The cost of last week’s rig accident, fire and eventual sinking in the Gulf of Mexico is continuing to rise. BP is responsible for the cleanup – a problem that, for now, at least, is continuing to grow. The UK oil company does not have insurance for oil spills, so will have to cover those costs itself. And it has yet to stem the leak.
Indeed, it became apparent today that it could take – in a worst case scenerio – several months to stop the leak. BP is attacking the problem on several fronts. The easiest and fastest is to activate the blow-out preventer, a system of valves designed to shut off an unexpected surge of oil or gas. If it can do that, the cleanup should be accomplished pretty quickly.
But, as a backup, BP already is bringing in two rigs to drill relief wells – a process that could take two to three months – to intersect the pipe and pump down a heavy fluid to stop the unrestrained flow. These rigs have to be taken away from work they were doing to drill other wells, which means a loss of time and money from those other operations. The process itself has its own costs, and it is time-consuming and delicate. Read more
The consensus is growing that the US won’t introduce a bill restricting greenhouse gas emissions this side of 2011, while Australia’s efforts have been shelved until at least 2013. Ironically, both bills were stymied in large part by political opportunism, as much as mere climate scepticism or opposition to carbon pricing. Read more
Speculators may get a bad rap in the public’s eye, but those involved more closely with commodity markets will usually point out that speculators play a useful role providing liquidity for those energy users who want to hedge against big price fluctuations. But the physical energy users themselves believe there can be too much of a good thing. Read more
As crude oil prices remain solidly above $80, Centre for Global Energy Studies analysts are a little wary of Opec warning of a second-quarter decline in demand. Read more
After last week’s talk of Russia offering Ukraine a 30 per cent discount on natural gas supplies from Gazprom, Russian prime minister Vladimir Putin is now making a “large-scale offer” to Ukraine to merge their nuclear power generation businesses. Meanwhile, commentators point out that the gas deal itself is not what it seems – but Ukraine is hardly in a position to bargain. Read more
- Solar sales to soar, but will profits follow?
- Kerry: Still pushing forward on climate/energy bill
- Shale gas and Putin’s choice
- Life on an offshore oil rig
- Five myths about green energy
- How did the rig blowout occur? [And more] Read more
Climate advocates pressure Senate to act on imperiled bill – The Hill
Renewable portfolio standard eyed at Senate climate washout looms – Argus
Russia offers Kiev nuclear power deal – FT
Gas prices may force shale drilling lower – Bloomberg
Opec would act if oil went above $100, says Kuwait – Reuters
GoM oil spill spreads as wells leak – Reuters
Indonesia to cut oil use, develop geothermal energy – Xinhua [And more] Read more