Daily Archives: January 11, 2010

Kate Mackenzie The Source: Winter energy woes; Missing data on speculators; Post-oil investing

January 11, 2010 2:00 pm by Kate Mackenzie

On FT Energy Source:

- About that UK nat gas crisis…

- Google’s energy master plan(s)

- The CFTC’s regulatory muddle, and the secret data on energy speculator positions

- Peak oil investment strategies are so over

- Who to thank for relatively low winter heating prices

- Obama’s $2.3bn renewables tax credits and the $1bn rig in Energy headlines

Further reading:

- The octagenarian behind California’s strict energy efficiency rules

- The conservative case for cap and trade

- The ‘monster’ Barnett Shale gas well

- Unintended ripples from biomass subsidies

- China’s global quest for oil

- Offshore rig deployment forecasts for 2010

- China ‘would never accept this request’ for monitoring carbon cuts

Posted in Uncategorised |

Kate Mackenzie Thank speculators and contango for relatively low energy bills

January 11, 2010 1:35 pm by Kate Mackenzie

Oil economist Philip K. Verleger points out a ‘dog that didn’t bark‘ in his latest weekly newsletter: home heating prices in the US are not skyrocketing, despite the extra cold conditions.

The reason for this happy and unremarked-upon turn of events, he writes, is that passive investors going long heating oil have contributed to market contango (in which long-dated contract prices are higher than current contracts). This in turn creates an incentive to store more of the products than has been set aside in previous cold winters, which in turn means no great supply squeeze and no dramatic price jumps.

Continue reading: “Thank speculators and contango for relatively low energy bills”

Posted in Markets, Power |

Kate Mackenzie Peak oil demand funds

January 11, 2010 12:54 pm by Kate Mackenzie

There are plenty of peak oil investment funds, but this is the first peak demand – or post-oil, as they call it – fund that we’ve heard of. The idea behind London-based Beetle Capital is not only everything peaks, but that the world is already in a peak oil phase and will soon enter a phase that is not just post-oil, but post-growth. From a short paper they published today:

“The world is now headed towards economic conditions that will entail not only cyclical but structural change: a damaged financial sector, an overstretched consumer base, rising energy prices, and shortages of food, water and other natural resources so severe that they could heighten global and regional tensions. These factors, combined with new external ones like carbon pricing, all point to one thing:  a crisis of confidence in growth.”

The paper goes on to say that we don’t really know what lies over the horizon, etc, etc, but although resource scarcity will have severe effects, it will also herald a period of “creative destruction in which new policies and new entrepreneurs will radically transform the vast complex of energy-related industries”. 

Continue reading: “Peak oil demand funds”

Posted in Emissions, Markets, Renewables |
From FT Alphaville January 11, 2010

By Izabella Kaminska

Last week was an interesting one for commodities reporting.

In short, the mainstream press discovered the UK natural gas market. And while it’s very nice that they should care so much about a usually under-reported market (bar end-user price-hikes), it did show up some curious operational misunderstandings and err, slightly alarmist reaction.

Namely the focus was on the National Grid’s issuing of two GBAs or ‘gas balancing alerts’, which some mistook for an outright “the UK has run out of gas” announcement, translating it further into the idea the nation’s inhabitants were imminently set to freeze to death and that the country was in for war-time style fuel rationing.

We’re talking about stories like this, and this, and this.

Continue reading: “Crying over hot air”

Posted in Gas, Markets |

Kate Mackenzie Google’s energy master plan

January 11, 2010 9:51 am by Kate Mackenzie

The New York Times’ Green Inc blog has an interview with Bill Weihl, Google’s “green energy czar”, which is his real title, as far as we can tell. Yes, it’s been a while since we covered the tech sector.

Anyway, the interview is interesting because it can be complicated to unpick exactly what is behind Google’s forays into energy and renewables, much of it is done via Google.org, which is not a non-profit, while other parts of Google are also involved in some of the company’s energy ventures.

In fact last month Google applied, through a subsidiary called Google Energy, for the right to sell power from the Federal Energy Regulatory Commission. This is apparently to buy renewable energy, but we reckon Google could make a tidy sum from becoming its own demand aggregator, if switching off its servers during high demand periods were an option.

Weihl is quite upfront about the fact that part of Google’s interest in energy comes from the fact that it’s a big energy user – and actually this is the first reason he gives.

Continue reading: “Google’s energy master plan”

Posted in Corporate news, Emissions, Markets, Renewables |
From FT Alphaville January 8, 2010

John Kemp at Reuters reminded us that the Commodity Futures Trading Commission is due to unveil a raft at new rules, with lots of new tricky details on position limits and exemption guidelines for a whole range of market participants.

Indeed, next Thursday the CFTC will hold an open meeting to discuss the proposals in Washington, along with a webcast and a listen-only conference call.

Wherein lies a clue to what this is all about: PR.

Taken at face value, the CFTC stance on how it should do its own job — i.e regulating the markets nominally under its control — is utterly bemusing.

Continue reading: “The regulatory muddle in energy markets”

Posted in Markets, Oil |

Kate Mackenzie Energy headlines

January 11, 2010 7:19 am by Kate Mackenzie

Freezing conditions a boon for oil tanker owners – along with storage demand (FT)

Reliance Industries sells $764m worth of shares to fund bid for Lyondell (Bloomberg)

UK’s dash for gas-fired power raises vulnerability concerns (FT)

Britain meeting emission reduction goals only because of recession (Bloomberg)

Obama awards $2.3bn clean energy tax credits (Reuters)

Nuclear radiation risks overplayed, says scientist (Observer)

Continue reading: “Energy headlines”

Posted in Uncategorised |

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