In Washington, natural gas has been lumped in with the oil industry as a conventional fossil fuel. And, as Robin West, chairman of PFC Energy, puts it: “The oil industry is just toxic, politically.”
Yet natural gas is the cleanest of the fossil fuels (oil, coal and natural gas), and the industry says new technology has brought US supplies up from about 30 years’ worth to 100 years’ worth in the past few years.
Some argue that the Obama Administration should be looking at to act as a bridge until renewables can be developed economically and at scale to make an impact in the US energy mix. Indeed, West believes that natural gas can increasingly back out high carbon coal, cutting greenhouse gas emissions:
This whole gas play is a game changer in north American energy. This can change the whole carbon policy in the US.
He’s not alone – the big discoveries have also prompted enthusiasm for natural gas from the likes of T. Boone Pickens and Robert F. Kennedy Jnr.
The problem for the natural gas industry is that policy makers have so far discounted natural gas. Read more
Great graphic from Canadian newspaper The National Post:
The always-informative China Environmental Law blog makes a few good points about China (again) beginning construction on a 20GW wind farm – apart from the fact that it’s commencement was already announced last month in English-language China Daily.
The Jiuquan mega wind power base will be built in two phases. The first one, a 3.8 GW base comprising of 18 200-MW and two 100-MW wind farms, is developed by 20 developers and will be completed by 2010, Feng Jianshen, vice governor of Gansu, told reporters.
Chinese power firms Huaneng Power International and Datang International Power are among the developers, which also include six foreign firms, Feng said, without giving the names of the foreign investors.
Those who try to estimate how much the world has left need not only think about new technological advances that have enabled oil companies to extract fuel from shale rocks, 10,000 feet under the ocean and in Canada’s oil sands. They also must remember the Arctic.
It is an area that remains largely unexplored because of the difficult conditions there.
Yet American and Canadian scientists are sailing into the Arctic this summer to map the seafloor. Their goal is to help define the outer limits of the continental shelf, as each country can exercise sovereign rights over their extended continental shelf’s natural resources, including control over minerals, petroleum and sedentary organisms, such as claims, crabs and coral. Read more
Are general concerns over resource depletion rising in the UK? Last week we saw the IEA peak oil story, the Wicks report on energy security, and The Economist publish an alarming cover story about the future of the country’s energy supply.
Today, Will Whitehorn of Virgin Galactic and Jeremy Leggett of Solar Century argue in the FT that the UK is ignoring the threat of peak oil.
Both are members of the UK Industry Taskforce on Peak Oil and Energy Security, a group of eight companies, half of whom are rail operators. Whitehorn and Leggett write that the group concluded last year that the risk from peak oil was bigger than that of terrorism:
We fear this is because of over-estimation of reserves by the global oil industry, underinvestment in exploration and production, or a combination of the two. Once the descent begins, the realisation would sweep the world that another leading industry has its asset assessment systemically wrong. The danger is that producing nations then start cutting exports. At that point, for some oil-consuming nations, energy crisis becomes energy famine.
The many macro-watchers in the oil markets are closely watching the exit strategies of the Fed and other key OECD central banks from their monetary expansion policies. Will interest rates be increased too soon and stifle a growth in demand? Do higher energy prices indicate that demand is already responding?
Bank of America Securities-Merrill Lynch analysts argue that monetary policy in emerging markets is the thing to watch. The recovery, they argue, is more about emerging economy demand than OECD demand, and continuing loose policy in countries with large numbers of consumers in the $5,000 – $20,000 income bracket – a “sweet spot” for energy demand – will be a crucial influence on oil demand. Meanwhile, some emerging economies, unlike their western counterparts, centrally control the supply of credit as well as the supply of money – so they have been able to boost the credit supply much more quickly than OECD countries. Read more
The debate over rising energy prices has lately focused on how an early rise in commodities prices might stall an economic recovery. But two well-publicised books this year have focused on the effect of permanently higher energy prices on the shape of the world economy, rather than just its growth rate.
One is Jeff Rubin, whose ‘Why your world is about to get a whole lot smaller‘ says higher oil prices will make the importation of previously cheap manufactured goods unaffordable, prompting a return to localised economies. Christopher Steiner’s ‘$20 a gallon‘ makes a similar point.
Several interviews by the FT’s Richard Milne suggest this shift might already be taking place: some large manufacturing companies are already localising their production, partly because of higher energy prices:
“A future where energy is more expensive and less plentifully available will lead to more regional supply chains,” Gerard Kleisterlee, chief executive of Philips, one of Europe’s biggest companies, told the Financial Times.
Warning sounded over sharp rises in oil price
Rising prices could derail economic recovery (FT)
Crisis and climate force supply shift
Companies increasingly looking closer to home (FT)
Asian bid for African oil overstated, says study
Study dismisses idea Africa’s oil exporters are exploited (FT)
A dream of hydrogen
$100m to keep promise of hydrogen cars alive (NYT)
North Carolina: Effort to ban wind turbines
Bill bans wind turbines from scenic ridgelines (NYT)
Nigeria’s Oando targets dormant fields
$1.3bn move to expand production (FT) Read more