Daily Archives: June 5, 2009

Kate Mackenzie


- Head of an unidentified national oil company at this week’s NOC conference in Abu Dhabi Read more

Kate Mackenzie

The Waxman Markey bill (or American Clean Energy and Security Act, as it is more properly known) has plenty of detractors, as battles in the environmental blogosphere show.

There are those who oppose cap-and-trade schemes outright; those attacking the giving away of the initial allocations instead of auctioning them all off; and those who believe that the 25 per cent renewable energy goal will be ineffective.

At the same time, some good defences to all three broad criticisms have been put forward – for example, economist Robert H. Frank wrote about the benefits of putting a market mechanism on emissions, and Robert Stavins at Harvard explained why the allocation giveaways are not necessarily a serious impediment to a cap-and-trade scheme.

But the most compelling of the anti-ACES arguments centre around carbon offsetting and the problem of ‘additionality’. Read more

Kate Mackenzie

A couple more good reports for the renewable sector were published today, both suggesting that credit conditions are beginning to improve.

Barcap, in its global demand forecast for European renewables, is raising its view of the solar sector to positive, and maintained a positive on the wind sector. Energy efficiency, however – which includes fuel cells, tidal power and sustainable buildings – remains at neutral.

Barcap says credit conditions are improving, and:

As the expectation for the availability of credit has begun to return, companies in the renewables segment appear to be some of the first to benefit.

 Read more

Sheila McNulty

Despite the sharp drop in demand for natural gas, the world’s biggest international oil companies are continuing to make massive investments in liquefied natural gas (LNG) projects.

For they must invest now if they are want to meet rising demand projected in coming years and grow a niche business for themselves.

These massive LNG production projects are, by their very nature, long-term investments that require at least five years and billions of dollars and superior project management skills to develop.

The majors tend to be well-equipped to carry them out, given decades of project management experience, the technical know-how, and deep pockets backed by strong financing capabilities.  And they want to keep this market to themselves. Read more

Kate Mackenzie

On Energy Source:

Tanaka on demand destruction and long-term supply Read more

Kate Mackenzie

Nobuo Tanaka, the executive director of the IEA, spoke on Wednesday about demand destruction:

Overall, he said some demand had been permanently destroyed by the economic crisis and last year’s record oil price, which peaked at $147.27 a barrel in July. Read more

Kate Mackenzie

The world’s biggest known conventional oil field and the jewel in Saudi Arabia’s reserves, the Ghawar field, is shrouded in mystery as Saudi Aramco keeps information on the field closely guarded.

A contributor to The Oil Drum, ‘JoulesBurn’, parses a great deal of available data about five early exploration wells in Ghawar, and what they imply for the entire field’s production. Read more

Crude oil prices maintained their assault on the $70 a barrel mark on Friday while base metals rose and gold consolidated around the $980 an ounce level as commodity markets stayed on course for a strong finish to the week.

Nymex July West Texas Intermediate rose 39 cents to $69.20 a barrel while ICE July Brent added 43 cents at $69.14 a barrel. Read more

Kate Mackenzie

Yale 360 has an interview with Freeman Dyson, a Princeton physicist and ‘reluctant climate change sceptic’. A profile of Dyson in the New York Times in March caused outrage, much of it for giving such coverage to a sceptic.

Dyson does not style himself as an expert on current climate change studies, or even as particularly interested in mounting a campaign: “First of all, I am 85 years old. Obviously, I’m an old fuddy-duddy. So, I have no credibility. And, secondly, I am not an expert, and that’s not going to change. I am not going to make myself an expert.” Dyson believes in some of the most common climate change sceptic arguments, including that recent global warming is part of a trajectory going back several hundreds years.

However his criticism of current climate change theory is largely a disgreement with the whole academic approach to the subject. He says the science around prevailing climate change view relies too much on models and not enough on other disciplines such as biology. Read more

Sheila McNulty

Valero Energy’s warning that it will post a loss in the second quarter underlines the difficulties facing the refining sector. But analysts remain bullish on the company itself.

Valero is the US’ biggest refiner. As Bernstein Research points out in a recent note, Valero is clearly ahead of peers in terms of financial and operational performance.

The company’s robust balance sheet has allowed it to undertake strategic acquisitions while other US and European refiners are trimming capex to deal with the economic downturn.

Yet, as the second quarter warning indicates, the company is not immune to the economic downturn. Read more