we don't plan to sell [the uncontracted gas] beforehand, you never know what happens in this crazy world."

Woodside noted the proximity of other uncommercialised gasfields in the same region offshore Western Australia. The company plans to operate its onshore plant as an open-access facility for Woodside and third-party gas.

IAG Asset Management portfolio manager Alan Martin said Pluto could be another North-West Shelf in the making. "They're not going to stop with just this one phase," he said. "You can be assured of that. There's a lot of gas in adjacent blocks that needs a processing centre."

Mr Voelte said there was also potential for Woodside to make more discoveries on its own exploration blocks adjacent to the Pluto and Xena fields. "Pluto opens up a whole suite of opportunities out there," he said. He added Woodside was still conducting earlier-stage work on its other LNG projects, including Browse and Sunrise.

TreeHugger has a post on a huge new magnetic levitation wind turbine being touted by an Arizona company that can potentially generate one gigawatt of power at low cost.
It's a vision of a magnetically levitated wind turbine that can generate one gigawatt of energy (enough to power 750,000 homes). This is the device proposed by a new Arizona-based company, MagLev Wind Turbine Technologies. The company claims that it can deliver clean power for less than cent per kilowatt hour using this wind turbine.

Magnetic levitation is a very efficient method of capturing wind energy. The blades of the turbine are suspended on a cushion of air, and the energy is directed to linear generators with minimal fiction losses. But the big advantage with maglev is that it reduces maintenance costs, and increases the lifespan of the generator.

The company also points out that building a single huge turbine like this reduces construction and maintenance costs, and it requires less land space than hundreds of conventional turbines. The company is headed by Ed Mazur, a researcher of variable renewable energy sources since 1981 and inventor of the magnetic levitation wind turbine.

China already has Maglev wind turbines in operation, see: The World's First "Magnetic Levitation" Wind Turbines Unveiled in China.

This article by WorldChanging goes into the technical details of using maglev in wind turbines.



Over at TOD, commenter Step Back made an interesting comment about my review of Children Of Men, noting that the movie had a Christmas release and there is a religious aspect I'd overlooked - which is blindingly obvious in retrospect, although I guess its unsurprising an atheist like me watching well out of the Christmas season wouldn't notice it. COM is a nativity tale...

The Guardian has a post on some very low impact English hobbit style dwellings called "The green green grass of home".
Nearly 10 years ago, Tony Wrench stretched a rubber pond lining over a circle of timber posts and made himself a round home. By a field full of meadowsweet in a peaceful Welsh valley, Wrench and his partner, Jane Faith, live as unobtrusively as humanly possible. Were it not for a lazy trail of wood smoke, you could walk past the Roundhouse and not realise it was there.

And, as luck would have it, the 30ft diameter hobbit-style home has found itself in the midst of a radical experiment: last year Pembrokeshire county council and the Pembrokeshire Coast national park authority agreed to grant planning permission for low-impact developments (LIDs) in the council area - and even in the national park - if they met stringent criteria. It is an unusual policy that could encourage other planning authorities across Britain to rethink sustainable development: after all, these homes are affordable, carbon-neutral and can be built on green fields without environmental degradation.

But the pioneers of zero-carbon living have long been derided as hippies and denied legitimacy by the planning system, from the celebrated Tinker's Bubble in Somerset to Steward Wood in Devon. Wrench is typical, forced to fight his eviction from the moment council officers spotted the glint of his bus-window skylight during an aerial inspection. "An unsightly and incongruous appearance," sniffed the first inspector to clap eyes on the Roundhouse. And to Wrench's dismay, in the new policy's first test, his retrospective application for the Roundhouse was rejected last week.

Grapes are trained over the eaves of the green roof of his home, built on neglected farmland owned by a friend at Brithdir Mawr. Freshly dug potatoes sit in a bucket by the door and, after nearly 10 years, the bracken still sprouts through the kitchen's earth floor every spring. Three small solar panels and a tiny wind turbine provide power. Sometimes Wrench has to choose between his laptop or a lightbulb, but it is not a life of deprivation. ...




The CSM has a "smart grids" style story about the need to introduce smart metering to help reduce (and shift) power consumption - "Juicing down for global warming".
Many power utilities are gearing up to install "smart" meters in kitchens or living rooms to show customers the cost of their electricity use – per minute and perhaps per appliance. During times of peak usage, utilities may even remotely adjust your home thermostat.

Having an instant electric bill on the wall, with dollar signs rolling like a gasoline pump, is designed to create sticker shock – and then, perhaps, a conservation ethic to help curb climate change. People might cut back their use of power-hungry devices, from clothes dryers to the TV "sleep mode." They might, for instance, turn on dishwashers only after 10 p.m.

Some utilities hope to install "intelligent sockets" that communicate between appliances and the electricity provider. On hot summer days, when electric rates would be raised through "dynamic pricing," those customers who voluntarily give up control of their usage – and it would have be voluntary – would be given rebates.

But can such watt-saving steps help save the planet? Yes, if they keep utilities from building more carbon-spewing power plants – especially the expensive kind that rev up only during peak hours. By many estimates, fossil-fuel power plants are likely to be the preferred source of electricity for years to come.

As it is, utilities can't keep up with rising demand. One projection shows a 19 percent rise in peak-time electricity usage over the next decade while only a 6 percent growth in power capacity.

Something's got to give. And it may be consumer lifestyles.

A three-year experiment in California with 2,500 customers showed they reduced their average electricity demand by 13 percent during peak summer hours when they had to pay five times the normal cost. Users with the kind of "smart" thermostats that adjust appliance use cut back by 27 percent. ...

Links:

* Giamag - Mercedes-Benz unveils DiesOtto - the “future of the gasoline engine”

* Reuters - Mexico, Venezuela oil slumps could hit U.S. supply

* Prensa Latina - Mexican Company Predicts End of Oil

* Voice Of America - Bombing of Mexican Pipelines Puzzles Security Experts

* McClatchy - Attacks on Mexico pipelines show extensive knowledge of energy infrastructure, officials say. Does anyone know what the Mexican press (obliquely referenced in the article) is saying ? Jeff - what is your interpretation ?

* Reuters - World Bank panel probing Chevron West Africa gas pipeline

* Reuters - Canada to face oil pipeline shortage: regulator. Tar sands oil production outpaces pipeline volume growth.

* CFR - Reading Oil’s Tea Leaves

* The Clean Slate Report - Lights Out Reviewed in the WSJ

* James Hansen (New Scientist) - Huge sea level rises are coming – unless we act now

* Grist - Life, Liberty, and the Pursuit of Crappiness: Navajo nation at odds over coal-plant plan

* Paul Krugman (NYT) - The Sum of Some Fears (via EB).

* The Guardian - Yes, we can shop our way to a cleaner Earth

* Grist - Review: The Upside Of Down

Big Green ?  

Posted by Big Gav

Neal Dikerman at CleanTech Blog has an interesting post on IBM's efforts to enter the solar energy market.

I had a chance recently to visit with one of the individuals responsible for IBM’s (NYSE:IBM) Big Green Innovations strategy – which has made a splash in the cleantech world over the last half year. We were talking on a range of topics, but one that piqued my interest was the description of IBM’s work in photovoltaics – and a few thoughts on where they were going. I did not ask, and he did not offer, any particulars on the work in progress, but he did make mention of a few points that I thought were well worth repeating:

* IBM is expecting to be a player in the solar cell business – likely seeing commercial impact in the next 18 months to two years.
* IBM is developing both advanced crystalline technologies and CIGS processes – relying on their semiconductor manufacturing expertise and nanotech research to make breakthroughs in controlling PV manufacturing processes.
* You will not likely see IBM making branded modules – perhaps instead a cell production business strategy?
* IBM sees the potential for very high efficiency multi-junction cells in foreseeable future.

The fascinating part is that IBM is not a newcomer to the game. When you do a little background research, you dig up some fascinating tidbits, including a couple of articles dated 1978 in the IBM Journal of Research and Development that are interesting given the historical perspective they add to the discussion. For those still thinking that Silicon Valley venture capital is the real innovator behind the solar sector - see below.

As far as the mainstream (or even cleantech) press on IBM’s solar photovoltaic development, though, there has been little mention, and no details. News.com had a recent mention (but no details) of IBM’s solar interests (along with an oblique mention of their work in developing desalination membranes for the water sector). There was a brief mention of IBM and an organic solar cell development in a 2004 year old Business Week article. And a brief mention of interest in solar technology in an Information Week article about the IBM Innovation Agenda – which the Big Green Innovations is a part. But that's about it.

There are over a dozen recent US patents and published applications by IBM referencing a range of solar cells or photovoltaic technology, a few are listed below - that can give some indication of what work IBM has going on.

* 7,109,584 Dendrite growth control circuit
* 7,094,651 Hydrazine-free solution deposition of chalcogenide films
* 6,933,191 Two-mask process for metal-insulator-metal capacitors and single mask process for thin film resistors
* 6,875,661 Solution deposition of chalcogenide films
* 6,774,019 Incorporation of an impurity into a thin film
* 6,316,786 Organic opto-electronic devices
* 6,351,023 Semiconductor device having ultra-sharp P-N junction and method of manufacturing the same
* 20070057255 Nanomaterials with tetrazole-based removable stabilizing agents
* 20060032530 Solution processed pentacene-acceptor heterojunctions in diodes, photodiodes, and photovoltaic cells and method of making same
* 20050158909 Solution deposition of chalcogenide films containing transition metals ...

So whether it’s high efficiency multi-junction cells to compete in the concentrator market, or organic or CIGS cells for BIPV, or providing advanced silicon cells to enable a new group of entrants into the rooftop module market, or something new entirely – IBM bears watching in the solar sector.

Robert Rapier has a post called "the future is solar" (and wind and tidal and geothermal if you ask me), with a follow up at TOD.
There are approximately 4 billion arable acres in the world. There are many different feed stocks from which to make renewable diesel, but most biodiesel is made from rapeseed oil. Rapeseed is an oilseed crop that is widespread, with relatively high oil production.

Consider how much petroleum could be displaced if all 4 billion acres of arable land were planted in rapeseed, or an energy crop with an oil productivity similar to rapeseed. The average rapeseed oil yield per year is 127 gallons/acre. On 4 billion acres, this works out to be 33 million barrels per day of rapeseed oil. The energy content of rapeseed oil is about 10% less than that of petroleum diesel, so the petroleum equivalent yield from planting all of the world's arable land in one of the more popular biofuel options is just under 30 million barrels per day. This is just over a third of the world's present usage of petroleum, 85 million barrels per day. Yet this is the gross yield. Because it takes energy to grow, harvest, and process biomass into fuel, the net yield will be lower, and in some cases may even be negative (i.e., more energy put into the process than is contained in the final product).


The fundamental problem here is that photosynthesis is not very efficient. Consider the rapeseed oil yield above. A reader at The Oil Drum made a table that is basically the solar capture/conversion to oil from various crops. I tried to recreate the table, but it was taking far too much time (Blogger has a terrible quirk about tables), so here is a link.

Basically, the gist is that only a few hundredths of a percent of the incoming solar energy gets converted into liquid fuels. Of course some did get converted into other biomass, which could be otherwise used for energy, but generally when an acre of rapeseed/canola is planted, we get about 0.06% conversion of the sun's energy into oil. (This exercise can still be proven by assuming the theoretical limit for photosynthesis. One must just make more assumptions and it is not as easy to follow).

Consider now direct solar capture. Let's not even consider the record 40+% efficiency that Spectrolab announced last year. Let's not consider any of the more exotic technologies that are pushing the envelope on direct solar capture efficiency. BP's run of the mill silicon solar cells operate with an efficiency of 15%. That's about 250 times better than the solar to rapeseed oil route. Or, to put it a different way, you can produce the same amount of energy with direct solar capture in a 13 ft. by 13 ft. area that you can by photosynthesis in 1 acre of rapeseed. And odds are that you have a roof with an area that size, which could be used to capture energy without the need to use arable land.

Of course the disadvantages are 1). The costs for solar are still relatively high; 2). We have a liquid fuel infrastructure; 3). Storage is still a problem. But in the long run, I don't see that we have any chance of maintaining that infrastructure. The future is solar.

Dave Roberts at Grist has an interview with Amory Lovins.
If politicians think in sound bites and intellectuals think in sentences, Amory Lovins thinks in white papers. His speech is studded with pregnant pauses -- you can almost hear the whirs and clicks as an enormous mass of statistics, analyses, and aphorisms is trimmed and edited into a manageable length. I've talked to experts who struggle to substantiate their answers. Lovins struggles to leave things out.

No one has done more to change the world of energy, both its intellectual underpinnings and its real-world practice, than Lovins. Beginning with a seminal Foreign Affairs article in 1976 -- "Energy Strategy: The Road Not Taken?" which introduced the "soft path" to energy -- Lovins shifted the focus from bigger to smarter, from more to more-with-less. He's consulted with businesses, governments, and militaries on how to achieve organizational goals using less energy and less money. His books and articles are legion; the latest is Winning the Oil Endgame, a "roadmap to getting the U.S. completely, attractively, and profitably off oil."

This year marks the 25th anniversary of the Rocky Mountain Institute, the "think and do tank" Lovins founded. The occasion will be celebrated in early August at an event attended by, among others, Bill Clinton and New York Times columnist Thomas Friedman.

I gave Lovins a call to check in on some of today's greatest energy challenges, from biofuels to Iraq to a backwards-looking Congress.

question After all you've done to shift the energy debate, why do supply-side questions still dominate the discussion in Congress?

answer Congress is a creature of constituencies, and the money and power of the constituencies are almost all on the supply side. There is not a powerful and organized constituency for efficient use, and there's a very strong political (but not economic) constituency against distributed power, particularly renewables. So I would not pay too much attention to what Congress is doing. I'm not saying it doesn't matter, but ultimately economic fundamentals govern what will happen -- things that don't make sense, that don't make money, cannot attract investment capital.

We see this now in the electricity business. A fifth of the world's electricity and a quarter of the world's new electricity comes from micropower -- that is, combined heat and power (also called cogeneration) and distributed renewables. Micropower provides anywhere from a sixth to over half of all electricity in most of the industrial countries. This is not a minor activity anymore; it's well over $100 billion a year in assets. And it's essentially all private risk capital.

So in 2005, micropower added 11 times as much capacity and four times as much output as nuclear worldwide, and not a single new nuclear project on the planet is funded by private risk capital. What does this tell you? I think it tells you that nuclear, and indeed other central power stations, have associated costs and financial risks that make them unattractive to private investors. Even when our government approved new subsidies on top of the old ones in August 2005 -- roughly equal to the entire capital costs of the next-gen nuclear plants -- Standard & Poor's reaction in two reports was that it wouldn't materially improve the builders' credit ratings, because the risks private capital markets are concerned about are still there.

So I think even such a massive intervention will give you about the same effect as defibrillating a corpse -- it will jump but it will not revive.

question Does the same critique apply to liquid coal?

answer Yes. I was delighted when both the Chinese State Council and the U.S. Senate about a week apart canceled [liquid coal] programs.

question But I'm sure you're aware that the political push behind liquid coal is still very much pushing.

answer Of course, including some people who should know better. It has fundamental problems in economics, carbon, and water, and bearing in mind that we can get the country completely off oil at an average cost of $15 a barrel, something in the $50s to $70s range doesn't look viable. Those who invest in it, publicly or privately, will lose their shirts, and deservedly so.

I think a good way to smoke out corporate socialists in free-marketeers' clothing is to ask whether they agree that all ways to save or produce energy should be allowed to compete fairly at honest prices, regardless of which kind they are, what technology they use, where they are, how big they are, or who owns them. I can tell you who won't be in favor of it: the incumbent monopolists, monopsonists, and oligarchs who don't like competition and new market entrants. But whether they like it or not, competition happens. It's particularly keen on the demand side.

question Will Big Coal fall on its face?

answer It's already clearly happening in the global marketplace -- although the U.S. lags a bit, having rather outmoded energy institutions and rules. Worldwide, less than half of new electrical services are coming from new central power plants. Over half are coming from micropower and negawatts, and that gap is rapidly widening. The revolution already happened -- sorry if you missed it.

question How might your notion of "brittle power" apply, not to developed countries but to countries that are developing in conditions in which resilience is at a premium? Iraq is the obvious example.

answer Some of us have made three attempts at [bringing decentralized power to Iraq] and there's a fourth now under discussion. The first three attempts, the third of which was backed by the Iraqi power minister, were vetoed by the U.S. political authorities on the grounds that they'd already given big contracts to Bechtel, Halliburton, et. al to rebuild the old centralized system, which of course the bad guys are knocking down faster than it can be put back up.

question How could Iraq have played out differently?

answer If you build an efficient, diverse, dispersed, renewable electricity system, major failures -- whether by accident or malice -- become impossible by design rather than inevitable by design, an attractive nuisance for terrorists and insurgents. There's a pretty good correlation between neighborhoods with better electrical supply and those that are inhospitable to insurgents. This is well known in military circles. There's still probably just time to do this in Afghanistan.

Meanwhile, about a third of our army's wartime fuel use is for generator sets, and nearly all of that electricity is used to air-condition tents in the desert, known as "space cooling by cooling outer space." We recently had a two-star Marine general commanding in western Iraq begging for efficiency and renewables to untether him from fuel convoys, so he could carry out his more important missions. This is a very teachable moment for the military. The costs, risks, and distractions of fuel convoys and power supplies in theater have focused a great deal of senior military attention on the need for not dragging around this fat fuel-logistics tail -- therefore for making military equipment and operations several-fold more energy efficient.

I've been suggesting that approach for many years. Besides its direct benefits for the military mission, it will drive technological refinements that then help transform the civilian car, truck, and plane industries. That has huge leverage, because the civilian economy uses 60-odd times more oil than the Pentagon does, even though the Pentagon is the world's biggest single buyer of oil (and of renewable energy). Military energy efficiency is technologically a key to leading the country off oil, so nobody needs to fight over oil and we can have "negamissions" in the Gulf. Mission unnecessary. The military leadership really likes that idea. ...

So I guess the question is, why isn't Bush supporting the troops ?

Taiwan is about to trial a tidal / ocean current power generation system with the goal of being able to generate all their power needs via this method, retaining existing nuclear power plants as a backup and decommissioning their coal fired power stations completely.
The government is now discussing the possibility of large-scale ocean current power generation, using the strong Kuroshio current off the east coast of Taiwan to generate up to 1.68 trillion kilowatt-hours per year, officials at cabinet-level Council for Economic Planning and Development (CEPD) said Monday. ...

"Current power generation is not a new idea, " officials noted. "Countries like Britain, Canada, Norway, and Australia all have experience in deploying offshore marine turbines with capacities ranging from one megawatt to eight megawatts to support the electricity demand of hundreds to thousands of households."

"The problem is not the technology itself but how to locate a suitable site -- with a current strong enough, an undersea shelf not too deep, and a distance short enough to achieve power supply efficiency," they added.

However, they explained that based on the surveys done by National Taiwan University (NTU) , the sea area of some 6,000 square kilometers between the eastern county of Taitung and the outlying Green Island in the Pacific Ocean appears to meet all the requirements, and that the maximum potential capacity there exceeds 1.68 trillion kilowatt- hours per year -- while Taiwan's current annual demand of electricity is only about 98 billion kilowatt-hours.

According to the estimates of the project task force, a given site of 25 square kilometers located in the "shallow, high-speed zone" could support the deployment of 1,000 one-megawatt marine turbines, which would have a peak capacity of 1,000 megawatts: equal to the output of Taiwan's second nuclear power plant.

Chen, the project leader, noted that once the turbines enter commercial operation, Taiwan's existing coal power plants could be retired, while the nuclear power generators could be used as a backup system -- thereby resulting in a great reduction in Taiwan's total carbon dioxide emissions.

While I like George Monbiot a lot, his latest effort - "Eco Junk" - doesn't inspire me much - this grumpy sackcloth-and-ashes green socialist attitude is never going to get anywhere - he's self-marginalising as he is focusing on socialism first and sustainability second (and doing a very bad job selling both of them). The whole vibe here is the opposite of the Viridian Manifesto which recognises that you need to offer people a positive vision of the future if you want them to do something to change, not frighten them off with a dismal vision of carbon rations and relative poverty (both of which are unnecessary in my view).
With rising sea levels and more winter rain (and remember that when the trees are dormant and the soils saturated there are fewer places for the rain to go) all it will take is a freshwater flood to coincide with a high spring tide and we have a formula for full-blown disaster. We have now seen how localised floods can wipe out essential services and overwhelm emergency workers. But this month’s events don’t even register beside some of the predictions now circulating in learned journals. Our primary political struggle must be to prevent the break-up of the Greenland and West Antarctic ice sheets. The only question now worth asking about climate change is how.

Dozens of new books appear to provide an answer: we can save the world by embracing “better, greener lifestyles”. Last week, for example, the Guardian published an extract of the new book by Sheherazade Goldsmith, who is married to the very rich environmentalist Zac, in which she teaches us “to live within nature’s limits”. It’s easy: just make your own bread, butter, cheese, jam, chutneys and pickles, keep a milking cow, a few pigs, goats, geese, ducks, chickens, beehives, gardens and orchards. Well, what are you waiting for?

Her book also contains plenty of useful advice, and she comes across as modest, sincere and well-informed. But of lobbying for political change, there is not a word: you can save the planet in your own kitchen – if you have endless time and plenty of land. When I was reading it on the train, another passenger asked me if he could take a look. He flicked through it for a moment then summed up the problem in seven words. “This is for people who don’t work.”

None of this would matter, if the Guardian hadn’t put her photo on the masthead last week, with the promise that she could teach us to go green. The media’s obsession with beauty, wealth and fame blights every issue it touches, but none more so than green politics. There is an inherent conflict between the aspirational lifestyle journalism which makes readers feel better about themselves and sells country kitchens and the central demand of environmentalism: that we should consume less. “None of these changes represents a sacrifice”, Sheherazade tells us. “Being more conscientious isn’t about giving up things.” But it is: if, like her, you own more than one home when others have none.

Uncomfortable as this is for both the media and its advertisers, giving things up is an essential component of going green. A section on ethical shopping in Goldsmith’s book advises us to buy organic, buy seasonal, buy local, buy sustainable, buy recycled. But it says nothing about buying less.

Green consumerism is becoming a pox on the planet. If it merely swapped the damaging goods we buy for less damaging ones, I would champion it. But two parallel markets are developing: one for unethical products and one for ethical products, and the expansion of the second does little to hinder the growth of the first. I am now drowning in a tide of ecojunk. Over the past six months, our coatpegs have become clogged with organic cotton bags, which – filled with packets of ginseng tea and jojoba oil bath salts – are now the obligatory gift at every environmental event. I have several lifetimes’ supply of ballpoint pens made with recycled paper and about half a dozen miniature solar chargers for gadgets I don’t possess.

Last week the Telegraph told its readers not to abandon the fight to save the planet. “There is still hope, and the middle classes, with their composters and eco-gadgets, will be leading the way.” It made some helpful suggestions, such as a “hydrogen-powered model racing car”, which, for £74.99, comes with a solar panel, an electrolyser and a fuel cell. God knows what rare metals and energy-intensive processes were used to manufacture it. In the name of environmental consciousness, we have simply created new opportunities for surplus capital.

Ethical shopping is in danger of becoming another signifier of social status. I have met people who have bought solar panels and mini-wind turbines before they have insulated their lofts: partly because they love gadgets, but partly, I suspect, because everyone can then see how conscientious (and how rich) they are. We are often told that buying such products encourages us to think more widely about environmental challenges, but it is just as likely to be depoliticising. Green consumerism is another form of atomisation – a substitute for collective action. No political challenge can be met by shopping.

The middle classes rebrand their lives, congratulate themselves on going green, and carry on buying and flying as much as ever before. It is easy to picture a situation in which the whole world religiously buys green products, and its carbon emissions continue to soar.

It is true, as the green consumerists argue, that most people find aspirational green living more attractive than dour puritanism. But it can also be alienating. I have met plenty of farm labourers and tenants who are desperate to start a small farm of their own, but have been excluded by what they call “horsiculture”: small parcels of agricultural land being bought up for pony paddocks and hobby farms. In places like Surrey and the New Forest, farmland is now fetching up to £30,000 an acre as city bonuses are used to buy organic lifestyles. When the new owners dress up as milkmaids then tell the excluded how to make butter, they run the risk of turning environmentalism into the whim of the elite.

Challenge the new green consumerism and you become a prig and a party pooper, the spectre at the feast, the ghost of Christmas yet to come. Against the shiny new world of organic aspirations you are forced to raise drab and boringly equitable restraints: carbon rationing, contraction and convergence, tougher building regulations, coach lanes on motorways. No colour supplement will carry an article about that. No rock star could live comfortably within his carbon ration.

But such measures, and the long hard political battle required to bring them about, are, unfortunately, required to prevent the catastrophe these floods predict, rather than merely to play at being green. Only when they have been applied does green consumerism become a substitute for current spending rather than a supplement to it. They are harder to sell, not least because they cannot be bought from mail order catalogues. Hard political choices will have to be made, and the economic elite and its spending habits must be challenged, rather than groomed and flattered. The multi-millionaires who have embraced the green agenda might suddenly discover another urgent cause.

Links:

* Alex Steffen - The World WIth Us

* SMH - Shell reports big finds in Australia. It will be interesting to see just how much oil and gas ends up being found in the Browse basin.

* John Quiggin - Plateau oil

* Conservatives For Climate And Environment. Conservatives who want a carbon tax (unlike the fake conservatives in the government who are just representatives of a single industry lobby group).

* IHT - Britain to build 5 'eco towns' as part of new mass home building program

* The Globe And Mail - Microbe converts light to energy

* The Herald - One-tenth of Scotlands farm land earmarked by power firm. Biofuels are stupid.

* The Market Oracle - Buy Feed Corn: They're about to stop making it. One from F. William Engdahl. If he is a tinfoil merchant he is class above most of them (but be wary nevertheless). Regardless of whether or not the thrust of his theory is correct, biofuels are still stupid.

* Washington Post - Easy Money, Lifeblood Of Economy, Is Drying Up. Plenty of financial doomerism in the air today - don't give in to the fear is Peak Energy's advice.

* Cryptogon - NYSE Imposes Trading Curbs as Stocks Tumble. When I saw the quoted Reuters article in my news feed this morning, I correctly prediucted that (a) I'd see it on Cryptogon tonight and (b) that Kevin would invoke the name of the fabled Plunge Protection Team. I'm not sure that being so accurate a judge is a good thing mind you.

* Cryptogon - It’s the Old Sell-Gold-to-Cover-Stock-Losses Play.

Peak Oil Portfolio Update  

Posted by Big Gav

Once again, more than six months have passed since I last updated the peak oil portfolio, so I figure its time to have a look and see how its been going.

The same disclaimers as last time applies - this isn't investment advice, I'm not a financial adviser and never ever invest based on the rantings of strangers on the internet, particularly pseudonymous ones that pretend to be carnivorous reptiles.

Bearing in mind that over this period, the oil price has risen from around US$63 to US$73 (positive for this portfolio), while the A$ has risen from 79 cents to 88 cents (negative) and the ASX has risen from 5410 to 6340 (positive), here's how things are looking:

CompanyQuantityPriceValue
Oil Search (OSH)2520$3.98$10,030
Woodside (WPL)280$44.90$12,570
BHP (BHP)445$38.05$16,930
Alinta (AAN)865$15.07$13,030
Origin (ORG)1355$9.56$12,950
Worley Parsons (WOR)965$35.40$34,160
Centennial Coal (CEY)1980$3.44$6,810
ROC Oil (ROC)3570$3.56$12,710
GRD (GRD)1755$2.90$5,090
TAP Oil (TAP)1690$1.97$3,330
Paladin (PDN)2200$8.01$17,620
Solco (SOO)16,665$0.115$1,910
Aust Renewable Fuels (ARW)3185$0.36$1,160
Karoon (KAR)2560$2.42$6,190
Compass Resources (CMR)3155$5.50$17,350
Downer EDI (DOW)820$7.36$6,030
Wind Hydrogen (TBD)25,000$0.20$5,000
Cash20,000$15,000
Total20,000$197,870
since last+25.0%
since start+41.0%


By way of comparison:
WTI$63 (approx)$7316.0%
WTI (adjusted to A$)$80 (approx)$834.00%
ASX 2005100541017.0%


I'm making one new addition to the portfolio, buying $5000 of new entrant Wind Hydrogen as it sounds interesting, generating hydrogen as a form of energy storage attached to a wind farm - the sort of thing we will see a lot of in future when we eventually transition to an entirely clean energy economy (my few alternative energy investments thus far have been dismal, especially compared to the oil services and uranium companies, however I'd rather this portfolio wasn't comprised entirely of ethically challenged industry sectors - at some point I'll do a completely clean tech version of the portfolio, but I'm not in a hurry).

The portfolio has done pretty well lately (if I could get a 25% return - not including dividends - on my money every 7 months I'd be pretty happy), though in the current financial environment even a complete idiot would make a hefty profit (note: in reality I'm actually stupider than a complete idiot as I have precisely nothing invested in the market). Still - an 8% outperformance over the index is pleasing, especially with the oil price only rising slightly in local currency terms.

On the other hand, the guys at The Daily Reckoning has been going on about a "crack up boom" (a whole lot of other peak oil / resources investment talks at that link) for a long, long time now, so this could of course just be an example of hedging against the debasement of fiat currency rather than any growth in real value. Other groups seeking to profit from the peak continue to pop up in my Google alerts fairly regularly too,

On a semi-related note (to the "crack up boom" theory), Crikey had a good article on a "tale of two economies", noting how the headline economic figures aren't being reflected in the hip pocket of the average punter, who is just seeing rapidly rising food and energy prices (and possibly further rises in interest rates - didn't the Rodent promise to keep rates low before the last election ?).
Tale one: The big picture

* Since 1996, the Australian economy has grown 3.5% on average per annum. Growth is expected to comfortably exceed 4% this year.
* Australia is experiencing near full employment. Only 4.3% of the workforce is jobless, with many wondering how future job vacancies are going to be filled.
* At 2.4%, the inflation rate is well under control. The Treasurer soberly characterised this as “consistent” with the Federal Government’s targets.
* Interest rates remain low -- 6.25% -- with yesterday’s job figures lowering the chances of another rate rise before this year’s federal election.
* The resource boom continues to drive employment, fill government coffers and supply handsome returns to investors.
* Despite concerns about the household budget, The Australian reports that "Consumer sentiment remains relatively strong, buoyed by a raft of solid economic fundamentals including a stable interest rates environment and falling petrol prices...".
* The Australian sharemarket continues climbing north. The All Ords has risen 1400 points in 12 months (from 4,943.80 on 13 July 2006 to 6,400.10 on 9 July 2007). The S&P 200 has followed suit, climbing from 4,966.10 a year ago to 6,363.40 on 9 July 2007.

Tale two: You and me

* Under-employed part time workers: 483,900
* The most recent national data (March quarter 2007) shows that the average housing mortgage repayment to household income (for first home buyers) ratio is 30.7%.
* More than a million households -- or 16.3% of all Australian households -- are now over the rental or mortgage “stress” threshold, which is defined as spending 30% or more on housing costs. In 2001, the figure was 11.6%. (Incidentally, the Coalition holds six marginal seats with more than 16.3% of households experiencing household stress, and another seven marginal seats with more than 13% of households experiencing housing stress.)
* The most recent data (March quarter 2007) shows that the total household debt to disposable income ratio was 158.7% nationally in seasonally adjusted terms. It has risen 117.4% since March 1997.
* Australian Bureau of Statistics figures show that in the 10 years to March 2007, average full-time wages rose 47%. Over the same period:
o food prices rose 41.3%
o petrol prices rose 61.3%

* The Courier Mail reported yesterday: “Wages have increased 13.8% in the past three years, but have been left behind by soaring supermarket bills, which skyrocketed by a massive 28%.”

* According to the Sydney Morning Herald:
o Interest payments now soak up more than 11% of all household income, about 2 percentage points more than in 1989 when mortgage interest rates were 17%.
o Those in financial difficulty can apply to withdraw cash from their super account if they are in acute financial need. The amount released for this purpose jumped from $70 million in 2005 to $135 million last year.

* According to the Insolvency and Trustee Service Australia:
o Total personal insolvency activity (31,964) increased by 16.9% in the 2006-07 year.
o 6,572 new bankruptcies in the June 2007 quarter, an increase of 15.2% against the June 2006 quarter (5,705). Overall, new bankruptcies increased by 13.2% during 2006-07.

On a local peak oil note, Energy Bulletin recently had an article on "Peak Oil Down Under" by Dave Cohen from ASPO-USA.
Australia serves as a microcosm of a world entering the peak oil era.1 It can be shown beyond a reasonable doubt that Aussie oil production has peaked. As their oil companies struggle to offset production losses as demand grows, Australians must face up to the stark choices these circumstances present. One road, taken by the United States long ago, creates dangerous, ever-growing dependencies on imported oil to fill the supply and demand gap. The other road, leading to energy independence and security, spawns alternatives that allow Australia to move beyond oil. Will the Land Down Under seize the opportunity they now have to make the right choice?

Official forecasts of Australia's future oil (= crude oil plus condensate) and gas resources and production (OGRA) are made by Geoscience Australia (GA), which is similar in function to the America's USGS. Their latest comprehensive report was issued in 2004. Figure 1 (click the graphic left to enlarge it and keep the page open) shows historical production along with GA's 10%, 50% and 90% probability cases for estimated oil production out to 2025, where "a production estimate at the X% probability (= PX%) level means that there is a X% chance of production being at least as high as the figure shown."

Figure 1 establishes the central fact about Australia's oil production: it has peaked according to the most probable future production scenarios. Only the 10% probability case shows a higher production level, so it necessary to assess how Geoscience Australia's forecast has fared since 2004 and take a look at projects coming on-stream to demonstrate that Australia is definitely past peak — and just in case John Howard's shortsighted government harbors some residual hope (APPEA) that the problem will just magically disappear.

Figure 2 gives the production trend (using EIA supply data) since the beginning of 2001 through March of 2007, along with a rough comparison with the GA's high, middle and low cases. Oil production has mostly followed, but is a little below, the P90% (low production) case. This is not good news for Australia.

The offshore Exmouth sub-basin of the Carnarvon Basin (Figure 3) off the northwest Australian coast is where the action is for new oil projects. Australia's production jumped from a low of 370 thousand b/d in June, 2006, to a highpoint of 510 thousand b/d in October. The increase was mostly due to the Enfield development coming on-stream in July, 2006. Enfield, which is operated by Woodside and Mitsui, was built with a production capacity of 100 thousand b/d using 5 producing wells along with 8 water and gas injection wells, all connected to a floating storage and offloading platform (FPSO). Figure 4 gives Enfield's production profile since then, indicating that production reached 74 thousand b/d in the early fall, a level which supported the October rise.

From November on, including an anomalous jump in February, 2007, Australian production has averaged only 469 thousand b/d. Part of the problem has been at Enfield, where "ENA-03, one of the major production wells, was shut-in due to unexpected sand production and early water breakthrough" in October. Woodside's guidance indicates that 2007 production is expected to average only 45 to 55 thousand b/d. It is doubtful whether Enfield will ever produce at or near capacity. ...

Australian energy expert Graeme Bethune's best estimate for 2010 is 600+ thousand b/d, some 100 thousand barrels below the peak year 2000. This forecast accords with Geoscience Australia's P50 case, but production at this level is now pushed out a few years into the future. The capacities of all the fields mentioned here add up to 321 thousand b/d, counting Vincent as 70 thousand and taking the problems at Enfield into account. Added to the latest March, 2007 figure of 466 thousand b/d, the tally would be 787 thousand b/d, exceeding Australia's year 2000 highpoint. How can this be?

Production uncertainties in the offshore fields of northwestern Australia are accompanied by steady declines in all their other major oil basins, as shown in Figure 5. Only the Exmouth sub-basin production has seen erratic growth since 1985, with the exception of a short-lived production spike from the Timor Sea in the 2000 - 2001 period. Both Timor and Carnarvan production have fallen off recently, but only the latter is capable of picking up the slack out to around 2010. Whether production will actually meet EnerygQuest analyst Graeme Bethune's expectation of 600+ thousand barrels a day at the end of this decade is anybody's guess.

Now that it has been established that peak oil Down Under has almost certainly come and gone, and that near term production increases may be disappointing, it is appropriate to ask what Australia is doing about it. Prime Minister John Howard's government is doing next to nothing, according to Bruce Robinson and Phil Hart of ASPO-Australia. The graph (left, click to enlarge) adds a projected oil demand line from Geoscience Australia to their P50 estimate. As consumption increases and production decreases steadily after the 2010 secondary peak, Australia must close the gap by importing more and more oil. ...

Unlike America, which has been traveling down the dangerous foreign oil dependency road for decades, Australia has a chance to fix the problem now. Is Australia's current inaction due to the fact that their oil production will increase a bit in the short term? Do Aussie policy-makers believe that oil imports will always be easily available at reasonable prices? Such myopic visions of the future ignore the global warning signs that peak oil is near. Rather than slip into a perilous import dependency, Australia can take the initiative toward energy independence that would guarantee their economic well-being for a long time to come.

Moving on to local energy news, Santos (a notable omission from the portfolio above) is making some interesting moves trying to push up local gas prices by threatening to build an LNG plant to ship out east coast coal seam methane production. Maybe my skepticism about us running out of gas within 30 years as some predict is misplaced - we not only missed out on piping in PNG's gas but we're also going to ship our own gas offshore. However I remain hopeful that the tech industry will eat the fossil fuel industry within a decade or so...
SANTOS and Arrow Energy have stepped up plans to build separate liquefied natural gas export plants in Queensland in a bid to help link eastern Australia's cheap gas prices to the international oil price. Santos yesterday revealed surprise plans to build a $5 billion to $7 billion LNG plant in Gladstone which would be based on its coal-seam methane resources. The 170 to 220-petajoule-a-year project, construction of which is set to be completed in 2014, would export around the same amount of gas as the failed Papua New Guinea pipeline project was supposed to bring into the east coast market.

Meanwhile, coal seam methane (CSM) producer Arrow Energy entered a trading halt to raise $125 million from institutions in part to help fund studies into a rival 55PJ-a-year LNG plant in Gladstone that would start production in 2010. Arrow chief executive Nick Davies said the announcement of Santos's larger project validated the use of CSM for LNG. "It also takes a huge amount of gas out of the market, placing more pressure on the supply/demand equation and the gas price in Queensland," he said. "That should lead to prices that are perhaps not at Western Australian levels but close to that."

Eastern Australian gas prices are among the cheapest in Organisation for Economic Co-operation and Development member nations, and gas producers like Santos have long argued for a price rise. Santos spokeswoman Kathryn Mitchell said there was more than enough CSM in Queensland to meet demand in the domestic market and to sell overseas, even though her company has yet to prove up the reserves needed to make the LNG project viable. ...

Goldman Sachs JBWere analyst Anthony Bishop said the Santos announcement would be greeted with a degree of scepticism by the market, given LNG from CSM has not been done before in Australia and this could be "merely a stalking horse" for higher domestic gas prices. "This is likely to place upward pressure on eastern states gas prices irrespective of whether the project proceeds," he said.

In May Citigroup noted eastern Australia's gas prices were around $3.40 a gigajoule, compared to $10 in the US. It said gas prices had risen to more than $5 a GJ in some sales in WA because domestic buyers had to compete against LNG export prices. "Gas prices rise when a perception of a shortage can be created and, without the PNG pipeline project, our view has been this perception may be easier to create than the market currently thinks," Citigroup analyst Di Brookman said.

Another notable absence from my portfolio is uranium miner ERA, whose shares are soaring in spite of bad weather induced problems.
Energy Resources of Australia Limited (ERA) announced its first half net profit after tax has plunged 71.5% to $5.7 million for the half-year ended 30 June 2007 largely due to increased rainfall. The group noted this was above previous guidance of a loss of between $5 and $10 million.

The Northern Territory miner said the reduction in profit was largely due to the deferral of production and sales deliveries associated with the exceptionally heavy rainfall at its Ranger operation in late February and early March 2007 and a delay in a vessel arrival.

Another company striking trouble has been Oil Search, who have also been having difficulties obtaining equipment.
Oil Search has downgraded its full-year production forecast for calendar 2007, with equipment delays and slower than anticipated progress on two wells in Papua New Guinea taking its toll.

The oil and gas producer has cut its full-year forecast to between 9.5 million barrels of oil equivalent (Mmboe) and 10 Mmboe, down from 10.5 Mmboe to 11 Mmboe previously. Oil Search attributed the downgrade to the late arrival of equipment from the United States and Europe and the slow progress of the Juha and Kutubu 2 wells in PNG.

"The 2007 full-year production forecast has been revised to between 9.5 Mmboe to 10 Mmboe, with a similar production level expected in 2008," Oil Search managing director Peter Botten said.

Production is expected to improve in 2009, with Oil Search forecasting a 10 to 15 per cent rise in output. Oil Search delivered increased production in the second quarter of 2007, with record oil prices providing a significant boost to revenue.

I was in WA last weekend and the resource boom shows no sign of slackening off, judging by the bulging-at-the-seams airport and the fact that almost every engineer I know is now working for the big mining companies or oil services companies (and the guys at the oil services companies have plenty of tales of problematic offshore field geology and even more problematic constraints on obtaining resources like drilling rigs and offshore construction vessels).

One of the new projects that has kicked off is BHP's "Pyrenees" development off Exmouth, which is where most of the latest developments are being done.
BHP BILLITON has approved the development of the $US1.7 billion ($1.98 billion) Pyrenees oilfield 20 kilometres offshore of Western Australia as part of its push to increase its stagnant oil and gas production. BHP's petroleum production has been flat in the past few years due to natural field decline. The division, once BHP's top earner, is expected to rank fourth in terms of profits this year, after base metals, carbon-steel materials and stainless-steel materials.

There has been a long-running debate in the investment community as to whether BHP should sell or spin off the petroleum division to create more value for its shareholders. The debate could be resurrected once its incoming chief executive, Marius Kloppers, takes the helm in October, given his background is entirely in minerals, rather than petroleum.

However, the petroleum division's importance should be boosted over the next two years as BHP completes construction of several important petroleum projects in the deepwater Gulf of Mexico and offshore Western Australia. UBS forecasts petroleum will be BHP's most profitable division in 2009. The company is expected to start producing oil at its most important project, the Atlantis South joint venture with BP in the Gulf, by the end of this year or in early 2008.

Moving away from corporate news, Australio's first carbon trading market is now open, though this is unlikely to have a large impact for now as emissions trading is entirely voluntary (and larger participants like AGL currently trade on the Chicago Climate Exchange).

THE nation's first greenhouse gas market opened today, five years head of the federal government's plan for a market-based system.

The Australian Climate Exchange (ACX), a joint venture with niche emerging companies trader Australia Pacific Exchange, says it sets a market-based price for greenhouse pollution for the first time. The price of carbon opened at $8.50 per metric tonne. After a day's trading, 1600 tonnes of Australian Greenhouse Office-accredited “voluntary emission reductions” (VERS) had changed hands at a final price of $8.60 a tonne.

The exchange comes well ahead of the federal government's plan to establish a `cap and trade' system by 2012. Prime Minister John Howard has also said that emission reduction targets and a carbon price would not be decided until next year.

The ACX has also outpaced rivals NSX Ltd, which operates the Newcastle and Bendigo stock exchanges, and ASX Ltd, which operates the Australian stock exchange. ACX managing director Tim Hanlin said ACX was answering demand from business for a carbon price through a “transparent, credible and auditable” system. “There is no tax, no penalty, no target that backs up the trading of this emissions commodity,” Mr Hanlin said today. “What does back it up is the desire by companies to actually respond .. to their customers' needs and desires to reduce their emissions footprint.”

Under the ACX system, buyers and sellers trade the VERS in minimum lots of 100 tonnes. Each offset unit is certified by the government greenhouse watchdog and must be lodged with the ACX registry first before it can be traded. The registry tracks the traded offsets until they are extinguished - that is when an owner acquits the offset against emissions.

Mr Hanlin, who earlier worked for Woodside Petroleum Ltd, scouting greenhouse offset opportunities, said he expected the exchange would facilitate `spot' and `forward' selling of the abatement units in primary and secondary markets. ...

The NSX, which recently bought a water trading exchange used by farmers, has said it wanted to launch a carbon emissions trading platform next month. The ASX has said it would proceed with its scheme after the federal government's pricing details were known.

Several Australian companies, including electricity giant AGL Energy, are already trading carbon but on an exchange in Chicago.


The Australian also has a report on local companies "Cleaning up in water and energy".
GREEN is the new black, and the list of technologies described as clean is growing longer by the day. The rivers of capital flowing into the cleantech sector have refreshed a deep pool of startups eager to market their green credentials with energy, water, recycling, agricultural, biofuels and mining products all vying for a place in the line-up.

Venture capitalists, fund managers and industry proponents are struggling for consensus on what's cleantech and what's not, but there's agreement that energy and water efficiency systems are among the hottest prospects for Australia.

"Energy and water are the two big ones," Starfish Ventures investment director Ivor Frischknecht said. Australia and Israel are regularly pegged as the two leading developers of water efficient technologies, and Clean Technology Australasia chief executive Jeffrey Castellas said the country's clean energy startups were also well-placed.

In particular, he thinks that clean coal companies have opportunities in India. "The market size for energy efficient technologies in India right now is about $3 billion per annum with a 15 per cent growth rate," Mr Castellas said.

Even in the area of energy efficient cleantech, some developments are leading industry watchers to scratch their heads. One is the Australian IPO market for so-called hot rocks startups tinkering with geothermal energy systems. "The Australian market has been very receptive to the hot rocks technology," Mr Frischknecht said. "I don't know what's driving it, frankly."

I'm not sure why this is a mystery - there is a huge hot rock resource available and Australians are used to punting on small resources companies that go digging speculative holes in the desert - its a match made in heaven.

Another report in The Australian on slowly emerging local cleantech investment is "Money pours into green tech".
DOTCOM entrepreneurs are beating a path to the clean technology sector as cashed-up super funds open the spigot for ventures targeting green concerns ranging from energy to drought and global warming.

Venture capitalists who raked in big bucks during the 1990s internet boom are also setting their sights on cleantech, with plans to funnel tens of millions worth of general technology funding into green startups. Worldwide, investment in clean technologies designed to reduce consumption, increase industrial efficiency and slash emissions, has exploded in the past three years.

The Cleantech Venture Network reports that North American and European venture capital investment in cleantech hit $US3.6 billion ($4billion) last year, up 45 per cent from 2005 and more than double the $US1.7 billion pumped into the sector in 2004.

Similarly, industry development group Clean Technology Australasia has tracked a surge in the number of deals in the local cleantech sector. "In 2004-05 we tracked just over 200 deals in Australia. We did the same report again in 2005-06 and we tracked just over 300 deals," Clean Technology Australasia chief executive Jeffrey Castellas said. "This is an area that is certainly undercapitalised and the market opportunities and growth opportunities for these technologies are big."

The opportunities are tantalising traditional technology venture capitalists, who have earmarked big chunks of their investment funds for the sector. High-profile dotcom venture capitalist Bob Christiansen has said a slice of his new $170 million Southern Cross Fund would go to green investment opportunities.

Melbourne venture capitalist Starfish Ventures, meanwhile, says about a third of the $200 million it had under management was intended for cleantech deals. The fund was also targeting IT and life science plays. "There's interest growing across multiple dimensions," Starfish investment director Ivor Frischknecht said. "Firstly, the number of startups is growing, so that's the ultimate driver. Along with that, and this is a really, really positive trend, there are quite a lot of accomplished, experienced startup professionals coming into cleantech from the IT sector."

Starfish has already staked out positions in two cleantech startups: soil moisture sensor developer Senviro; and energy efficient welding technology developer MIGfast.

MIGfast is also backed by Cleantech Ventures, a new breed of dedicated clean technology venture capitalist emerging in Australia. Last month Cleantech closed a $50 million early stage fund with $20million in federal Government Innovation Investment Fund money and a $30 million injection from VicSuper. Private equity player CVC is also in the market, raising $30 million for its Sustainable Investments fund.

Cleantech investment principal Jan Dekker said he expected more cleantech-focused funds to emerge in the future because the commercialisation channels differed from IT and life sciences. ...

Stuff.co.nz has a report on a New Zealand company (with mysterious foreign backers) who are developing an algae derived aviation fuel - "World first: Flying high on pond scum".
Air New Zealand and airliner manufacturer Boeing are secretly working with Blenheim-based biofuel developer Aquaflow Bionomic Corporation to create the world's first environmentally friendly aviation fuel, made of wild algae.

If the project pans out the small and relatively new New Zealand company could lead the world in environmentally sustainable aviation fuel. It's understood Air NZ is undertaking risk analysis. If everything stacks up it will make an aircraft available on the Tasman to test the biofuel.

The fuel is essentially derived from bacterial pond scum created through the photosynthesis of sunlight and carbon dioxide on nutrient-rich water sources such as sewage ponds. Air NZ would most likely test the fuel on one engine while normal aviation fuel would drive the other engine. Fuel is held in cells on the aircraft that can be directed to a specific engine.

None of the parties involved will talk about the joint venture development because of confidentiality agreements but whispers about the project were circulating at the roll-out of the Boeing 787 Dreamliner in Seattle in the US last week. Local Marlborough media reported a visit by Boeing to Aquaflow earlier this year and Boeing has stated publicly since then that it believes algae is the airline fuel of the future.

The New York Times has an editorial on Dick Cheney's secretive energy taskforce meetings - "How the Energy Dice Were Loaded". Unsurprisingly, some of the few documents to leak out of these meetings were maps of Iraq, dividing up the regions containing Iraq's "undiscovered" oil that the proposed Iraqi oil law will hand over for development by foreign companies. And then a couple of later, Iraq was coincidentally invaded - Mr Cheney must have been a boy scout when he was younger...
The names of some of the corporate big shots and industry lobbyists who helped shape the deliberations and conclusions of the super-secret Cheney energy task force in 2001 are now beginning to surface, thanks to a former White House aide who provided a list to The Washington Post.

It’s interesting to discover that Kenneth Lay, Enron’s chairman, was favored with two audiences. But the rest is sadly familiar. The task force, which developed a national energy policy, had all the time in the world for the big energy producers — some 40 meetings with the oil, gas and coal companies and their trade associations — but barely a moment for environmentalists. It’s hardly surprising that its report favored producers of fossil fuels at the expense of conservation and alternative fuels.

What this list really does is remind us how and why this administration has squandered six years that should have been devoted to finding innovative answers to the big questions of oil dependency and global warming.

Bruce Sterling's latest Viridian Note is out, with the body of this one written by his wife - "Viridian Note 00495: Serbia and the Flames" (MonkeyGrinder also has a look at wild weather in China, Texas and England).
Today was the hottest day ever recorded in Belgrade, Serbia. Broke the previous heat record by two-and-a-half degrees Celsius.
http://news.bbc.co.uk/2/hi/europe/6913152.stm

Naturally, I was there. Hey, I could have been worse off in Tewksbury.
http://news.bbc.co.uk/2/hi/talking_point/6914254.stm

I'd be betting that when they start counting the elderly ex-Communist dead in this region, they're going to stack up in surprising, French-heat-wave style numbers. Although we Viridians have been predicting and describing these calamities for years now, surprisingly, nobody in power seems used to them yet. Even the victims still act a little surprised.
http://www.iht.com/articles/2007/07/24/news/heat.php

I try not to yield to the temptation to repeat the obvious to 2,000 people day after day, though, when mayhem arrives on my doorstep, I still feel that Viridian urge. Nevertheless, I have to shut this list down soon. It makes no sense to mimic news that's on the front page of Google News every day. And it's getting louder. Every year. All those NGOs, corporate-funded professionals, energy speculators... let them do the heavy lifting, dammit!
http://www.climatecrisiscoalition.org/

It's not like the climate crisis is news to people in power; they all know it's there, like AIDS, or a fire in the basement; they just wonder what they can possibly do about their drowning, baking constituents.
http://ec.europa.eu/commission_barroso/dimas/index_en.htm
http://www.theage.com.au/news/world/brown-links-floods-to-climate-change/2007/07/24/1185043111436.html

Besides, I've now come up with a new,
non-Viridian design-journalism scheme which is going to occupy all my efforts for about six months! Rather than being global and theoretical and involving a lot of eco-handwringing, it's going to involve stuff like heavy industry and lots of cool conventions and glamorous parties! Furthermore, rather than being parochial, Texan and American, it will have a decisively Italian flavor! Did you know that Torino, Italy, is the official 'world capital of design' for 2008? Well, neither does anybody else, and I plan to help change that. Link:
http://www.torinoworlddesigncapital.it/portale/en/

You can help, too. There will be more news in September. In August I'm fleeing the heat by heading into the hills to finish my novel. Hey, somebody's gotta write 'em.

In the meantime, here is an article by Viridian guest star Jasmina Tesanovic.

Link:
http://en.wikipedia.org/wiki/Jasmina_Tesanovic http://blog.b92.net/blog/59/Jasmina%20Tesanovic/

Serbia and the Flames

Today was the hottest day in Serbia ever since the temperature has been measured, 45 C.

If we Serbs were truly interested in our survival as a nation, we'd be scrambling to get some modern hardware for dealing with ecological catastrophes. It's been ten years since Milosevic sold off our forest fire-fighting aircraft and pocketed the money.

We would talk together seriously about last year's massive floods throughout the Danube basin, about this year's deadly heat wave in Serbia and throughout the Balkans, about the state of emergency in our neighbor Greece, about the electricity shortages and blackouts throughout the region, about the woods of our homeland set on fire.

Even tidy Britain is being overwhelmed with their flood catastrophes, while here in Serbia we lack any organized emergency-response because the Serbian state is, by its nature, in an emergency situation all the time.

Instead, the Serbian Parliament spent this day discussing Kosovo: angling for Russian friendship to fend off the US demands, while dodging EU pressure to simply let go of that long-lost province. They have no air conditioning inside the Serbian Parliament, so delegates were comically fanning themselves with official papers while the presidents were sweating in their stuffy official suits.

The Russians promised us practical help for the smoldering forests of the border, but they have yet to send a single Russian helicopter. Meanwhile the firemen and local peasants are saving our burning forest heritage with raw courage and mostly hand-tools.

When will we overcome our local obsessions and realize we are part of a world in a general crisis? The climate crisis isn't for rich countries, it's for every country. Especially us. We had Floods in 2006, now Fires in 2007 == the cause is in the Air, and we will end up with no Earth.

Global warming is invisible... it steals up on us like a slow fever, but our daily lives are being transformed by it. Kids can't get milk at school, eggs might be poisoned with salmonella, the crops are wilting in the fields.

My friend, a pianist, sews clothes by her air-conditioner instead of playing her piano.

I am singing after dark instead of writing at noon.

My friend is writing a book about the future but is not sure if it is the same book he started anymore.

My young friend, the web designer, had her computer collapse. So she went out to walk her three dogs and collapsed from the heat in two hours.

My friend activist from inner Serbia is sleeping in an office where there is an air conditioner. Two weeks ago before, she condemned air conditioners because they burn fossil fuels and make the global warming worse. She also has the very Serbian superstition that cold drafts of air are not good for your bones. Well, any hot draft of air over 40C does not cool your body == it heats your body and can kill you from heatstroke.

My pregnant Albanian friend from Pristina sleeps heavily day and night while her friends in Kosovo demonstrate for some unilateral declaration of independence.

If there is any justice in this injustice, it is that global warming has no borders or nationality, and yet it has guilty and victims. Guilty: all of us who ignored inconvenient truths and sacrificed the ecological conscience for other more or less legitimate priorities. Victims: everyone yet to be born on our damaged planet; when crops wilt and forests burn down to black stumps, does it matter if that wasteland is called Kosovo or Serbia?

Year by year, mankind is becoming justly afraid of our vengeful climate. I have an epiphany: our world in 1999 is becoming all the world. No electrical, no water, no business-as-usual: fear. I remember those bombing days of Serbia and Kosovo when everyone in this land, without exception, was a refugee under a scowling enemy sky.


O=c=O O=c=O O=c=O O=c=O O=c=O
IT'S NOT ABOUT SURVIVING;
IT'S ABOUT PREVAILING
O=c=O O=c=O O=c=O O=c=O O=c=O

A few links from the fringes to close, as I'm sure you've all been missing your fringe politics and tinfoil (especially you guys who only read this blog for the conspiracy theories).

* Beyond The Beyond - Off the Bottle-Hurling Barricades and Back to the Heretic-Leftist Websites (PINK, BLACK, PIRATE: TAKING STOCK OF ROSTOCK). Where Bruce finds this stuff I can't imagine, but I found it entertaining, and it does demonstrate just how marginalised the left has become - the pinks and blacks seem to have purely nuisance value politically. The pirates are a little more interesting though.

* The Village Voice - The Teapot Dumb Scandal. On Bush, Vlad "the Paler" Putin, Siberian Oil and the Hydrogen Economy.

* Cryptogon - White House Denies Congressman’s Request to See Continuity of Government Plans. Even the American Enterprise Institute is starting to get uneasy.

* Crypogon - Old-Line Republican Warns ‘Something’s in the Works’ to Trigger a Police State. Protest against the Iraq war, lose your house.

* Energy Bulletin - The seven habits of highly subversive people. Glad to see someone understands what Harry Potter is about. "And to JK Rowling for reminding me that children innately understand totalitarianism, thus the subversive and imaginative nature of the Harry Potter series in the grand tradition of child empowering childrens books". Put simply, Voldemort is a Republican (though to be fair, not all Republicans are death eaters - and that's Ron Paul I'm thinking of - just most of them).

* Ron Paul rEVOLution - Ron Paul Profiled in the Los Angeles Times

* Detroit News - Ron Paul emerges as GOP's unlikely rock-star candidate. "Freedom is popular".

* TechCrunch - Ron Paul: A Distributed Web 2.0 Campaign. I never expected to se Mr Paul on TC - or speaking at Google for that matter (imagine Bush speaking as coherently or passionately as this)...

* Rigorous Intuition - Blackshirts and Skins. Some self awareness appears. Having never read any tinfoil before I came across the peak oil world, it took me a long time to get my bearings - the conspiracy theories of the far left seemed to merge with the conspiracy theories of the far right once I'd read read enough of them - the same plot lines and often the same villains (something my recent experiment investigating Club Of Rome tinfoil demonstrated perfectly). It seems that this is mostly because the left is a lot less mature than the right when it comes to conspiracy theorising, and has absorbed a lot of the illuminati / freemason / "international banker" stuff without fully understanding its origins (my mind always boggled whenever RI did freemason tinfoil without acknowledging past masters like Pat Robertson and his ideological predecessors). Hopefully the lines between the communist new world order and the fascist new world order will be drawn a little more clearly in future and I'll be able to tell the right black hand from the left (for balance, here's some traditionalist NWO tinfoil)...

* Transition Culture - Amusing Nonsense on YouTube

* 10 Zen Monkeys - Don’t Call It a Conspiracy — the Kennedy Brothers. RU and Jamais Cascio talk to David Talbot about the parahistory of the Kennedy brothers. I knew Jamais had to be a tinfoil hound deep down...

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