Monthly Archives: July 2009

Kate Mackenzie

On FT Energy Source this week:

- Jeff Korzenik on why commodities regulation is different

- Why offshore wind won’t work

- Gazprom’s quest for world domination

- Do oil sands + peak demand spell doom for oil majors?

- Wind power: Like it’s 1909

- Nimby-ism: Coming to a renewable energy project near you

- Could Saudi’s new oil capacity be a factor in Copenhagen talks?

- Doom and gloom abounds in oil majors’ results

- What prompted the FSA oil meeting?

- Contrarian oil watcher Henry Groppe

- BP still hearts Iraq

- The unenviable task of curbing commodities speculation

- Some fundamental optimism and pessimism in oil

Kate Mackenzie

McKinsey might think that new standards and loan guarantees are the way get better energy efficiency.

Bah. What about just wearing more climate-appropriate clothes?

The EU’s energy commissioner Andris Piebalgs (not pictured right) is all over the idea on his blog:

Many experts consider that the most efficient way of saving heating or cooling is simply reduce or increase by 1º the temperature that of our thermostats. One degree variation could lead to up to 10% energy savings. And however, it is not so unusual to find people that sleep with a blanket in the middle of the summer because they keep the air conditioning too high. Equally, you see some people in the middle of the winter walking around their apartments with a simple t-shirt. Maybe the right choice of clothes together with a wiser use of the heating and cooling systems may have a positive impact on their comfort and also on their energy bills.

As Piebalgs notes, the idea is not without precedent. As Japan recoiled from the oil shock of 1973, one measure it took (along with mandating strict efficiency rules for businesses) was to introduce the ‘energy conservation look’.

Kate Mackenzie

In the slew of second quarter losses announced by oil companies this week, lower oil prices has been universally cited as the key problem for oil majors. As long they are able to weather the downturn in demand and prices, and adequately replace their reserves, they stand to reap huge profits again when prices rise.

However as some of the big, easily accessible oil reserves begin to ebb, much of this reserve replacement is being done in areas of more marginal production – meaning the cost of replacing oil reserves is gradually rising.

But will higher oil prices necessarily mean more profits for years to come?

Kate Mackenzie

On FT Energy Source:

Refining, the weakest link in the recovery

Comment: Why commodities regulation is different

Carbon credits hit by carousel fraud

Markets: Oil dips as commodities consolidate

The problem(s) with efficiency

About that natural gas storage…

Climate change attitudes and the lure of oil revenue

On FT.com:

Eni results drop on falling oil prices

Profits and output fall at Total


Further reading

Pemex’s production is going to fall even more (Rigzone)

China’s CNPC reportedly signs MoU with Iran’s NIOC (UpstreamOnline)

Implications of China’s first Annual Pollution Information Transparency Index  (Greenlaw)

Top 10 climate change sceptics (Greensheet)

A drop in demand sees Beijing closing lots of small, dirty coal plants but it’s really just a side-effect of falling demand (Yahoo, China Environmental Law)

India’s oil output will rise 25% from next month (Economic Times)

Kate Mackenzie

A survey by the University of Maryland found that interest in climate change efforts is strong, with a majority in almost all of the 15 countries covered supporting greater action by governments. A look at the figures however shows that the US had one of the lowest levels of support.

Meanwhile the New York Times reports that in California support for the state’s own laws aimed at reducing emissions is weaker than it once was:

Kate Mackenzie

Yesterday’s EIA data showed natural gas is continuing to build – another 71 billion cubic feet, almost 19 per cent above the five-year average for that week. And this trend has been under way for some time:

European crude oil prices dipped on Friday while base metals rose and gold consolidated above the $930 level as commodity markets traded cautiously ahead of vital US second-quarter growth data, due for release later in the session.

In energy markets, ICE September Brent dipped 39 cents to $69.72 a barrel while Nymex September West Texas Intermediate lost 27 cents to $66.67.

WTI continued to trade at a discount of more than $3 a barrel to Brent due to concerns about US demand conditions prompted by a massive increase of 5.1m barrels in crude stocks, reported on Wednesday.

Read the full commodities report

Kate Mackenzie

Carousel fraud has found its way to the carbon market. The particularly European type of fraud entails setting up complicated import and export schemes between EU member countries, charging buyers for value-added tax in the country of destination, and then absconding with the tax rather than handing it over to the governments.

In 2006 the UK and German governments embarked on a series of raids in 2006, and the UK introduced ‘reverse charging’ for VAT on certain items prone to carousel fraud. At the time carousel fraud was mainly seen as confined to small electronic goods such as mobile phones and computer chips.

By Izabella Kaminska
Crude oil refining  margins have been trying to warn the world about weak US demand for months now. This week’s oil major results may  finally spread the realisation that not all is well in industrial demand for energy into the wider public consciousness.

James Fontanella-Khan

Profits slump at Shell and Exxon
Regulators to review London oil markets (FT)

US Senate cuts some Obama priorities in energy spending bill
White House says cuts would hamper energy policy efforts (Platts)

China bows to activist pressure by moving $5bn refinery plant
Public outcry over Kuwait joint venture (FT)

Chesapeake continues gas-production increase
Growth comes despite low prices and growing oversupplies (WSJ)

UK regulator summons oil market players
Meeting follows episode of rogue trading (FT)

Treasury acts on carbon-credit fraud fears
UK Treasury imposes zero rate of value (FT)

US Gulf Coast spot natural gas prices fall on storage build
Expectations of significant build to gas stocks (Platts)

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

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