A programme to bring plug-in hybrid electric vehicles to the streets of Houston is being launched on Tuesday by Reliant Energy, which is backed by one of the nation’s largest power producers, NRG Energy.

The programme includes converting 10 Toyota Prius cars, owned by the city of Houston, to plug-in hybrid electric vehicles and installing 10 vehicle-charging stations to power them. Seven of the 10 charging stations will be open to use by the public, representing the biggest public charging infracture in Texas.

The goal is to raise consumer awareness and education about plug-in electric cars and promote Houston and Texas as an electric vehicle center.

Continue reading "Houston goes electric: even the world capital of oil backs plug-in cars, a little"

The announcement by Devon Energy that it will sell its Gulf of Mexico and international assets to generate up to $7.5bn, so it can focus its attention on the north American onshore assets and retire debt, underlines the growing significance of the US natural gas play.

Devon, which has been an early investor in the natural gas play, with its leading position in the Barnett Shale, must believe that future returns lie with natural gas trapped in shale across the US. Indeed, a lot of the independents do.

Continue reading "Devon asset sale underlines potential of US onshore gas play"

Just about everyone seems to agree that the US needs climate legislation to curb carbon emissions in the hopes of preventing global warming. The problem is how best to get there. Both the House and the Senate have come up with their versions of the way forward. But industry analysts and energy companies themselves make some good points that Congress should consider before drafting any final legislation.

David Johnson, a managing director at Protiviti, the risk consultancy, says the exemptions, extensions and allowances offered under climate legislation being debated by Congress could drive prices of carbon credits below the cost of reducing emissions. This, he notes, would defeat the purpose of the Boxer-Kerry bill being debated in the Senate and the Waxman-Markey bill passed by the House. The bills also  would allow companies to shift emissions produced domestically to their international quotas. In his own words:

You could get price spikes with higher volatility, driven by bets on whether regulators will allow extensions, deferrals, accelerations, etc. But it could end up significantly cheaper to buy allowances than install scrubbers or any other equipment to reduce emissions.

And while few outside the industry want to take on concerns expressed by ExxonMobil, Rex Tillerson, chief executive of the world’s biggest publicly listed oil company, makes a good point when he says a carbon tax would be far more efficient, easier to regulate and, therefore, cheaper in the long run. He also believes cap-and-trade will lead to volatile prices for emission allowances, undermining the ability of businesses to invest in advanced technologies, creating economic inefficiencies and inviting manipulation in the markets for allowances.  Continue reading "Some points for Congress to consider on climate bills"

KL Energy says it is the only company in the US with an industrial scale demonstration plant producing cellulosic ethanol. And it is ready to build commercial plants to produce cellulosic ethanol in four continents - north America, south America, Asia and Europe.

Cellulosic ethanol - where liquid fuel is produced from starchy material such as corn husks - is one of the one of the great hopes of biofuels industry, because it means fuel can be made from plant sources without the need to compete with food crops.

But KL first needs funding for its proposed plants. The credit crisis has not only made it difficult for everyone to get credit, but especially those venturing into new, untested areas and looking for project finance. The key is to tie up with a big name company who can get access to finances. Continue reading "Reviving next-generation biofuels investment in the US"

ExxonMobil does not make investments lightly - and it’s been reluctant to acquire new resources for years now. So to see it winning the right to develop Iraq’s giant West Qurna oil field means there must be a lot of potential there. Exxon can afford to pay for a field worth having.

Exxon beat out ConocoPhillips and Lukoil for the project, in the third such deal this year - but the first to be led by a US company. It marks the first time a US-led consortium of companies will re-enter Iraq’s oil industry in more than 30 years. Exxon must believe the administration is ready to do business with. Patrick McGinn, Exxon spokesman, made that clear that the company had “agreed with the Ministry of OIl on the principles of the rehabilitation and development of the West Qurna field”. Continue reading "ExxonMobil bulking up on reserves again"

At NRG Energy’s coal-fired electricity plant in Thompsons, Texas, a train from the Powder River Basin coal mines of Wyoming pulls in after a five-day trip from Wyoming, loaded with more than 15,000 tonnes of coal.  It takes eight hours to unload the 130-car trains, and then the next train pulls in.

This plant burns 35,000 tons of coal on a hot day to provide electricity to cool area homes. And bulldozers must constantly shift the coal stockpiled in a giant mound under the hot, noonday sun to prevent combustion as it awaits its turn in the 2,200°F furnace.

Yet burning the coal to make electricity, transporting it 1,500 miles to the power plant and keeping it cool emits enormous amounts of carbon dioxide.

The US government estimates CO2 emissions from coal-fired electricity generation comprise nearly 80 per cent of total CO2 emissions produced by the generation of electricity in the US. Sixty to 80 per cent of coal is, in fact, carbon, making it the most carbon intense of all the fossil fuels. The Environmental Protection Agency has estimated the average US coal plant emits 4.6m metric tons of CO2 each year. And there are 600 coal-fired electricity plants across the country. Continue reading "Coal: The big challenge for US CO2 emissions"

Four years after the Texas City refinery exploded, leaving BP vowing to improve process safety across its US operations, the UK oil company is back on the wrong side of regulatory officials.

Last week, the US Labor Department said BP still has systemic safety issues, four years after an explosion at its Texas refinery killed 15 people and injured 170. The Department’s Occupational Safety & Health Administration (Osha) issued a record $87.4m (£53m) in proposed fines on the company, noting that, in spite of Lord Browne being replaced as BP chief executive after the blast, BP continued to violate US safety regulations under the leadership of Tony Hayward. Osha insisted BP had yet to correct potential hazards faced by BP employees.

BP denied the accusations, saying it has done all it agreed to do and invested more than $1bn in upgrading the facility. It is contesting the fines. Continue reading "Years after Texas City disaster, BP yet to boost board refining knowledge"

Valero, the biggest US refiner, reported a net loss of $219m, or 39 cents per share, for the third quarter of 2009. This swung from net income of $1bn, or $1.91 per share, for the year-earlier quarter. The results were not surprising, given lower margins on diesel and jet fuel and smaller discounts on sour crude oil and other feedstocks. Bill Klesse, Valero’s chief executive, had this to say:

Given the difficult refining conditions, we took further action in the third quarter to improve our profitability. First we extended the plantwide shutdown of the Aruba refinery. At the Delaware City refinery, we streamlined operations by closing the gasifier complex and idling the coker. In October, we began a focused effort to reduce costs at our Paulsboro refinery. Across our refining system, we have been taking advantage of our operating flexibility by shifting feedstocks and operating rates to optimize throughput margins.

There is no doubt Valero has done what it can to withstand the storm. And analysts and investors were not surprised by the results. Indeed, Kleese put on a brave face, saying the company would continue to focus on improving profitability by lowering costs and becoming more competitive, on expectations that the improving world economy will drive demand growth for its products and support a recovery in refining margins and sour crude discounts.

The problem is that even if demand returns, everyone knows climate legislation is coming. And refiners are among those expected to be the hardest hit. A new report by Accenture Strategy Energy Practice underlines that fact in a report on the sector that notes, on top of low industry margins and a weak gasoline market, new regulations could trigger the perfect storm.

Continue reading "More troubles to come for US refining"