Daily Archives: August 21, 2009

Kate Mackenzie

On Energy Source this week:

- Gregor Macdonald on how SoCal will cope with high oil prices

- ‘Energy Citizen’ rallies sparked accusations of astroturfing. And perhaps, another big oil backlash?

- Crude oil stocks fell. But why?

- China wants oil, Ecuador wants money

- Speculators are to blame for last year’s oil price spike, says Dresdner/Commerzbank

- More on Ed Morse’s case against energy price bullishness

- China’s talk of a 2050 emissions peak: nothing to be cheerful about

- UK utilities think smart meters are fine – as long as customers can’t see them

Sheila McNulty

It’s not a big surprise that the Obama Administration decided to grant a permit to build the Alberta Clipper, a 1,000-mile pipeline designed to carry up to 800,000 barrels a day of fuel from Canada’s vast oil sands into the US.

But the oil sands fuel is greenhouse gas intensive, and importing it into the US will add to carbon emissions. So approving its construction contradicts the administration’s goal of building a green economy.

Yet politics is politics. And despite Obama’s campaign pitch to change Washington, it is becoming increasingly clear that is easier said than done. Just as the Waxman-Markey climate bill had to be watered down to appease enough Congressmen to make it out of the House, the Alberta Clipper had to be approved to appease Canada – a major supplier of crude oil to the US.

Nothing in government is done without compromise and a nod and a wink at someone. Environmentalists know that, but they had high hopes that a president who came into office campaigning against global warming would at least make a symbolic gesture and reject the permit, if only to appear to stand by his principles.

By Tracy Alloway

Wow, the commods analysts at Dresdner/Commerzbank have taken a rather bold — if slightly self-congratulatory — stand on oil speculators.

In a note published on Thursday, analysts Eugen Weinberg, Barbara Lambrecht and Carsten Fritsch, are very clear: oil speculators have driven up oil prices, and pending an imminent clampdown by the CFTC, those oil prices will now be going down — closer to their fundamentals.

Kate Mackenzie

On FT Energy Source:

Natural gas bulls

Long road ahead for algae-biodiesel venture

Trans-Atlantic commodities get co-op-tastic

The big oil backlash?

Further reading:

Why utilities want to charge householders who install solar panels (Environmental Capital/WSJ)

Refiners vs utilities in getting free allowances under Waxman-Markey (Houston Chronicle)

How climate change is creating twin plagues of beetles and forest fires (Newsday)

A new, more CO2-absorbent algae strain? (New York Times)

That awkward in-between stage: oil and gas in ‘deep shallow’ waters (The Barrel/Platts)

New Queensland coal-fired plants will require CCS (Argus)

Kate Mackenzie

The spot price for natural gas contracts in the US fell below $3 per million BTU yesterday for the first time since 2002, but gas producers are still pushing ahead with new shale plays.

Things do not look great for natural gas, right now. The ratio of natural gas to crude prices is at historic levels, storage is getting tight as supplies rise, and it’s not been a great summer for consumption.

Yet the likes of Anadarko and Chesapeake are bullish and plan to keep expanding their investments in shale gas.

Kate Mackenzie

Remember BP’s announcement of a small investment in Martek, a company trying to make biofuels from sugar with algae?

That $10m investment by BP was only a tiny fraction of the shrinking pot of money it has allocated to renewables, but it’s pretty small beer for Martek too, according to the Washington Post:

Martek’s annual revenue was $352 million last year, nearly 90 percent of which came from sales to baby formula manufacturers. Using algae, Martek makes DHA, an omega 3 fatty acid that has been proven to be important for brain and eye development in babies. As the only company that makes what is regarded as a “clean” DHA product — other manufacturers offer DHA in the form of fish oil derived from tuna and salmon — Martek’s product has cornered the U.S. market.

The story quotes two analysts, one of whom describes the investment as a “small bet” on a “long shot idea”. The other points out that genetic engineering of the sort needed to make a marketable biodiesel product, takes “a long, long time”.

The more interesting points come from Martek itself:

In theory, Martek President David Abramson said this week, turning algae into the type of fuel BP could use isn’t a remarkable accomplishment. The larger, more important trick would be to develop a product for a price that matches or beats the cost of fuels used by vehicles today.

“This is very doable in a lab, if you don’t care about the price,” he said.

Related links:

Affordability Martek’s problem as it looks to turn fuel into algae (Washington Post, 20/08/09)
Back to petroleum (FT 07/07/09)
BP’s jatropha venture: In case you were wondering (FT Energy Source, 17/07/09)

James Fontanella-Khan

Washington approves oil-sands pipeline
‘Positive economic signal in difficult times’(FT)

Power plants invest in renewables
Industry set to boost growth of clean energy (FT)

Gas industry girds to fight in the Senate over climate
Debate comes at a critical time for the gas industry (WSJ)

Australia backs 20% renewable energy target
Bill had been split from the government’s more ambitious plan (FT)

Petrobras finds light crude off Brazil coast
Preliminary studies indicate that around 280m barrels were found (Reuters)

Wellstream warns over contracts
Shares in the oil and gas pipeline manufacturer slipped more than 10% (FT)

Rio backs ore pricing reform as profts drop
Revenues from continuing operations fell from $27.2bn to $18.8bn (FT)

Poor farmers biggest losers from warming planet
Report highlights the need to supply them with drought-resistant seeds (Bloomberg)

Two-way technology for leaner, cleaner networks
Smart grids to balance supply and demand much more efficiently (FT)

Savings potential scales new heights
The global potential for energy efficiency is vast (FT)

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