Daily Archives: January 28, 2010

Sheila McNulty

Weakness in the refining sector hit oil company earnings in 2009, with Valero, the US’ biggest refiner, widening its full-year net loss to $1.98bn, from a net loss of $1.13bn in 2008. ConocoPhillips, the US’ third biggest oil company, reported  its worldwide refining crude oil capacity utilization rate was 76 per cent in the fourth quarter, and it had deferred a planned upgrade project at its Wilhelmshaven, Germany, refinery.

Its refining and marketing division reported a fourth-quarter loss of $215m, swinging from a profit of $289m in the 2008 quarter, and a full-year profit of $37m, plunging from $2.3bn in profit in full-year 2008. Nonetheless, Conoco also has an exploration and production division, which offset the drop in demand for refined goods brought on by the economic downturn and a move toward energy efficiency and renewables. And a year spent restructuring, when the downturn exposed weaknesses in its portfolio, resulted in full-year 2009 earnings of $4.9bn, compared with a loss of $17bn in 2008.

Kate Mackenzie

Is the argument over who caused crude prices to spike – speculators or market supply-and-demand fundamentals – too simplistic? The Oxford Energy Studies Institute has published a lengthy paper by Bassam Fattouh arguing that it is. The paper is for the meeting of the world’s energy ministers taking place in Cancun in March, but all 60-odd pages are available online now.

Fattouh notes that despite numerous attempts, there’s little conclusive evidence on the culpability of speculators on crude prices. He points also to problems in the physical market,  which he says is relatively illiquid, lacking in transparency and dominated by a few players. The futures markets meanwhile are “more transparent, highly liquid and characterised by a large number of players with diverse expectations”.

Kate Mackenzie

On FT Energy Source:

- Energy lessons for the Obama administration

- Chinese electric vehicles

- Barnett Shale health report

- The iPad-emissions post

- Areva, Conoco and Valero in Energy headlines

Further reading:

- Is clean tech China’s moon shoot?

- Storing energy as ice

- Why Daniel Yergin can expect a good welcome at Davos

- The energy security-as-racism problem emerges

- A chance at redemption for ethanol

- Reconfiguring Nabucco

- Air quality improvements offset climate policy costs

- The carbon-trading shell game

Kate Mackenzie

We missed this report from last weekend that Chinese car manufacturer BYD is planning to spend $3.3bn on developing batteries over the next five years.

Here are a few random US electric vehicle (EV) investment announcements that made headlines over the past week. Note the difference in scale compared with BYD’s plans:

GM invests $246m to build electric motors in US

Fisker Automotive raises $115.3m

Better Place raises $350m

Kate Mackenzie

The hydraulic fracturing process carried out in horizontal shale gas wells has had a lot of criticism for its environmental record. The process is very water-intensive and there are many claims that it can contaminate nearby drinking water. The Texas Commission on Environmental Quality, meanwhile, has carried out a study into air pollution from 94 oil and gas sites in the Barnett Shale area of Northern Texas – all within half a mile of residential areas – and found elevated concentrations of benzene, a known carcinogen, in several places.

Kate Mackenzie

CNet’s Martin LaMonica tries to find an ‘eco-angle’ to Apple’s iPad, and discovers there are a few pluses and minuses, and as with many efficiency questions, it depends partly on the end user.

Part of it is the dead trees vs electronics debate – saving trees is good, but then there are the chemicals and the energy use to consider. The short lifespan of most electronic devices is of particular concern in terms of pollutants.

Kate Mackenzie

Conoco swings to profit (FT)

Argus eyes pact with GDF-Suez on reactors (FT)

Valero losses continue (FT)

SEC says companies should disclose climate risk (NY Times)

Vale in $3.8bn deal for Bunge’s Brazil assets (FT)

Hacker, Tillerson and other oil execs lunch with Obama (Houston Chronicle)

Belarus, Russia end oil supply row (WSJ)

Tax breaks to lure oil and gas sector to Shetlands (FT)

Anadarko announces ‘major find’ in Gulf of Mexico (Houston Chronicle)

Peabody beats analysts’ estimates as China demand soars (Bloomberg)

Obama eager to help advance climate bill (Reuters)

Interest in voluntary carbon credits picks up (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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