Daily Archives: July 21, 2009

Kate Mackenzie

US climate scientists are about to support research into geo-engineering, according to New Scientist. The magazine says a final draft of the American Meteorological position paper on the subject endorses further research on manipulating the earth’s environment to counteract the effect of CO2 emissions, making it the first major scientific body to do so.

The document states that “deliberately manipulating physical, chemical, or biological aspects of the Earth system” should be explored alongside the more conventional approaches to climate change. Conventional approaches means reducing emissions – “mitigation” in policy-speak – and adjusting to the unavoidable effect of climate change – known as “adaptation”. Read more

Kate Mackenzie

The epic hostile takeover bid by nuclear power company Exelon for independent rival NRG is over, after NRG shareholders today voted Exelon’s proposal for nine new independent directors.

Exelon’s efforts were considerable. Its all-share bid represented a 37 per cent premium to NRG’s share value when it was first made in October, but this eroded to a few percentage points by mid-June, prompting Exelon to raised the offer in July. NRG fought back by pointing to the regulatory hurdles faced by the deal, which would make the US’ biggest power group, and using its precious cash reserves to make an acquisition of its own. Read more

Kate Mackenzie

A new paper from Harvard’s Belfer Center estimates the cost of carbon capture and storage (CCS), and comes up with a few promising figures for the technology.

CCS technology is not proven at commercial scale and is expected to develop further, making it very difficult to reliably estimate how much power generated using CCS will ultimately cost. And estimating finance costs for such capital-intensive projects are tricky enough: McKinsey figures that weighted average capital costs could vary the cost of carbon abatement with CCS by as much as €9 per tonne – much more than coal, steel or engineering costs which were each estimated to have a €1 impact.

Despite coming out with slightly higher carbon abatement cost estimates than other studies, the Harvard paper has some positive conclusions for CCS in terms of costs and comparisons to other low-carbon energy technologies. Read more

Kate Mackenzie

On Energy Source:

Markets: Oil inches higher while gold dips Read more

Oil prices inched higher on Tuesday but gold dipped below the $950 level and base metals eased as commodity markets consolidated after their recent gains.

Dr Frédéric Lasserre, head of commodities research at Société Générale, said that risky asset classes, including equities and commodities, were benefiting from a return of macro-economic optimism and risk appetite, on the back of strong quarterly results from major US banks.

Nymex August West Texas Intermediate rose 29 cents to $64.27 a barrel. The August contract was due to expire at the end of the session and the September traded flat at $65.29 a barrel. Read more

Kate Mackenzie

The moribund outlook for North Sea production has been the talk of the UK oil and gas industry for much of this year. Dramatic numbers such as a 78 per cent year-on-year fall in exploration wells drilled in the first quarter sent the industry into a spin, and UK Oil & Gas, the industry group, has been repeating its calls for tax relief, arguing that a dramatic slowdown in investment could mean that some recoverable oil and gas is never produced.

But is it a problem for the companies operating there? For BP, the UK’s biggest oil operator, UK oil production fell 14 per cent from 2007 to 2008. And specifically, its North Sea production has almost halved in five years. Read more

Kate Mackenzie

Exxon’s ability to replace its oil reserves is almost as legendary as its profitability. While many of its supermajor rivals struggle to make it to 100 per cent, Exxon reported a 103 per cent replacement in 2008.

Steve LeVine asked Exxon why its news releases and annual reports have put the replacement rate at more than 100 per cent for the past nine years, while its 10K filings to the SEC only put it at more than 100 per cent for four out of those nine years. Read more

New Delhi pulled into Ambani gas conflict
Letter to Indian prime minister raises stakes (FT)

Oil and gas: Legal bid to create a national champion
Pending legislation would overhaul Nigeria’s petroleum industry (FT) Read more