Daily Archives: May 21, 2009

Kate Mackenzie

Congressional Quarterly says the US oil industry is increasing spending on political lobbying while others are pulling back: the sector spent $37.3m in the first three months of the year, which is 52 per cent higher than the average of each quarter in 2008 (year-on-year figures are not given).

With a new administration resolved to shake up the country’s energy landscape, it’s not surprising that oil lobbying spending is surging.

Kate Mackenzie

If news of twittering Libor isn’t enough for one day, Shell plans to publish hurricane updates on Twitter, during the storm season, which begins in a fortnight. They only have 30 followers at the time of writing; but admittedly there’s not much to say on the subject yet. In fact, very little.

Most of the oil majors tend to be a little on the conservative side when it comes to social media, but Shell is after all the oil major that has dipped a toe in the water with blogging (it tends avoids the subject of Shell itself, but still) and allowed their chief executive to be harangued by George Monbiot on video.

Related link:

Twitbore (FT Alphaville, 21/05/09)

Kate Mackenzie

On Energy Source:

Voluntary carbon markets double in size, but ‘buyer beware’ still holds true
Fewer ‘carbon cowboys’ as more credits are verified

Chinalco makes some concessions on Rio Tinto
May go some way to allaying shareholders and political objections

Markets: pricing like it’s 2007
‘Remarkable’, says BNP Paribas analyst

Climate change and marketing 101
Are emotions more important than information?

How the car industry learnt to love vehicle emissions standards
What a difference the threat of bankruptcy makes
Elsewhere:

Petrobras seems to be the winner in China’s $10bn loan ‘Fears that China will lock up all the world’s resources are not founded, at least in this deal’ (247wallst.com)

CAFE convergence The auto emissions rules saves carbon emissions, but at a cost far higher than the expect market price (Energy Outlook)

Iraq’s baby oil bureaucracy How the slow moving system threatens plans for future oil revenue (Forbes)

Google’s under the radar algae play seeks fresh funds Grant recipient seeks to take sewage-based system to next level (earth2tech)

The voluntary carbon offset market doubled in size between 2007 and 2008 to $750m, according to a report (PDF) from New Carbon Finance and Ecosystems Marketplace, confirms that 123 million tonnes of carbon credits were bought and sold last year around the world. This is more than double the 2007 figures, of 65 million tonnes, worth $331 million. The average price for voluntary offset credits rose 20% to $7.34/tCO2 equivalent.

This is good news, of sorts. But the voluntary market is by far the smallest part of the carbon markets; in contrast the EU emissions trading scheme was worth $95bn in 2008. And, as the FT has previously reported, the voluntary market is the least well regulated, with offsets of very variable quality being sold in the past.

However quality does appear to be improving – New Carbon Finance and Ecosystem Marketplace emphasise that “more than 96% of offset credits were verified to a thirdparty standard in 2008.”

Related links:

Beware the carbon offsetting cowboys (FT, 25/04/07)
Guide to good carbon offsetting (FT, 25/04/07)

Kate Mackenzie

Sources have confirmed that Chinalco plans to restructure its proposed investment in Rio Tinto to overcome regulatory – and more, importantly, political – hurdles to the $19.5bn deal.

The Chinese miner is prepared to limit its investment to 15 per cent rather than 18 per cent. However:

Chinalco would not be prepared to go below a 15 per cent equity stake and would not sacrifice the minority stakes in has agreed to buy in Rio’s assets, including a 15 per cent stake in the Western Australian iron ore assets, one of the people said.

The person added that Chinalco also recognised that the original deal it struck with Rio in February was far less attractive to the mining group’s shareholders given the recent global stock market rally and rise in commodity prices.

Shareholders, having seen Rio Tinto fend off a takeover bid from BHP Billiton last year not long before commodity prices began to crash, need some persuading, as does the Australian government. The decision by Australia’s Foreign Investment Review Board but it will ultimately rest with the country’s treasurer, Wayne Swan and prime minister, Kevin Rudd.

It difficult to overestimate the sensitivity of this sort of foreign ownership in Australia, where the country’s abundant natural resources create a sense of vulnerability, especially concerning its more densely populated neighbours to the north. Conservative senator Barnaby Joyce, one of the most vocal opponents of the deal, sums up that fear: “We still have the same problem that the resource in situ, in the ground, is owned by another nation’s government.”

Related link:

China to restructure Rio Tinto deal (FT, 21/05/09)

Nymex July West Texas Intermediate fell $1.48 to $60.56 a barrel after reaching a six-month high of $62.26 in the previous session.

ICE July Brent lost $1.33 at $59.26 a barrel.

Harry Tchilinguirian, senior oil analyst at BNP Paribas, said that it was “remarkable” that under current economic conditions and faced with high levels of crude oil inventories that oil prices had returned to $60 a barrel.

BNP noted that $60 a barrel was a level crossed in 2007 when the world economy was growing at around 5 per cent, spare production capacity in Opec countries had dwindled to just above 2m barrels a day and constraints in non-Opec supplies were emerging.

“With the exception of non Opec supply, none of those conditions apply this year, and yet we are at $60 a barrel.”

Kate Mackenzie

Should information the only currency in the debate over climate change, or is savvy marketing and emotive language more important?

Yale University this week published a survey on beliefs and attitudes to climate change. Researchers ‘segmented’ the respondents, in much the same way as marketers segment their target markets. They divided them into six groups:

- Barroso uses US to press China on green issues
European Commission president urges fresh concessions (FT)

- US backs United Arab Emirates nuclear bill
US to share nuclear technology (WSJ)

- Iraqis urge oil minister to quit over low output
Call comes after rare public dressing-down (WSJ)

- Australian Securities Exchange to develop energy-related futures
Aims to launch products based on coal, gas and renewable energy (FT)

- Woodside in talks with Apache on Pluto project gas
Negotiations on non-exclusive basis (Reuters)

- Shell to announce 2009 hurricane updates on Twitter
Service is for both media and public (Reuters)

- Sinopec share-price estimate raised 27% by JPMorgan
Stock’s 12-month price target increased to HK$7 (Bloomberg)

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