Daily Archives: December 3, 2009

Kate Mackenzie

Takver, Flickr

Source: Takver, Flickr

Could the energy from avid exercisers be effectively harnessed to provide commercial electricity? The BBC has apparently tested this out in a programme going to air tonight in the UK, called (rather worrying for our gym-energy empire plans) ‘Bang goes the theory’.

The Guardian has seen the preview and indeed, it doesn’t end well:

This is the conclusion of Tim Siddall of Electric Pedals, the company hired to supply the bicycles and cyclists. For 11 hours, 100 volunteers rode furiously, getting no more than lunch and the chance to be on TV. “They were dead excited at first,” says Siddall. “But after five hours they had had enough of the boredom and the pain.”

There are some jokes about how many cycling slaves the BBC would need to power its film kit. But what we found most interesting was that the big problem (apart from scalability, presumably) was feeding the cyclists:

“You would use more energy feeding them than the energy they produced,” says Siddall.

In otherwords, the “energy return on investment” was poor — rather like American corn ethanol and (hypothetical) CCS-equipped power plants.

But such poor returns are something we may have to get used to.

Kate Mackenzie

FT Energy Source:

- Refining ironies

- Perennially unpopular cap-and-trade

- The gas-intensive future

- The UK’s new favourite baseload power source

- Copenhagen and carbon offsets galore in Spot news

- Exxon CEO’s lesson for other execs

Further reading:

- Is China’s oil binge coming to an end? (WSJ, Houston Chronicle)

- Scraping the bottom of the earth’s barrel (New Scientist)

- ‘People have put up with an enormous amount of energy waste‘ (Andris Piebalgs)

- UAE cuts 10-year electricity demand forecast by 10% (The National)

- Coal world (Gregor)

Kate Mackenzie

A big increase in LNG imports to the UK, thanks to two new terminals, is not only raising the spectre of trans-Atlantic arbitrage - it’s also seeing natural gas become the baseload fuel of choice in the once coal-dominated market.

Reuters reports that UK power generators are not anticipating the usual squeeze on gas prices this winter, so much so that Centrica, the biggest electricity provider, plans to run all its gas-fired plants at capacity, rather than focusing on coal for winter baseload supply:

As FT Alphaville reported, a number of US refineries have had to mothball plants in the last month due to poor product margins. Ironically, this action may now be beginning to boost product cracks (the difference between crude and product prices and what determines refinery profitability).

As Stephen Schork reports on Thursday:

… the NYMEX spot 321 crack spread has rallied by 172 bps (see today’s Chart of the Day) since Valero’s announcement to close Delaware City. Last night the margin of products to WTI was over 10%. That is still well below range of the seasonal norm of around 13½%, but is marks a significant improvement from the 6.6% margin average we saw for the two weeks preceding Valero’s decision.

But he also asks the question: are cracks rallying because of decisions this quarter by refineries like Sunoco, Valero, et al to take capacity offline, or are cracks rallying in spite of those actions?

Kate Mackenzie

On the face of it, there are so many reasons to dislike carbon trading. Setting up a derivatives trading system to achieve something as morally and politically fraught as climate change just feels wrong, somehow, to many people. Still others (the Brookings Institution is the latest) argue that a carbon tax is superior.

Yet while the majority in most countries supports action on climate change, surveys suggest that attitudes to cap-and-trade are more ambivalent. Yet an HSBC survey last year showed that carbon trading simply doesn’t rate highly on people’s radars, when thinking about government action on climate change:

HSBC Climate Confidence Monitor

Source: HSBC Climate Confidence Monitor

So, given all the criticisms of cap-and-trade, why is it so popular with policymakers? To understand both the critics and the supporters, we’ll go through the key arguments against cap and trade:

Sheila McNulty

The massive rise in recoverable US natural gas resources in recent years is the talk of the energy industry. But it is important to remember that the US does not have a monopoly on gas resources.

Indeed, massive natural gas projects are on drawing boards all over the world, from Qatar to Australia, where liquified natural gas projects are the major energy projects in the works. Shell’s chief executive Peter Voser last week reiterated that he sees the gas taking the lead from oil within the company’s own production volumes. And now, the latest data from InterOil confirms Papua New Guinea is a country to watch, as well.

Kate Mackenzie

Special report: Copenhagen climate summit
The issues, the players, and the politics that could change the world (FT)

Lex: Ethanulled
Ethanol is a environmental travesty and a waste of taxpayer money (FT)

ICE sets trading volume records for Brent, gasoil
Brent futures trading in November up 22% year-on-year  (Argus)

Editorial: Anticlimactic policy
The best solution is a global cap and tradeable national quotas (FT)

South Korea fines LPG cartel $581m
Six companies fined for price-fixing (Reuters)

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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