Daily Archives: October 23, 2009

Kate Mackenzie

On FT Energy Source this week:

Yergin vs Simmons 2: Battle of the IEA data interpretations

The hidden cost of energy – on health

The ‘obscure’ hedge fund and the ailing lender

Who’s responsible for cutting CO2 emissions? Who cares?

Two down, two to go for Copenhagen negotiators

So the US administration is not against drilling

Just how much shale gas is there?

US Chamber of Commerce climate prank

What’s really going on for BP in Iraq

Kate Mackenzie

On FT Energy Source:

Google, Microsoft and renewables: Why not?

Reports of the dollar’s influence on oil are exaggerated

BP, Exxon and Ghana

Total boss warns of energy security in Spot News

The dreadful scourge of greywashing

Further reading:

Pew poll finds fewer Americans believe in global warming (AP)

Solar companies team up with auto industry for manufacturing expertise (LA Times)

Chesapeake announces output from its main gas shale plays (Oil & Gas Journal)

An oil-rig-inspired wave machine in Australia (CleanTechnica)

Does Hurricane Katrina decision herald a tsunami of climate change lawsuits? (Energy Legal Blog)

Oilwatch monthly October 2009 (The Oil Drum)

Computer says Copenhagen will be a bust (Foreign Policy)

Kate Mackenzie

Will big tech companies invest in UK offshore wind?

The FT’s Ed Crooks reports they are thought to be considering it:

John Lynch, the head of power for Europe at Bank of America Merrill Lynch, said he “would not be surprised” if information technology companies keen to cut their carbon dioxide emissions were to invest in European offshore wind “in the not too distant future”.

Google and Microsoft both refused to comment on possible future investment plans, but a commitment to offshore wind would fit with their strategies to reduce the cost and environmental impact of their electricity consumption.

Companies like Google and Microsoft are big electricity users, because of their huge data centres. The US Environmental Protection Agency estimated data centres accounted for 1.5 per cent of US electricity consumption in 2006 and that this would rise to 3 per cent in 2011 (and with industrial electricity consumption falling because of the recession, perhaps that forecast will turn out to be conservative).

The consumption of some of the biggest data centres is so big that Google, Microsoft, and Yahoo all have located facilities along the Columbia River to take advantage of cooling and hydroelectricity, while Amazon is reportedly planning to do the same.

Kate Mackenzie

That’s what analysts at Barclays Capital say – in fact, they argue in a weekly note, the effect of the weak dollar on all commodities markets is not as great as it might seem.

Firstly, they write, the movement of different commodities markets in recent weeks are divergent enough to undermine the view that the dollar is the “main driver” of price moves.

Second, a simple analysis of dollar moves against daily returns shows a wide range of correlations:

Unsurprisingly, gold has the strongest rolling 30-day correlation at 65%, but for others, correlations are lower at 57%, 34% and 22%, respectively, for oil, copper and corn. All of these correlations are at present somewhat above their five-year averages (which are 51.7% for gold, 25.4% for oil, 19.5% for corn and 17.8% for copper), but not massively so and there are clearly other things going on.

Still, we note that correlation for oil is over 50 per cent, and more than double its five-year average.

FT Energy Source

Is the battle for Ghana’s newfound oil riches about to become even more complicated?

ExxonMobil has agreed to buy private equity-owned Kosmos’ 23.5 per cent stake in the massive Jubilee offshore oilfield, which is believed to hold 1.8bn barrels, for more than $4bn. But the Ghanaian government wants the national oil company, GNPC, to get in on the deal, perhaps with China’s CNOOC. GNPC argues that the Kosmos-Exxon agreement took place after data was given out to 26 prospective bidders in a ‘breach’ by Kosmos, and any bidder for the company would need to remedy that breach. Kosmos sources say the Exxon deal is done, and it is binding.

So, just to muddy the deep waters further, is BP getting involved?

Oct. 22 (Bloomberg) — BP Plc, Europe’s second-biggest oil company, may bid for Kosmos Energy LLC’s stake in the Jubilee field off Ghana’s coast and has hired Goldman Sachs Group Inc. to advise it, two people familiar with the matter said.
BP has held talks with Ghana National Petroleum Corp. about a potential joint offer for Kosmos’s Ghanaian assets, though no decision has been made, the people said, asking not to be identified because the discussions are confidential.

BP is not commenting. But there are a few dots that could be attractively joined together.

Google and Microsoft eye wind farm investments, energy adviser says
Multinationals aim to ‘green’ their electricity use (FT)

Total warns of energy insecurity
Fears green policies will cause shortages (FT)

India’s PM Singh calls for sharing of clean power
Developed countries frustrated by demand (FT)

BP said to study bid for Kosmos Energy’s stake in Jubilee field
Has hired Goldman as adviser, people familiar say(Bloomberg)

Belgium and GDF Suez agree partial tax truce
Deal is part of new charge on country’s nuclear industry (FT)

Seoul begins to realise its foreign oil ambitions
Korea is set on rivalling China (FT)

Lex: KNOC / Harvest Energy

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