Daily Archives: March 18, 2009

William MacNamara

This morning there were fresh rumours that Rio Tinto, the major coal and uranium miner, would seek a rights issue after all, which would sink the Chinalco deal and drown the share price.

This is unlikely to happen - unless triggered by a widespread shareholder revolt. The company picked a new chairman, Jan du Plessis, yesterday, and his first words were of unwavering support for Chinalco and the Chinese mining major’s offer to hand Rio nearly $20bn.  But it is worth exploring some of the alternatives to Chinalco buzzing around the market.

Kate Mackenzie

On Energy Source today:

Green jobs: Some (as yet) unanswerable questions

IEA warns demand estimates could fall further

Nuclear power a little more popular with the people, too

International carbon offsets in the US? Forget it

Commodities report:

Oil slips but remains in sight of $50

Elsewhere:

Oil: Unusual majority support at The Oil Drum on this chart suggesting production peaked in 2008

Oil: It took a recession to help break the ice between Opec and the US (The National)

Nuclear: Weapons plutonium is a tough sell as reactor fuel (Green Inc)

Emissions: The true cost of bottled water is making people cross, again

Jobs: A roughneck’s story of the downturn (Energy Bulletin)

Biofuels: Valero buys VeraSun assets; ADM doesn’t (Platts)

Fiona Harvey

Rumblings are growing around whether government estimates of the number of jobs to be created in the “green” economy are overly optimistic.

Governments around the world, including the US, the UK, Germany and China, have been promising “green collar” jobs as a way out of the recession.

Rob Stavins at Harvard has also been blogging about why a ‘single policy instrument’ is not always best.

When the FT looked into the claims of the UK government on the number of green jobs to be created, we found several problems.

Kate Mackenzie

Nobuo Tanaka told the Opec seminar in Vienna today that the IEA may have to revise its demand projects downwards yet again. From Dow Jones:

“I can’t rule out further downgrades of our oil demand outlook,” Tanaka said.

But he was cautious on capacity, too:

“Spare production capacity may be significantly lower than we have projected,”
Tanaka said.

Kate Mackenzie

Governments have shown increasing support for nuclear power in recent months: Sweden last month decided to end its ban on allowing new reactors; France is progressing towards building a second reactor; Finland has a new plant well under way, the UK is planning several and even the Dutch are looking at their options. The Russia-Ukraine gas dispute earlier this year – following a similar incident a few years earlier – was widely viewed as a reason for European countries to reconsider nuclear energy. Last month several prominent UK environmentalists said the green movement should embrace it; though the idea remains very controversial.

Now a survey by Accenture suggests an increasing number of citizens are also more receptive to the idea of nuclear power. Of 10,000 people in 20 countries, 29 per cent said they supported the use, or increased use, of nuclear power, while another 40 per cent they might support it if their concerns were addressed.

Kate Mackenzie

The new US administration has been fairly explicit about its plans for a cap and trade system to reduce carbon emissions, but Citigroup’s head of emissions markets, predicts it won’t include international offsets. Garth Edward said there was no “demand” for UN Certified Emissions Reduction offsets, mainly because President Obama would not be able to force Congress to accept it. He also said the Regional Greenhouse Gas Initiative – a cap and trade system set up by 10 US states – will ‘probably be oversupplied’.

Energy news from elsewhere:

- Biofuels to get boost as oil unlikely to weaken, says former BP chief (Bloomberg)

- US energy secretary says open to carbon tariff (WSJ)

- Venezuela says its proved oil reserves increased to 172.3bn barrels (Bloomberg)

- ADM fails to acquire assets of bankrupt ethanol producer VeraSun (Platts)

- Russians eye Cuba offshore oil deal (Reuters)

Energy news from the FT:

- Shell rewards bosses despite poor returns
CEO Van der Veer paid €10.3m in compensation

- Shell shapes $32bn production boost
2009 marking sixth successive year of production decline

- Crude extends rally while gold retreats
Oil prices pushed towards $50 per barrel after Opec meeting

- UN fears Brussels re-writing emissions deals
Top official warns of EU backsliding on agreement

- Rio Tinto picks BAT chairman to replace Skinner
Jan du Plessis is relative newcomer to mining

- Du Plessis must sell China deal to sceptics
New Rio chairman has 3 months to persuade shareholders

- Lex: Rio/Chinalco deal needs plan B

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