Daily Archives: April 1, 2010

Kate Mackenzie

After all, a good look at how Wednesday’s offshore drilling announcement will likely be viewed by individual Senators suggests it has.

As President Obama said in the earlier stages of the presidential campaign, opening up offshore waters will make about as much difference to US energy security as getting drivers to inflate their tires properly (he changed his stance on offshore drilling later in the campaign). Moreover, the importance of the decision isn’t yet known, because these areas of seabed haven’t been explored, having been off-limits for so long.

Little of the oil in question would be likely to flow before the end of even a two-term Obama administration. Next to the bigger issues of US energy policy, new drilling off the coast of just over half-a-dozen US states is small beer.

So the consensus is that this proposal is more about politics than policy — and if it is to be justified, it must be in terms of shepherding a successful climate bill through a fractious and partisan Senate. But is it a success, in those terms?

Kate Mackenzie

Switching to renweable power, as we frequently hear, is difficult. It’s unreliable, expensive, requires complicated changes to infrastructure, regularly falls foul of nimby-ism, and somewhat ironically, environmental problems.

At the same time, fossil fuels are not looking like being an easy option forever. Even if one overlooks climate change, other problems of pricing, supply, and geopolitics are increasingly apparent.

And now PriceWaterhouseCoopers has come up with a sketch of how Europe and North Africa could get 100 per cent of their electricity from renewable energy by 2050.

Kate Mackenzie

Is natural gas the easy way to reducing greenhouse gas (GHG) emissions that its supporters suggest?

While the fuel burns cleaner than coal, a very preliminary paper by Robert Howarth, a professor of ecology and environmental biology at Cornell University, says that natural gas might not be such a good option when total emissions are considered.

Howarth’s paper is made up of very rough estimates, which he acknowledges, but he already thinks that natural gas recovered from new hydrofracturing techniques appears to have higher emissions than combustion emissions alone would suggest.

Kate Mackenzie

This week’s International Energy Forum in Cancun, Mexico, has marked something of a turning point for multi-lateral sentiment on oil markets.

Despite some grumbling from the US, energy ministers of oil-importing countries were largely supportive of Opec’s recent actions to keep oil prices high enough to ensure investment in future production, despite the difficult history between Opec and consuming nations.  Meanwhile the International Energy Agency’s executive director mused that China’s ascendancy in energy markets would make his organisation less relevant, and said he hoped China would eventually become a member.

Below is Carola Hoyos’ video wrap of the conference – and links to more of the videos produced there, which include some very interesting interviews with key global players.


IEA’s Nobuo Tanaka on the agency’s diminishing relevance

IEF’s Noe van Hulst on the changing sentiment among energy ministers

Opec’s Abdalla Salem el-Badri on how China driving oil prices

Kate Mackenzie

News that Shell’s Perdido platform has begun to produce oil is a significant moment for the companies who are renewing their efforts to extract oil from deep below the Gulf of Mexico’s waters.

These companies – many of them oil ‘supermajors’ including Chevron, BP, Exxon, and Total – have been making huge investments in new ultra-deepwater technology to retrieve crude oil from depths that would previously have been impossible, or uneconomic, to exploit. The Perdido facility sits on the seabed below 2.45km of water – which Shell helpfully explains is equivalent to six Empire Buildings stacked on top of each other and is more than 50 per cent deeper than any other commercial facility.

US domestic oil production notoriously began to decline in the 1970s and the hope is that these renewed efforts will lead to something of a resurgence for the country’s output – although it will be fairly fleeting.

Despite the challenges, plays like this are popular with the majors – numerous other ‘lower tertiary’ projects, backed by operators such as Chevron and BP, are expected to begin production in the next few years.

Kate Mackenzie

- America’s more homegrown energy future

- Europe finds electric car religion

- CERA says Iraq’s oil plans are too ambitious

- The Chinese hackers are coming after our grid… or not

- Where wave and tidal power is up to

- Drill, but not everywhere

Kate Mackenzie

White House seeks a climate consensus (FT)

Obama to permit Atlantic oil exploration (FT)

UK offers to back Kyoto protocol after 2012 (FT)

Energy-consuming nations align with Opec on intervention (FT)

Shell’s GoM Perdido platform starts production (Bloomberg)

Shale gas not cleaner than coal, says professor (Reuters)

Macarthur rejects $A3.3bn Macarthur bid (FT) Lex (FT)

UK CCGT output hits record in March (Argus)

Sheila McNulty

The oil and gas industry has decided to meet the Obama administration halfway on its efforts to open up some areas of offshore drilling that had been closed to the industry. While they want far more than has been offered, so far, they also know they have to tread carefully given the world’s move against carbon intensive fossil fuels.

The reality is that, despite how dependent the world is on oil and gas, it does not like being so. And the move to find new energy sources is not going to let up. Indeed, even today, the  Department of Energy announced new measures to support the search for replacement transport fuels.

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