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Panel wants fuel taxes hiked to fund highways

WASHINGTON -- A 50 percent increase in gasoline and diesel fuel taxes is being urged by a federal commission to finance highway construction and repair until the government devises another way for motorists to pay for using public roads.

The National Commission on Surface Transportation Infrastructure Financing, a 15-member panel created by Congress, is the second group in a year to call for higher fuel taxes.

With motorists driving less and buying less fuel, the current 18.4 cents a gallon gas tax and 24.4 cents a gallon diesel tax fail to raise enough to keep pace with the cost of road, bridge and transit programs.

Green revolution stalls on cheap oil

Low oil prices and the credit crunch are threatening to stall the green revolution. The value of crude has dropped from a summer high of nearly $150 a barrel to below $40, taking the wind out of the sails of turbine manufacturers and others ­trying to build low-carbon alternatives.

Jeremy Leggett, founder and executive chairman of Solarcentury, says: "Talk of the death of renewables is premature but clearly big solar farms and wind projects are being cancelled. Everything is suf­fering in the current climate but its my contention that the low oil price is a temporary thing and the growth of renew­ables will resume."

Russia, Ukraine Poised to Resume Talks After Gas Halt

(Bloomberg) -- Russia prepared to resume talks with Ukraine in their dispute over the price of natural gas after cutting supplies to its western neighbor for the second time in three years, threatening fuel shipments to Europe.

Ukrainian President Viktor Yushchenko said in a statement the two sides are near a compromise, urging state utility NAK Naftogaz Ukrainy and OAO Gazprom, Russia’s gas exporter, to meet again in the next one or two days. Gazprom also proposed talks.

Houston's Future Is Now

For that reason, when he looks into the distant future, he sees Houston's fate as dependent upon diversification. "We don't want to be the Detroit of the 21st century," he says. "Not to say that we have to rush out right now and close all the refineries...but I think Houston will someday have to face up to how it's going to make a living in the 21st century."

Bishop points to oil industry experts like Matt Simmons, who thinks peak oil is already upon us. "The oil industry might go flat in the teens," Bishop notes.

Rising costs become more important factor in oil price

While prices remain well above the infamous $10 oil Alaska faced and survived in 1999, many in the industry say $40 today doesn't buy what it bought just a few years ago.

"The fundamental cost of our business has changed over the past couple of years," Jim Bowles, president of Conoco Phillips Alaska, told members of the Resource Development Council during their annual conference in Anchorage in mid-November.

At the same event, outgoing BP Exploration (Alaska) Inc. president Doug Suttles estimated oil industry costs have increased 15 to 20 percent per year for the past few years.

Costs associated with new facilities at oil and gas fields have risen 9.2 percent over the past six months, according to the Upstream Capital Costs Index, published twice each year by the affiliated consulting firms IHS and Cambridge Energy Research Associates.

The index shows oil-field costs doubling since 2005 after several years of only slight growth. A piece of equipment costing $100 at the start of the decade now costs $230.

Kuwait's Dow deal scrapping highlights crisis

KUWAIT CITY (AP) — Kuwait's decision to scrap a $17.4 billion joint venture with U.S. giant Dow Chemical has triggered warnings that the oil-rich Gulf nation's fractious politics could undercut efforts to kick-start stalled economic development plans.

Just days before the Jan. 1 launch of K-Dow, the Cabinet backtracked, saying on Sunday the deal was too risky in light of the current global financial crisis and the precipitous fall in oil prices. On the surface, the rationale appeared sound, as other projects throughout the region have either been canceled or shelved for the same reasons. But the real impetus may have been political, rooted in an ongoing feud between lawmakers and the Cabinet.

Oil out with a bang with 14% spike

NEW YORK (CNNMoney.com) -- The price of oil jumped Wednesday, capping a volatile year with a swing of $7 from the session low to the close, as investors responded to news of a possible supply disruption in Europe.

Light, sweet crude for February delivery rose $5.57, or 14.2%, to settle at $44.60 a barrel on the New York Mercantile Exchange.

Gas prices: Waayy up, waayy down

NEW YORK (CNNMoney.com) -- This is a year drivers will never forget - gas prices surged and crashed at unprecedented levels.

"We've never had a year where we had these extremes - 2008 was really a tale of two markets," said Ben Brockwell, director of data pricing for the Oil Price Information Service.

UK: Tesco petrol hits new record low

TESCO triggered a New Year fuel price war yesterday after slashing the cost of petrol to its lowest level in FOUR YEARS.

Gulf Oil Blocks May Be at High Risk during 2009 Active Hurricane Season

The outlook for the 2009 Hurricane Season is not a good one for the Gulf coast from Louisiana to Alabama which has a 70% chance of experiencing a landfall of a tropical storm or hurricane. According to Houston based Weather Research Center’s meteorologist, Jill Hasling, the Center's outlook is forecasting that the 2009 Hurricane Season will have at least 7 named storms with 4 of these tropical storms intensifying into hurricanes.

Steve LeVine: For Big Oil, a Day of Reckoning

Most of us are elated with gasoline prices, especially those driving to see relatives. We are down on the Chesapeake shore, and filled up the mini-van for $1.49 a gallon. But if you are a petro-state or an oil company, these aren’t happy times.

Output at China's Huge Daqing Oilfield Slows in '08

Crude oil output in PetroChina's Daqing oilfield, China's largest, fell 3.6 percent from a year earlier to 40.2 million tonnes in 2008, or 804,000 barrels per day, Xinhua News Agency reported on Wednesday.

Sinopec Adds 104MM Tons Oil Reserves in Shengli Field

State-owned Sinopec Group said it has added 104.08 million tonnes, or 760 million barrels of proven geological oil reserves to its largest Shengli oilfield.

That is the 26th consecutive year that annual new discoveries in the field surpassed 100 million tonnes.

Report: Toyota developing solar powered green car

TOKYO -- Toyota Motor Corp. is secretly developing a vehicle that will be powered solely by solar energy in an effort to turn around its struggling business with a futuristic ecological car, a top business daily reported Thursday.

Linda McQuaig: Guns, butter and petroleum - Prices may have fallen but black gold retains its unique ability to fuel international conflicts

The reality remains that oil is a finite resource, a precious one-time inheritance we've used up recklessly over the past century. As a result, we've already consumed most of the Earth's easily accessible oil. Much of what's left can be produced only with great difficulty, at enormous environmental and financial cost – as Alberta's oil sands illustrate.

For years, critics, including leading geologists and economists as well as prominent Houston investment banker Matthew Simmons, have argued that we're rapidly depleting global reserves of conventional oil, creating a potentially dangerous situation for the world. Governments, however, have ignored or played down the problem.

Russia cuts all gas supplies to Ukraine

MOSCOW — Russia's Gazprom gas monopoly cut all supplies of natural gas to Ukraine on Thursday after talks broke down over payments for past shipments and a new energy price contract for 2009.

Gazprom officials said the cuts began as planned at 10 a.m. local time (2 a.m. ET) and the Ukrainian gas company Naftogaz confirmed a steady drop in supplies.

FACTBOX - Top Russian gas customers in Europe

(Reuters) - The following is a list of the top customers in Europe of Russia's gas export monopoly Gazprom , which cut supplies to its neighbour Ukraine on Thursday over a pricing dispute.

Russian gas volumes transiting Belarus spikes

Minsk - The volume of Russian natural gas transiting Belarus en route to European customers has increased by one-quarter, a Belarusian official told the Belapan news agency on Thursday. The Russian natural gas monopolist Gazprom added 25 million cubic metres of gas sent through Belarusian pipelines over December volumes, according to the report.

The Gazprom increase was reportedly an intentional but nonetheless insufficient compensation for shipping volume potentially lost by the Russian company due to an embargo on gas shipments it imposed on Ukraine as a result of a pricing and payment dispute.

Roller coaster petroleum

Lots of people have asked me -- and pretty nearly every other geologist in the nation -- what’s likely to be in store for fuel prices. In the shorter term, I’m expecting low prices, but in the longer run I fear we’re likely to see price spikes again and again.

...A former teacher of mine, Ken Deffeyes of Princeton University, taught me about this cause of “fluttering” prices several years ago. Oil prices will be high, he argues, and they will also be highly variable.

It’s not easy to plan for substantial cost variations, but that’s our challenge, both individually and as a nation.

Iran cuts oil output by 545,000 barrels a day

Iran said on Wednesday it would cut oil output by 545,000 barrels per day from Jan. 1 in line with OPEC's decision to reduce production.

Year-end leap in oil price could bode well for gold in 2009

Longer term the peak oil scenario, which sees production potential reaching a maximum followed by a serious decline, if correct, would suggest a continuing high oil price environment from late in the next decade, although timing of the 'peak' is open to argument. Cognisant of the reserve depletion likelihood, major oil producers may thus be more ready to make production cuts to maintain prices at what they see as reasonable levels with a contrarian effect on the strength of the U.S dollar as, for the time being at least, the world's largest consumer of oil and oil products. Some would say that security of continuing oil supply is what the Iraq Wars have, in reality, been all about.

Oil Price Vagaries will challenge Obama

There is no more easily accessible oil. Independent audit procedures are needed to measure output. Lower oil prices are likely to impede the massive investment needed to meet increased demand by 2030.

Obama's big oil decision: Bush opened the door to oil shale, a huge energy source. Will Obama close the door too soon?

Despite his hopes for renewable energy, Barack Obama faces tough choices early in his term on whether to extract more oil within the US. Americans are still years, maybe decades, from kicking the oil habit. One reserve – with at least a century of supply – lies below the Rockies. Will a "green" president ignore this black ooze?

Big names help bankroll Obama inaugural

An eclectic group of people have donated to the committee, from financier George Soros to energy expert and author Daniel Yergin, model Rachel Hunter and John Thompson, coach of the Georgetown University basketball team.

Locals offer wide range of resolutions

James Howard Kunstler, author, social critic and blogger: “My hope for 2009 is that President Obama will usher in a new period of reality-based politics and policy. A changing of the guard in the White House does not guarantee this. It will take courage and resolve, since the problems we face in energy, banking and geopolitics are very severe. Personally, I resolve to resume publishing my local newsletter, Civitas, here in Saratoga. It’s time for me to re-engage with local issues.”

A New Year’s Wish for Coloradans and the United States

Like a 400 pound fat man at an “all you can eat” buffet, the citizens of this country continue devouring their resources, land, water and energy like tomorrow won’t arrive! Not only that, they (we) added 3.1 million of humans to this country this year and every year via immigration — to accelerate those consumption levels.

Wasting Our Watts

This may sound too good to be true, but the U.S. has a renewable-energy resource that is perfectly clean, remarkably cheap, surprisingly abundant and immediately available. It has astounding potential to reduce the carbon emissions that threaten our planet, the dependence on foreign oil that threatens our security and the energy costs that threaten our wallets. Unlike coal and petroleum, it doesn't pollute; unlike solar and wind, it doesn't depend on the weather; unlike ethanol, it doesn't accelerate deforestation or inflate food prices; unlike nuclear plants, it doesn't raise uncomfortable questions about meltdowns or terrorist attacks or radioactive-waste storage, and it doesn't take a decade to build. It isn't what-if like hydrogen, clean coal and tidal power; it's already proven to be workable, scalable and cost-effective. And we don't need to import it.

This miracle juice goes by the distinctly boring name of energy efficiency, and it's often ignored in the hubbub over alternative fuels, the nuclear renaissance, T. Boone Pickens and the green-tech economy.

Alternative energy companies stung by tight credit

Alternative energy stocks were battered on Wall Street in 2008 as volatile commodity prices, a continuing global recession and tightening credit markets drove one ethanol company into bankruptcy protection and sent shares of others down more than 90 percent.

UK: Elderly fearful of soaring heating bills

Elderly people in Lancashire are turning off their heating and wearing coats indoors in fear of getting soaring energy bills.

Groups which represent older folk say pensioners are coming to them daily with worries about rocketing prices for gas and electricity.

Pakistan: Energy crisis reaches new heights

LAHORE - SHORTAGE of natural gas, CNG and LPG has followed petrol crisis and almost everyone has been affected.

The City is in the grip of severe cold weather and citizens are unable to warm their houses because of shortage of electricity and gas.

Electricity is expensive and available only for a few hours. Gas pressure in many residential areas is inadequate even for cooking or heating homes.

An acute shortage of petrol has affected the mobility of people. Petrol shortage has impacted mostly motorcyclists and luxury car owners who have not converted their vehicles to CNG.

Pakistan: Massive load shedding triggers violent protests in Faisalabad

FAISALABAD: Massive load shedding brought life in Faisalabad to a standstill on Thursday. Hundreds of power looms workers took to the streets, they protested over continued power outages and blocked city’s main arteries.

According to sources, protestors surrounded local Fesco office, burnt tyres and chanted slogans against Fesco officials. A large contingent of police was deployed on the occasion. Agitated workers set a bakery on fire but two labourers were also injured when the bakery guard opened fire.

California's OriginOil seeks better way to grow algae

LOS ANGELES (Reuters) - One could say they are working on the green slime that could change the world.

In an unassuming converted warehouse in Los Angeles, the 10 employees of OriginOil are working to perfect the way microscopic algae is grown and refined.

Survey finds water shortage expected for Oregon

The words "Oregon" and "rain" often appear together, but results of round-table talks indicate Oregonians doubt there will be enough water for everyone as the state's population grows and summers become drier with climate change.

The five sessions were held in September and October. Two-thirds of those surveyed at the roundtables across the state doubt whether Oregon will have enough water to cover all its needs 20 years from now.

Revealed: The cement that eats carbon dioxide

Cement, a vast source of planet-warming carbon dioxide, could be transformed into a means of stripping the greenhouse gas from the atmosphere, thanks to an innovation from British engineers.

The new environmentally formulation means the cement industry could change from being a "significant emitter to a significant absorber of CO2," says Nikolaos Vlasopoulos, chief scientist at London-based Novacem, whose invention has garnered support and funding from industry and environmentalists.

Oak tree deaths herald new pest threat to traditional plants, Kew curator warns

Traditional British plants from the oak tree to the garden cabbage are under threat because of the effects of climate change, the curator of Kew Gardens has warned.

Bush may be giving Obama breathing room to fight global warming

Recent moves by lame-duck officials, though frustrating to environmentalists, offer the president-elect time and political cover to deliberately craft rules on emissions, energy lobbyists say.

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Though the model of oil prices being a valid 'signal' of long term scarcity took a hit in 2008, many of our future trajectories do hinge on higher (or lower) oil prices. Here is the 2009 Poll on where oil futures prices will close 2009. There were 6 posters who voted on a close below $50 in the 2008 Poll, but none in the public comments section (so I am not sure who they were); thus the prize of 'a date with Professor Goose' gets extended to 2009 (poor PG). In full disclosure, here was my thinking in that thread a year ago. Below the fold is a screenshot of last years poll results and some commentary. Feel free to add your own analysis, links, etc. I wonder how many in the general public would agree that July 2008 will prove to be the all time high in oil production...?

12/31/2007 Price Poll Where will oil futures close on 12/31/2008? -(Oil was at $97 per barrel at the time) (***Note - this is a pretty small sample size and may be more reflective of who was on their computers On 12/30-12/31, than a random sample of TOD readership...;-)

2009 will mark a sharp reduction in oil projects and investments, scrapping of marginal production, and lack of capital for new investments due to higher price decks for banks. But at least for now, consumption decline rates will exceed production decline, barring more OPEC cuts. The open question is what is the resting pulse of world oil demand and do we emerge from the credit crisis with a full or half head of steam, or languish further into a depression. Oil price and supply, at least for 2009, will take their cues first from the economy, and second from depletion/cuts.

Please add your comments and vote in the 2009 Poll

Happy New Year.

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It is pretty clear that 2009 will not be a great year. At best, we are likely to see a continuation of what we have seen in the recent past--lots of bankruptcies, more foreclosures, lots of layoffs. At worst, the situation could suddenly become much worse--a major oil exporter could suddenly collapse; the US may experience hyperinflation or deflation; or the US could experience a major hurricane and not be able to recover from it because of credit/import problems.

What can we do to make the year a better one for ourselves, our families, and our communities? We can perhaps plant a garden. We can learn to be more thankful for what we do have. We can let jobless relatives (children, parents) move in with us. Are there any good books that people have read that they would recommend? What are people doing now to cope?

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It can sometimes be a little unclear (especially first day of a new year) how the previous year changed the world. No one guessed in 1946 that the Magnetron Spencer Percy was developing for use in a RADAR system (and that subsequently melted a candy bar in his pocket) would one day become the microwave oven. But I like to think that we can make some pretty good guesses about which of this year's innovations are going to be with us, and changing our world, for a good long time.

Here's my list of the top ten clean tech innovations of 2008.

Light Antennas

You know how you can capture and produce radio waves with antennas? Well, what if you could built an antenna so small, it could capture and emit light? The first large array of these nano-antennas was produced this year, and the possibilities for them are endless. They may become efficient light sources, efficient solar panels, or simple ways to transfer energy we feel as heat into energy that we don't feel at all, making them a kind of passive climate control system.

President Barack Obama

Maybe not an innovation in the traditional sense, though, I like to think that it took some innovative thinking to get this man elected president. But President Obama's Administration has already grown to include clean technology advocates and researchers, and carries with it promises of green collar jobs, carbon markets, and restored protections for many of our imperiled ecosystems.

EEStor Begins to Emerge

The power storage company, EEstor, which we're still not 100% sure isn't full of crap did finally begin to tell us some things about their miraculous-sounding power storage technology. If true, vehicles could have batteries lighter than gas tanks, that could charge in five minutes and would never degrade. These ceramic "electrical energy storage units" have not yet seen the light of day (or independent verification) but they do already have contracts with Lockheed Martin and plans to deliver their first unit to an electric car company shortly.

The Gas Crunch

Hey...remember back when gas was freaking ridiculously expensive? Well, while the market may not (the Ford F-150 is, once again, America's most popular vehicle) the innovations that poured into the market to try and help consumers deal with high gas prices will not go away. Better hybrid systems, more efficient engines, massive investments in biofuels, the re-emergence of diesel in America were all direct implications of skyrocketing gas prices.

Solar at Grid Parity

The cost of delivering electrons to the grid has gone up a little bit in the past year, and the cost of delivering electrons to the grid using solar power has dropped dramatically. The first solar electrons costing roughly the same amount as natural gas electrons were produced this year. There's no reason to think that this trend will end, as natural gas gets more expensive, and solar systems get more efficient. In fact, one company is already promising solar power at the same price as coal!

Project Better Place Expands Wildly

While I'm still not 100% sure that Better Place, with it's many battery swapping stations, cell phone-like payment plans and "one sized battery fits all" platform makes the most sense, they have managed to get a lot of governments to bite. California, Hawaii, Australia and Denmark have all signed deals with Agassi's gigantically ambitious electric car program. It could all become extremely passe if EEStor's technology pans out. But otherwise it's one of the few solutions that will work now, instead of waiting for battery technology to catch up with our goals as car drivers.

Pickens Counterbalances Gore with a Real Vision

We've tired of Al Gore. The love affair was great while it lasted, but he's been attacked from too many angles to really latch onto his message anymore. But what about an ultra-conservative, Texas oil man? Now that's the kind of champion clean technology needs! And not only does he provide a different perspective, he provides a clear plan for how he wants to change our energy future. And while it might be a plan that would make him one of the richest people in the world, it's also actually a pretty good plan.

http://feedproxy.google.com/~r/EcoGeek/~3/mLQnkUe_5QM/

So now that you know my opinions of which innovations of 2008 are going to change the world the most...how about a less subjective metric. In fact, this list is purely objective, simply listing which cleantech venture deals managed to pull the largest number of dollars.

All together, the top ten account for about $1.8 Billion dollars, with all but one of those deals being in the solar power industry.

Indeed, this has been the year of solar power deals! The only deal in these top ten venture cleantech deals that wasn't solar was the $166M series B funding for Range Fuels, the company that's building America's first cellulosic ethanol plant.

The largest deal was Fotowatio's $350M deal to start consolidating solar power projects in sunny Spain. But the majority of investments were in much younger companies trying to scale up production.

The capital costs were high for all of the small solar companies trying to make a go of it this year, regardless of which technology they were using. But CIGS solar manufacturers fighting to be the first to market took home three of the top five spots. Nanosolar, Miasole and Solopower all took home more than $200M of funding in the last year.

Solar thermal, a less technologically advanced, but still rapidly innovating field got a lot of investment dollars as well. eSolar, Solel and BrightSource all brought in more than $100 M from various investors.

Thanks to GreenTechMedia for compiling the list!

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Oregon looks at taxing mileage instead of gasoline

PORTLAND, Ore. – Oregon is among a growing number of states exploring ways to tax drivers based on the number of miles they drive instead of how much gas they use, even going so far as to install GPS monitoring devices in 300 vehicles. The idea first emerged nearly 10 years ago as Oregon lawmakers worried that fuel-efficient cars such as gas-electric hybrids could pose a threat to road upkeep, which is paid for largely with gasoline taxes.

"I'm glad we're taking a look at it before the potholes get so big that we can't even get out of them," said Leroy Younglove, a Portland driver who participated in a recent pilot program.

The proposal is not without critics, including drivers who are concerned about privacy and others who fear the tax could eliminate the financial incentive for buying efficient vehicles.

But Oregon is ahead of the nation in exploring the concept, even though it will probably be years before any mileage tax is adopted.

Russia looks to re-route EU gas

Russian gas giant Gazprom says it can no longer depend on Ukraine as a transit route to the EU and is looking to develop alternatives.

In a BBC interview, the deputy chairman of Gazprom, Alexander Medvedev, said he hoped EU countries would back the move.

Russian gas exports to Romania fall by 30-40 pct

BUCHAEST (Reuters) - Russian natural gas supplies to Romania suddenly fell by 30-40 percent on Friday as a result of the Russia-Ukraine gas row, the head of Romania's state-controlled pipeline operator Transgaz said.

U.S. to Add 12 Million Barrels to Strategic Petroleum Reserve

(Bloomberg) -- The U.S. Energy Department plans to add 12 million barrels of oil to the nation’s Strategic Petroleum Reserve, the first increase since before prices surged to a record in July.

New national security strategy highlights Arctic

A new Russian national security strategy will be adopted in February, Secretary of the Russian Security Council, Nikolay Patrushev confirms. The new strategy, which will cover the period until 2020, includes a high level of focus on the energy potentials of the Arctic.

Speaking in a recent meeting with the Russian Academy of Sciences Presidium, Mr. Patrushev said that the new strategy is planned adopted in February this year, Interfax reports.

According to newspaper Kommersant, which has obtained a copy of the document, the new strategy presents the USA as Russia’s continued main competitor in global affairs. It also concludes that Russia has overcome the political, social and economic crisis of the 1990s and that it thus has “restored the possibility to protect its national interests” and that is now “a key player in a world of multi-polar international relations”.

Number of active oil rigs drops by 98

HOUSTON — The number of rigs actively exploring for oil and natural gas in the United States dropped by 98 this week to 1,623.

China starts Iraq's first foreign oil work in decades

BAGHDAD (Reuters) - The Chinese National Petroleum Company (CNPC) started work on a $3 billion oil project in Iraq on Friday, the first foreign firm to begin such work since dictator Saddam Hussein nationalised the industry decades ago.

A CNPC delegation formally opened the al-Ahdab oi field project in Iraq's eastern province of Wasit, officials there said.

ExxonMobil wrestles over Point Thomson

ExxonMobil wants to start drilling wells in Alaska's North Slope, but the oil giant said the state is denying a drilling permit for the 106,201-acre field known as Point Thomson and is therefore taking its case to Alaska's Superior Court.

Poland sees gas deliveries from Ukraine drop

WARSAW (Reuters) - Deliveries of natural gas to Poland from Russia via Ukraine fell 6 percent on Friday afternoon, gas operator Gaz System and gas monopoly PGNiG said in a statement.

Ukraine's Naftogaz denies theft of European gas

KIEV (Reuters) - Ukraine's state-run gas company, Naftogaz on Friday denied a claim by Russia's Gazprom that it had been stealing gas destined for Europe.

"Naftogaz considers that any statement from official representatives of Gazprom about the unsanctioned siphoning off by Ukraine of Russian gas destined for Europe is untrue," Naftogaz said in a statement.

OPEC to Cut Crude Shipments by 1%, Oil Movements Says

(Bloomberg) -- OPEC will cut daily shipments of crude oil by 1 percent in the four weeks to Jan. 17 as the group enacts supply reductions announced in the past four months, according to industry consultant Oil Movements.

...“OPEC are baring their fangs but the market is still skeptical,” Oil Movements founder Roy Mason said in a telephone interview from Halifax, England. “They’re still well short of the targets announced earlier this year, and nowhere near the ones announced in December.”

Shipments from the Middle East will decline 1.2 percent to 16.96 million barrels a day in the period to Jan. 17, Oil Movements said.

ANALYSIS - Economic crises sharpen Russia-Ukraine gas row

KIEV/MOSCOW (Reuters) - The deepening economic crises that have gripped both Russia and Ukraine may make it harder to find a resolution to the row over cut-off gas supplies, analysts said on Friday.

Russian state-controlled gas behemoth, Gazprom, halted supplies to Ukraine on New Year's Day at 0700 GMT, provoking memories of a similar cut-off three years ago that briefly reduced gas supplies to some European Union customers.

There is little room for manoeuvre.

"The very severe financial stringency for both sides, but especially for Ukraine, will make this negotiation even more protracted than in previous gas crises," said Christopher Granville, managing director of Trusted Sources, an emerging markets research company in London.

Fog closes Houston Ship Channel, stalls 20 vessels

HOUSTON (Reuters) - Fog has closed the Houston Ship Channel, including Galveston and Texas City, to oceangoing vessel traffic, the U.S. Coast Guard said Friday.

Fog closes Lake Charles, La., ship channel - pilots

HOUSTON (Reuters) - Fog has closed the ship channel to the refining and petrochemical center at Lake Charles, Louisiana, the local pilots organization said.

Russia says Europe gas flows on Jan. 3 in doubt

MOSCOW (Reuters) - Ukraine has not given agreement to ship the full volume of gas to Europe on Saturday that Russia has requested, Russian gas export monopoly Gazprom said on Friday.

"The Ukrainian side for the next 24 hours has not agreed to the needed transit volume," Gazprom spokesman Sergei Kupriyanov said at a Moscow news conference.

Hungary says gas pressure from Ukraine drops

BUDAPEST (Reuters) - Pressure on Hungary's natural gas pipeline that ships Russian gas via Ukraine is dropping, oil and gas firm MOL said on Friday.

Russia accuses Ukraine of stealing gas

Russia accused Ukraine of stealing gas destined for the rest of Europe today, a day after cutting supplies to its neighbour in a contract dispute.

The volumes Russian export monopoly Gazprom (GAZP.MM) said Ukraine was siphoning off were small, but the accusation suggested Moscow was in no mood for compromise in a re-run of a 2006 argument that led to supply shortages across the EU.

Gazprom said it was responding to Ukraine's actions by increasing exports via alternative routes, including Belarus. Energy companies in Europe said they had not felt any disruptions to their supplies since the cut-off.

"The Ukrainian side openly admits it is stealing gas and is not ashamed of this," Gazprom spokesman Sergei Kupriyanov said.

Countries in tug-of-war over Arctic resources

(CNN) -- One of the planet's most fragile and pristine ecosystems sits atop a bounty of untapped fossil fuels.

The U.S. Geological Survey estimates that 90 billion barrels of oil, 44 billion barrels of natural gas liquids and 1,670 trillion cubic feet of natural gas are recoverable in the frozen region north of the Arctic Circle.

And the fight over who owns those resources may turn out to be the most important territorial dispute of this century. Russia, Canada, the United States, Denmark, Norway, Sweden, Iceland and Finland all have a stake in the Arctic's icy real estate.

A Surge in Bicyclists Appears to Be Waiting

After a summer of their dreams, bicycle store owners are facing a grim reality this winter.

Big increases in business this year led some shop owners to think that they were largely insulated from a slowing economy. But the economy has continued to spiral downward, taking bicycle sales and much else with it.

The question now is whether all the bicyclists who appeared last summer will be back next summer.

“This is not like the rest of the recessions we’ve been through,” said Jay Graves, who owns six Bike Gallery stores in Portland, Ore., the first of which his father started in 1974.

Energy in the real world

Solar and Wind are not renewable. The energy from solar and from wind is available but not renewable. An oak tree is renewable. A horse is renewable. They reproduce themselves.

But, and a very important but, the human made equipment used to capture solar energy or wind energy is not renewable. In fact, there is considerable fossil fuel energy embedded in this equipment. The glazing on a solar collector of any kind – solar thermal water, solar thermal air, and solar electric – requires energy to manufacture. Aluminum comes from bauxite. It takes considerable energy to refine the bauxite. When I was fourteen, I worked loading trucks in an aluminum extrusion plant. The ingots of aluminum would be heated, pushed through a die to shape, then cut and put on carts. We would take these carts and move them into a small room heated to around 400 degrees F where they were baked. Because this was Florida, we would be fairly dripping with sweat when we would go into the room to remove the cart. By the end of the day, our shirts were caked with our own salt.

Worldwide oil and natural gas reserves increase in 2009

The higher crude oil and natural gas prices of the first half of 2008 brought about record drilling activity which brought about an increase in crude oil and natural gas reserves worldwide.

As the industry responded to record-high prices, production increased worldwide by 1.1 percent.

New estimates of world’s oil reserves total 1.34 trillion barrels, up 10.5 billion barrels from a year ago, according to the December 22 edition of the Oil & Gas Journal. The latest estimates of gas reserves total 6.254 quadrillion cubic feet, up 68.67 trillion cubic feet from 2007.

Steel Industry, in Slump, Looks to U.S. Stimulus

The industry itself is turning to government for orders that, until the September collapse, had come from manufacturers and builders. Its executives are waiting anxiously for details of President-elect Barack Obama’s stimulus plan, and adding their voices to pleas for a huge public investment program — up to $1 trillion over two years — intended to lift demand for steel to build highways, bridges, electric power grids, schools, hospitals, water treatment plants and rapid transit.

“What we are asking,” said Daniel R. DiMicco, chairman and chief executive of the Nucor Corporation, a giant steel maker, “is that our government deal with the worst economic slowdown in our lifetime through a recovery program that has in every provision a ‘buy America’ clause.”

Nepal to import power from India in face of 'energy emergency'

Kathmandu (PTI) Nepal plans to import power from India from tomorrow to overcome its severe energy crisis as it faces 16 hours daily blackout soon, an official said today.

Power crisis continues across the country, triggers violent protests

KARACHI: The ongoing power crisis has intensified across the country as two hours of load shedding is being observed after every hour. The Pakistan Electric Supply Corporation, despite its tall claims, have miserably failed to maintain the power supply. Meanwhile, country is generating near about 7500 MW of electricity against the overall demand of 11500 MW. In order to fill this gap, 15 hours of power cuts are being observed in urban areas while 20-hour long electricity load shedding is being reported in the rural areas.

As Recession Deepens, So Does Milk Surplus

As American dairy farmers increased their shipments of powdered milk, cheese and other dairy ingredients to foreign markets, their incomes rose. And the demand surge helped drive up the price of milk for American families. The national average for whole milk peaked at $3.89 a gallon in July, up from an average of $3.20 a gallon in 2006.

But now, demand for dairy products is stalling amid a global economic slowdown and credit crisis, even as supplies have increased. The result is a glut of milk — and its assorted byproducts, like milk powder, butter and whey proteins — that has led to a precipitous drop in prices.

Biophysical Economics: In the future, economists will return to earth

The proposals for bailouts, regulations and government spending sprees all share one tragic flaw: they assume no physical or biological limits to human growth. Most economists cling to an 18th century mechanical universe that conjured an "invisible hand" of God, that would allegedly convert private greed into public utopia.

Indeed, a few got rich, but the meek inherit an earth featuring child slavery, sweatshops, a billion starving people, toxic garbage heaps, dead rivers, exhausted aquifers, disappearing forests, depleted energy stores, lopped-off mountain tops, acid seas, melting glaciers and an atmosphere heating up like a flambé.

Oil falls to below $42 a barrel

LONDON – Oil prices fell below $42 a barrel Friday after Russia and Ukraine said a dispute over natural gas payments wouldn't affect shipments to Western Europe.

Light, sweet crude for February delivery fell $2.85 to $41.75 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. Trading was closed Thursday for New Year's Day.

Guinea’s Military Government Cuts the Price of Gasoline by 13%

(Bloomberg) -- The military government of Guinea, which seized power on Dec. 23, has cut the price of gasoline by 13 percent after crude oil prices declined.

Oil May Rise as OPEC Members Curb Output, Survey Says

(Bloomberg) -- Crude oil may rise as the Organization of Petroleum Exporting Countries makes record production cuts to counter the deepest economic slump since World War II.

Seven of 14 analysts surveyed by Bloomberg News, or 50 percent, said futures will gain through Jan. 9. Five respondents, or 36 percent, forecast oil will fall and two said there will be little change in prices. Last week, 46 percent of analysts said prices would drop.

Russian continues to withhold gas to Ukraine

MOSCOW (AP) -- Ukraine sought support Friday in European capitals a day after Russia cut off gas supplies and hardened its stance on prices.

But the two countries pledged they would keep gas flowing to the rest of Europe, and as of late Friday afternoon there were no reports of interruptions in shipments beyond Ukraine.

Russia-Ukraine gas row highlights EU's dependency

LONDON (Reuters) - Russia's decision to cut off gas supplies again to Ukraine underlines the urgent need for Europe to reduce its dependency on Russian supply, because the annual row over payments seems unlikely to end soon.

Angola Takes Helm as OPEC Enacts Record Output Cut

(Bloomberg) -- Angola, OPEC’s newest member, took over the group’s presidency yesterday as producers implement a record output cut to reverse last year’s slump in prices.

The rotating leadership of the Organization of Petroleum Exporting Countries passed to Angola from Algeria as the 12- member group starts a 9 percent reduction in its total production target agreed in December after prices crashed $100 in five months.

After worst year ever, commodities may lag recovery

SINGAPORE (Reuters) - Commodities, until six months ago the darling of investors and an out-performing asset class, sealed their worst year on record with accelerating losses in the fourth quarter of the year, data showed on Thursday.

Industrial metals, crude oil and even grains took it on the chin as the world fell into recession and investors sold anything liquid or risky to cover deepening losses elsewhere or sock away cash for a brighter day, wiping out six years of nearly unbroken gains in the space of months.

Executive of the Year 2009 - T. Boone Pickens

Despite strong head winds, T. Boone Pickens tirelessly pushes plan to reduce America’s foreign oil dependence.

UK: More uncertainty lies ahead for public services

If there is one thing certain about the nature of the century that lies ahead, it's uncertainty. From climate change to water, energy and food supplies, Earth's life-support systems are creaking under the strain of humanity. For those who run public services, the prospect of a series of overlapping emergencies, each involving the raw materials of survival and each affecting unprecedentedly large numbers of people, is a formidable new challenge.

That may sound unduly apocalyptic – but then apocalypse is in the air, the subject of an increasing number of books, articles and official reports. The New Scientist earlier this year carried a discussion on the "end of civilisation". The American academic Jared Diamond's Collapse was one of a spate of recent books examining how societies break down. Gaia scientist James Lovelock has gone further, suggesting that humans could be reduced to a "rump" of half a billion "survivors" (the world's population is currently 6.8bn) with large areas of the planet becoming uninhabitable as climate change bites.

Opportunities abound in 2009

Our green challenges did not disappear when the stock markets collapsed. Climate change remains a real threat, even if gasoline prices are about half of their peak this summer. Peak oil production is also here, which is another good reason to conserve that resource in the long run.

It's unfortunate that carbon taxes cause such angst in this country. Fuel taxes are much higher in Europe, which is part of the reason European cars are more fuel-efficient.

Tenn. residents fear impact of sludgy ash spill

The piles of ugly, gray mess created a huge mudslide-like effect that destroyed three houses, displaced a dozen families and damaged at least 42 properties. The sludge spread across 300 acres and into the Emory River. It created an alien-looking landscape that resembles no recent natural disaster.

"We don't know what the long-term environmental effects of something this size are," Tennessee Gov. Phil Bredesen said Wednesday after viewing the damage. "We can speculate all we want or like, but to my knowledge, there's not been one this large in the past in this country."

It's that uncertainty — fear of the unknown — that's generating so much concern here. "This could be something that shows up in five or 10 years," says Raymond, 58. "It's not what's happening to people right now, it's what could happen to our children and grandchildren years down the road."

Utilities Offer ‘Green’ Nuclear Plans to Customers

Thinking about making over your home or business so that it runs greener? What about going nuclear?

That seems to be what at least two utilities are hoping customers will opt for as concerns grow about the damage created by planet-warming emissions from highly polluting sources like coal and from other fossil sources like gas.

Energy fears fuel sales of firewood

Americans are stoking their fires, shifting to wood-generated heat to save money. "People are going back to the older days of living," says Mel Barley of Fired Up Firewood in Lubbock and Amarillo, Texas. Sales of pinon, mesquite and oak firewood in October were double the same month a year ago, owner Randy Hair says.

"They're trying to ... save all the money they can," Barley says. "The more they save on fuel, the more money they have to buy other things."

Chickens given roosts in urban backyards

California Web developer and business consultant Rob Ludlow gets laughs when he tells people his pets make him breakfast.

It's no joke. Ludlow, his wife, Emily, and their two daughters have five egg-laying hens living in the backyard of their Bay Area home in Pleasant Hill, Calif. "Can your dog or cat claim the same?" Ludlow asks.

He is among the growing number of city dwellers across the country choosing chickens as pets — raising them for eggs that proponents say taste fresher, for pest control, for fertilizer and, as the economy continues to struggle, for a cost-saving source of protein.

Enthusiasts have been pecking away at multiple local laws this year and have persuaded officials in cities such as Fort Collins, Colo., Bloomington, Ind., and Brainerd, Minn., to change the rules.

Hong Kong air pollution worst since records began: official data

HONG KONG (AFP) – Air pollution across large swathes of Hong Kong last year reached its highest level since records began, despite government efforts to improve the environment, official figures showed Friday.

Hong Kong suffers high air pollution, caused partly by huge numbers of factories over the border in southern China, and there have been fears the problem could compromise its position as an international finance centre.

Nasa climate expert makes personal appeal to Obama

One of the world's top climate scientists has written a personal new year appeal to Barack and Michelle Obama, warning of the "profound disconnect" between public policy on climate change and the magnitude of the problem.

With less than three weeks to go until Obama's inauguration, Professor James Hansen, who heads Nasa's Goddard Institute for Space Studies, asked the recently appointed White House science adviser Professor John Holdren to pass the missive directly to the president-elect.

Coral growth in decline at Great Barrier Reef

"The data suggest that such a severe and sudden decline in calcification is unprecedented in at least the past 400 years," the researchers stated in the study, published in the peer-reviewed journal Science.

A reef expert not involved in the study described it as "very important." In a commentary posted on newsvine.com for msnbc.com, John Bruno added that "the findings are frankly pretty scary."

Climate scientists: it's time for 'Plan B'

The plan would involve highly controversial proposals to lower global temperatures artificially through daringly ambitious schemes that either reduce sunlight levels by man-made means or take CO2 out of the air. This "geoengineering" approach – including schemes such as fertilising the oceans with iron to stimulate algal blooms – would have been dismissed as a distraction a few years ago but is now being seen by the majority of scientists we surveyed as a viable emergency backup plan that could save the planet from the worst effects of climate change, at least until deep cuts are made in CO2 emissions.

Canada's forests, once huge help on greenhouse gases, now contribute to climate change

VANCOUVER — As relentlessly bad as the news about global warming seems to be, with ice at the poles melting faster than scientists had predicted and world temperatures rising higher than expected, there was at least a reservoir of hope stored here in Canada's vast forests.

The country's 1.2 million square miles of trees have been dubbed the "lungs of the planet" by ecologists because they account for more than 7 percent of Earth's total forest lands. They could always be depended upon to suck in vast quantities of carbon dioxide, naturally cleansing the world of much of the harmful heat-trapping gas.

But not anymore.

In an alarming yet little-noticed series of recent studies, scientists have concluded that Canada's precious forests, stressed from damage caused by global warming, insect infestations and persistent fires, have crossed an ominous line and are now pumping out more climate-changing carbon dioxide than they are sequestering.

http://feedproxy.google.com/~r/EcoGeek/~3/g_uHcqiuY2A/

The Coast Guard in Japan, like other public services from every country feeling the economic crunch, is being told to lower expenses. How do you rescue drowning people on the cheap? In the seaside towns of Takamatsu and Wakamatsu, the Coast Guard offices have taken an idea from high school students that lowers the cost of flotation devices while helping the environment.



A few years ago, a group of high school students on a field trip to the sea came across a drowning man. The quick-thinking students improvised a flotation device using 16 plastic bottles and rescued the man. Though the invention was invented out of necessity, the Coast Guard realized that it was effective.



Each of these red lifesavers made from recycled polyethlene bottles cost about $2. That's a significant savings for the Coast Guard which used to spend $50 to $200 for new official flotation devices. The Coast Guard plans to have the bottles at piers and breakwater lights on rocky shores near fishing ports at the door of lighthouses. The Coast Guard also has step-by-step instructions here on how to make your own flotation devices out of plastic bottles here, but you have to be able to read Japanese.



Photo credit: Wakamatsu Coast Guard

Via: InventorSpot

 

 

http://feedproxy.google.com/~r/theoildrum/~3/32U7e6_JX_o/4678

The following is a post by both Dr. Charles Hall and EROI Guy. Most of the material comes from a recently published book chapter titled “Peak oil, EROI, investments and the economy in an uncertain future.” The book can be found here. Dr. Charles Hall is a professor of Systems Ecology at the College of Environmental Science and Forestry in Syracuse, New York, and has written about energy issues many times on The Oil Drum, found here.

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The enormous expansion of the human population and the economies of the United States and many other nations in the past 100 years have been accompanied by, and allowed by, a commensurate expansion in the use of fossil (old) fuels, meaning coal, oil and natural gas. To many energy analysts that expansion of cheap fuel energy has been the principal enabler of economic expansion, far more important than business acumen, economic policy or ideology although they too may be important (e.g. Soddy 1926, Cottrell 1955, Georgescu Roegan 1971, Odum 1972, Kummel 1982, Kummel 1989, Jorgenson 1984 and 1988, Hall et al. 1986 (and others), Dung 1992, Ayres 1996).

While we are used to thinking about the economy in monetary terms, those of us trained in the natural sciences consider it equally valid to think about the economy and economics from the perspective of the energy required to make it run. When one spends a dollar, we do not think just about the dollar bill leaving our wallet and passing to some one else’s. Rather, we think that to enable that transaction, that is to generate the good or service being purchased, an average of about 8,000 kilojoules of energy (equal to roughly the amount of oil that would fill a coffee cup) must be extracted from the Earth and turned into roughly a half kilogram of carbon dioxide (U.S. Statistical Review, various years).

History has shown that removing the energy supply from the economy will cause it to contract immensely or even stop. Cuba found this out in 1991 when the Soviet Union, facing its own oil production and political problems at that time, cut off Cuba’s subsidized oil supply. Both Cuba’s energy use and its GDP declined immediately by about one third, all groceries disappeared from market shelves within a week and the average Cuban lost 20 pounds (Quinn 2006). Cuba subsequently learned to live, in some ways well, on about half the oil as previously, but the impacts were enormous. While the United States has become more efficient in using energy in recent decades, most of this is due to using higher quality fuels, exporting heavy industry and switching the way we define economic activity (e.g. Kaufmann 2004). Many other countries, including efficiency leader Japan, are becoming substantially less efficient (Hall and Ko, 2007, LeClerc and Hall 2007, Smil, personal communication).

So if energy is required for economic growth and maintenance, then the important question is how much oil and gas (i.e. energy) is left in the world? The answer is a lot, although probably not a lot relative to our increasing needs, and maybe not a lot that we can afford to exploit with a large financial and, especially, energy profit. Therefore a more precise question might be, “How much oil is left that will yield a large energy profit?" Energy return on investment is a way to answer the latter.

Energy Return On Investment (EROI or EROEI) is simply the energy that one obtains from an activity compared to the energy it took to generate that energy. The procedures are generally straightforward; simply divide the Energy Gained (Out) by the Energy Used (In), resulting in a unitless ratio. The running average EROI for the finding and production of US domestic oil has dropped from greater than 100 kilojoule returned per kilojoule invested in the 1930s to about 30 to 1 in the 1970s to between 11 and 18 to 1 today. This is a consequence of decreasing energy returns as oil reservoirs are depleted and as energy costs increase as exploration and development are shifted deeper and offshore (Cleveland et al. 1984, Hall et al. 1986, Cleveland 2004). Even that ratio reflects mostly pumping out oil fields that are half a century or more old since we are finding few significant new fields. In other words we can say that new oil is becoming increasingly more costly, in terms of dollars and energy, to find and extract. The increasing energy cost of a marginal barrel of oil or gas is one of the factors behind their increasing dollar cost, although if one corrects for general inflation the price of oil has increased only a moderate amount.

The same pattern of declining energy return on energy investment appears to be true for global petroleum production. Getting information on global oil production is very difficult, but a study currently submitted for publication indicates that the global EROI for petroleum production has been declining over the past 8 years and is currently about 18:1 (Gagnon and Hall, submitted). In fact, if the rate of decline continues linearly for several decades then it would take the energy in a barrel of oil to get a new barrel of oil. While we do not know whether that extrapolation is accurate, essentially all EROI studies of our principal fossil fuels do indicate that their EROI is declining over time, and that EROI declines especially rapidly with increased exploitation rates (e.g. drilling).

This decline appears to be reflected in economic news also. In November of 2004, The New York Times reported that for the previous three years oil exploration companies worldwide had spent more money in exploration than they had recovered in the dollar value of reserves found. Therefore it is possible that the energy “break-even” point has been approached or even reached for finding new oil. Whether we have reached this point or not the concept of EROI declining toward 1:1 makes irrelevant the reports of several oil analysts who believe that we may have substantially more oil left in the world, because it does not make sense to extract oil, at least for a fuel, when it requires more energy for the extraction than is found in the oil extracted.

Declining EROI rates for US and World oil exploration and production indicate that our [society’s] ability to weather the coming peak oil storm will depend in large part on how we manage our investments now. From the perspective of energy, there are three general types of investments that we make in society. The first is investments into getting energy itself; the second is investments for maintenance of, and replacing, existing infrastructure; and the third is discretionary expansion. In other words, before we can think about expanding the economy we must first make the investments into getting the energy necessary to operate the existing economy, and into maintaining the infrastructure that we have, at least unless we wish to accept the entropy-driven degradation of what we already have. Declining EROI means that the required investments into the second and especially the first category are likely to increasingly limit what is available for the third. In other words, the amount of energy and dollars spent supplying the energy for economic maintenance will likely increase, while the remainder left for discretionary purposes will likely decrease.

Declining EROI is mainly a consequence of the “best first” principle. This is, quite simply, the characteristic of humans to use the highest quality resources first, be they timber, fish, soil, copper ore or, of relevance here, fossil fuels. This is because economic incentives are to exploit the highest quality, least cost (both in terms of energy and dollars) resources first, as was noted 200 years ago by economist David Ricardo (1821). For instance, the peak in finding oil was in the 1930s for the United States and in the 1960s for the world, and both have declined enormously since then. An even greater decline has taken place in the efficiency with which we find oil; that is the amount of energy that we find relative to the energy we invest in seeking and exploiting it. The pattern of exploiting and depleting the best resources first is occurring for natural gas as well. US natural gas originally came from large fields in Louisiana, Texas and Oklahoma. Its production has moved increasingly to smaller fields distributed throughout Appalachia and, increasingly, the Rockies. The largest fields that traditionally supplied the country with natural gas peaked in 1973, and then as “unconventional” fields were developed second by drilling a vast amount of wells, a somewhat smaller peak occurred in 2007.

In summary, there are three related forces that may reshape societies and economies around the world: peak global oil production, declining EROI of global oil exploration and production, and the “Best First Principle”. They imply that we no longer have the ability to substantially increase oil production without substantially increasing the amount of oil used to get that oil, and finally, that any new discoveries will invariably cost increasing amounts of money and energy to produce. The interplay of these three forces will most likely limit the amount of money designated for discretionary spending, while increasing the amount of money and energy needed just to sustain economic function.

Ayres, R.U. (1996). Limits to the growth paradigm. Ecological Economics, 19, 117-134.

Cleveland, C. J. (2005). Net energy from the extraction of oil and gas in the United States. Energy: The International Journal, 30(5), 769-782.

Cleveland C. J., Costanza, R., Hall, C.A.S. & Kaufmann, R.K. (1984). Energy and the US economy: A biophysical perspective. Science, 225, 890 897.

Cottrell, F. (1955). Energy and society. (Dutton, NY: reprinted by Greenwood Press)

Dung, T.H. (1992). Consumption, production and technological progress: A unified entropic approach. Ecological Economics, XX, 195 210.

Gagnon, Nate and C.A.S. Hall. A preliminary study of energy return on energy invested for global oil and gas production. (In Review).

Georgescu Roegen, N. (1971). The Entropy Law and the economic process. (Cambridge, MA: Harvard University Press)

Hall, C.A.S. & Ko, J.Y. (2006). The myth of efficiency through market economics: A biophysical analysis of tropical economies, especially with respect to energy, forests and water. (In G. LeClerc & C. A. S. Hall (Eds.) Making world development work: Scientific alternatives to neoclassical economic theory (pp. _________) Albuquerque: University of New Mexico Press)

Hall, C.A.S., Cleveland, C. J. & Kaufmann R. K. (1986). Energy and resource quality: The ecology of the economic process. (New York: Wiley Interscience. Reprinted 1992. Boulder: University Press of Colorado.)

Jorgenson D.W. (1984). The role of energy in productivity growth. The American Economic Review 74(2), 26 30.

______. (1988). Productivity and economic growth in Japan and the United States. The American Economic Review 78: 217 222.

Kaufmann, R. (2004). The mechanisms for autonomous energy efficiency increases: A cointegration analysis of the US Energy/GDP Ratio. The Energy Journal 25, 63-86.

Kümmel R. (1982). The impact of energy on industrial growth. Energy The International Journal 7, 189 203.

______. (1989). Energy as a factor of production and entropy as a pollution indicator in macroeconomic modeling. Ecological Economics 1, 161 180.

LeClerc, G. & Hall, C. A. S. (2007). Making world development work: Scientific alternatives to neoclassical economic theory. (Albuquerque: University of New Mexico Press)

Odum, H.T. (1972). Environment, power and society. (New York: Wiley-Interscience)

Quinn, M. (2006). The power of community: How Cuba survived peak oil. Text and film. Published on 25 Feb 2006 by Permaculture Activist. Archived on 25 Feb 2006. Can be reached at megan@communitysolution.org

Ricardo, David. (1891). The principles of political economy and taxation. London: G. Bell and Sons). (Reprint of 3rd edition, originally pub 1821).

Soddy, F. (1926). Wealth, virtual wealth and debt. (New York: E.P. Dutton and Co.)

http://feedproxy.google.com/~r/EcoGeek/~3/HzG870y48rA/

Anyone who has traveled to India knows about the massive amount of chaotic traffic on the streets. Crossing the road in Delhi is a terrifyingly heart-stopping adventure. Instead of motorcycles and cars, many people opt for the conveniences of a rickshaw. But, this being the 21st century, some inventors have come up with a version that’s a little more high tech than the old pedal-driven kind.



The Soleckshaw is still in the trial stages, but the solar powered rickshaw has already people talking and contemplating what the technology could do if these vehicles replace the human-powered kind. The Indian prototype by the Center for Science and Industrial Research has been running in trial stages since October. The dual-powered cycle operates by pedal power and a 36 V 240-350 W battery that gets charged at a solar charging station. It has a carbon footprint of zero, so it doesn’t pollute any more than the traditional version.



The solar version reaches a pretty impressive speed of about 15 kilometres per hour and, fully-charged, the battery can keep going for 50-70 kilometres. The goal is to develop the current four Soleckshaws into more advanced models in time for the 2010 Commonwealth Games in Delhi.



If a manufacturer is found to mass produce the Soleckshaws, however, some worry that they would be too expensive for most rickshaw pullers. Each Soleckshaw is expected to cost 2.5 times more than the traditional ones, though the Indian government has offered guaranteed loans for drivers who want to buy them. It’s also unclear who will pay at the solar charging stations will the drivers be expected to pay for their own electricity?



Modeled in some ways after the SolarCab, which was developed in London and set to launch next year, the rickshaw will also be outfitted with solar panels on its roof. But with a unique decorative flair of their own, the Soleckshaws have animated Mickey Mouse and Donald Duck stickers painted on their sides. An added bonus of the solar rickshaw is that the battery can recharge riders’ mobile phones as they zip from one destination to the next.

Image via Treehugger

Via: Ecoworldly and India’s Department of Science & Technology

http://feedproxy.google.com/~r/EcoGeek/~3/IwfG3I_347I/

***NOTE: Industrious EcoGeeks have tried their hardest to find the original source article reporting this news. The AP Article claimed to be quoting an article from Japan's Nikkei. That Nikkei article has not been located, and appears to not exist...so Toyota may not have claimed that they're working on a car solely powered by solar. Frankly...since it seems like such a fantastical claim...we are not surprised. But if this is true...I'll take back some of the mean things I said below :-).

I find it hilarious that Toyota has been going on and on about how extended-range electric vehicles are technologically impossible, and now they're saying that their goal is a 100% solar powered car.

OK Toyota, we get it, you dropped the ball. You were riding so smoothly on your hybrid-electric white mare that you forgot to keep innovating for a couple of years. That's cool, you're welcome to jump back on the bandwagon any time...but don't tell us you'll be doing it with an impossible car.

A vehicle with solar panels to help charge the hybrid or all-electric battery? Sure. A car that comes with a discounted photovoltaic system for your house...I'll buy that. But you can't have a car that is solely run by photovoltaic panels on the car. It is literally impossible.

To power the average 30 mpg car, you'd need a solar array roughly the size of two cars. Even high efficiency solar cells at noon in the desert couldn't produce enough power to run a street-legal two seater. Of course, none of this will really be an issue...since 100% of the cities in America have these pesky things called shadows.

It's possible that something was mistranslated by the AP, who reported the story from a Japanese article. Maybe they're just hoping to build a car that could be run by the energy generated by solar cells...if the car was parked in the sun for 16 straight hours.

Solar powered cars, in general, I believe to be a poor use of solar panels. Because of the relatively small loss of power in transferring electrons from your roof to your car, it's always a better idea to put the panels on your roof. The car will invariably spend less time oriented toward the sun and more time in shadow.

Why not have the panels where they will always catch the maximum amount of sun? They'll cost less, be more versatile, and produce far more power.

Via the AP (and just about every environmental blog on the planet)

http://feedproxy.google.com/~r/theoildrum/~3/-7w2UbW7gNQ/4930

Russia oil output falls for first time in a decade

MOSCOW (Reuters) - Russian oil production fell by around one percent in 2008, official data showed on Friday, the country's first annual decline in a decade after large increases in previous years and a sign of things to come.

The decline is widely expected to continue because of ageing reserves and plunging oil prices, which combine with heavy taxation to leave producers with limited cash to invest in maintaining production and opening new fields.

Russia gas row disruption spreads

Russian gas flows to four European Union countries were below normal levels on Saturday after Moscow cut off supplies to Ukraine in a pricing row, and there were no talks in sight to resolve the dispute.

Temperatures were below zero overnight in Europe, and Bulgaria's Bulgargaz joined energy firms in Poland, Romania and Hungary in saying they had noted falls in supply, though flows to Europe's biggest economy, Germany, were not affected.

The carbon footprint of nuclear war

Almost 700m tonnes of CO2 would be released into the Earth's atmosphere by even the smallest nuclear conflict, according to a US study that compares the environmental costs of developing various power sources.

Lester R. Brown: Planting Trees And Managing Soils To Sequester Carbon

As of 2007, the shrinking forests in the tropical regions were releasing 2.2 billion tons of carbon per year. Meanwhile, expanding forests in the temperate regions were absorbing 0.7 billion tons of carbon annually. On balance, a net of some 1.5 billion tons of carbon were being released into the atmosphere each year, contributing to global warming.

Obama sketches out recovery plan

NEW YORK (CNNMoney.com) -- President-elect Barack Obama on Saturday offered the most detailed statement yet of his economic recovery plan, sketching out broad-based spending proposals and tax incentives aimed at reviving an economy mired in recession.

In his weekly radio and video address describing what he called the American Recovery and Reinvestment Plan, Obama spelled out five main goals. He said his plan proposes to:

? double renewable energy production and make public buildings more energy efficient;

? rebuild crumbling roads, bridges and schools; computerize the health care system; modernize classrooms, labs and libraries;

? and provide tax breaks to American workers.

Aramco, Dow seek cost cuts

JEDDAH - Saudi Aramco and the US Dow Chemical are approaching contractors to gauge their interest in bidding for work on the Ras Tanura integrated refinery and petrochemicals complex on a build-own-operate basis in an effort to minimize cost exposure.

Pakistan: Gas crisis hits over 2500 factories

KARACHI: Gas crisis in the country continued unabated, as the supply and demand gap has widened up to 700mmcfd (million, million cubic feet per day).

The intensifying shortage of gas supply has now hit over 2500 industrial units in Lahore, Faisalabad, Multan and other cities/towns, whose supplies remain severed for the last several days and were forced to lockout, which has severely hit the production process resulting difficulties in meeting the export orders deadline and rendering the workers to unemployment in large numbers.

Govt acts after riots, orders end to gas cuts

ISLAMABAD: As violent energy riots raged in various cities and towns, President Asif Ali Zardari here on Friday ordered an immediate end to gas load-shedding for domestic consumers and elimination of circular debt in the power sector that has bulged to Rs400 billion, crippling the power generation system, in six months.

Volatile Fuel Prices Shift Off-shore Drilling Debate

The past year's volatile gas prices are impacting the ongoing debate on whether to drill for oil off the coasts of Virginia and California. Spencer Michels reports on how the price swings and new technology are affecting the controversy.

Iran welcomes OPEC emergency meeting in February

TEHRAN (Xinhua) -- Iran's representative to the Organization of Petroleum Exporting Countries (OPEC) Mohammad Ali Khatibi said here on Sunday that Iran welcomed OPEC emergency meeting in February, the semi-official Fars news agency reported.

EU resists participating in Russia-Ukraine dispute

PRAGUE (Reuters) - European Union president the Czech Republic said on Saturday it did not intend to become a participant or mediator in gas contract disputes between Russia and Ukraine, but urged both sides to reach an agreement soon.

Nigeria military: Oil pipeline blown up in south

WARRI, Nigeria — An oil pipeline was blown up with dynamite in Nigeria's restive south, a military official said Saturday.

Regional army chief Brig. Gen. Wuyep Rimtip said he did not know how severe the damage was or if there were any casualties as a result of the blast late Friday in Delta State in Nigeria's restive south. Officials from the pipeline's owner Agip — a subsidiary of Italian energy giant Eni SpA — were not immediately available for comment.

Bosses lay off thousands of
workers throughout Mexico

With 80 percent of its exports dependent on a rapidly contracting U.S. market, Mexico has been hard hit by a series of factory closings and layoffs. Mexico is Latin America’s second largest economy after Brazil.

Ford, Chrysler, General Motors, Nissan Mexicana, and Volkswagen de México have all announced they are closing factories across Mexico for the next month or more—the first time they have ever done so. Honda and Toyota have said they do not plan to suspend production at this point.

Ford sees sharp drop in U.S. sales

DEARBORN, Mich (Reuters) - Ford Motor Co (F.N) expects industry-wide December U.S. auto sales to drop by some 35 percent from a year earlier with no sign of a turnaround in the first quarter of this year.

Ford, the No. 2 U.S. automaker, expects that full-year sales of light vehicles in the world's largest market will drop to near 13.2 million for 2008, down from near 16.2 million in 2007, Ford's chief sales analyst George Pipas said on Friday.

Fighting the tide

IMAGINE your home is slowly sinking into the sea, and then consider Australia's Pacific neighbours who do not have to use their imagination.

A climate change seminar in Sydney heard that scientists are starting to recognise the 52 island nations of the South Pacific as the mine canaries of climate change.

But that is little consolation for the people whose homes and ancestral lands are in danger of disappearing beneath the waves.

California greening

Masdar’s green city is soon to rise from the sands of Abu Dhabi. Green buildings are being designed and created across the UAE. And a rapidly increasing number of private and commercial homes around the world are going off-grid.

More and more blueprints show this could be the dawning of a new sustainable age in architecture and design.

Robert Bryce - Obama, Vilsack and Salazar: The Ethanol Scammers’ Dream Team

Barack Obama promised to deliver “the change we need.”

Alas, the president-elect cannot seem to change his thinking about the ethanol scam. Over the past few weeks, Obama’s delusions about ethanol have become even more pronounced. On December 16, Stephen Power of the Wall Street Journal reported that Obama’s transition team has been talking to the Renewable Fuels Association (RFA) -- the trade group funded by the corn ethanol producers -- about a bailout for the ethanol industry. Two days later, Obama announced that the former governor of Iowa, Tom Vilsack, would be the next Secretary of Agriculture and that Colorado Senator Ken Salazar would be the next Secretary of Interior. Announcing the selection, Obama said Vilsack and Salazar would be part of the “team we need” to strengthen rural America, create “green jobs” and “to free our nation from its dependence on oil.”

The fact that Obama continues to repeat this line about “dependence on oil” shows a near-complete ignorance of the scale of America’s energy needs. The U.S. currently has about 251 million registered motor vehicles, 8,200 commercial aircraft, 224,000 general aviation aircraft, and 12.7 million recreational boats. And nearly every one of those machines runs on oil.

Michael T. Klare: Time to Kill the Oil Beast - America's overreliance on petroleum is the source of all its energy problems.

If the recent Presidential campaign demonstrated anything, it was that Americans want and expect the next president to make dramatic changes in U.S. energy policy. Americans want to see a substantial reduction in their country's reliance on imported oil— especially from hostile countries or those perceived as posing a significant security threat, such as the nations of the Middle East or Russia and Venezuela. With concern over global warming growing, Americans also want to see a large increase in reliance on renewable energy sources, such as wind and solar power. And they want any progress on the energy front to create jobs and economic opportunities at home, rather than in foreign countries.

The Ghost of Crude Oil Futures

Matthew Simmons, who I quoted in last week's article in his recent interview with Fortune, believes that demand has not fallen to the extent that prices are reflecting. Furthermore, he states that $40 oil (much less $30 oil) is so devastating to oil-based economies, that OPEC will actually continue to make supply cuts as necessary. On top of this, companies in the oil and gas industry are cutting production (and hence supply) for the very same reason.

Here is the problem: there is no way of collecting precise, reliable demand data in such a short period of time. So, we are essentially guessing in terms of where we think demand actually is and how this should affect prices.

Uganda Government News: Workers appeal to government over fuel crisis

Workers under their umbrella organizations, National Organization of Trade Unions have appealed to the government of Uganda to intervene in the fuel market to stop an already bad situation from getting worse.

NOTU says many workers and other Ugandans are reeling from the bad effects of escalating fuel prices which have got worse in recent days.

Toyota's Solar Concept Might Not Be a Car At All

It seemed fitting that the first viable solar car would come from the Land of the Rising Sun, but a chorus of online skeptics have begun dismissing reports that Toyota's "top secret" solar concept would ever see the light of day.

Global Warming Is Just the Tip of the Iceberg

The Cold War shaped world politics for half a century. But global warming may shape the patterns of global conflict for much longer than that -- and help spark clashes that will be, in every sense of the word, hot wars.

We're used to thinking of climate change as an environmental problem, not a military one, but it's long past time to alter that mindset. Climate change may mean changes in Western lifestyles, but in some parts of the world, it will mean far more. Living in Washington, I may respond to global warming by buying a Prius, planting a tree or lowering my thermostat. But elsewhere, people will respond to climate change by building bomb shelters and buying guns.

In Obama’s Team, 2 Camps on Climate

WASHINGTON — In the fall of 1997, when the Clinton administration was forming its position for the Kyoto climate treaty talks, Lawrence H. Summers argued that the United States would risk damaging the domestic economy if it set overly ambitious goals for reducing carbon emissions.

Mr. Summers, then the deputy Treasury secretary, said at the time that there was a compelling scientific case for action on global warming but that a too-rapid move against emissions of greenhouse gases risked dire and unknowable economic consequences.

His view prevailed over those of officials arguing for tougher standards, among them Carol M. Browner, then the administrator of the Environmental Protection Agency, and her mentor, Al Gore, then the vice president.

Mass. launches effort to protect coast residents

Massachusetts is kicking off an innovative pilot program to defend the state's 78 coastal communities against rising sea levels and fiercer storms brought on by global warming.

Opposition claims Perth needs flood gates for the Swan

Western Australia's Opposition Climate Change spokeswoman Alannah MacTiernan wants the State Government to consider installing flood gates along the Swan River.

Ms MacTiernan says sea levels are rising more rapidly as a result of climate change and putting Perth at risk of regular flooding.

New bill would cut greenhouse gases emitted from Texas refineries

HOUSTON—If Texas were a country, the refineries lining the Gulf would make it the eighth-largest producer of greenhouse gases in the world.

“Texas is a major emitter of carbon, in part because we fuel the rest of the country,” State Sen. Rodney Ellis said.

Ellis wants the state to lead the way in cutting back. He’s filed a bill to give state regulators the authority to force energy companies to slash their greenhouse gas production.

Can we remake Ireland's future?

THE COLLAPSE OF THE BANKING system is not just a short-term glitch. It is a symptom of the much larger set of epochal shifts that are now unfolding - the end of the American hyper-power and the rise of a new multi-polar world; peak oil and the beginning of the end of the energy economy that was created in the 19th century; global warming and the need for a fundamental and rapid shift in the nature of our economies; the collapse of free-market ideology and the realisation that the pursuit of short-term growth for its own sake creates more problems than it solves.

A year after $100, oil prices cut in half

HOUSTON – Exactly one year after crude eclipsed $100 a barrel for the first time, 2009 trading began Friday with prices roughly half their year-ago levels, and some believe oil could be headed even lower.

From peak to plenty - oil's tumultuous journey through 2008

(MENAFN - Arab News) And what an extraordinary year 2008 has been! From peak to plenty, the energy world has covered an exceptionally long - rather tumultuous - distance over a period of less than six months. As 2008 began, global energy markets crossed the Rubicon - the $100 mark - for the first time in history. And then it continued and continued registering one peak after the other, touching the $147 a barrel mark on July the 11th to be exact.

And precisely at that moment, there were discussions all along of oil going even beyond the $200 mark. Those were the days it were the proponents of the peak oil theory who were reigning. Mat Simmons and Co. had a mesmerized audience before them.

The 'permabear' keeps on growling in 2009

What set Mr. Prechter's call for 2008 apart from some other strategists such as Eric Sprott who got the popping of the credit bubble right, is Mr. Prechter didn't call for an associated runup in commodity prices as investors fled to hard assets.

He's been calling for oil to go as low as $10 (U.S.) a barrel for a long time, even as oil surged toward $150 six months ago.

"It sounded crazy at the time," he says. "Not so much now. We counted about 60 'peak oil' books published from 2005 to 2008, all very popular. People can burn them this winter to keep warm if they went broke buying oil futures."

Georgia reduces gas tax as prices dip even lower

ATLANTA -- Georgians can celebrate a reduction in the state's gasoline tax as they welcome in the New Year. But it will mean less revenue for transportation projects.

The state tax was lowered by 4 cents per gallon to 14.6 cents starting Thursday. Georgia's gas tax is adjusted twice a year based on the average price of gas. When that average price dips - as it has in recent months - the tax goes down as well. Gov. Sonny Perdue rescinded an executive order he issued in June that froze the tax as prices skyrocketed over the summer.

Gazprom official says Ukraine stealing gas for Europe

PRAGUE (AFP) – The deputy head of Russia's Gazprom, Alexander Medvedev, accused Ukraine Saturday of stealing 35 million cubic metres of Russian gas a day intended for Europe, saying Kiev would have to pay for it.

Ukraine is sending its own gas to EU states, Kiev says

Kiev/Brussels - Ukraine is sending gas from its own reserves to EU states Romania and Hungary to compensate for a fall in supply from Russian gas monopoly Gazprom, Ukraine's gas company said Saturday.

Russian Gas Exports to Bulgaria Fall by 15 Per Cent

Bulgaria is receiving 15% less natural gas from Russia due to the dispute between Gazprom and the Ukranian government, state-owned gas provider Bulgargaz reported, quoted by Reuters on Saturday.

Russia said to be awaiting Ukraine response to talks offer

Negotiations over disputed gas contracts cannot resume because there has been no relevant response from the Ukrainian side, Gazprom's export head Alexander Medvedev said in Prague on Saturday.

Oman says to trim 2009 spending if sub-$45 oil

MUSCAT (Reuters) - Oman will cut public spending this year if the
average oil price slips below the $45 per barrel it budgeted for 2009, the
economy minister said on Saturday.

The curse of Nigerian oil

Attacks on oil industry facilities and kidnappings for ransom are frequent in the creeks of the Niger Delta, which is home to Africa's biggest oil and gas industry.

The BBC's Sue Lloyd-Roberts argues that Nigeria's "black gold" has brought wealth to a few but fuels greed and corruption on a grand scale.

6 Reasons Why Nuclear Power Can't Save Us

1. Length of time to come on stream

Commissioning and building new plants is a time-consuming business (at least twenty years), so they would have little or no impact on cutting emissions over the next twenty years, nor build any resilience in the face of peak oil.

2. Insurance

The insurance industry refuses to underwrite nuclear power, a gap it looks like the government will have to fill, resulting in a huge invisible subsidy for nuclear power.

http://feedproxy.google.com/~r/theoildrum/~3/ftatUJIbNXk/4929

As we enter yet another episode of worried or sanctimonious articles about the gas conflict between Russia and Ukraine, it's worth remembering a few simple facts:

1) The conflict started in 1992, not in 2006;


2) Russia cannot win a gas war against Ukraine and knows it;


3) the real underlying stakes are not about Russia or Ukraine.

1) The conflict started in 1992, not in 2006

A given in most of the coverage of this episode is that these things have been happening over the past few years only. Everybody remembers the 2006 episode 3 years ago, which brought the issue to global awareness, and most coverage seems to think that this is when it all started. It's not. Russia and Ukraine started squabbling about gas as soon as the Soviet Union broke up, ie from 1992. There were cuts to gas deliveries to Western Europe in 1992 and 1993, which led the major importers - the GDFs, Ruhrgas and SNAMs - to set up offices in Kiev to try to understand what was going on and to bring pressure on the then new country of Ukraine to not interrupt gas deliveries.

I spent half a year in GDF's Kiev office in 1994, where I painstakingly collated local sources to prepare a report on the Ukrainian gas industry, and picked up most of the content for my PhD dissertation on the independence of Ukraine and its relationship with Russia, both of which were defined largely by gas. I've never been able to ascertain that Ukraine actually ever paid anything for gas to Russia then or since.

The reality is that the Soviet gas industry was born in Ukraine in the 1930s, and the infrastructure was built from there and Ukraine is still a central part of the gas pipeline network even as the focus of activity moved to Western Siberia. Splitting the Soviet Union along Republic borders made for an often unworkable allocation of physical assets, and nowhere was this more true than for gas. The consequence is that vital assets for Gazprom are located in Ukraine and thus no longer under its direct control.

The ties between the industry in the two countries are thus massive, impossible to unwind, and highly constraining. Effectively, as soon as there is a conflict between the two countries, the temptation to use the "gas weapon" (ie to hurt the other by, in the case of Russia, withholding gas or, in the case of Ukraine, withholding export infrastructure) is large - and it has happened repeatedly, until, each time, cooler heads prevail.

So you could go back and look into Ukrainian and Russian papers from any date over the past 17 years and find that they have articles about unpaid Ukrainian debts for gas (which, since 1992, have for some reason always been in the $1.5-2 billion range) and bilateral brinkmanship. Yet somehow the gas continues to flow every year.

So why do we think that the conflict started in 2006? Well, it's just that we started to care that year, for some easy-to-identify reasons:

• The 2004 orange revolution put Ukraine on the map, as a new, spunky member of the "democratic world" against the axis of evil and other assorted dictatorships, a group that Russia was beginning to join in the White House view. Never mind that Yuschenko was initially more pro-Russian than Yanukovich, hardliners in both the US and the Kremlin were happy to play this as a West vs Russia fight and it de facto became one. Suddenly, the arcane gas disputes that only a few buyers cared about became the battlefront between two large blocs, and one that the WestTM cared about.


• The run up in oil prices since 2003 has had an impact on gas prices (Russia's gas is sold to Europe at prices indexed, with a lag, to oil prices) and more generally on how much attention we give to energy-related issues. For Russia, the urge to get more money out of the gas delivered to Ukraine was growing; for the West, the attention paid to energy supplies similarly got more priority.


• More importantly, 2006 is the year when the UK became, it seems unexpectedly for its political leadership, a gas importer rather than a gas exporter. Suddenly, for the first time ever, security of gas supply became an issue for English-language experts. Somehow, this turned into Europe's dependency on Russian gas and Ukrainian transit being a big deal - never mind that Western Europe has been importing Russian gas for 40 years and that companies like GDF and Ruhrgas have been aware of the delicate situation of Ukrainian transit for 15 years.


• Almost at the same time, 10 Central and Eastern European countries joined the EU. As the majority were former Soviet satellites (or even Soviet Republics), they are very wary of Russia and most of them are highly dependent on Russian gas, because their supply infrastructure was built in the context of the COMECON. While they are not all in the same situation (in particular, transit countries have a lot more leverage), they have certainly encouraged the EU to focus on Russian gas supplies a lot more closely, and a lot more adversarially.

While these recent factors can explain why it's not unreasonable to care more today than in the past about the underlying conflict, there is no excuse not to provide the relevant context, ie that this is a long, simmering dispute that has no good guys and no bad guys and which has very little to do with us.

2) Russia cannot win a gas war against Ukraine and knows it

The most important bit of information that would need to be provided is why this conflict happens in the first place, and how it's been resolved in the past.

The reality of Soviet legacies is that Ukraine has a lot of vital Soviet-times gas infrastructure (the pipelines are an obvious item, but, just as significantly, Ukraine controls most of the storage capacity of the Russian export system, something rather important when you know that winter gas demand is 2-3 times summer demand and pipelines can be made smaller if you can ship gas all year long and store it close to markets for winter use). It is also a heavy-industry country, with very high gas demand. It has also mostly depleted its gas reserves, making it heavily dependent on gas from Siberia.

So there is a strong co-dependency, with Russia needing Ukrainian infrastructure to honor its export contracts to Europe, and Ukraine needing Russian gas. In the early years, there were additional constraints, such as the only Soviet manufacturer of large pipes used by Gazprom being in Ukraine, the only manufacturer of medium sized pipes (needed by the Ukrainians) being in Russia, and gas going to Southern Russia needing to flow through Ukrainian territory. I have written in detail about this co-dependency in this article: Ukraine vs Russia: Tales of pipelines and dependence (Dec. 30, 2005).

Ukraine used to get its gas allocation from Soviet planners, and continued to expect the same after independence. When Russia first tried to get payment fors its deliveries in the early 90s, it failed; when it first cut off gas to Ukraine to enforce payments, Ukraine simply tapped the gas sent for export purposes in Ukrainian-controlled pipelines; when European buyers howled, Russia relented and restored gas supplies without having managed to be paid by Ukraine. This happened repeatedly in 1992-1994 until both sides learnt not to make their disputes as public (ED: "not" added in last sentence).

The exact same thing happened over the years, but more discreetly. 2006 marked a change in that the dispute was thrust into the limelight once again, but fundamentally the same thing as before happened. The proof of this in January 2006, Russia restored deliveries before an agreement was announced. This was mostly overlooked in Western coverage of the crisis, as was the fact that the announced agreement was absurd on its face - everybody should have realised it was a sham (the price Russia claimed to be getting and the price Ukraine agreed to "pay" were not compatible, even with the inclusion of ultra cheap gas from Turkmenistan - and nobody asked why Turmenistan would agree to such a low price).

The hard fact is that Russia cannot cut off Ukraine for any period of time, because that endangers its exports (Kiev has always retaliated by siphoning exports), and Gazprom knows it perfectly well. The other hard fact is that, in practice, giving roughly 20% of its gas shipments to Ukraine as payment for transit (over an average of more than 1,000km) is an acceptable transaction for both sides. Of course, when prices for gas go up, as in recent years, the temptation to change the balance of the trade is tempting, but Russia simply has no practical way to do so.

If that is the case, why on earth does Russia play this charade every year - especially now that critical Western eyes are firmly locked on the issue?

I have a simple theory: it's all a distraction from what's really at stake.

3) The real underlying stakes are not about Russia or Ukraine

The leadership of Gazprom has long ago understood that it could not get any money out of official deliveries to Ukraine. It "solved" that problem in a completely different way, by privatising a portion of the gas trade to Ukraine - the portion going to customers able to pay for their gas. These customers used to pay the central Ukrainian gas company, which did not pass on that money to Gazprom. What was put into place was a mechanism whereby these customers would pay less for their gas, but would pay another supplier directly, formally unrelated to either Ukrainian gas authorities or Gazprom.

Of course, only gas coming from Russia could be delivered, and it still needed to use Ukraine's gas infrastructure, so the active cooperation of Gazprom, Russian and Ukrainian senior people was required to put that Trade in place (you can't move 30 billion cubic meters of gas per year without the approval of senior management, and cover from senior politicians) - but the very real money generated did not need to go either to Kiev or to Moscow. Thus the top people that enable that Trade are able to personally benefit massively from it - and effectively cut out both Kiev and Gazprom. (I have described this Trade in a long article for French think tank IFRI here: Gazprom as a Predictable Partner. Another Reading of the Russian-Ukrainian and Russian-Belarusian Energy Crises )

Now, such a juicy business attracts others keen to get in on the action. In Ukraine, political infighting can largely be understood, in my view, by the fight over who will be the Ukrainian counterparty to that Trade. (It's no coincidence that Yulia Timoschenko made her fortune in gas trading in the 90s, and that Yanukovich represents some of the largest gas-users from heavy-industry in Eastern Ukraine). In Russia, similarly, one has to go beyond the image of a monolithic Kremlin with its faithful Gazprom arm - both are rife with infighting and coalitions within both centers of power that come and go (as an example, just look how the 50% of Gazprom formally owned by the Russian State is split between at least two public bodies controlled by different senior Kremlin insiders).

So while the world is focused on the predictable public brinkmanship between Ukraine and Russia (Russia threatens, Ukraine appears to cave in at the last minute, but really doesn't, Russia cuts gas, Ukraine siphons gas, Russian is indignant, both sides make their case to Europe, Russia restores gas supplies, another meaningless agreement is announced), the real fight over the loot is taking place more discreetly between a few oligarchs in Moscow and Kiev. But nobody is talking about that. Which is the whole purpose of the theater show we are "offered."

Worries about Russia or Gazprom using the "gas weapon" against Europe are misplaced. In their official capacity, both are keenly aware of their absolute dependency on exports to Europe for a huge chunk of the country's income, and on the need for stable, reliable long term relationships to finance the investments needed in gas infrastructure (and they know their clients share that need). They are happy to play power politics with the West's worries as this goes down well with their own domestic audiences, but fundamentally they will not rock the gas boat.

Now, what is a lot more worrisome is that governments in Ukraine and Russia can tolerate--and indeed encourage--such blatant breaches of their authority and such large scale theft of what are effectively public resources. That the highest levels of government in both countries, and major bits of their infrastructure can be instrumentalised in what are disputes between unknown oligarchs only shows how little rule of law and accountability there is in these countries, and how powerless Putin really is when dealing with competing power factions.

http://feedproxy.google.com/~r/theoildrum/~3/_ZNyJEJKC2Q/4928

Below the fold is a guest essay by longtime TOD commenter DavebyGolly on how our society/population might possibly 'retrench' given the current limitations we are faced with. It is a bit longer than we expect for the Campfire slot, but Dave has good ideas, by Golly. Please submit your own essays (or ideas for same) for TOD:Campfire to TODCampfire@gmail.com or campfire@theoildrum.com. Guidelines for submissions and content are here.

(**Note: we are working on making the colors and graphics here purtier)

Radical Retrenchment -- A reference model

Nate Hagens and the Campfire format encouraged me to write this, (well, something, not necessarily this.) That I do not provide statistics, graphs, formulas, references, footnotes should not be taken to mean I think them unimportant. They are. But I am essayist (at most). The exercise here is to apply logic to research already done by others. The issue: what ought be done to allow us, our species, to survive the decline and end of the industrial era? When I say ought be done, I mean by society, by government, by popular movements, etc. Although I certainly will do my best to help my children and grandchildren survive, I do not believe they can do well when society is crashing around them. I believe in striving for collective survival, without which individual survival becomes pretty grim. This is, admittedly, an un-American sentiment, if not worse. But the words "radical" and "retrenchment" already arouse suspicions, don't they?

The subtitle "a reference model" is added to show that I am not completely looney. I know that what's envisioned here will be regarded as utopian. It is not the route that will be taken, not soon in any case. But I also believe that it is, directionally at least, the only possible route toward a comfortable survival for the species. And the comfort qualifier is conditioned on its being taken soon. What follows, if one agrees with the presuppositions, is a reference model with which to compare ought with is, in order to prepare ought to do battle with is.

Peak energy

"Radical retrenchment" is a term I've used in many posts at TOD. All here is based on the "strong" version of peak oil, i.e. peak energy - not only is oil peaking, but other hydrocarbons will soon follow, and the alternatives cannot in toto come close to making up the difference. Therefore we are also at peak underground resources, i.e. metals and minerals. In other words, we are in the closing decades of the industrial era.

Not all who accept peak oil accept peak energy. There are many who believe some forms of alternative energy, singly or in combination, will rescue us from at least a drastically reduced energy budget, and therefore the industrial age can continue if certain adjustments, though possibly large ones, are made. I don't join that debate here although I would like to see it argued more explicitly here at TOD.

The exercise here is to follow the logic of peak energy, should one accept it as I (and many others) do. While I am well convinced of the reality and importance of global warming and the wider ecological catastrophes that are unfolding, I focus mainly on the energy component. I believe there is no great harm in so restricting myself, because the means of redress are very close if not identical, at least in the long run.

Since energy is going into decline and with it metals and other underground resources, our industrial civilization is also going into decline. I say "our", even though this refers to but a fraction of the world's people. The remaining larger fraction has been affected, but deprived of most of the benefits while shouldering a disproportionate share of the costs.

What does this wind-down of the industrial era mean for the species? It means a radical shift in our way of life. It means a shift from dependence on underground resources to aboveground resources. The shift will take place over the coming decades. Underground resources are hydrocarbons, metals, and other minerals, as well as deep aquifers. Aboveground resources are biological resources, life, water aside from that in deep aquifers, and all else that is available without deep digging and lots of energy (clay, rocks, etc).

The aboveground resources are the bulk of what we shall ultimately have available to us. The biological and other cycles taking place on the surface of the earth can provide us resources, for free and forever (on a human time scale), so long as we do not exceed the capacity of nature to renew them. (Although we do not yet know what all or even most of those limits are.) Global warming and other ecological constraints may, of course, significantly modify the capacity of nature to renew a resource.

So we know where we have to end up, at least in terms of the material basis of our existence. And we also know that even in the best of circumstances we cannot go directly there: there has to be a transition.

Radical retrenchment

Although unavoidable, there are two complications. The first: the earth is much impoverished from what it was 100, 1000, and 10,000 years ago. Species diversity, soil, forests, water, etc. are all much the worse, in addition to the underground depletions discussed above. Our population, on other the hand, is much larger. Therefore retrenchment via simply turning back the clock is not an option, or at best a grim one.

The second: During the course of civilization man has progressed, at least in accumulating knowledge of nature, in developing science and culture. And the oil age in particular has allowed us a glimpse into the workings of nature that would never have been otherwise possible. In a word, globalization has not been all negative. Global human community, global science, global culture have emerged. There is much that is well-worth preserving. It is indeed vital to do so in light of the impoverishment of the earth mentioned above. This is the only advantage we have over our ancestors who ascended into the industrial era, in contrast to us who are beginning our descent out of it.

What, in this descent, can be rescued from the industrial era, and indeed the ages before it? Although retrench we must, we must also strive to not retrench too much, if at all possible. Global science, culture and intercourse require a certain minimum population level, plus some form of global communication and interchange, even though it does not require the huge volume of physical and electronic goods that currently flow through the global arteries and nerves.

Retrench too much and humanity is reduced to isolated tribes which will not have the natural abundance and hence the potential for upward mobility enjoyed by our ancestors. It will be a dark age with no renaissance. Will it be possible to find a point of retrenchment at which both sustainability is achieved and a global intercourse is maintained? Who knows? But not knowing it impossible, we have to assume and hope it is possible, and strive for it.

The destination

What then must things be like when we have used up all or almost all of the underground resources? Cars are out since steel and other metals are out. Planes and rockets and even trains are out. Motors as we know them are out. Concrete is out. In a word, the fundamentals of our current way of life are out.

Agriculture, of course, must be in. It will have to be diversified and local. Everything will have to be recycled, and that taken from the soil returned to it. Draft animals will replace tractors. Human labor will sometimes replace tractors. Because motors are out, manual labor is back in (not that it ever completely left, as any gardener knows). Other farm animals are in. Trees are in, and forests will be allowed to grow and be replanted.

Will farms be (primarily) individual plots? It doesn't seem likely. It seems far more likely that agriculture will operate directly out of dense small towns. Dense because motorized transportation may be lacking. The bulk of the food for these towns will be grown directly in the surrounding areas. Dense because amenities can be shared, such as libraries, schools, a doctor, etc. Dense because a greater division of labor can be supported, but nothing, of course, remotely approaching what we have in metropolitan areas today.

How will such towns be interconnected? Roads can be built. Canals can be dug. Land and water vehicles can be built. What will power them? Horses or oxen certainly. Motors? One doesn't know. How much metal will still be accessible or left over from the industrial era? More interesting still, to what extent can we find biological replacements for metals? It seems extremely unlikely that we'll ever be able to build rockets out of biological materials. Or even motors.

Energy? Clearly a certain amount can be extracted sustainably - e.g. wood and other biomass. Solar, wind and hydro were around long before the machine age. How much they were independent of metals I do not know. There's no fundamental reason wind and water mills cannot be constructed out of purely biological and aboveground materials (e.g. rocks). And there were draft animals of course.

Communication? This is crucial, because without it, global interchange, culture and science are impossible - another, this time permanent, dark age supervenes. Snail mail has been around a long time, and represents a worst-case scenario. Were it to be the best case, that would represent a considerable regression in tempo, if nothing else. (Not that there is something holy about our current frenzied pace.) Copper? Fiber optics? Satellites? It's hard to see that these, in ascending order of unlikelihood, will continue being available longer term. Of course there are reflecting mirrors and other such possibilities when and where conditions are appropriate. But the fun of solving such problems as these will belong to later generations.

All in all, the three key items are: 1) a local near self-sufficiency in food staples, and a regional self-sufficiency in a broader range of items; 2) small town density in order to retain a minimal level of specialization and cultural level; 3) communication with the outside world and the global community as best as can be done.

The transition

That, in my view, is where we have to end up if one follows the logic of peak energy. But the oil is not yet gone, and metals are still to be had. Any government (or opposition) proposing a direct leap to the above scenario would be immediately drawn and quartered. There has to be a way of transitioning from where we are to where we must end up. On the other hand, if there is no transitioning, then nature will put us on the fast track, chaotically and disastrously. The longer the delay, the greater the chaos and suffering.

My discussion of the transition will be somewhat US-centric because that's what I know (well, sort of). The present is, of course, a long, long way from where we must end up. But just because of that, just because there is so much waste in the US, the first steps in transitioning here could, in principle, be relatively painless.

Start with our small towns. Most are dying, many are already dead. The surrounding agriculture is industrial monoculture, as anyone who flies across the country with a window seat can see. A good first start would be, beginning with some, to rebuild them, repopulate them densely, with few or no cars, reconnect them and their population to agriculture, rediversify the agriculture and re-introduce light industry connected to local and regional needs. The global market economy is currently crashing (you may have read) and there is little likelihood (you may dispute) it can return to what was formerly regarded as normalcy. Therefore the people who repopulate these small towns will be stepping, to a significant extent, outside the global market economy. There will have to be training, there will have to guidance, there will have to be experiment. Agriculturally savvy people will need to lead the way. But there will be motivation to make it work in light of what's happening in the outer economy and its legions of unemployed.

The small dense towns are the link to the future. Making this initiative work, working out the kinks - there will plenty - is vital and ought to be a leading component of any rational government policy to combat the unfolding meltdown. Money spent here will pay and will allow people to survive. A policy of simply and only putting millions of people on the dole with nothing to do, no hope, waiting for capitalism to need them again, can only lead to disaster. Popular movements that simply replicate the demands of the depression era will only compound disaster.

The suburbs must be reconcentrated, densified, the larger ones perhaps broken up into several small towns. Building on the fringes must be stopped. Those edifices already at the fringes must either be moved or cannibalized for reconstruction in the center. Land must be return to gardens, parks, etc. Car use must be reduced and restricted to the periphery. No one should need walk more than several blocks for all their basic needs. But those blocks they must walk.

The interstates need to run rail lines down their median strips both for passenger and freight. In the shorter term, buses should replace cars, and truck trains replace individual trucks on the interstates. Yes, some infrastructure repairs are required, but not an entire redo to continue the auto age. Some interstates, some bridges may well have to be abandoned and cannibalized.

Most airports and air traffic should (not so) gradually shut down. They will anyway, but it should be done in a planned way.

The larger cities need to become carless, and where not dense, densified else emptied and returned to open space, occupied by parks and gardens. There will be less and less for people to do in the big cities. With the expansion of the non-global-market economy in the small towns, the parasitic paperwork of the big cities will become ever more superfluous, and shrink. The cities themselves will therefore need to gradually shrink overall, and perhaps reconcentrate in multiple centers in the case of those that sprawl.

In this process there will need to be a lot of cannibalizing of existing infrastructure and buildings. Much of what we have is geared to the car and truck culture, and suburban sprawl. The cities are filled with modern pyramids, monuments to oligarchs. They too, over the coming decades, will need to come down and be cannibalized.

The cities, in the longer term, cannot survive as large as they are. The will need to be a steady movement, over decades, from the large cities, to dense small towns. And, as we've already said, the suburbs also need to become dense small towns.

Conclusion

In the transition, all needs to be focused on the goal, and on staying ahead of the depletion curve in getting there.

I end, though not abruptly, with a few miscellaneous observations.

Commuting. Currently, every weekday there are long ribbons of slowly moving cars streaming into and out of the major cities during rush hours. Commuting needs to be reduced steadily and firmly. There needs to be encouragement of job swaps, home swaps, carpooling, vans, and anything else that can contribute to rapidly winding down this madness.

Cities. What role will cities have in the post-transition, post-industrial era? One could cite Athens, Babylon and other cities that existed prior to the industrial era. But the post-industrial era will differ from the pre-industrial. Large agricultural surpluses were available to the Romans for expropriation. And the latifundia were slave-based. Because of the earth's depleted condition, because of the large population, the post-industrial agriculturalists will not be slaves - in order to make a go of it, they will have to use the science and knowledge gained from the industrial era just to survive. It is also unlikely that a new Rome will be able to survive by appropriating surpluses from surrounding regions, much less the world.

Science and technology. Much of the knowledge we have acquired during the oil age in particular may turn out to be irreplaceable, one-time and nonrenewable. It seems unlikely that the 22nd century will be building mammoth particle accelerators and sending satellites to the planets. Our experimental knowledge of the very large and the very small may well be coming to an end. Future astronomers and physicists may be restricted to working with the data we have already accumulated, plus whatever more is gathered in the coming few decades. Conservation of this heritage will be at least as important as the service performed by the Arabs in preserving classical Western knowledge.

Dark ages.Biological based technology. Charles Mann, in his 1491 discusses pre-Columbian technology and contrasts it to the metals-based technology of the West. The silk worm provided a key ingredient in early Chinese industry. Bamboo and hemp are two more examples. And of course wood. There are many more. I think that this whole topic will become of ever great interest.

Metals. How long can metals last if recycled? Which of them can and cannot be recycled? This will greatly affect the length of the transition period and will affect the ease if not the possibility of continuing rapid global communication and intercourse. Metals, unlike hydrocarbons, are not consumed. They can play a role long after the hydrocarbons are gone. A farseeing policy would attach great importance to the conservation and recycling of metals.

Conserving the ultimate resources. Since the ultimate resources are the soil, the water, the air, it is important to not further degrade them in the transition. This means not opening new mines, not drilling new wells, not destroying new habitats in the pursuit of extending the oil age. It means restricting ourselves to the existing mines and wells where the damage has already been done, and keeping ahead, i.e. retrenching ahead of the depletion curve of these existing mines and wells.

Two sets of books. In the transition (at least) two sets of books need to be kept - one financial, one physical. I believe that it is only in the last few decades that people have started keeping track of global physical resources. Physical resources have generally been of concern only after having been filtered into a price, a valuation. We can see the wide disconnect this has lead to, with oil having dropped from $147 to below $40 per barrel at the same time that the amount in the ground is diminishing at the rate of few per cent a year, and production at major fields declining at almost 7 per cent a year. Where pricing of major resources get so far out of kilter, there needs to be intervention to bring markets and physical resources into line. These rents should be invested in retrenchment.

The fatuity of the economists is bottomless. They speak of credit evaporation, fiscal stimulus, bailouts, lowering interest rates, restoring liquidity and all such things. Never, never, never do they speak of the physical world and its limits. Seventy years ago they could get away with it, because money, then, could suck resources out of the ground. But that was because they were still plentiful, with no end in sight. Now the end is in sight for those who care to look.

Population. Population must be and will be reduced. How? There's nature's way and there's the humane way. The humane way is to reduce reproduction. I believe that small towns based on agriculture will partially solve this problem. Because such entities will be self-sufficient in most basics, resource constraints will press upon them directly and sensibly. Over-consumption of resources will punish them. Therefore I feel that population, along with other resources, will be managed directly. Population is very much a regional and even local issue. Some areas of the earth will sustain a much larger density than others.

Money. What role will money play? Barter, which precedes and leads up to money historically, will play a major role. So too will local currencies, and perhaps regional currencies. It seems unlikely there will be a global currency (such as the dollar or even gold). Much less will there be global capital and investment flows.

World government. Some express fear of a world government, imagining some entity similar to the Stalin government at the height of the Soviet Union. This is a groundless fear. There will be no material basis for such an entity. Nor will there be flotillas of B-series bombers and troop transporters spreading benevolence around the globe. We will be lucky to have established global consultative bodies, where information and experience can be exchanged. Such bodies will highly dependent upon providing concrete value to their supporting communities in order for their existence to be tolerated. The same would be true of regional bodies.

War. War is becoming unaffordable even as we speak. That hasn't stopped it yet, and there may well be one more global conflagration in the winding down of the industrial era. But the end of war is already in sight. Things are not as they were. The earth is much depleted. It will take great effort, skilled and scientifically informed effort to eke out a living, and to extract and appropriate surpluses will be meaningless. The underground resources, those for which the current wars are being fought, will have been long since been depleted.

Alright then, blast away!

http://feedproxy.google.com/~r/theoildrum/~3/eGYvRHW1KFM/4934

Canadian oil-sand mines stuck as crude price plummets

Canada's once booming oil sands industry is cooling fast as the plunging oil price undermines investment. More than US$60 billion (£41 billion) worth of projects to extract oil from the bitumen-rich sands of northern Alberta have been delayed in the past three months, according to a study of industry figures by The Times.

A string of companies, including Royal Dutch Shell, Petro-Canada and SunCor, have been among those that have frozen multibillion dollar projects - in some cases indefinitely.

Fall in oil price may trigger UK deflation

The recent slump in the price of oil could help boost the UK economy, but too much of a further fall could reverse the good done, said a study backed by accountancy firm Ernst & Young.

Russia kindles flame of hope in Bosnia refinery

BOSANSKI BROD, Bosnia (Reuters) - A flare at the top of a 50-meter high tower in the Balkans shows Russia building political capital in a notoriously fractured part of Europe.

The flame in late November marked the restart of operations in Brod, Bosnia's sole oil refinery which had been out of action since 2005 after being seriously damaged during the 1992-95 war.

Blue laws and fuel conservation

During World War I, auto dealers supported closing gas stations on
Sunday to forestall government rationing of fuel. The most restrictive
blue laws in North America in Bergen County, New Jersey came about to
limit traffic congestion caused by massive retail development. Can
Blue Laws be used today to manage traffic, conserve fuel, moderate
fuel price increases, and help air quality?

Kurt Cobb: No second chance

It is the mission of nearly every mainstream economist to overcome the pessimism of those who study the natural world and who don't see how the human endeavor can continue on its current course of endless exponential economic growth. "Now, now," these economists will say to the natural scientists, "you are being alarmist just like many before you. Let the marketplace work its wonders and let economic prosperity come to all parts of the world and this will enable us with our newfound wealth to address the many environmental problems we need to face."

Such arguments seem like mere nonsense to any scientist who believes that endless economic growth is the cause of those problems. But the difference between these two camps may be less than it appears. Enlightened economists do acknowledge the need to treat the environment which sustains us with more care. The main issue appears to be timetables.

Czechs are latest casualty in gas dispute

Russian natural gas supplies dropped by 5% to the Czech Republic. Turkey also seeing reduced flow. Emergency meeting called for Monday.

Tar sands refinery projects face sticky future

US refineries are expanding operations to process oil from Canada’s tar sands just as efforts are building to limit the use of the more polluting fuels.

Saudi Arabia hikes February light prices

Dubai: Saudi Arabia raised its official selling prices for February for light crude oil to customers in the United States and Asia, state oil firm Aramco said on Sunday.

Buyers of Saudi oil had expected the price to rise as the kingdom cuts supply under an agreement with the Organisation of the Petroleum Exporting Countries (Opec).

Low crude prices stifle growth of Saudi Arabia's foreign assets

A steep decline in oil prices sharply depressed growth of Saudi Arabia's foreign assets in November after recording their highest increase in the previous months of 2008 because of a surge in its petrodollar income.

Iraq Production, Conservation Could Keep Oil Price in Check for Years

I’ve always said that the apparent peaking of the global oil supply at about 86 mb/d that was seen during 2006 - 2008 in the face of rising demand was only partly due to the Peak Oil concept of rapid decline rates in old fields and the eventual inability of new fields coming on stream to overcome that. The other important constraint to growing the oil supply was above-ground issues of war and violence, primarily in Iraq and Nigeria. I’ve always maintained that if either or both of these countries manages to turn on their oil spigots as rapidly as nature would allow, the global oil supply could grow substantially from here and Peak Oil would be pushed off for some years.

...All of this suggests to me that when global growth resumes the price of oil will have some immediate rise but it is not likely to be a robust and rapid increase to and beyond $100 for some time. The exact time will depend on when global growth resumes. If we are lucky and that happens in 2010, then perhaps we will see the oil price reach and exceed 2008 heights around 2014 - 2016.

Gunmen seize oil services vessel off Nigeria: sources

LAGOS (Reuters) – Gunmen hijacked a vessel belonging to French oil services group Bourbon off Nigeria's Niger Delta on Sunday as it traveled toward a Royal Dutch Shell offshore oilfield, security sources said.

The vessel was carrying four expatriates from Cameroon, Ghana and Lebanon when it was attacked near the Bonny Fairway buoy, a major shipping route for the Nigerian oil services industry, one of the sources said.

Russia toughens stance in gas dispute with Ukraine

MOSCOW: Gazprom, Russia's gas monopoly, said Sunday that it was raising the price it wants Ukraine to pay for natural gas, hardening its position in a dispute that has decreased supplies to Europe.

Oiling the wheels

India’s oil companies have had a record of failing to pull off big acquisitions overseas and have often lost out to the Chinese in the race for oil. A week ago, the man at the helm of India’s “global” oil company — ONGC Videsh — pulled off the country’s largest acquisition in the oil sector, bang in the middle of a financial slowdown.

Israel: Oil Refineries beats import threat

In recent months, the fuel companies had been in talks to import fuel products, especially from Indian refineries.

Cut oil sales to Israel backers - Iranian commander

TEHRAN (Reuters) - An Iranian military commander called on Islamic countries to cut oil exports to Israel's supporters in response to the Jewish state's offensive in Gaza, the official IRNA news agency reported on Sunday.

IRNA, giving only his last name, quoted commander Bagherzadeh as saying oil was "one of the powerful elements of pressure" on the Jewish state's Western backers in the "unequal war" faced by Palestinians in Gaza.

"Pointing at Westerners' dependence on the Islamic countries' oil and energy resources, he (Bagherzadeh) called for cutting the export of crude oil to the Zionist regime's supporters the world over," IRNA said.

OPEC's Loss Is Grocers’ Gain

Groceries are the top item on which US consumers are spending their savings from lower gas prices, ahead of putting the money in savings, holiday gift-buying, and paying off credit cards, according to research from retail analytics firm Precima, Retailer Daily reports.

Of the 3,013 consumers who were asked to choose from a list of ways they use money saved on gas, 48% said they’re spending it on groceries, followed by saving (42%), holiday gift-buying (37%), paying off credit cards (30%), entertainment (10%), and other (14%).

Russia-Ukraine: A Market Dispute

Are the Russians and Ukrainians simply fated to go to the mat every year about this time, causing grief to their neighbors? Or is something else at work in their antagonism?

The philosophical answer is that, while it’s hard to imagine these two former Soviet states living as friendly neighbors any time soon, the current dispute is a separate matter.

Aide says EU faces tougher Russia if does not help Ukraine

The European Union must help Ukraine solve its gas row with Russia, which has led to a supply cut, or face a tougher stance from Moscow on energy security and other issues, a Ukrainian presidential aide said on Sunday. Skip related content

Oleksander Shlapak, First Deputy Chief of Staff of President Viktor Yushchenko, also said Gazprom's proposal that Ukraine pay $418 per 1,000 cubic metres is "utter nonsense."

Growth of China's energy imports slows in Jan.-Nov. 2008 but value soars

BEIJING (Xinhua) -- China imported 240 million tonnes of major energy commodities (oil, refined products, natural gas and coal) in the first 11 months of 2008, up 3.7 percent year-on-year, according to a report released on Sunday by the General Administration of Customs.

Move to Increase Logging on Oregon Land

The Interior Department announced a controversial decision late Wednesday to double the rate of logging on 2.6 million acres of federally owned forests in southwestern Oregon. In doing so, it brushed aside the objections of the governor and two federal agencies charged with guarding the quality of the area’s water and the health of the fish that depend on it.

Error Seen in E.P.A. Report on Contaminant

The Environmental Protection Agency failed to follow its own guidelines and made a basic error in evaluating how a toxic contaminant in rocket fuel harms human health, according to a report by the agency’s inspector general.

The contaminant, perchlorate, has been found in significant levels in drinking water in at least 400 locations; scientific studies indicate that perchlorate blocks the necessary accumulation of iodide in human thyroid glands. Iodide insufficiencies in pregnant women are “associated with permanent mental deficits in the children,” the E.P.A. said.

Walking While Intoxicated

Every year, New Year’s revelers are warned about the risks of drunk driving. But what about drunk walking?

Looking Forward: Anticipated Production Start-Ups for 2009

Looking beyond oil and gas prices for the coming year, there is a number of anticipated production start-ups planned for 2009. Spanning the globe -- from the deep waters of the Gulf of Mexico to the harsh conditions of the North Sea -- the following projects are scheduled to commence production this year.

Saudi May Lead Price Hikes, Volume Cuts

SINGAPORE --Middle East crude oil producers led by Saudi Arabia are expected to raise official selling prices next week as a prelude to volume reductions, potentially keeping Asian refiners on the defensive.

Pakistan: President’s directives about loadshedding fall flat

PESHAWAR: Despite directives by President Asif Ali Zardari to end the prolonged power and natural gas suspension, people faced immense hardships as the problems persisted on Saturday.

The frequent hours-long electricity breakdown and gas supply-drop and low pressure coupled with severe winter due to downpour have made life miserable for the residents of Peshawar and adjoining areas.

Pakistan: Protest turns violent, leaves dozens injured

FAISALABAD: Thousands of textile workers took out violent rallies in different parts of city on Saturday and police fired in the air to disperse the protestors. Angry mobs burned tyres in the streets and pelted police with stones during a day of protests. More than 30 people were arrested and two dozen policemen were injured. The protestors set on fire many vehicles in various parts of the city. Windowpanes of a branch of UBL bank were smashed by the protestors located in front of Govt. Islamia College, Sargodha Road.

Xinjiang Becomes China's Second Largest Crude Oil Producer

The western Xinjiang Uygur Autonomous Region became China's second largest oil production base in 2008 with an output of 27.4 million tonnes, up 1 million tonnes from 2007.

According to Thursday's Chinanews.com., Xinjiang overtook Shangdong Province, the previous second largest.

The Last Day of the Iraq War

It's too late to fix Iraq before the pullout date. All U.S. troops can do now is keep trying to slow the killing and get out. They call it 'Iraqi good enough.'

Venezuela's PDVSA Tripled Net Profit to $12B

Venezuelan state oil company Petroleos de Venezuela more than tripled its net profit in the first nine months of the year, taking in billions of dollars in additional gains due to record high oil prices.

Petroleos de Venezuela's, or PdVSA, net profit through Sept. 30 stood at $12.145 billion, a 225% increase from the $3.734 billion in the same period in 2007, according to the company's latest financial report posted on its Web site.

Pipeline manager suspended over oil crisis

Kenya Pipeline Company has suspended a senior manager for allegedly stopping pumping of petroleum products inland from Mombasa.

Aspirational Futurism, Uncertainty and Resilience

One of the secondary effects of the latest set of crises to grip the world is the rise of essays and articles from various insightful folks, laying out scenarios of what the future will look like in an era of limited resources, energy, money, and so forth. Most of these follow a similar pattern: a list of reasonable depictions of a more limited future, and at least one item that seems completely out of the blue.

The best example has to come from James Kunstler’s description of the world to come in his “non-fiction” The Long Emergency and his explicitly fictional World Made By Hand. Along with his schadenfreude-soaked claims about the end of suburbia, automobiles, and all things superficial, he comes in with stark assertions that we’ll all be making our own music and acting on stage for each other, instead of listening to that damnable recorded “rock-roll” music and the disco and suchlike.

Depression: a nation in pain

On Dec 15, 1935 , a High Point woman wrote President Franklin D. Roosevelt about her underwear.

She didn’t have any. Neither did anyone in her family.

“Please give my children and myself some underclothes or we will freeze to death (in) this cold weather,” the woman pleaded. “We cannot make it.”

The family also needed money for rent, food and fuel.

The woman said her husband made only $6.75 a week, not enough to feed and clothe a family of nine .

A Cleaner Way to Keep the City Running

A new building with affordable rents in the Bronx will be powered partly by 10 wind turbines, which should cut its utility bills for common areas in half.

Urban Singapore Prepares to Gobble Up Its Last Village

The country’s last rural village has been designated for demolition and redevelopment, a final step in one of the world’s most extreme national makeovers.

Ethanol innovator driven to replace oil

"There is not a shortage on the means to produce food and fuel on the surface of Planet Earth," he says, tapping his fingers for effect on the conference table in his spacious, yet spartan, office. "There are those out there who would have you believe there's a problem out there. There is not a problem out there."

Energy demand is down sharply – and could stay that way

People worldwide are driving less, flying less and using less electricity — but for how long?

Less gasoline. Less jet fuel. Less crude oil. Less natural gas. Less electricity.

At the end of 2008, Americans were getting downright stingy with their energy use. Between wildly volatile energy prices and a deepening recession, Americans are curtailing their renowned reputation for energy consumption in what some believe could be a long-term trend.

The economists’ term for it is "demand destruction." This year’s poster child is driving, as the number of miles driven is showing the biggest drop since the federal government started keeping the statistic.

Where Will Oil End 2009?

Is 2009 going to be an exciting year for oil? Institutional investors don`t think so. Their estimates are very similar - much of Wall Street expects oil prices to average about $50 a barrel in 2009. Some of the firms and their specific forecasts:

Project aims to increase oil, gas kept in salt domes

About a half-mile from the marker of the original Spindletop gusher — a flagpole next to a lake and marsh — AGL is drilling into a salt dome that stretches 30,000 feet below the surface to carve out the first of two cylindrical natural gas storage caverns taller than two Williams Towers.

The $310 million project aims to increase storage capacity for gas used by power generators and marketers so they can park the gas when they don’t need it and get at it quickly when they do.

Canada's Africa Oil stops Somali exploration:staff

DHAROOR, Somalia (Reuters) - Canadian oil and gas exploration company Africa Oil Corp has stopped exploration in Somalia's Puntland region for lack of funds, local staff and contractors said on Sunday.

The company had started seismic mapping in a region it believed had strong prospects of holding rich oil deposits like those in geologically similar Yemen, a neighbour across the Gulf of Aden.

"Africa Oil Corp has failed in its objective ... due to lack of funds," Ahmed Ali, a local staff member, told Reuters. "We have not received salaries for three months. Foreign staff have already flown out and the company has stopped its operation."

The Peak Oil Scam Controlling Oil Prices

Fifty year ago, experts stated that Peak Oil would be reached by the year 2000. Now, most experts [Oilempire.us] say that this number will probably be in the year 2020. If you knew you were being told that a product would soon be in low supply, and you believed it, you could raise prices on a whim.

US Mineral Management Services (MMS) reveals that natural leakage of oil from the ocean floor is 620,500 barrels per year around North America alone. Considering that the world ocean area is over ten times that area, it can easily be extrapolated that at least 6 million barrels per year leak out into the world oceans.

Tehran to reform subsidy scheme for oil products

TEHRAN: Iran will begin deregulating the heavily subsidised prices for oil products in three stages in the year starting in March.

Deputy oil minister in charge of planning Akbar Torkan said it was part of President Mahmoud Ahmadinejad's economic reform plan that includes increasing energy prices and paying direct subsidies to the needy people instead.

Iran Budget to be Based on Oil Price of $37.5: Report

TEHRAN (Reuters) - Iran's 2009-10 budget is expected to be based on an oil price of $37.5 per barrel, a "logical" level in view of last year's price fall, Oil Minister Gholamhossein Nozari was quoted as saying on Sunday.

Nigeria's foreign exchange reserves fall by $6 bln in December

As the global credit crisis takes its toll on the world economy and further depresses oil prices, Nigeria 's foreign exchange reserves fell by 6 billion U.S. dollars or 8.2 percent in December last year to 52.7 billion dollars.

Agip pipeline sabotaged in southern Nigeria: army

LAGOS (AFP) – A pipeline belonging to Agip, a unit of Italian energy giant ENI, was blown up with dynamite in restive southern Nigeria, a military officer said Sunday.

There were no casualties in the explosion which happened on Friday night, General Wuyep Rimtip, the military commander in charge of the southern oil-producing states of Bayelsa and Delta, told AFP.

Ukraine accuses Russia of sabotaging Europe's gas

KIEV/MOSCOW (Reuters) - Ukraine accused Russia on Sunday of
deliberately reducing gas flows to customers in Europe as they face freezing
winter temperatures.

Poland, Hungary, Romania, Bulgaria and Turkey have reported drops in
supplies after Russian state-controlled gas export monopoly Gazprom cut off
Ukraine on New Year's Day in a dispute over prices.

Ukraine Seeks EU Involvement in Resolving Russian Gas Dispute

(Bloomberg) -- Ukraine sought assistance from the European Union in resolving its dispute with Russia over the pricing of gas supplies as OAO Gazprom increased natural-gas deliveries to Europe via three alternative routes.

Customers told dispute could affect gas supply

KIEV, Ukraine (AP) — A top Ukrainian official warned Saturday that European customers could see serious natural gas disruptions in about two weeks if the energy dispute between Russia and Ukraine is not resolved, and the Russian gas monopoly Gazprom accused Ukraine of boycotting contract negotiations.

Governors ask Uncle Sam for $1 trillion

PHILADELPHIA (Reuters) -- Governors of five states urged the federal government to provide $1 trillion in aid to the country's 50 states to help pay for education, welfare and infrastructure, as states struggle with steep budget deficits amid a deepening recession.

China seeks cure for Spring Festival rail travel headache

BEIJING (Xinhua) -- For many Chinese who want to nab railway tickets home for the annual Spring Festival migration, the government's promise of having a better system by 2012 is just a distant hope.

Starting Friday, the first day to book tickets for the travel rush expected to last from Jan. 11 to Feb. 28, long queues appeared at ticket booths in almost every major railway hub.

Release Stranglehold On Domestic Oil

It's going to be another cold winter in many parts of the country. Staying warm will likely come at a high cost, with heating bills expected to jump by as much as 25 percent. Those bills may become even steeper during the next few years, if Congress pursues any of the counterproductive energy solutions that lawmakers and candidates have recently touted in their campaigns.

Oil market lessons

The longer I study economic phenomena, the more I learn two truths. The first truth is how little I know. This is very humbling. There is just too much information out there for any one human being to process. The second truth is that this abstract thing we call "the market" can and does do what no human being or computer can - it does process all the pertinent information.

Hey! Who’s stealing my country anyway?

As an award-winning agrologist, Holm focuses on food and agriculture. She sees the SPP as a direct threat to Canadian farmers (who would lose the protection of supply-management regimes) and Canadian consumers.

"Canadians have not put a priority on farm and food policy because as a nation we have never gone without," Holm writes. "Embarrassingly, Canada remains one of the few nations in the world that does NOT have a national food policy. But things are quickly changing, and community discussions around peak oil, peak food, food security, food safety, food miles, food sovereignty and food democracy are moving that change forward."

Under the SPP, such discussions would be pointless. Canada would lose the right to create or enforce national policies in areas like food, energy and investment. Removing that right is precisely the objective of the SPP.

Hamas holding Natural gas discoveries off coast of Gaza hostage in 2006?

An unexpected energy windfall on Israel's doorstep promises to resolve Israel's energy security concerns for years to come. Unfortunately for Israel, it is the Palestinian Authority that controls the licensing of these reserves. So, as Operation Summer Rains washes away the administrative and political structures in the occupied territories, has Israel decided to use Hamas as an excuse to dismantle the PA and seize its energy assets.

China violates accord with Japan over disputed gas field: report

TOKYO (AFP) – China has violated an agreement with Japan and continued developing a gas field in a disputed area in the East China Sea, a press report said Sunday.

End of the ethanol era

The Iranian hostage crisis prompted Jimmy Carter to look for a home-grown alternative to Mideast oil. Cornell University scientist David Pimental began studying the concept. He added up the energy used in manufacturing ethanol and compared it to the amount of energy the fuel produces. There was a net loss, he decided. But the farm lobby succeeded in winning tax breaks and subsidies for the fuel.

"We're actually importing more oil to produce ethanol," is Pimental's assessment. "It's not making us oil-independent, and it's costing us a lot of money."

Solar Panel in a Most Unlikely Place

Browsing through this set of photos of one man's trek through the Caucasus mountains in the eastern European country of Georgia, I was awed by the sight of a solar panel on a home that resembled a centuries-old stone barn.

Soot reduction 'could help to stop global warming'

Governments could slow global warming dramatically, and buy time to avert disastrous climate change, by slashing emissions of one of humanity's most familiar pollutants – soot – according to Nasa scientists. A study by the space agency shows that cutting down on the pollutant, which has so far been largely ignored by climate scientists, can have an immediate cooling effect – and prevent hundreds of thousands of deaths from air pollution at the same time.

Global Warming May Become the Instigator of World War IV

Global warming is the cause of a number of damaging effects to the earth and its inhabitants, such as climate change, glacier retreat, rising sea levels, and now we may have a new threat on the horizon... world war! According to the 2007 CNA Corporation report, there is clear indication that as the tensions of global warming continue to heat up, so may the possibilities of war.

http://feedproxy.google.com/~r/theoildrum/~3/yCRf9IJdW3c/4933

Recently, Rune Likvern wrote a post talking about the possibility of a natural gas shortage in the United Kingdom, possibly as soon as February or March 2009. Rune isn't the only one worried about the supply of gas in Europe and the UK. A little over a year ago, Euan Mearns wrote two posts about the European natural gas supply, the first called European Natural Gas and a follow-up addendum called Daddy, will the lights be on at Christmas? In this post, we combine the two posts and re-run them. Besides being relevant to the gas shortage issue, the posts also provide some additional background related to current Russian/Ukrainian dispute.

OECD European gas production looks set to peak in 2008. After that, falling production combined with rising demand will see OECD European gas imports wanting to rise from current 197 BCM per annum to 442 BCM per annum by 2020. Where will this gas come from and how will rising European imports affect N America and the rest of the world?

Figure 1 OECD Europe gas production and conceptual forecast. Click all charts to enlarge

Executive summary

• 
  As of 2006, OECD Europe produced 55% of its own natural gas with the majority of gas imports coming from Russia and Algeria.
  


• 
  OECD Europe has three main gas producers - Norway, The UK and The Netherlands. Norwegian gas production is undergoing a major expansion, but this is forecast to halt at 130 BCM per annum next year for political resource conservation reasons. UK and Dutch gas production are in decline, and combined OECD Europe indigenous gas production looks set to peak in 2008.
  


• 
  Gas consumption has been rising at 2.6% per annum since 1980 and there are a number of reasons to suggest that rising demand for gas will continue into the future unless it is checked by high price or shortages of supply.
  


• 
  It is believed that Russia will do what she can to maintain gas exports to OECD Europe. But with their three biggest gas fields - Yamburg, Urengoy and Medvezhye - in decline, maintaining supplies from second tier assets will be a major challenge. In order to maintain supplies to the OECD Europe, supplies may have to be cut to other countries.
  


• 
  Algeria, Egypt and Libya will all see expansion of gas production in the years ahead, but will also experience growth in indigenous consumption, especially in Egypt. Gas exports from these North African states are forecast to peak in 2015. They may provide an additional 33 BCM of exported gas to the European market.
  


• 
  OECD Europe gas imports are forecast to grow from current 197 BCM per annum to 442 BCM per annum by 2020 - if we see business as usual growth in demand and consumption. Where will this additional 245 BCM come from? Some may come from N Africa and some from West Africa and Qatar. It seems unlikely that an increase in imports on this scale will be possible and that high price and shortage will ration supply. This market driven outcome may hit the poorer nations hardest and one may suspect this may have a destabalising effect.
  

Introduction

This post will provide a production forecast for Europe's main gas producers (the UK, The Netherlands and Norway); it will examine existing import patterns in Europe's main gas consumers (Germany, Italy and France) and the ability of gas exporters to meet growing OECD European demand - Egypt, Libya, Algeria, and in particular Russia. This article was initiated as part of study of UK gas security. The UK faces rapidly falling gas production and an equally rapid expansion of imports and the key question for the UK is where will this gas come from? This will be dealt with in a separate post.

There are a number of ways to divide Europe for economic analysis. I have chosen to break out data for European states that are members of the OECD. This includes the important oil and gas producer Norway, which is not a member of the European Union (EU) but excludes the Baltic States, Romania and Bulgaria which are EU members but have not yet joined the OECD.

Figure 2 Map of the European Union.

Turkey is a member of the OECD but lies mainly outside of Europe and is not included in this study. Turkey is a major importer of gas, especially from Russia.

Data sources and gas units

Throughout this article I have used data from the 2007 BP Statistical Review of World Energy. I have also used billion cubic metres (BCM) as the standard unit for gas measurement. According to BP, 1 BCM is equivalent to:

35.3 billion cubic feet (BCF)

0.73 million tonnes of liquified natural gas (LNG)

36.0 trillion British Thermal Units (BTU)

6.29 million barrels oil equivalent (BOE)

Gas production forecast

OECD Europe gas production is dominated by three countries - the UK, The Netherlands and Norway, with lesser but significant quantities produced by Denmark, Italy, Poland and Germany.

Figure 3 OECD Europe gas production and conceptual forecast.

The UK

The changing face of gas production in the UK lies at the heart of Europe's emerging gas problem. In 2003, the UK was a net exporter of gas to Europe but with peak production in 2000 and production now falling at 8.7% per annum it had become a net importer by 2004. The challenge facing the UK gas industry will be the subject of a detailed post.

Figure 4 UK gas production and consumption history

The UK forecast is based simply on extrapolating the 8.7% decline to 2020 by which time production is forecast to be 26 BCM per annum. At peak in 2000, the UK produced 108 BCM per annum and in the space of 20 years the UK will have gone from net exporter to a major importer, being dependent upon imports of over 80 BCM per annum.

This view on decline of UK gas production is shared by the UK BERR (Department for Business and Enterprise Regulatory Reform - formerly the DTI). See for example Figure 5.2 in this report.

The Netherlands

The Netherlands is home to OECD Europe's largest gas field. Discovered before WWII, the full extent of the Slochteren Field did not become apparent until the post-war years. It was the discovery of this field in the Permian Rotliegendes sandstone that sparked the exploration for gas and then oil in the North Sea.

Figure 5 Europe's largest gas fields. Data for Slochteren from Rembrandt Koppelaar. Troll and Ormen Lange from the NPD.

Slochteren lies onshore in the Groningen area of northern Holland and dwarfs the giant Norwegian gas fields of Troll and Ormen Lange. Further fields were found around Slochteren in the on-shore and off-shore areas.

Slochteren was never produced flat out and the Dutch government has laterally set a production cap on the field. In the period 2006 to 2015 this cap is set at 425 BCM over the 10 year period. NAM (the Shell - Exxon operating consortium) can optimise production over this time frame but strictly within this overall limit. The production cap on Slochteren has resulted in a long drawn out production plateau analagous to that seen in the Saudi super giant oil fileds - a very enlightened production strategy on behalf of the Dutch government.

Figure 6 Dutch gas production and forecast based on data provided by Rembrandt Koppelaar. The smaller offshore fields are showing a decline similar to the UK. Note that the volumes here are substantially larger than quoted by BP (see Figure 7). Rembrandt suggested this could be due to adjustment by BP for the energy content of the gas.

The other fields were not subject to regulation and are now in decline in similar manner to the UK gas fields. According to Rembrandt, Slochteren will also begin to decline naturally after 2015 and the bottom line is that Dutch gas production is now in an irreversible decline phase.

The forecast for the Netherlands is based on data kindly supplied by Rembrandt. This has smaller fields declining at a similar rate to the UK, while Slochteren has a somewhat lower decline rate.

Figure 7 History of Dutch gas production and exports.

Figure 8 Destinations of Dutch gas exports. Note that the Dutch import gas from Russia and Norway for re-export.

It can be seen that Dutch gas exports have been declining irregularly since the late 1970s and that some day post 2020, the Dutch may become an importer of natural gas.

Norway

Norwegian gas production has expanded rapidly in recent years, mainly the result of the Troll Field development. This expansion is set to go on for another couple of years, but then I suspect the expansionary phase will come to a halt.

In 2006 Norway produced 87.6 BCM of gas. Since then the Langeled pipeline that connects the Ormen Lange Field to Easington in England (and also to continental Europe) has been completed. The capacity of Langeled is about 20 BCM per annum. Furthermore, the development of the Snøhvit Field in North Norway with an LNG train provides Norway with an additional 5.7 BCM capacity.

The Norwegian export pipeline system is reported to have a capacity of 120 BCM per annum. With domestic consumption running at 4.5 BCM and LNG production at 5.7 BCM, future Norwegian production is forecast to run at 130 BCM per annum.

With Europe becoming ever more thirsty for gas, there was a plan to expand production in the Troll Field by 20 BCM per annum. Most significantly, this consent was refused by the Norwegian parliament. Hence Norway is in a position of having ample reserves to sustain a short term production boost, but instead seems to be choosing the path of restrained production which will favour an extended plateau at lower than maximum possible production levels.

Figure 9 Norwegian gas infrastructure.

The map of the Norwegian gas pipeline export system shows where Norwegian gas enters the UK and Continental Europe. The UK imported gas from Norway during the 1970s and 1980s where gas from the Frigg Field was piped to Scotland via the Vesterled pipeline. Since then the UK has had no need for Norwegian gas - until recently where a massive expansion of import capacity has been built. The Vesterled pipeline is now connected to the Norwegian gas transmission network and has been one route into the UK for Norwegian gas in recent years. There are, however, two new pipeline systems. The already mentioned Langeled pipeline that connects the UK to Ormen Lange via the Sleipner hub. And the Tampen Link that connects Statfjord and other mature fields in the Tampen Spur area to the UK operated FLAGS pipeline system. FLAGS transports associated gas from the northern UK fields to St Fergus in Scotland and since that UK gas production is now in decline, the Tampen Link will fill that surplus capacity - for a while at least.

Five other pipelines make landfall in continental Europe at 4 import terminals. Three pipelines feed two terminals in North Germany. And one pipeline lands at Zeebrugge in Belgium and one at Dunkirk in France. These entry points are connected to a broader European gas transmission system which pipes Norwegian gas as far as Spain, Austria, the Czech Republic and Poland.

Figure 10 Export destinations for Norwegian gas. Up until 2006, all Norwegian exports were via pipelines to Europe. In 2007, Norway opened its first LNG train and it will be interesting to see where these LNG exports end up.

It can be seen that Germany is by far the largest importer of Norwegian gas, followed by France, Belgium, the UK and Italy. One curiosity in this data is that the Netherlands are shown as a net importer of Norwegian gas. I can but speculate that The Netherlands are importing Norwegian gas to meet export contracts whilst conserving their own gas reserves.

Demand and import patterns

Natural gas consumption within OECD Europe has grown on average at 2.6% per annum since 1980. Back in 1965, Europe consumed less than 25 BCM per annum and this grew to over 470 BCM per annum by 2005, fuelled by North Sea gas. Higher prices and shortage of Russian supply saw consumption fall in 2006.

Figure 11 Forty years of gas binge in OECD Europe.

Where next for European Natural gas demand? Will the past trend continue, or will high price curtail demand? This is impossible to answer, but there are a number political, demographic and resource factors consistent with demand continuing to grow unchecked.

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  Growing prosperity in former Eastern European states leading to growth in energy consumption.
  


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  Migration from East to West placing greater strain on infrastructure and energy use in the West.
  


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  Migration from Northern to Southern Europe leading to greater prosperity in the latter and ever increasing energy needs - see for example gas consumption data for Spain.
  


• 
  Climate policies which as a quick fix continues to drive gas power generation forward as a more efficient and CO2 friendly means of generating electricity.
  


• 
  Pending shortages in oil supplies may lead to substitution by natural gas in automobiles.
  

If demand for natural gas continues to grow then source of supply and the security of that source is highly relevant. The following section shows the main sources of supply for Europe's main consumers (excluding the UK). One thing all gas import strategies have in common is diversity of supply.

Germany

Germany has some significant and stable indigenous gas production, but is heavily dependent upon The Netherlands, Norway and Russia for pipeline imports. With Dutch gas production in decline, Germany will presumably be looking to increase supplies from elsewhere.

The cornerstone of the German strategy is the Baltic pipeline that will assure supplies of Russian gas direct to Germany that will by-pass former Soviet republics and East European states.

Without LNG, the German strategy seems constrained, since falling UK and Dutch production will place greater demand on Norwegian and Russian gas from several other states.

Figure 12 The import sources of gas to Germany.

France

France is unique among major European gas consumers with no indigenous gas production. France produces no oil and only a little coal - hence their reliance upon nuclear energy for power generation.

Like Germany, France relies heavily upon Dutch, Norwegian and Russian gas pipeline imports. France also has a mature LNG import trade with significant imports from north and west Africa.

Figures 13 & 14 The import sources of gas to France.

Italy

Italy has significant but falling indigenous gas production. It also has a highly diversified gas importation infrastructure born in part from its geographic location. Italy imports gas from Norway, The Netherlands and Russia but is also linked to Algeria and more recently Libya by pipeline.

Italy also imports small amounts of LNG, mainly from Algeria. Note how there were significant imports from Nigeria in 2004 - but then nothing. It seems these cargoes may have switched to France in 2005 / 06.

Figures 15 & 16 The import sources of gas to Italy.

Current and future sources of supply

The chart shows that Russia and Algeria are by far the most important sources of imported gas to OECD Europe. This raises the questions of whether or not these countries will be able to maintain or increase future supplies and if not, where will Europe's growing thirst for gas be met in the future?

Figure 17 Sources of gas in OECD Europe in 2006.

Russia

Russian gas production had an interim peak in 1991, and with the fall of the Soviet Union went into decline for a number of years. Since 1997, production has begun to rise again and a new high was reached in 2006 of over 600 BCM per annum. The $60K question is where next for Russian gas production? This question is just as important as the future direction of Saudi oil production.

Figure 18 Russian gas production, consumption and exports.

Figure 19 Destinations of Russian gas exports

Russia exports less than one third of its gas production. The majority of exports are to OECD Europe, though a significant amount still goes to former republics. But the amount going to Ukraine, Belarus and Moldova is not documented in the BP statistics, and is presumably included with Russian consumption data. The structure of Russian gas production makes exports vulnerable to any down turn in production and / or increase in domestic consumption. Russian gas exports have been essentially static since 1990, and with the largest fields in decline (see below) it seems unlikely that Russia could at this stage raise production to meet the rising import requirements of OECD Europe.

Figure 20 Map showing the west Siberian gas fields of Russia. The three giant fields of Yamburg, Urengoy and Medvezhye have historically provided the bulk of Russia's gas. All three are now in decline (see below). Much of Russia's remaining potential lies in this area, particularly on the Yamal peninsula, to the left of the circle. The map is borrowed from a presentation by Kjell Aleklett.

Figure 21 Russian gas production forecast by Jean Laherrere showing how second tier fields may compensate for decline in the three giants - Yamburg, Urengoy and Medvezhye.

Historically, more than 50% of Russian gas production has come from 3 giant fields - Urengoy, Yamburg and Medvezhye. This excellent chart (unpublished) from Laherrere shows that all three of these core producers are in decline. Since Russia has relied upon these three supergiants for core production they now have an inventory of second tier giant fields to develop that may compensate for the decline from The Big 3, as shown on Laherrere's chart.

The challenges for Gazprom are immense. Bovanenko lies on the Yamal peninsula below permafrost. It is at the end of proposed piplelines shown as dashed red lines on the map above. Shtockman lies out of helicopter range in the Barents Sea. Recent reports suggest that the Russians want to use a floating nuclear reactor to power the production platform.

Figure 22 Russian gas production scenarios by Jean Laherrere. WEO forecasts show rising consumption matching rising production with flat exports of around 200 BCM per annum.

This new chart from Laherrere 2007 shows a peak in Russian gas production about 8 years from now with unconstrained production which is unlikely to happen. Instead, constrained production as indicated by the slowly rising WEO 2006 forecast matched by rising consumption will give rise to relatively flat gas exports forward to 2020. So it seems likely that Russia will be able to maintain gas exports but will unlikely be able to increase exports to compensate for falling OECD Europe production.

A critical geo-political question, however, is how these exports are distributed in future? The Sakahlin projects will see East Siberian gas entering the Asian markets for the first time. Furthermore, the Baltic Gas Pipeline will witness a new prioritisation of gas energy security in Germany and western Europe.

The Baltic Gas Pipeline, which is under construction under a joint venture between Gazprom and German companies BASF and E.ON, will deliver 27.5 BCM per annum direct to Germany in the first instance with the option to rise to 55 BCM. All of OECD Europe's gas from Russia currently has to cross The Ukraine and then either Slovakia or Poland in order to reach the main destinations of Germany, Italy and France. As we saw in the winter of 2005 / 6, Russia struggled to meet all commitments given extreme cold weather at home and cut gas supplies to some unfavoured former Soviet enclaves. The spat with Ukraine at that time highlighted how dependent OECD Europe was on the goodwill of the Ukrainians and the Baltic Pipeline circumvents that problem, providing gas security to Germany at least.

Figure 23 Map of pipelines in Ukraine that carry Russian gas to western Europe via Poland and Slovakia. From Ukraine vs Russia: Tales of pipelines and dependence by Jerome a Paris

The Baltic pipeline will be fed primarly by gas from a new field. The Yuzhno-Russkoye field, which recently started production, is located in the same area as Urengoy, is included in Laherrere's chart and is one of the new fields that will offset decline from The Big 3. This new export capacity, therefore, does not necessarily represent new productive capacity but merely a more secure route for Russian gas into the OECD.

OECD Europe currently receives 115 BCM per annum from Russia, so the Baltic pipeline may eventually secure almost half of those deliveries. However, should OECD Europe face gas shortages, it is those countries at the end of the pipeline that will still be most vulnerable. Some interesting negotiations may lie ahead.

In summary, it is exceedingly difficult to predict how reliable Russian gas exports to OECD Europe will be in future. It seems most likely that Russia will maintain current production levels of 600 BCM per annum until 2020. However, increasing domestic consumption, and exports to East Asia may see gas exports to the west declining. Germany will be in the strongest position to secure supplies. If the remaining supplies are rationed by ability to pay then some of the poorer eastern European states may suffer.

Algeria

Figure 24 Map of oil and gas infrastructure in Algeria. Europe is fortunate to have gas rich North Africa lying off its southern shores.

According to the BP Statistical Review, Algeria has 4.5 TCM remaining gas reserves placing it number 8 in the world. Accordng to the analysis of Jean Laherrere, Algeria has 4TCM gas reserves remaining, which is in fair agreement with the BP figure. It is fortunate for Europe that Algeria lies close to the southern border of the continent allowing Algerian gas to be piped into Italy and Spain. There is also a significant trade in LNG between Algeria and Europe.

Figure 25 Discovery and production gas models for Algeria by Jean Laherrere.

Laherrere provides a more detailed picture of gas production than can be compiled from the BP data. The main difference is production reported gross of re-injected gas. An unconstrained production peak some 17 BCM per annum higher than today's production is shown around 2015.

Figure 26 Algeria gas production, consumption and exports. Production and exports have not risen since 1999.

Algerian production grew steadily until 1999 but has since stagnated. There was a new discovery cycle during the 1990s and it is this that may provide impetus for some new production growth. Algerian consumptin is growing slowly and this will consume a portion of new production. New gas export capacity is estimated roughly to be 12 BCM per annum by 2012.

Figure 27 Destinations for Algerian pipeline gas exports.

Algeria exports about 37 BCM per annum by pipeline but is also active in LNG production with LNG exports of 25BCM in 2006. Most of the LNG was exported to Europe (and Turkey) with only small quantities going further afield. Europe is a short trip for an LNG tanker from North Africa, and in terms of tanker utilisation I suspect it will continue to be more profitable to deliver N African LNG to Europe than further afield.

Figure 28 Destinations for Algerian LNG gas exports.

The IEA 2005 energy outlook had this to say:

Algeria is the third-largest exporter of natural gas in the world. Exports are expected to increase as pipeline and LNG projects are brought on line. Gas exports were 64 bcm in 2003 and are expected to climb to 76 bcm in 2010 and reach 144 bcm by 2030.

The IEA target for 2010 looks marginally optimistic and their target for 2030 is a reserves busting feat as indicated on Laherrere's chart (Figure 25).

Libya and Egypt

Both Libya and Egypt have seen rapid expansion of their gas production and exports in recent years. This is set to continue at a slower pace for a number of years according to these forecast models from Jean Laherrere. Growing population and domestic gas consumption in Egypt looks set to outstrip production growth and Egypt may cease to be a gas exporter beyond 2025.

Figure 29 Gas discovery and production models for Libya by Jean Laherrere.

Figure 30 Gas discovery and production models for Egypt by Jean Laherrere. In the export model (Figure 31) I have used the "slow" production model for Egypt.

Combining the three production models of Laherrere from Algeria, Egypt and Libya provides this picture of gas exports from N Africa peaking at around 120 BCM per annum in 2015. That represents a 33 BCM per annum growth from current export levels.

Figure 31 Gas export model for N Africa showing expansion of production and exports in the years ahead but with a conceptual export peak around 2015.

OECD Europe gas security

With OECD Europe indigenous gas production set to decline and good reasons for believing that demand for natural gas will continue to expand in the future, OECD Europe faces the prospect of importing ever larger amounts of gas (LNG) from ever more remote parts of the world. Current imports are running at 197 BCM per annum and the BAU scenario shown below shows imports burgeoning to 442 BCM by 2020. Where will this additional 245 BCM come from?

Figure 32 Gas scenarios for OECD Europe summarising the indigenous supply forecasts and demand forecasts from the preceding sections. With the BAU demand scenario, imports will need to grow from current 197 BCM per annum to projected 442 BCM per annum by 2020 - an increase of 245 BCM per annum. It is doubtful that this quantity of gas may be sourced from African and Middle East markets. It is therefore considered more likely that high price and supply shortages will curtail demand for gas. It is conceivable that conservation, more efficient energy use and substitution with alternative sources of electricity may fill the gap left by declining gas supplies.

This is near impossible to answer with certainty. My feeling is that Russia will strive to meet current commitments which will result in their gas exports neither increasing nor decreasing in the 2020 time frame. N Africa will see strong growth in production that will be offset by strong growth in their domestic consumption. Up to 33 BCM of new supply may come from N Africa and it seems reasonable to assume that the majority of that gas will come to Europe. That leaves 212 BCM to source from else where and will inevitably entail a massive expansion of LNG export and import infrastructure beyond that which already exists. In the period 2010 to 2020 Europe will face fierce competition for LNG supplies from the mature markets of Japan, South Korea and Taiwan and growing competition from new markets for LNG in the USA and most likely also in China.

In 2006, the total global LNG trade was 211 BCM and so we are talking about doubling that by 2020 to satisfy OECD European needs alone. The main sources of new supply will be West Africa (Nigeria), Qatar and Iran. Since Qatar has declared a moratorium on new LNG projects forward to 2011 it is a major challenge for these three countries alone to meet global demand growth.

Figures 33 & 34 The changing face of gas security in OECD Europe. With a BAU demand scenario, OECD Europe will face importing ever growing quantities of LNG from remote sources around the globe.

The crux of this whole issue is how growing demand for gas is managed. The UK, and other OECD governments seem intent on allowing market forces to determine the outcome. I would be the first to admit that the dynamics of supply and demand in the European gas trade has so many dimensions that trying to regulate and plan this trade is not simple. But on the other hand, allowing market forces, national economic strength, and price to determine who gets and who doesn't get the available energy may have disasterous and unforeseen outcomes. A scenario where the former Soviet Republics and then the east European states and perhaps Turkey are left in the cold whilst western Europe uses historic strengths to secure itself energy supplies may have unpleasant outcomes flowing from a newly destabilised former Soviet bloc. Energy poverty throughout the poorer parts of Western Europe may also have undesirable consequences for the warm middle and upper classes.

The main message of this post, therefore, is to call upon the politicians of the OECD in Europe to show some rare leadership, and to recognise that massive energy conservation, and expansion of sensible alternative energy schemes, offer a better alternative to the polarisation that is likely to result from allowing market forces to determine the outcome of energy decline.

Acknowledgement I am indebted to Jean Laherrere who upon my request sent his most recent work on gas resources in countries relevant to the European market. Many of the charts come from a paper titled "Etat des reserves de gaz des pays exportateurs vers l’Europe" presented at Club de Nice Energie et geopolitique 29 nov. - 1er dec. 2007.

Addendum: Daddy will the lights be on at Christmas?

... or is Europe running low on natural gas?

OECD Europe gas imports may grow by 295 BCM per annum by 2020. In the same time period, global LNG production is set to grow by 350 BCM per annum. So we Europeans should be OK, so long as the USA, Japan, China, South Korea, India and Taiwan are not planning to expand their LNG imports as well.

Edinburgh, the capital of Scotland, at Christmas. A wondrous site. And none of our politicians or the general public ever wonder where the energy comes from and how we will pay for it. Cutting CO2 emissions is a priority for all parties. Eliminating nuclear power is also high on the agenda. Confused? Our politicians certainly are. Visit Edinburgh while you can, it's one of Europe's finest cities.

This is a follow up to the post I had on European Gas last week. In the comments nrgyman2000 posted his forecast for Norwegian gas production that was somewhat more pessimistic than the assumptions I had made. The UK department of BERR also sent me some more reports with interesting data on Global LNG liquefaction and regasification capacity. SamuM posted a lengthy comment on Russian gas with 10 charts that is recommended reading. This post aims to pull this new information together and concludes that European gas and energy security is in a perilous situation.

Norwegian gas supplies

nrgyman2000 [Editor's Note: Now known as Rune Likvern] posted this forecast for Norwegian gas production to 2020. This forecast looks realistic and is based on official reserves estimates for Norwegian gas fields and estimated decline rates. In essence the giant Troll (in red) and Ormen Lange Fields (in white) show no decline in the forecast period since they are producing well within capacity and are facilities constrained. Other gas fields and associated gas from oil fields decline as reserves become exhausted.

I sent this to the Norwegian Petroleum Directorate (NPD) and invited comment. As always the NPD were very obliging and sent me this link to this figure saying that this was the only official gas forecast from Norway for the last five years.

I need to point out that Norway does hold large gas reserves and could produce higher volumes but this is a political issue. The Norwegian government recently refused an application to expand gas production in the Troll Field by 20 BCM per annum - in the interest of maximising oil recovery from that field. A future expansion of Troll may well take place and new field discoveries and developments may further boost Norwegian production beyond the volumes forecast by nrgyman2000.

But in the absence of any firm commitments on behalf of Norway in this regard, Europe should be planning for reduced gas imports from Norway from 2010. Given the energy predicament that Europe finds itself in, it would be helpful if the Norwegian government provided some clearer guidance as to their future gas export potential and intention. It would be a sensible strategy for Norway to impose energy rationing upon Europe and in so doing instill best practice in energy consumption, lay the ground work for sustainable energy use and lower the vast amounts of CO2 that Norway exports to the rest of the world every year.

Russian gas exports

In an excellent comment, SamuM posted this chart attributed to Aleksandr Ananenkov, Deputy CEO of Gazprom. The chart seems to come from this presentation by Vladimir Milov in Budapest in September 2007, on the Nabucco pipeline proposal. I've uploaded this presentation on the TOD server and it can be downloaded here.

This chart tends to confirm the contention I made in my European Gas post, which was that new field development in Russia would be sufficient to offset declines in the years ahead, but no more.

A revised view of OECD Europe's gas import growth

Taking into account the information posted by SamuM reinforces my view that Russia will maintain but will struggle to increase gas exports to OECD Europe in the years ahead. And taking into account the Norwegian gas forecast of nrgyman2000 suggests that Europe's indigenous production may be lower than I previously assumed. The revised forecast shows an increase in OECD gas imports of 295 BCM per annum to 2020 if consumption follows historic trends. Where will this gas come from?

For good measure I have made a similar chart for OECD Europe oil imports. Anyone wondering why world oil prices have gone up and are still rising need look no further than this chart. Where next for the oil price?

Liquefied natural gas - LNG

The UK government department for Business Enterprise and Regulatory Reform (BERR) have sent me reports on gas amounting to thousands of pages in recent weeks. More on that when I post on UK gas early in 2008. However, two tables from this report (large pdf) by Global Insight caught my eye. I have often heard that global LNG import capacity far exceeds export capacity and these tables seem to verify this contention.

The first of these tables (Exhibit 3) details how the global LNG trade is expected to develop in the period to 2025. Focus on Case A which is an optimistic scenario. At present there is 250 BCM liquefaction capacity (400-150) and 510 BCM regasification capacity (800-290). Note that liquefaction capacity equates to export capacity and regasification equates to import capacity. So, globally there is double the import capacity than export capacity for LNG.

By 2020, the timeframe for most forecasts, liquefaction capacity is forecast to grow to 600 BCM per annum and regasification capacity will grow to 1000 BCM per annum. The imbalance is redressed slightly but import capacity will still exceed export capacity by a factor of 1.7. It seems like there will be many disappointed importers and in a competitive LNG market the stage looks set for gas prices to escalate.

The other highly significant feature of these data is that they give an indication of how the international gas market will grow in the years ahead. Global Insight appear to forecast growth of 350 BCM per annum. Comparing this with the forecast growth in OECD Europe imports of 295 BCM per annum shows that Europe alone will likely have the appetite to consume most of the new global LNG supply in the period to 2020. What about the USA, Japan, China, India, South Korea, and Taiwan?

This discrepancy is so large I wrote to BERR inviting comment but have not received a satisfactory response as to how 350 BCM new global LNG export capacity is to be shared around the OECD and India and China?

Looking at the strategies of the International Oil Companies (IOC's) there is a similar picture (Exhibit 10). At present they have built 83 BCM of liquefaction capacity and 269 BCM of regasification capacity. I find this quite extraordinary that companies will happily invest in import infrastructure for non-existent product. The UK gas strategy will rely heavily upon LNG imports and there is a headlong rush to build import facilities.

Is it just me, or does anyone else sense the presence of an elephant?

Conclusion

Daddy, will the lights be on at Christmas? Most probably yes in the UK, though it is worth noting that with cold weather across continental Europe, UK gas spot prices have been running about double this year compared to last. With governments intent on pursuing market regulation of the energy sector we must wait for prices to get so high that this kills demand (the elderly freezing to death) and inflation kills our debt laden economy.

Next year I'd quite like to see the UK government commission studies on foreign gas supplies that goes beyond building import facilities and assuming the gas will be there to fill them. I'd also like to see the Norwegian government publish a clear statement of intent on their future gas production potential and strategy. It is no longer satisfactory to have national governments cite IEA reports that are built upon the incredible efforts of the United States Geological Survey.

http://feedproxy.google.com/~r/EcoGeek/~3/DktRaeRjr_U/

The US's new President has a lot on his plate. An unsustainable and unstable energy supply, a crumbling economy with skyrocketing unemployment, and an environmental crisis the likes of which have never been seen.

And, I suppose, he could take on all of these issues one by one...but that just wouldn't be in the spirit of things. Obama seems to have a "one plan to cure them all" kind of attitude and, so far, I'm a fan.

According to his weekly YouTube address, shown above, Obama plans to add three million jobs to the American economy by doubling renewable energy production and vastly improving the efficiency of existing buildings. Jobs, Energy and Environment in one sentence! And if he's including hydro-electric in his renewable energy production numbers, than this is a HUGE commitment. Of course, he doesn't say when it will be done, so we should all reserve judgment until we get a few more specifics.

Of course, this approach is dangerous. By focusing on all three, it's possible that none of them are going to be addressed adequately. Indeed, this plan might be the worst way of all to create jobs and deal with our environmental crisis. But that's not the way it looks to me.

By focusing on efficiency, Obama guarantees energy savings for his buck, and also the creation of infinitely employable jobs retrofitting existing buildings. This creates a very high number of jobs per dollar spent, and they are jobs that can never be outsourced.

Additionally, by setting high but achievable goals for renewable energy production, he creates the foundation of a long-term energy strategy in which we don't just use less, but we replace existing power generation with clean sources. And, theoretically, this plan might breathe a little life into the all-promising growth sector of renewable energy.

Now, I could be wrong about this, I might just be a fanboy with very little economic training (OK, I definitely am.) But I think the time is ripe for a real domestic energy strategy that utilizes the innovation and dedication of the American people.

http://www.realclimate.org/index.php/archives/2009/01/environmenta

At RealClimate, we have more than once been accused of being imbalanced — criticizing those who would deny the basic science of climate change, while leaving inflammatory statements by what might be called the "environmentalist side" without comment. It's not an entirely a fair criticism, because there is a world of difference between the willful obfuscation of science and the naive exaggeration of it. There are however plenty of silly, and sometimes outrageous, claims made - see e.g. the Telegraph on Jan. 3^rd — and we probably ought to do a better job of calling these out, particularly when they show up in prominent places. So to inaugurate the New Year, I humbly offer a rant about a minor but illustrative example that I happened to notice because there was a link to it on Nature Reports Climate Change.

The subject of the linked article, in the British online newspaper The Independent, is the decline of various bird and butterfly species in England. The article, entitled Changing climate devastates UK species, reports that "insects in particular, and creatures that feed on insects…were sharply reduced in numbers" due to a "cold late spring, a wet summer, with few sunny days, and the long dry autumn…." Now I have no reason to doubt the accuracy of the claim that 2008 was a hard year for UK insects and insectivores. But this is weather we're talking about, not climate. And while it is true that at least one prominent study shows that there has been an overall increase in rainfall in the latitude band that includes the UK, and that climate models reproduce this trend (see e.g. the Zhang et al. article in Nature, in 2007), one cannot, as we are fond of pointing out, attribute a single, or even several individual extreme weather events to "climate change".

Indeed, Peter Stott, a co-author on the Zhang et al. study noted, in reference to 2007 (the wettest summer on record in the UK) that "This latest study cannot make the link between climate change and what we have experienced so far this summer." Moreover, most projections actually suggest drier summers in the UK in the future, though with increased convection (so less total precipitation, but bigger rainstorms).

Another thing that bugs me about the Independent article is the suggestion that climate is becoming "more unpredictable". I suspect what is meant here is that we used to know what a mean season and normal variations were, and now we don't. That's valid, since the baseline climate is changing. But saying it this way — that "climate is becoming more unpredictable" is misleading. In fact, climate may, if anything, become more predictable as anthropogenic forcing becomes even more dominant (as greenhouse gas concentrations increase), relative to natural forcing and variability. And what is definitely not the case — but might be inferred from the article — is that weather is becoming more unpredictable. Weather prediction is based on observations just a few days in advance — climate and climate trends have nothing to do with it.

The point here is not that we shouldn't be concerned about the fate of insects and birds in the UK (that would be the kind of conclusion that only the most willfully ignorant would draw.) They have been in decline for a long time (mostly due to land use change and pesticides) and there is little doubt that climate change will continue to add insult to injury. But it is simply wrong to confuse a year or even two years of unfavorable weather with a change in climate, and it is irresponsible to headline an article that is really about weather with the provocative juxtaposition of "climate" and "devastates". Doing so gives the average reader the sense that their personal observations about "weird weather patterns" or fewer sightings of Parus caeruleus represent definitive manifestations of climate change. The fact is, climate changes are — so far — small enough in most places, relative to the natural variability, that one's personal experience is a very poor guide to what is happening over the long term (observations of sea ice changes by those that live in the high Arctic notwithstanding).

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The Costly Compromises of Oil From Sand

OTTAWA — A major source of oil for the United States must now confront another problem: its carbon footprint.

Canada, in large part because of the production capacity of its oil sands, is now the largest oil supplier to the United States. But environmental groups in both countries are pushing for a slowdown or even a halt to further oil sands development, which is concentrated in northern Alberta.

Not all oil is alike when it comes to environmental impact, and many environmentalists single out production from the oil sands as the epitome of “dirty oil.” In a recent study, the RAND Corporation estimated that oil from the oil sands generates about 10 to 30 percent more greenhouse gases than conventional crude.

That may place oil sands exports in a precarious position when Barack Obama becomes president this month and moves forward with a climate change program.

Green revolution: still possible amid deep recession?

Experts believe that current prices, just below $50 a barrel, will persist only as long as the downturn. The IEA has for the first time hinted that the era of "peak oil" may be upon us – the highwater mark of production, after which output will start to taper off. As soon as economic growth resumes, it will open a costly gap between supply and demand – unless the world radically transforms the energy model.

"The minute you get recovery, you'll get a sharp rise in oil, which will stall the recovery," says Tom Burke, an environmental scientist and former British government adviser. "So you have to use the stimulus to get yourself off oil dependency and that will reduce the climate curve and you'll start to drive carbon the way you want to go.

New cold war in Europe as Russia turns off gas supplies

Fears of a deep chill spread across Europe yesterday after a row between Russia and Ukraine over gas prices cut supplies to the rest of the continent on a day of plummeting temperatures and heavy snowfalls.

The European Union said the situation was "completely unacceptable" as thousands of businesses were urged to switch fuels, and households struggled to keep warm in sub-zero temperatures. But there was no sign of an end to the standoff between Russia's energy monopoly Gazprom and Ukraine, locked in battle since New Year's Day.

Dependence on Russian energy places Europe at risk: The EU must ensure that no one can hold it to ransom in future

The angry stand-off between Russia and Ukraine over gas is now seriously disrupting supplies to several European Union countries. Romania has lost 75 per cent of its supply; Bulgaria has only a few days' gas left; Slovakia is on the verge of declaring a state of emergency. The European Commission has waded in with indignant condemnation. But what may look like a replay of what happened three years ago, when Russia drew international condemnation for shutting off gas supplies to Ukraine is in many ways very different; 2009 is not 2006.

Automakers Fear a New Normal of Low Sales

DETROIT — The historic collapse of the new-car market dragged on in December, raising questions of whether the auto industry will ever again have sales levels that it took for granted just a few years ago.

The 'McMansion' trend in housing is slowing

In Atlanta's 1920s-era Kirkwood neighborhood, teardown projects in the last year have been cast in the simpler Craftsman style, which have immediately found buyers. Indeed, US builders say their clients increasingly look for quality materials and workmanship rather than sheer size. Some families are even abandoning the one-bedroom-per-child model, builders say, in favor of larger, but fewer, shared rooms.

..."There's an awareness now that some of the homes frankly are too big," says Scott Van Duzor, a home builder in Illinois's Fox River Valley. "The McMansion has almost become embarrassing to some people," he says. "They're listening not just to their wallet but their conscience."

LA water cops hunt wasteful faucets, sprinklers

Officials estimate that landscaping accounts for as much as 70 percent of household water bills.

Offenders can be cited with a warning or hit with fines that start at $100 for homeowners and automatically appear on water bills.

The tough tactics began this summer after a voluntary conservation program yielded only a 4 percent drop in water use. Restrictions were expanded and penalties stiffened with the aim of seeing a 10 percent reduction.

Recipe for Famine

The bag of green peas, stamped “USAID From the American People,” took more than six months to reach Haylar Ayako. For seven of his grandchildren, that was a lifetime. They died as the peas journeyed from North Dakota to southern Ethiopia. During that time, the American growers, processors and transporters that profit from aid shipments were fighting off a proposal before Congress to speed deliveries by buying more from foreign producers near trouble spots. As a result of legal mandates to buy US goods, the world’s most generous food relief program wasn’t fast or flexible enough to feed the starving in Ethiopia’s drought-ridden South Omo region last year.

“I am so grieved that I lost those children,” said Ayako, a Bena tribesman, speaking in his local Omotic language. “They died of the food shortage.”

Chevron lifts force majeure on Nigeria oil output

LAGOS (Reuters) - U.S. energy giant Chevron (CVX.N) said on Tuesday it had lifted a force majeure on oil output from its Escravos terminal in Nigeria a month and a half after saboteurs forced it to shut in around 90,000 barrels per day.

The company said it had lifted the measure, declared on Nov. 19 and which frees it from contractual obligations, with effect from Jan. 1.

"Production and lifting operations have resumed," it said in a statement.

Peak oil expert to speak at Western Michigan University

KALAMAZOO--Dr. Kenneth Deffeyes, a famed Princeton geologist who believes world oil production peaked three years ago, will speak at Western Michigan University at 7 p.m. Tuesday, Jan. 13.

Speaking in the Fetzer Center's Kirsch Auditorium, Deffeyes will be the first to speak as part of WMU's new Gwen Frostic Environmental Studies Seminar Series. The event is open to the public without charge.

The Powerful Case For $1 Gas

If problems in the Middle East are resolved fairly peacefully and other regions which produce oil can avoid significant turmoil, oil should dive back toward $30.

Oil prices are up 25% over the last two weeks. This rise in oil prices has encouraged some analysts to forecast that gas prices could go up 20 or 30 cents in the near future..

The case for lower gas prices is a simple case. The recession could move unemployment in the US to 11% or more. It could cut corporate earnings for several quarters. Air traffic could drop and with it jet fuel demand. Many companies could cut back on trucking.

Gas will move to $1 because things will get so bad that it can't stay higher, for better or for worse.

Gas war may boost alternative routes to Europe

MOSCOW (Reuters) - Russia's decision to cut gas exports to Europe via Ukraine in mid-winter may shock the continent into backing major new pipelines to bypass Ukraine, cementing Moscow's control over European gas supplies.

The mystery of Antarctica's speeding glacier

With the possible exception of the ice that covers Greenland, the West Antarctic ice shelf is the most important body of water in the world. If it thaws, the results will be disastrous for millions, raising sea levels and flooding coastal cities such as London, New York, Tokyo and Calcutta. So it is understandable that scientists are alarmed as to why one particular section of it - Pine Island Glacier - is melting so much faster than the rest.

Pine Island, which contains around 30 trillion litres of water, is slipping into the sea at an ever accelerating rate, a development that alone could raise sea levels by as much as 10cm over the next century. Starting at an altitude of 2,500m, the glacier is 95 miles long and 18 miles wide, reaching the sea as an ice wall 750m high. Even before it began to speed up, it was one of the fastest-flowing glaciers in the world, at nine yards a day.

Utility cutoffs fuel carbon monoxide poisonings

Severe winter weather and a stormy economy could combine to make one of the season’s common killers, carbon monoxide poisoning, even worse this year, public health and safety officials say.

Coast-to-coast snowstorms and power outages, paired with spiking rates of utility shutoffs spurred by record unemployment, are likely to increase the accidental exposures that typically send more than 20,000 people to the emergency room and kill nearly 500 each year.

...Deprived of power, people are firing up gas-powered generators and bringing barbecue grills indoors, forgetting the deadly consequences of the colorless, odorless, tasteless gas that can lead to illness, brain damage — and death.

“We see it during power outages and we see it during bad economic times,” said Jim Burns, past president and spokesman for the National Association of State Fire Marshals. “Unfortunately, people in desperate times take all means to stay warm.”

Iran offers more gas to Turkey

TEHRAN, Iran—Iran is prepared to increase gas exports to Turkey after Ankara's supplies -- along with those of several European nations -- were cut due to a dispute between Russia and the Ukraine, an Iranian diplomat said Tuesday.

Shell Said to Delay Start of Gasoline Unit at Pernis

(Bloomberg) -- Royal Dutch Shell Plc is delaying the start of a gasoline unit at Pernis, Europe’s largest refinery, by at least a week after a pipeline fire forced its shutdown last month, two people familiar with the situation said.

BP names Russia troubleshooter as U.S. boss

LONDON (Reuters) - British oil major BP Plc (BP.L) appointed the man who led negotiations with its oligarch partners in Russian joint venture TNK-BP (TNBPI.RTS) as head of its U.S. unit.

BP said on Tuesday Lamar McKay, formerly leader of the company's Special Projects Team, had been appointed chairman and president of BP America.

The Fall of Green Travel

Environmentally-conscious vacations are out of fashion. Travelers expect their next getaway to be green — and they’re not willing to pay more for it.

Richard Heinberg: Slo-mo Splat

Remember the wall that environmentalists (like the 1972 "Limits to Growth" authors) have long been saying that industrial society would eventually hit? Permit me to make the formal introduction: Industrial society, meet wall; wall, meet industrial society.

It's understandably taking a while for the recognition to seep in. We are not accustomed to seeing every indicator of economic well-being, in virtually every country in the world, slam into reverse over the course of a few short months. I still have random conversations with businesspeople and bankers who say we've hit bottom and recovery is at hand; in their view, this is just another business cycle. I see things a bit differently: to my eyes the world situation looks like a slow-motion film of a train wreck, and the sheet metal at the front of the locomotive has only just begun to crumple.

Brace for 'Climate Wars'

On how to predict the fall of human civilization:

"Most of [the scenarios] were from military reports. There was a lot of awareness among scientists about the severity of climate change, but scientists don't do strategic scenarios. A lot of that scenario stuff, believe it or not, actually started with Shell Oil back in the '70s. They came up with relatively disciplined rules for these things -- we're not just writing science fiction here. What we want is credible, possible futures. The pentagon's very big on that now.

"The American military has been doing them for a long time -- they're not hard to get at. When Bush didn't want climate change discussed at all, the Pentagon went to the think tanks in Washington and said, 'We need you to do all the research that we've already done, but can't publish. You publish it, and we'll distribute it to our staff.'

"I was in Washington in February -- I met with a lot of senior career people, and there wasn't a denier among them. They had made their plans, and were waiting for the administration to change so they could get some action on these things."

U.S. In the Midst of a Revolution

Sandwiched around the election of the first African-American President of the United States, we find the debacles associated with the collapse of the international finance sector and the imminent end of the American automotive industry as we've known it for decades -- accompanied by the scurrying of would-be leaders and experts around the world attempting to patch holes in the badly leaking dikes with hastily-applied band-aids.

It's abundantly clear that the world has changed drastically. In my view, we're now in the midst of truly historical sea changes, although the biggest implications of these dramatic changes are very unclear -- and may not become fully apparent for some time to come.

FACTBOX - Global energy investment hit by financial crisis

(Reuters) - The deepening of the global financial
crisis and a deep drop in energy prices have forced companies to
scale back spending and delay projects, with expensive ventures
in the Canadian oil sands hardest hit.

Below is a list of projects that have been delayed or scaled
back in recent months, as well as other related news.

What's next: Oilsands

The collapse of oil prices has possibly set back Canadian production growth as much as five years.

Factbox: who gets what from Gazprom

The biggest European customers for Russian gas, whose supplies are likely to be hit by the dispute between the Russian gas export monopoly Gazprom and Ukraine:

Gazprom's Tactics Harsh But Its Logic Sound

The Russian gas goliath's argument that the price it charges Ukraine must rise is a valid one, based on its own costs.

Bulgaria president: "We have to reopen the shut reactors of the Kozlodui nuclear plant"

Bulgarian president Gheorghi Parvanov declared on Tuesday that Bulgaria must reopen the closed reactors at the Kozlodui nuclear plant, Novinite informs. The decision comes after Russia decided to cease the natural gas deliveries though the pipelines that cross the Ukrainian territory. On Tuesday morning, the pipelines delivering gas to the Balkans region were shut down.

Shortage of nuclear fuel hits Indian nuclear power plants

Shillong (IANS) India’s nuclear power plants have been working at about half their capacity due to shortage of nuclear fuel despite the efforts of the Uranium Corporation of India Limited (UCIL) to tap indigenous uranium deposits. The power plants are facing shortage of uranium supply due to the slow process of opening up of new uranium mines.

Tom Whipple: The Top 10 Peak-Oil-Related Stories of 2008

1. The Global Recession

The impact that declining world oil production will have during the coming year, and possibly longer, is now inextricably intertwined with the course of the economic recession that is sweeping the world. During 2008 the world’s stock markets lost some $30 trillion in investor equity. Nearly every major government was forced to begin massive bailouts of financial institutions and many have started to support failing businesses. The end is not in sight.

While many peak oil observers long anticipated that faltering world oil production would lead to much higher oil prices and eventually to an associated economic meltdown, the setbacks of the last year have complicated the situation. While it is clear that worldwide demand for oil has stopped growing and has started to decline in the last six months, it is not yet clear just how fast demand is falling. The sudden drop in oil prices has further complicated the situation by setting off a race between falling prices and slowing economic activity.

Related: PeakOil.com's most read stories of 2008

It will take more than goodwill and greenwash to save the biosphere

Monbiot: Shell may boast about tackling climate change, but companies tend always to sacrifice good intentions for hard cash.

Obama's Chance For a Blue Legacy

Today, President Bush will begin for the ocean what President Theodore Roosevelt did when he created the National Park System. The administration is announcing plans to create a national monument that will protect 195,000 square nautical miles of the Pacific Ocean -- bigger than the size of California and almost 50 percent larger than all U.S. national parks combined. Sweeping areas of the ocean's most pristine treasures, including spectacular corals and the deepest canyon in the world, will be protected by law and given the chance to become stronger.

Yet what is most significant about this move is the opportunity it creates for President-elect Barack Obama.

China's green investment challenge

China's environmental and renewable energy sectors are poised for another year of strong growth. However, green industries still face a daunting array of challenges.

Harnessing space energy

The first commercial solar power plant was commissioned in 1985 near the town of Shchelkino in the Crimea in the Soviet Union and had a peak load of 5 mWt, or just as much as the world's first nuclear reactor. But the costly and inefficient power plant had to be shut down in the mid-1990s, as on Earth it could not work to full capacity. Consequently, we must consider building such power plants in outer space.

Paramedics get muscle cars

EMS District Chief Jeffrey Hammerstein said the department comparison-shopped before settling on the Chargers, which are similar to those recently purchased by the N.C. Highway Patrol.

They are cheaper and more fuel-efficient than the Chevrolet Suburbans and other SUVs issued to EMS supervisors, as well as comparable police interceptors such as Ford's Crown Victoria. Their resale value, he added, should be higher when it comes time to sell them as surplus vehicles.

Gulf takes wrong currency path

The GCC members produce between them some 16 million barrels of crude oil per day, and possess some 45% of known oil reserves. In addition, members, particularly Qatar, also have immense reserves of natural gas.

The key innovation that will enable a Gulf Clearing Union is the simple expedient of creating - within a suitable legal framework - a "petro" unit redeemable in a constant amount of energy value, let's say the energy released by burning 100ml (measured at 20 Centigrade) of n-octane.

Such a definition of an energy value unit provides a straightforward benchmark for both domestic and international buyers of oil, gas, petroleum products, and even electricity, to use petros - as well as, or instead of, US dollars - in settlement for purchases of GCC production.

Oil Rises to 5-Week High Above $50 on OPEC Cuts, Russia Dispute

(Bloomberg) -- Crude oil rose to a five-week high above $50 as Kuwait and Qatar indicated they will implement supply cuts announced by OPEC last month, and a dispute between Russia and Ukraine reduced natural gas shipments to Europe.

Kuwait and Qatar plan to cut oil shipments to Asia starting in January, refinery officials in the region said today, after the Organization of Petroleum Exporting Countries agreed on a record output reduction on Dec. 17. OAO Gazprom cut gas shipments to Europe through Ukraine to less than one third of normal levels, a NAK Naftogaz Ukrainy spokesman said.

“The focus is shifting from demand to supply again,” said Eugen Weinberg, a Commerzbank AG analyst in Frankfurt. “We know demand is going to be very weak, but cuts from OPEC and the latest geopolitical risk will compensate.”

Gasoline price up first time in 16 weeks

WASHINGTON (Reuters) – U.S. retail gasoline prices have risen for the first time in 16 weeks as higher crude oil costs were reflected at the pump, the government said on Monday.

The national price for regular unleaded gasoline jumped 7.1 cents over the last week to $1.68 a gallon, but was still down $1.43 from a year ago, the federal Energy Information Administration said in its weekly survey of service stations.

Soybeans Jump to 3-Month High on Crude Oil, Dry Weather Concern

(Bloomberg) -- Soybeans extended gains to a three- month high and corn rallied on speculation higher oil will boost demand for crops as a source of alternative fuel and concern that dry, warm weather will damage crops in Brazil and Argentina.

UK: Energy bills to drop by more than £100

CONSUMERS were today given hope that their energy bills will fall in the New Year, after Scottish Power cut the cost of one of its tariffs by 10 per cent.

Consumer groups said it was the “shape of things to come”, with reductions of 10-15 per cent expected across the board in the coming months.

Ukraine: Russia cut gas to Europe by two-thirds

KIEV, Ukraine – Ukraine's gas company Naftogaz said Tuesday that Russia cut natural gas supplies to Europe by about two-thirds, raising the stakes in a spiraling dispute between the two neighbors that bodes ill for European consumers.

Naftogaz spokesman Valentyn Zemlyansky said Gazprom sent only 92 million cubic meters of gas for European consumers, down from 221 Monday and about 300 during previous days.

"That is all they are sending, in several hours Europe will feel it," Zemlyansky told The Associated Press.

Slovakia to call state of emergency over gas-agency

PRAGUE (Reuters) - Slovakia will declare a state of emergency over a drop in gas supplies from Russia, Czech news agency CTK reported on Tuesday, citing Slovak Economy Minister Lubomir Jahnatek.

Europe begins to feel gas pipeline pinch

Moscow – Thermometers are plunging across Europe, and so is the pressure in the natural-gas pipelines connecting the continent with its key supplier, Russia.

But no one is pushing the panic button yet. The five-day-old gas war between Moscow and Kiev appears worse than in past years, aggravated by Ukraine's deepening financial and political crises and Russia's urgent need to refloat its floundering state budget by raising gas prices. Europe, watching closely, has sufficient gas reserves to see it through any short-term crisis and has officially declined to take sides.

It's time to see through Gazprom

The bust-up between Russia and Ukraine that threatens to gum up the gas supplies of much of southern and Eastern Europe hardly comes as a surprise. It is almost part of the New Year ritual and somehow – perhaps Kremlin meteorologists are in on the plot – always seems to strike during a cold spell. Across the continent, radiators run cold.

So why hasn’t the European Union devised some kind of strategy by now to deal with the threat? Years of talk about energy security have generated nothing but hot air.

Mexico's Pemex pushes ahead with Chicontepec field

MEXICO CITY, Jan 5 (Reuters) - Mexico's state oil company Pemex has awarded over 2 billion pesos ($148 million) in construction contracts at its Chicontepec project aimed at boosting crude output, the firm said on Monday.

The contracts call for the construction of access roads and site preparation work at 344 well pads, where Pemex plans to drill thousands of horizontal oil wells to tap the difficult-to-produce oil of Chicontepec.

Dow to Take Action Against Kuwait on Halted Venture

(Bloomberg) -- Dow Chemical Co., the largest U.S. chemical maker, plans to pursue legal options against Kuwait for canceling a joint venture agreement and will seek a new partner to invest in its basic-plastics business.

U.S. Refiners Don't Look Cheap (Unless We're Going Back to '06-'07 Environment)

In regards to U.S. refiners still being priced for good times, in my view as per EV /Capacity analysis. If you have a bullish near term view on their industry, think we're going back to 2006-2007, then fine. The point I make is that if you think we're going back to a 1999-2002 environment, then U.S. refiners such as Valero Energy (VLO), Tesoro (TSO), Holly Corp. (HOC), and Frontier Oil (FTO) still look a bit overvalued despite their massive declines this year.

Toyota to suspend production for 11 days in Japan

TOKYO — Toyota is suspending production at all 12 of its Japan plants for 11 days over February and March, a stoppage of unprecedented scale for the nation's top automaker as it grapples with shrinking global demand.

Cars outsell trucks in rough year

DETROIT — The final numbers are in, and it's official: 2008 was a crummy year to sell cars.

Not only did sales fall off a cliff, but consumer preferences changed faster than automakers could predict or react to. Gas prices skyrocketed, causing consumers to flee SUVs and trucks for smaller cars. Then the financial crisis hit, ruining nearly everyone's appetite for any vehicle.

Australians buying more bikes than cars

Australians continue to buy more bicycles than cars with the economic downturn, health issues and climate change driving sales, the Cycling Promotion Fund (CPF) says.

Figures released on Tuesday put total vehicle sales for 2008 at 1,012,64 while bike sales were 38 per cent higher at 1,401,675.

Australia: Ethanol demands may consume grain crops: farmers

Farmers say one fifth of New South Wales' grain crop could be eaten up by changes to the proportion of ethanol in unleaded fuel.

The State Government announced last month it would quadruple the ethanol mandate within three years.

Severn barrage: Row breaks out over UK's biggest renewables project

Government consultants have been accused of miscalculating the costs of a project to generate vast amounts of green electricity in the Severn estuary, promoting a 10 mile-long tidal barrier strongly backed by ministers in preference to a scheme that engineers and environmentalists say is far less damaging.

SAfrica to start wind power project: official

JOHANNESBURG (AFP) – South Africa's state-run power utility Eskom plans to start operating wind turbines this year to boost the supply of electricity, a company spokesman said on Monday.

"We are looking at building 50 wind turbines with two megawatts each before the end of this year across the country," Fani Zulu said on public broadcaster SA FM.

LDK shares slide after issues revenue warning

LOS ANGELES (Reuters) – Solar wafer maker LDK Solar Co Ltd warned on Monday of lower-than-expected fourth quarter and 2009 revenue, saying the global economic crisis and tight credit markets have weakened demand for solar power, sending its shares down nearly 14 percent.

The Chinese company also said it experienced a delay ramping up production at its new polysilicon plant. Polysilicon is the solar industry's key raw material.

The staggering cost of new nuclear power

A new study puts the generation costs for power from new nuclear plants at from 25 to 30 cents per kilowatt-hour — triple current U.S. electricity rates!

This staggering price is far higher than the cost of a variety of carbon-free renewable power sources available today — and ten times the cost of energy efficiency.

Group sues to force EPA to clean up Chesapeake Bay

WASHINGTON – A conservation group filed a federal lawsuit Monday to force the U.S. Environmental Protection Agency to enforce the law and clean up the polluted Chesapeake Bay, citing 25 years of failure to restore the nation's largest estuary.

Timber company drops road deal with Forest Service

HELENA, Mont. – The nation's largest owner of timberland disclosed Monday that it will no longer pursue changes in agreements governing its use of U.S. Forest Service roads — changes that critics complained could transform forests into housing subdivisions.

Pope: Pollution could destroy world's future

VATICAN CITY – Pope Benedict XVI is warning that pollution in the world could destroy our present and our future.

Contraceptive pill is polluting environment: Vatican newspaper

VATICAN CITY (AFP) – The contraceptive pill is polluting the environment and is in part responsible for male infertility, a report in the Vatican newspaper L'Osservatore Romano said Saturday.

The pill "has for some years had devastating effects on the environment by releasing tonnes of hormones into nature" through female urine, said Pedro Jose Maria Simon Castellvi, president of the International Federation of Catholic Medical Associations, in the report.

"We have sufficient evidence to state that a non-negligible cause of male infertility in the West is the environmental pollution caused by the pill," he said, without elaborating further.

1 in 5 considering leaving Hong Kong due to pollution: survey

HONG KONG (AFP) – One in five Hong Kong residents is considering leaving the city because of its dire air quality, a survey released Monday has found, raising fears over the financial hub's competitiveness.

The findings equate to 1.4 million residents thinking about moving away, including 500,000 who are "seriously considering or already planning to move," according to the survey by the think tank Civic Exchange.

Russia suspended from UN carbon trading scheme

The immaturity of one of the UN's flagship carbon trading scheme was underlined yesterday after Russia was suspended from trading carbon credits as a result of unpaid fees.

NEW FORECAST: 4ft Sea Level Rise by 2100 – threatened destinations include Manhattan, Maldives

The report, commissioned by the U.S. Climate Change Science Program, found that in light of recent ice sheet melting, global sea levels could rise as much as 4 feet (1.2 metres) by 2100.

The IPCC had projected a rise of no more than 1.5 feet by that time, but satellite data over the last two years show the world's major ice sheets are melting much more rapidly than previously thought. The Antarctic and Greenland ice sheets are losing an average of 48 cubic miles of ice a year, equivalent to twice the amount of ice in the Alps. The models used by the IPCC did not factor in the dynamic where warmer ocean water under coastal ice sheets accelerates melting. (About 600 million people currently live in low lying coastal areas.)

According to the Worldwatch Institute, of the 33 cities predicted to have at least eight million residents by 2015, some 21 coastal cities will certainly have to contend with sea rise impacts, however severe they may be. So it may not just be bye-bye to parts of Bangkok, but adieu to bits of Boston, many of Malibu's glamour spots and even sections of lower Manhattan.

Australia: Defence warns of climate conflict

RISING sea levels could lead to failed states across the Pacific and require extra naval deployments to deal with increases in illegal migration and fishing, a Defence Force analysis says.

"Environmental stress" has increased the risk of conflicts over resources and food and may demand greater involvement by the military in stabilisation, reconstruction and disaster relief, the analysis, prepared by Defence's strategic policy division, says.

It warns there is a risk of a serious global conflict over the Arctic as melting icecaps allow easier access to undersea oil and gas deposits.

http://feedproxy.google.com/~r/theoildrum/~3/5az7y7V7rj8/4915

In this post, I consider some major issues contributing to our current financial problems, before making a financial forecast for 2009. These are

1. Why so many asset classes are so highly correlated in times of distress. This chart gives my interpretation of part of the problem.

Figure 1

2. Why growth is essential for keeping the current debt-based financial system operating.

3. Where we are now, and the role reduced resources (including peak oil) are likely to play as we go forward.

4. My forecast for 2009.

1. Why so many asset classes are highly correlated in times of distress.

We keep hearing about plans to stimulate the "consumer" to buy more. Until I stopped to think about it, it wasn't obvious to me that the consumer (or perhaps I should say, ordinary citizen), and his ability to purchase goods and services are key to keeping the whole system going. These connections include:

1. Adequate income is needed for a citizen to repay the debt he already has.

2. Some of the "higher level" debt in the tower in Figure 1 is simply debt from one of the lower levels, recycled on someone else's balance sheet.

3. Revenues from ordinary citizens support the businesses and governments that have loans higher up on the "tower", and are critical to these organizations' ability to repay their own debt.

It is only when the system is under stress, and shortfalls in income of the ordinary citizen start shaking the system, that these connections becomes clearer. Let's look at the debt shown in Figure 1 by layer, starting from the bottom:

Layer 1. Household Debt (Mortgages, auto loans, credit card debt, student loans). Adequate income is needed for citizens to repay these loans. Also, if ordinary citizens have adequate incomes, this helps to keep demand for houses up, which in turn helps to keep the prices for houses up. These higher prices allow citizens to borrow more against their homes, and use this revenue to purchase even more, helping prop up businesses from which they buy goods and services. If the prices of homes drop because of inadequate demand, huge problems develop, as we are now acutely aware.

Layer 2. Debt of Non-Financial Businesses. This would include loans for companies like GM and Ford and mortgage loans for restaurants. It might include debt for casinos, and debt for church buildings. All of these businesses are directly or indirectly dependent on wage-earners having enough money to buy their products, or contribute their Sunday offerings, in order that they can repay their loans. Even if a business only sells its service to other businesses, it is a part of a chain of businesses that at its base is dependent on customers buying its goods and services.

Layer 3. Debt of Financial Businesses. To a significant extent, this is just recycled debt from the first two layers. What happens is that an individual or business borrows from a financial institution, for example a commercial mortgage or credit card debt. The financial institution repackages the debt (sometimes first slicing and dicing it) and lays it off again. If one of the first two layers defaults, then the third layer is likely to default as well.

Layer 4. Debt of State and Local governments. In a way, these governments are service providers. They collect money from their citizens one way or another (property tax, sales tax, tolls on roads, lottery tickets) to pay for the services they provide. If citizens are laid off, or are working for lower paid jobs, they will pay lower taxes to the state. Also, if the citizens don't bid up the prices of houses, it is difficult to collect as high property taxes on them. Some of a state's services, like unemployment compensation and health services for the poor, may increase in bad times.

Layer 5. Government Guaranteed Mortgages. This is just a recycled version of part of the mortgages in Layer 1, including those held by Fannie and Freddie, and those indirectly guaranteed by Fannie and Freddie. If the Layer 1 mortgages default (or are reduced because of "cram down" provisions), Layer 5 mortgages will almost certainly have problems as well.

Layers 6 and 7. Different Versions of Federal Debt. The Federal Government obtains most of its revenues from taxes of individuals. If citizens are earning less money, it is difficult to continue collecting as much taxes. Some of the taxes come from businesses, but to earn money to pay taxes, businesses have to sell some goods or services to the public. If citizens are short of funds to buy goods and services, the profits of businesses will be lower, and the revenues from taxes on these businesses is likely to be lower as well.

Layer 8. Unfunded Medicare / Medicaid. These are promises made to individuals that will eventually have to be paid for by someone. Ultimately, the funding for these will have to come from taxpayers, which for the most part are ordinary citizens.

Layer 9. Unfunded Pension Plan Amounts. Pensions are funded by a combination of investments in bonds, stocks and other securities. To the extent that these securities have performed poorly, there will be a shortfall in funding. The events of the last year will cause many pension plans to be in poor shape, because they hold debt shown in the tower in Figure 1 and some of it is defaulting. If additional contributions from the organization setting up the pension plan become necessary, these funds will ultimately have to come from a taxpayer (if it is a local government) or a purchaser of goods or services (if it is a business).

The above list relates only to debt and promises to pay, but other financial assets are affected as well. The value of stocks is likely to decrease if people aren't buying a company's goods and services because of inadequate income. Insurance companies will have financial difficulties, because they tend to hold many bonds which decline in value as defaults increase. Hedge funds hold a mixture of asset types, but are also likely to be affected. Derivatives vary in what they cover, but some of these will also be affected by debt defaults related to inadequate consumer income. While this list is not exhaustive, it gives an idea why inadequate income by the ordinary consumer is likely to ripple though the system in many ways.

I would note too that there are a lot of feedback loops in the tower. When things are very good, the feedback loops tend to make things look very, very good (higher wages-> higher spending -> profitable businesses -> more hiring -> rising home prices -> less need for government programs). These same feedback loops work the opposite direction when things are bad (layoffs, for example), making a bad economic scenario truly terrible. The huge tower is also expensive to maintain, and takes resources from productive uses, like building infrastructure and new factories. As more and more layers are added to the tower (like TARP), the tower becomes more and more unstable, and more and more likely to have big reactions to small events.

2. Why growth is essential to keeping the current debt-based financial system operating.

Perhaps the easiest way to see that growth is essential to repayment of debt is to think about the government's borrowing to bail the United States out of our current financial predicament. As with the vast majority of debt, the debt is not really for an investment that will add value in any real sense (more goods and services manufactured). Instead, it represents time-shifting of payments to the future, with an interest charge for this time shifting. In the case of the government spending, it is not even clear that all of the spending will be particularly beneficial. When previous stimulus checks were sent, some of the money was spent on goods imported from China, helping the Chinese economy. Also, some of the additional borrowing ended up in the pockets of high-paid financial executives who likely will not spend it on another car or house, since they already have more money than they are able to spend.

Think about the additional debt from the perspective of a typical wage-earner. Suppose the typical wage-earner's income is 100 units in 2007, 105 in 2008, 110 in 2009, 115 in 2010, 120 in 2011, and so on. If the government spends the equivalent of 10 units on the bailout (the wage-earner's share of the total), and gives the wage earner 3 units of it back as a stimulus check in 2009, the wage-earner's 2009 income will equal 110 + 3 = 113 with the stimulus check. It should not be too onerous a task to pay the 10 units back through higher future taxes, since the wage-earner's income will be higher in future years, and he can use part of that increased income to pay the 10 back. With interest, the total amount to be re-paid may amount to 11 or 12 or 13, but even this may not be too onerous, because of rising income. Additionally, there may be the possibility of "rolling the debt forward", and not really repaying it, saving it for society's grandchildren, since it looks like the future is getting better and better.

Suppose on the other hand that the typical wage-earner's income is 100 in 2007, 98 in 2008, 96 in 2009, 94 in 2010, 92 in 2011, and so on. If the government spends the equivalent of 10 units on a bailout, and gives the wage-earner 3 units of it back as a stimulus check in 2009, the 3 units added to the 96 units will bring the wage-earner almost back up to where he was in 2007, (since 96 +3 = 99). The difficulty comes in paying back the 10 (or 11 or 12 or 13) units, because these will need to be subtracted from the wage-earner's lower future income, putting him in progressively worse financial shape. Also, the possibility of "rolling the debt forward" is likely to go away, since those buying government bonds will figure out that in 2020, when the typical wage-earner's income is down to 74, the chance of the wage-earner using part of that income to repay the debt from 2009 is pretty poor.

Because of these issues, the amount of debt a declining economy can support is much lower than the amount a rising economy can support. It seems to me that if there is no interest to pay, time shifting works well in a flat economy (as in 5,000 year ago). If there is interest to pay, time-shifting works as long as the growth rate is equal to the "real" interest rate. If there is a long-term decline in the economy, (something never really experienced in the past), time shifting generally doesn't work well.

If an investment truly generates a return rather than simply time-shifts (a factory rather than a mortgage), it may be possible to use debt in a period of economic decline, but interest rates will need to be much higher (quite possibly 15%+) because of a much higher risk of default. Such high interest rates are likely to make most potential investments no longer profitable. As a result, I would expect that the total amount of debt in a declining economy would be much less than today--probably less than 10% of the current total debt load.

3. Where we are now, and the role reduced resources (including peak oil) are likely to play as we go forward.

Figure 2. Household debt outstanding and employee compensation since 2000. Household debt from economagic.com. Employee compensation from US Bureau of Economic Analysis. Adjustment to 2000 $ made using US GNP deflator.

This graph gives an indication as to the problem. Employee compensation has been fairly flat since 2000. The situation for many employees is likely quite a bit worse than what the graph would suggest when one considers that (1) the wages I show in 2000 $ are adjusted using the US GNP deflator, and the actual inflation rate is likely higher, so the trend in wages in 2000 $ is likely lower than that shown; (2) the increase shown includes population growth of about 1% per year rather than being on a per capita basis; and (3) pay changes have not been the same for all employees. In general, higher paid employees have tended to fare better than the rank and file (rising Gini Coefficient). Now that major layoffs are starting, the situation is worse than shown on the graph. Taxation policies have tended to reinforce the trend toward lower spendable income for the middle and lower classes, with most tax cuts since 2000 favoring the wealthy.

The reason the economy appeared to do quite well between 2000 and 2007 was the increase in household debt. With greater debt, families were able to buy more from business, keeping businesses profits high. Prices of houses also rose. The higher home prices allowed people to remove more equity from their houses, and use this equity to spend even more. In addition, the stock market was rising in 2002 to 2007, also contributing to the feeling of wealth.

The amount of additional spendable income available from (1) the increasing debt and (2) the money people could take out from the equity on their homes was truly phenomenal. Figure 2 indicates additional debt amounted to about $1 trillion a year. Also, as the value of homes inflated, people were able to refinance loans and use the additional cash to for buying other goods. The amount of home inflation was of the order of magnitude of $1 trillion a year, and this was available to homeowners to extract, theoretically making a total of up to $2 trillion a year. Funds available in these two ways (higher debt and equity extraction) were generally not subject to income tax, so the impact was even greater than if they had been added to wages. Employee compensation during this period was only $6 to $8 trillion a year, so the impact was very large.

Figure 2 shows that there was a sharp change, starting in late 2007. The total amount of household debt flattened, cutting out the less credit-worthy from buying more goods. Other factors not shown on the graph also had an effect. The prices of food and energy products rose, putting a strain on the finances of families, and causing debt defaults. In addition, homeowners were forced to stop padding their spending by taking more equity out from the value of their homes, because by then the value of their homes was falling, rather than rising. All of these factors provided a sharp contrast to the very favorable dynamic that existed when household debt was rising rapidly.

I expect that Greenspan and other financial leaders engineered much of the debt-driven growth in the 2000 to 2007 period when they realized that underlying growth rate was very low. Now we are hitting the "no free lunch" time. The attempt to pump up growth in the 2000 to 2007 period using additional debt could only produce a temporary fix, and that fix is falling apart. The fact that wages weren't really growing much in "real" terms suggests that there was an underlying problem that more and more debt could only temporarily disguise, but could not really fix.

A big piece of the problem is that energy consumption in the US has not been growing very rapidly since 2000, and we know from the work of Robert Ayres and Benjamin Warr that there is a close tie between energy use, increase in energy efficiency, and economic growth.

Figure 3. US Energy Consumption in BTUs, based on EIA data. Other (barely visible) includes geothermal, wind, and solar. Biomass includes wood and ethanol.

Between 1985 and 2000, US energy consumption (all fuels combined) grew by an average of 1.7% per year; between 2000 and 2007, US energy consumption grew by an average of 0.4% per year. On a per capita basis, energy consumption was actually declining between 2000 and 2007. Energy consumption through September 2008 is down about 2% from 2007 (about 3% on a per capita basis).

Another part of the problem is that a larger and larger share of US energy consumption has been coming from imports (Figure 4), and the US has been becoming less and less able to pay for these imports, as evidenced by its ballooning balance of payment deficit. If the US had been able to import energy, use the energy to produce products that were worth a great deal more, and export those products, the US would not have had this problem.

Figure 4. US Energy of all types, split between US produced and imported. Nuclear is treated as US produced, even though the fuel is mostly imported. Based on EIA data.

It appears to me that the US is rapidly reaching "peak energy", whether or not the world is reaching peak energy. What drives this peak is the economics of the situation--we are not producing enough goods and services with the fuels that we are importing to justify their continued importation. Also, even US produced natural gas from unconventional sources is becoming too expensive for the economy to afford. We have been in a type of overshoot in terms of buying more energy products than we really had funds for. The spike in prices for oil this summer helped force the issue. With the higher prices of oil and food, some people at the margin could no longer pay their mortgages, and the situation began to unwind.

Now with the lower prices of energy products, world oil production is starting to drop back. Demand is dropping off, because consumers are not able to borrow as much, and thus cannot buy as many goods and services requiring oil to produce. It is likely that US oil use will drop in years ahead, because of these factors. US natural gas production will also decline, because most of the new sources of natural gas are high priced sources (low Energy Return on Energy Invested sources), and consumers cannot afford the high cost of energy from these sources.

When the US faced a situation with declining energy availability in the 1970s, it was able to make changes to improve energy efficiency and to shift production of heavy goods offshore, and thus mitigate the impact of the decline in energy on economic growth. It seems unlikely that we will be able to do as much this time around. For one thing, the easy solutions have already been implemented. For another, US energy efficiency gains have only been about 2% per year in recent years. It will take capital (which is difficult to obtain now) to even maintain this kind of efficiency growth. Also, oil and gas are becoming more and more difficult to produce, meaning that a greater share of the oil and gas that is produced will need to be used in production of these fuels, leaving less for other uses.

The US economy has barely been growing between 2000 and 2008, apart from debt-induced growth; it has not been growing enough to produce much gain in the compensation of employees. If energy consumption declines from the level it is at today, it is likely that real growth will be even lower than it is today. Based of the discussion in (2) regarding how essential growth is for the repayment of debt, this suggests that it will be extremely difficult to pay back all of the debt that is currently outstanding. The existence of the close inter-relationship between all of the types of debt shown in Figure 1 suggests that there may be defaults on many of these types of debt simultaneously, and the same factors that caused debt defaults may affect other classes of assets as well.

4. My forecast for 2009.

It looks to me as though that we are due for a debt unwind, and with it a rapid decline in the US standard of living. Exactly what form it will take, and what the timing will be (for example, sudden one month from now or sudden three years from now, or gradual over a longer period), isn't certain. I would expect that many (or most) other economies in the world will be dragged along in this debt unwind and will experience a decline in their standards of living.

As I note in the Section 1 discussing why so many asset classes are correlated in time of stress, the tower of debt (Figure 1) has many feedback loops, and tends to magnify the economy's reaction to events, both favorable and unfavorable. When consumer debt is rising it tends to make the economy look very, very good. When there are layoffs, the interrelationships tend to magnify the impact, making the economic impact much worse. One wonders whether there are tipping points, beyond which it is not really possible for the system to recover--particularly now that the US seems to be at the point of "peak energy" (Section 3), energy is required for growth (Section 3), and growth is required to allow debt to continue (Section 2).

The tower of debt is in some ways deceptive. It can make the economy look mostly OK to the casual observer, until all too quickly, things start to fall apart.

So far, the "fixes" that the US government has been attempting seem mostly counterproductive. Putting government guarantees behind more and more debt (thus stacking Figure 1 higher and higher, with a new TARP layer) just increases the likelihood that the US government will be drawn into the downward spiral. The financial services layer will be less and less needed in years ahead, as our need for debt-based products declines. Bailing it out does not help get additional income to ordinary workers (although it may temporarily protect them from losing their bank account balances).

I expect that essentially all aspects of finances will be affected by the unwind of debt. A huge amount of debt will be defaulted on (or will be forgiven, so that an actual default does not need to occur). Regardless of whether the non-payment occurs because of default or forgiveness, the effect on financial institutions will be the same. Financial institutions such as banks, insurance companies, pension funds, and many hedge funds will find themselves in poor financial condition, because they were depending on the proceeds of this debt repayment to fund what they have promised--bank account balances; insurance policies; pension payments; or hedge fund returns. Institutions guaranteeing debt, such as monoline bond insurers will be particularly hard hit. The FDIC will likely be called on to rescue many failed banks, and will need to find funds from some source (printed money?) to do this.

As the year goes on, I expect each evaluation of where we are to be worse. Banks will report operating losses each quarter. Fannie and Freddie will need more funds than originally thought. TARP will need more funds than original planned. More and more businesses will enter bankruptcy, and more and more governments (states, cities, counties, and countries around the world) will find themselves unable to meet their obligations. There are a huge number of inter-relationships, and the bankruptcies and losses in one area will tend to cause more bankruptcies and losses in other areas, and act to destabilize the debt tower.

Debt of all forms will be very difficult to obtain, except through government sources. The interest rate the US government is currently paying is very low, mainly because of a "flight to quality". If the US government keeps issuing more and more debt, it seems likely that at some point this will change, because buyers will figure out that even if the US is the best of a bad lot, its risk of failure is significantly greater than 0%.

I do not expect a steep rise in the price of oil and natural gas in the next year, because the decline in demand is likely to outpace the decline in production in the short-term. If we look back at Figure 2, I expect that funds available to ordinary citizens will continue to decline in 2009, even considering any stimulus plan. This will happen because employee compensation will decline due to layoffs. Household debt outstanding will also decline (rather than just stay flat, as it has in the past year), because of the poor financial condition of lending institutions, and because with the poor economy, the risk of borrower default will be quite high, discouraging lending. A $300 billion stimulus program will be tiny in comparison to the boost the economy got in the past from increasing debt and greater refinancing (up to $2 trillion per year), as the prices of homes increased. With lower incomes, lower (actually net negative) cash flow from borrowing, and only a modest boost from a stimulus program, citizens will have less and less to spend on goods and services.

I think there is a distinct possibility that this could all end very badly. One possibility is that there will be more and more defaults, and the US government will not be able to prop up all of the institutions and will eventually default on its debt. While this seems to be the direction things are headed at the current time, the much more usual outcome is hyperinflation, caused by printing more and more money, wiping out the value of people's savings and pensions. Situations such as these are often accompanied by a new government (including a new constitution), and may even include different country boundaries (for example, Soviet Union after its fall).

Many people have started making preparation for the time when food needs to be produced locally and electricity is often not available. I would not discourage such preparations. While we do not know that the economy will collapse completely, I think such preparations are prudent, in the face of rising risk. Preparation for a major change takes many years, so starting earlier rather than later makes sense. Also, with the tower of debt (Figure 1) and the many feedback loops, the downward spiral can happen more quickly than our prior experience suggests is possible.

To solve our current financial problems, I expect that the United States (and other countries) will ultimately need a new financial system that is much less debt based. Such a system might start simply as ration coupons for food and energy products, and gradually be expanded to replace our current monetary system. Debt forgiveness and derivative write downs will also probably need to be part of the solution, but with the caveat that debt forgiveness and derivative write downs can be expected to have just as adverse an effect on the balance sheets of financial institutions as outright defaults. In conclusion, 2009 looks like to be a very challenging year for the new administration and for the world as a whole.

Last year's forecast: Peak Oil and the Financial Markets: A Forecast for 2008

http://feedproxy.google.com/~r/theoildrum/~3/4bps0y0BJw4/4940

Nate's interview on the Reality Report from December 29 is now available from Global Public Media. I think it is very good. According to the write-up:

In this edition of The Reality Report host Jason Bradford interviews Nate Hagens. In a show broadcast over a year ago Nate described the financial deleveraging process and how this could lead to commodity deflation, including "$50 oil."

Topics in this program highlight how the current financial melt down and impact the timing and severity of peak oil and natural gas--including the dreaded "natural gas cliff" as rigs go idle due to low prices. We discuss whether this means economic growth now over, and if so, how should societies adjust?

This is a link to the site where you can download or stream the talk. It is about 50 minutes long. (Per Jason: If you could ask TOD readers for help with GPM transcription services that would be handy. If interested/able they can contact laurel@postcarbon.org)

http://feedproxy.google.com/~r/theoildrum/~3/fvoXEAZDfik/4943

Shell seeks Colo. water for oil shale production

Shell Oil has filed for the first major water right on the Yampa River in northwest Colorado for its oil shale development plans.

Shell applied Dec. 30 in state Water Court to use about 8 percent of the Yampa's peak spring flow.

Shell spokesman Tracy Boyd says the water would be shipped to a reservoir for later use in oil shale production.

Critics say extracting oil from shale will use too much of the West's scarce water. Some estimates say it could take up to three barrels of water to produce a single barrel of oil.

Oil tumbles more than $4

NEW YORK (CNNMoney.com) -- Oil shed more than $4 a barrel Wednesday after a government report showed much larger than expected increases in crude and gasoline stockpiles, a sign that demand has fallen significantly.

Crude for February delivery fell $4.72 to $43.86 a barrel in electronic trading.

The government said crude stockpiles rose by 6.7 million barrels for the week ended Jan. 2.

Experts had expected a rise of 1.5 million barrels, according to according to a poll by research firm Platts.

Mexico to Freeze Gasoline Prices, Boost Jobs Spending

(Bloomberg) -- Mexico will freeze the price of gasoline for the rest of 2009, cut electricity rates for some industries and expand unemployment benefits as part of a financial stimulus to help the nation weather an economic slump.

The government and industries will increase spending on infrastructure such as roads, airports and sea ports to 570 billion pesos ($42.4 billion) this year, President Felipe Calderon said today in Mexico City. The price of heating gas will be cut by 10 percent and frozen for the rest of the year.

Petrobras Cuts Bolivia Gas Imports as Rains Fill Dams

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, cut its purchases of Bolivian natural gas after Brazil’s power-grid operator banned thermal- power generation in the southeast of the country.

Petrobras, as the company is known, is maintaining imports at levels that allow it to avoid paying for more gas than it needs under its contract with Bolivia, the Rio de Janeiro-based company’s press office said today in an e-mailed response to questions.

Russia learns lessons in PR war over gas supplies

KIEV (Reuters) - Russia has shown in its gas price row with Ukraine that it has learnt some lessons in how to handle the media since being widely portrayed as the aggressor during a similar dispute in 2006.

Energy regulator resigns

WASHINGTON (AP) -- Joseph Kelliher, the Republican chairman of the Federal Energy Regulatory Commission, announced Wednesday that he will resign his position effective Jan. 20, coinciding with the end of the Bush administration.

Kelliher's departure had been expected as President-elect Barack Obama is all but certain to select a Democrat to head the agency that oversees power grid reliability and wholesale natural gas markets.

Aptera pushes back retail deliveries to October 2009, looks for cash

As expectant Aptera buyers are obviously aware, the company failed to meet its self-imposed end of 2008 deadline to start delivering vehicles. In fact it wasn't even close. The company does expect to have a "production-intent" vehicle completed by the end of next week but that one isn't leaving the company. In a letter sent to customers this week, management acknowledged that they waited until far too late in the program to actually give consideration to many of the things paying customers might want in a vehicle; the ability to grab some food from a drive-through window, for example.

Who needs a hybrid?

Green is for sale. But who’s buying? Seriously, who needs a hybrid? Without question, fuel-saving technology is essential both for automakers who hope to compete in the next decade and for a nation stricken by energy problems. But if you dig through the sales numbers over the past few months, it’s easy to see that more consumers are asking whether the extra cost of a hybrid-electric car is really worth it.

Analysts expect Opec not to abandon expansion

Driven by a long-term strategy, Opec members will not abandon their expansion plans for the year and 2010 despite the prevailing low oil prices and a production cut, energy economists say.

As of now, work has commenced on about 100 capacity expansion projects in Opec countries with an estimated cost of $120 billion (Dh440bn).

These upstream projects are in addition to all energy infrastructure projects and downstream expansions.

OPEC Cuts Biting Into Oil Cos' Output Growth Areas

Oil majors that derive a large part of their income from production in member states of the Organization of the Petroleum Exporting Countries are finding the cartel's production cuts are hampering growth prospects in some of their most promising geographical areas.

As a result, both short- and long-term profit prospects will be hit, which could, in turn, hurt share prices.

So far, large oil companies have felt little pain from the global recession. But this may be about to change.

Bulgaria's capital city on energy saving scheme

Following the halted supplies of Russian natural gas to Bulgaria on January 5 2009, Sofia mayor Boiko Borissov introduced a plan that aims to reduce energy consumption troughout the city.

The first to go were the lighting of public buildings, Borissov told reporters on January 5 2009. Some of the street lights and the lights of the city's Christmas decoration were also turned off, as well as the heating in the city's public transport.

Don't act surprised

The West has sleep-walked once again into a Russia-Ukraine gas crisis, with another cutoff of natural gas supply in the middle of winter.

Europeans and Americans alike called the gas war of January 2006 a wake-up call, a needed warning to increase the security of gas supply on the Continent. But three years later, the causes of the chronic gas war remain firmly in place - an utter lack of coherent energy policy in Ukraine, malicious decision-making in Russia, and passive acquiescence by Western countries.

Central Asia's Era Of Cheap Gas Comes To A Close

Starting on January 1, Uzbekistan increased the gas price it charges neighboring Kyrgyzstan and Tajikistan for natural gas to $240 per 1,000 cubic meters, saying last year's price of $145 was far below real market prices.

The two impoverished Central Asian countries protested that the increase was excessive and unaffordable for their domestic customers. Sulosyn Toktosunova, a Bishkek-based expert, tells RFE/RL's Kyrgyz Service that many Kyrgyz households will no longer be able to afford their gas bills.

"The new gas price will have a very bad impact on people's living standards," Toktosunova said. "Possibly, we are going to have a serious crisis in this regard in 2009. Last year, many people were not able to pay their gas bills even with earlier, cheaper prices. They were in debt. How will they cope with new tariffs?"

Production at StatoilHydro's Yttergryta Gets Head Start

The Yttergryta subsea field has started gas production for the Asgard field in the Norwegian Sea, only eight months after the plan for development and operation (PDO) was approved.

The field has been developed from find to production in around 18 months and the first part of the subsea production facility was already in place before exploration drilling was started.

Oil prices: Wild 2008 ends with mild contango

Spot prices finish the end very low, but what about the long end of the curve, where market practitioners reflect their medium term expectation of the oil buy / sell balance?

Some would say the curve is in deep contango (i.e. future prices are higher than the spot), reflecting a strong expectation that prices will resume their upward movement as soon as the crisis is less severe.

But a close look at the forward curve suggests the contango is not that steep, and the implicit inflation calculated from the curve is much lower than what could be expected in a peak oil scenario.

Chesapeake Energy Defies Skeptics

Chesapeake spent much of the past five months doing deals that few thought possible. Some highlights: two deals with BP PLC (BP) for a combined $3.6 billion; a new $460 million bank line announced during the worst of the credit crunch; and a $3.4 billion asset sale to Norwegian oil giant StatoilHydro (STO). Total value of deals this year: roughly $12 billion.

"There are still skeptics out there, and we keep proving them wrong," Chesapeake spokesman Jeff Mobley said Monday.

Mexico: Fishing industry is sputtering

More than 95 percent of Mexico’s fishing fleet has been idled this week because the high cost of diesel to run the boats is eroding profits, an industry group said.

The nation’s fishing industry eventually will come to a complete halt as boat owners pressure the government to increase the subsidy for diesel, said Rafael Ruiz Moreno, president of the National Fishing Chamber of Commerce.

Smart Money Moves Back into Energy, But Carefully

A pair of deals by Oklahoma billionaire George B. Kaiser, widely considered one of the country's savviest energy investors, could be an early sign that after a massive selloff, the smart money is getting back into the oil industry.

But the cautious nature of the investments suggests that while a bottom may be near, the recovery won't be quick.

T. Boone Pickens likes odds for his energy plan

Every president since Richard Nixon has pledged to move the country toward energy independence, and they’ve all failed, oilman and investor T. Boone Pickens told a crowd at Rice University on Tuesday.

“But we have a better chance now with President-elect Obama than we would have with McCain,” the longtime Republican fundraiser said, because it appears Obama is serious about understanding the issues and is developing specific plans.

Why Obama's green jobs plan might work

Some states -- including Michigan -- already see renewable energy as their future: It's the only sector that appears to be making room for more employees despite the recession.

Saving a squirrel by eating one

Though squirrel has appeared occasionally in British cookery, history doesn't deem it a dining favorite. Even during World War II and the period of austerity that followed, the Ministry of Food valiantly promoted the joys of squirrel soup and pie. British carnivores replied, "No, thank you."

These days, however, in farmers' markets, butcher shops, village pubs and elegant restaurants, squirrel is selling as fast as gamekeepers and hunters can bring it in.

The beauty of the backyard turbine

Looking for a way to help the environment, PEI potato farmer Randy Visser hit upon an idea. His farming operation uses large amounts of electricity to cool, wash and sort potatoes, so he decided one way to help the planet would be to generate some of his own power.

That's why he's installing a wind turbine, with a top capacity of 50 kilowatts, or enough to meet the needs of about 16 homes when it's running full-tilt. It will allow him to cut his electricity purchases by a third to a half, depending on the strength of the gusts, using a non-polluting power source.

Oil prices to top $100 barrel by end of 2010: Pickens

HOUSTON (Reuters) - Texas billionaire T. Boone Pickens said on Tuesday that oil prices will rise above $100 a barrel by the end of 2010 as the global economy recovers.

Oil prices in the $40 a barrel range are "not going to be around much longer," Pickens told a gathering at the James A. Baker III Institute for Public Policy at Rice University in Houston.

...While the cost to transform the nation's transportation and electric infrastructure is enormous, Pickens said reducing the annual tab for imported oil "can pay for anything you are doing."

Government leadership is imperative, Pickens said. "Waiting for the free market can be disastrous," Pickens told reporters.

Lack of financing has slowed Pickens' ambitious plan to build the world's largest wind farm of 4,000 megawatts in the Texas Panhandle.

Russia orders Gazprom to stop Ukraine gas flow

MOSCOW (Reuters) - Russian Prime Minister Vladimir Putin ordered gas export monopoly Gazprom to halt gas supplies via Ukraine on Wednesday, Russian news agencies reported.

In a meeting with Putin, Gazprom chief executive Alexei Miller proposed halting deliveries of gas to the Russian-Ukraine border because Kiev was siphoning off the fuel, Interfax news agency reported.

Russia stops all gas supply to Europe via Ukraine

KIEV, Ukraine – Russia shut off all gas supplies to Europe through Ukraine on Wednesday — leaving tens of thousands of people in more than a dozen countries without heat during a winter cold snap. The EU accused both nations of holding consumers hostage in their contract dispute.

The effects of the gas cutoff reverberated across the continent, where some countries have substantial reserves and others do not.

Ukraine has stolen 86 mln cu m of gas in 2009 - Gazprom

MOSCOW (RIA Novosti) - Ukraine has stolen more than 86 million cubic meters of gas from Gazprom since the start of the year, the Russian energy giant said on Wednesday, adding that it had not shut off supplies to Europe via Ukraine.

"In the last 24 hours, Ukraine has illegally taken another 21 million cubic meters of Russian gas intended for delivery to Europe. As a result, since the beginning of year, just from Gazprom Ukraine has stolen more than 86 million cubic meters of gas," the company said in a statement.

What is Russia's end-game in gas row?

What was Putin seeking to achieve by reacting in this way? There is so far no consensus among diplomats and analysts about what Russia's end-game is. The following are the main theories:

Oil traders seek tankers to keep crude stored

Oil traders are seeking as many as 10 supertankers to store crude, potentially taking the amount hoarded at sea to almost five days of European Union demand, according to Frontline Ltd., the largest owner of the vessels.

About 25 of the carriers, each able to hold about 2 million barrels of crude, were already hired for storage. There are enquiries for 5 to 10 more, Jens Martin Jensen, Singapore-based interim chief executive officer of the company’s management unit, said by phone today. Traders are storing crude to take advantage of higher prices for supply in the future.

Don't get used to cheap oil, analysts say

HOUSTON – All that money you're saving these days at the gas pump? You might want to put it in the bank.

The same cheap oil that's providing relief to drivers and businesses in an awful economy is setting the stage for another price spike, perhaps as soon as next year, that will bring back painful memories of last summer's $4-a-gallon gas.

The oil industry is scaling back on exploration and production because some projects don't make economic sense when energy prices are low. And crude is already harder to find because more nations that own oil companies are blocking outside access to their oil fields.

Energy forward curves are tricky for Bloomberg

Forward curves in energy often lead to confusion. It’s very tempting to see them as a forecast of price, however, as FT Alphaville and Reuters columnist John Kemp (former Sempra analyst) have argued frequently — it’s not as easy as that.

OPEC makes virtually all of pledged supply cut: survey

LONDON (Reuters) - OPEC oil supply fell in December for a fourth consecutive month as members implemented a deal to cut output and prop up oil prices, a Reuters survey showed on Tuesday.

Abu Dhabi Releases Prices of Crude Oil for Loading in December

(Bloomberg) -- Abu Dhabi National Oil Co. released official selling prices for crude oil loaded in December, the state-owned company said in a statement faxed to buyers.

The table below gives the official selling prices, together with the change in dollars a barrel, free-on-board at the loading port. Free on board means the buyer will pay for any shipping costs to the destination, and there is no charge to the buyer for delivery to the vessel at the loading port.

Iran Cuts February Oil Supplies to Two Asian Refiners

(Bloomberg) -- Iran, OPEC’s second-largest producer, will reduce shipments of crude oil for February to two refiners in Asia as part its commitment to the group’s output cuts, said officials from the companies.

National Iranian Oil Co., the country’s state-owned producer, will lower supplies sold under long-term contracts by 14 percent, said the two officials at refineries in Taiwan and Singapore, who asked not to be identified because of company policies.

Strike hits some Indian refineries, natgas supply

NEW DELHI (Reuters) – Officials at India's state-run oil firms began an indefinite strike on Wednesday, demanding higher wages, hitting operations at four refineries and cutting natural gas supply, company and union officials said.

Gunmen raid ExxonMobil oil platform off Nigeria

CALABAR, Nigeria (Reuters) - Armed men attacked an oil platform belonging to U.S. energy giant ExxonMobil (XOM.N) off Nigeria early on Wednesday, the latest sign that criminal gangs are extending their reach in Africa's top oil industry.

Gunmen in a flat-bottomed vessel raided the facility, which lies some two hours by boat off the coast of the southern Nigerian state of Akwa Ibom, shortly after midnight. They also attacked a nearby barge and an oil services vessel.

"They shot into the air and water and ordered everyone on the platform into one room and threatened to kill us," a witness told Reuters, adding the raid had lasted two hours.

Saudi's crown jewel has more oil

Nearly 57 years after it was brought on stream, the field is still pumping more than half of Saudi Arabia's total crude output and believing that it has an even bigger potential, authorities are planning to embark on a new development scheme that could offset produced oil and maximise its reserves.

Rebuffing persistent claims by experts in the West and other countries, Saudi Aramco says the field is not ageing and its reserves could be even larger.

"Since its discovery, the enormous Ghawar has kept oil experts on their toes. In mid-2007, the Ghawar Integrated Assessment and New Technology (Giant) team, an interdepartmental group working on a long-term visionary endeavour to better understand and characterise the oilfield, came across an interesting finding while looking at ways to maximise the reservoir's oil recovery percentage," Saudi Aramco said in its quarterly bulletin, Dimensions.

Kuwait's secretive companies add to crisis woes

KUWAIT (Reuters) - Kuwait's weak financial regulation is compounding the effects of the global credit crisis, unsettling investors there and threatening the government's attempts to diversify its oil-driven economy.

A series of bombshell announcements from companies including Kuwait's biggest investment bank, Global Investment House, that they are struggling to cope with the financial storm have highlighted the Gulf state's lax rules on company disclosure.

Apache seeks to revive Australian natural gas project

Apache Corp. and Santos Ltd. are seeking to revive a $651 million natural gas project in Australia after signing an accord to sell the fuel to an iron ore venture proposed by Citic Pacific Ltd.

The restart of work to develop the Reindeer project depends on signing construction contracts by mid-March, Houston-based Apache said in a statement. Contracts with Clough Ltd., an engineering company, were scrapped last month after the project was halted because of a failure to complete the agreement with Citic Pacific.

Energy growth is a dead end

The utopian worldview that says the planet can sustain indefinite growth in energy production is grossly out of touch with the physical realities of the planet. There are very real limits to the supply of non-renewable fuels - fossil-based or uranium. At some point, perhaps not too distant, affordable supplies of non-renewable fuels will be gone. The concept of 'peak oil' has been common parlance in energy circles for years.

Obama's Oil Reality Check

For Barack Obama, sensibly and scientifically curing the nation’s energy crisis at breakneck speed will be better than a bucket of bailouts and several military invasions combined.

The new president could fight Iran and terrorism by reducing the estimated $1 trillion the U.S. economy spends each year on foreign oil from OPEC regimes. Jobs upon jobs would be created if his administration creates a new fuel infrastructure, alternative propulsion supply line, and upgraded public transit. What’s more, by subtracting America’s dependence on Mideast oil, Obama can influence whole spheres of foreign policy. Imagine a Middle East devoid of the petropolitical pressure point.

Anglesey "nuclear nightmare" warning

An announcement that energy giant RWE npower has secured grid connection and land for a new nuclear power station at Wylfa, Anglesey, has been greeted as a nuclear nightmare and a target for terrorists.

Capacity of China's small rural hydropower plants exceeds 50 mln kw

China said Wednesday that small hydropower stations, defined as those with an installed capacity of less than 50,000 kilowatts, numbered nearly 50,000 at the end of 2008.

That number represented one third of the country's installed hydropower capacity, according to Tian Zhongxing, head of the rural hydropower development department under the Ministry of Water Resources. Tian made the comment during the national water resources work conference held here in the capital of southern China's Guangxi Zhuang Autonomous Region.

EU biofuels growth seen slowed by financial crisis

OXFORD, England (Reuters) - The sharp drop in crude oil prices and the global financial crisis is set to disrupt the development of biofuels in the European Union, a top European Commission official said on Tuesday.

"The path will be a bit chaotic. I don't see a taking off in biofuels in 2009, 2010 but probably later because we know that oil prices will (eventually) increase again," Jean Luc Demarty, the European Commission's Director-General, Agricultural and Rural Development Department, told reporters.

California's snowpack levels breed new water worries

LOS ANGELES — Skiers are enjoying the early winter snows on California's mountains, but down closer to sea level are big worries that the snowfall and its spring runoff won't be enough to relieve two years of drought.

Unless the next few months prove to be wet ones, tougher conservation steps and even water rationing from cities to farms could be ahead for the nation's most populous state.

The impact could be felt across the country in higher food prices, officials warn, if water shortages reduce production in the 400-mile-long Central Valley where much of the nation's fruit is grown in irrigated fields.

NY adopts clean air rules, stricter than EPA's

ALBANY, N.Y. – New York environmental regulators adopted stricter air pollution rules on Tuesday to prevent power plants and factories from belching out more smog and soot.

Under rules adopted by the New York State Environmental Board, new industrial plants — as well as existing ones that modify operations in ways that increase emissions — will have to install state-of-the-art pollution controls. The rules take effect in March.

Japan to monitor greenhouse gases from space

TOKYO (Reuters) - Japan's space agency will launch a satellite later this month to monitor greenhouse gases around the world, officials said Wednesday, hoping the data it collects helps global efforts to combat climate change.

The Greenhouse Gases Observing Satellite (GOSAT), to be launched on January 21, will enable scientists to calculate the density of carbon dioxide and methane from 56,000 locations on the Earth's surface, the Japan Aerospace Exploration Agency (JAXA) said.

http://feedproxy.google.com/~r/theoildrum/~3/-kkbvhLCTVg/4911

The following guest post was written by Tom Standing, a member of ASPO-USA and a "semi-retired, part-time civil engineer for the City of San Francisco." Here Tom takes on the calculations for a 280 MW solar thermal plant in Arizona that I looked at back in February. My conclusion from that essay was that the electrical capacity of the U.S. could in theory be met on 10,000 square miles of land (with the normal caveats about storage, costs, etc.) Tom peels the onion a few more layers and puts the energy production into perspective.

Hello Robert,

You and I met at the Sacramento Peak Oil conference. Your presentations and discussions were most enlightening. I was heartened by your analysis of cellulosic ethanol. I have always been deeply skeptical of the notion that the U.S. might displace a meaningful portion of transportation fuel with biofuels from cellulose. I could give you some of my thoughts on this subject, but you have already covered the territory thoroughly.

I want to comment on your calculations you posted in TOD in February, regarding the proposed 280 MW solar thermal plant in Arizona. First, a bit about my background. I started my career as a chemical engineer, first in refinery operations, and then chemical processing design. But that was only about 4 years. Most of my career has been as a registered civil engineer in a variety of disciplines for the City and County of San Francisco. Over the years, I have become interested in, maybe even fascinated by, the prospect of utility-scale generation of electricity from qualified renewable sources.

Throughout North America and Europe, many people have focused on renewable energy as a means of reducing dependence on Middle East oil and reducing CO₂ emissions. They see renewable energy as an important element to achieve emissions targets of the Kyoto Protocol. In the U.S., renewable energy from wind, solar, and biofuels appears to be a keystone for energy policy in the Obama Administration. In Texas, T. Boone Pickens is campaigning for a new American energy policy centered on major input from wind-generated energy to displace electricity generated from gas-fired power plants. Natural gas would then be redirected as CNG to power autos and trucks. In California, Governor Schwarzenegger sees his “Million Solar Roofs” program as leading other states to do likewise, thereby reducing CO₂ emissions. California utilities are mandated to supply 20% of electricity from qualified renewable sources (wind, solar, bio/waste, geothermal, and small hydro) by 2015. Contributions from these sources have been stuck in the range of 10-11% since 2000. The 20% mandate appears to be a major challenge, maybe unrealistic.

Many questions come to mind in looking at the proposed Arizona plant. What precisely does the 280 MW refer to? Is it the plant’s output at capacity? Is it an annual average output? How much electricity will it generate annually? How will output vary during the day, or by season? How will output be affected by clouds?

There is important data available and a few fundamental design features that will answer these questions. Costs for construction, however, are not my strong suit. Other analysts will have much better information on costs. Cost of the plant will not change the results of my analysis.

1. Insolation Data

Reliable data for site-specific solar radiation (insolation) is critical to estimating solar capabilities. Fortunately, a massive database for insolation is posted on the National Renewable Energy Laboratory (NREL) website. In 2000, an engineer who designed solar facilities directed me to the site; I was utterly amazed at what was there. I had to be extremely selective to get the most useful data. I settled on 30-year (1961-1990) average insolation for 239 U.S. cities: monthly and annual average insolation in kWh per square meter per day. Readings for all 239 stations are given for all possible orientations of solar collectors, either fixed or tracking systems. Amazingly, insolation data is also tabulated for averages of each hour during the 30 years for all 239 stations (kW/m²), enough data to make your head spin! Data is also tabulated for insolation of all collector orientations at 239 locations above Earth’s atmosphere! For reference, I eventually copied pages that filled a binder weighing 10 lbs.

2. Site Coverage with Solar Collectors

A rough approximation for coverage of the 1,900-acre site with solar collectors is 50%. Space is needed for maintenance and control centers, electrical converter units, towers for power lines, and maybe a backup power facility fired by gas or oil. Proposed facilities to store electricity for release at night will also consume land.

In 2001, I toured a solar thermal plant at Kramer Junction in California’s Mojave Desert.

http://www.solargenix.com/pdf/CSPDOEJUNE2003.pdf

At one square mile, it is about 1/3 the size of the Arizona plant. I would say that close to half of the site is taken up by gravel roads for maintenance vehicles. At least weekly, wash trucks at night clean the collectors of dust that frequently blows around. The roads also provide necessary space between rows of collectors to prevent shading. Collectors tilted upward to gather more sunlight cast shadows at low sun angles. If the designers in Arizona are really stingy with land use, they may be able to cover 50% of the site with collectors, including facilities for power storage.

As with Kramer Junction, the entire site will be dedicated to industrial use, fenced off and completely secure. Areas covered by collectors are denuded of vegetation, graded, and compacted. There is hardly space for a rodent or a bird to live. Collectors are supported by steel columns embedded in reinforced concrete foundations designed to resist maximum wind forces upon the considerable surfaces of the collectors. These are real-world features that solar advocates overlook when they envision hundreds of square miles devoted to solar power.

3. Calculate Collector Area

We calculate the area of solar collectors in square meters to utilize NREL insolation data.

The 1,900 acres converts to 7.7 million sq m. With 50% for collectors, 3.8 million sq m are on the site.

4. Model the Collection Array

The Arizona plant is to be a concentrating system that tracks the sun. Surprisingly, NREL data shows that concentrating systems collect less sunlight per sq m than systems consisting of flat plates, one-axis tracking, tilted at an angle = to latitude of site. Thus to be generous, I will calculate the output based on flat plates, 1-axis tracking, tilt = latitude.

For Phoenix, NREL data gives average annual insolation for our model as 8.6 kWh per sq m per day (i.e. all days averaged for 30 years). For Tucson, insolation under our model is 8.7, with slight differences for each month.

5. Calculate Insolation Striking the Collectors

Here we convert solar energy striking collectors during one day, to the average rate during the day. Thus, for Phoenix (the nearest station with NREL data to the plant):

The average annual rate of solar power striking collectors

= [8.6 kWh/ (m²-day)] [one day/24 h]

= 358 watts/m², say 360 watts/m²

Scaling up this power for the entire plant, average daily solar power striking all collectors

= (360 W/m²) (3.8 million m²)

= 1,370 megawatts

6. Assume 15% Conversion of Insolation to Useful Electricity

The solar thermal plant at Kramer Junction converts about 15% of insolation striking the collectors into electricity. Therefore, a decent assumption for the Arizona plant that would be consistent with our other assumptions is 15% conversion.

Average electrical power generated by the plant over the entire year

= (0.15) (1,370 MW)

= 205 MW

This power output is, of course, highly variable, depending on time of day, season, and cloud cover. To get an idea for seasonal changes, the NREL data tells us that plant output would average 257 MW for an average day in June, to 138 MW for an average day in December.

7. Maximum Electrical Power Output

What might be the maximum electrical power output of the plant? It would correspond to maximum insolation, which is roughly 1,000 watts/m². Fifteen percent conversion gives a plant output of 150 W/m², times 3.8 million m², so maximum electricity generation = 570 MW.

According to NREL data for the desert, maximum insolation duration is about two hours a day under cloudless skies from late spring through early summer. The duration of maximum shortens with increasing time away from June 21. In early spring and late summer, maximum insolation slips below 1,000 W/m².

Clouds have a widely variable effect, from a 10 or 15% reduction from thin cirrus clouds, to a 50-70% reduction from dense cumulus clouds (thunderheads). At Kramer Junction, operators adjust flows of the heat transfer fluid whenever a cloud drifts over the array. I seem to remember that operators engage small electric pumps to keep the fluid flowing in portions of the array that experience cooling. The Arizona array, with three times more area, will experience more frequent effects of cloud shadows.

8. Annual Energy Generated

One final simple calculation gives us the average annual electrical energy that the Arizona plant will generate. It is the product of four factors:

Insolation, average day (NREL data) = 8.6 kWh/ (m²-day)

15% conversion of insolation to electricity

Area of solar collectors = 3.8 million m²

365 days/year

Thus the 1,900-acre Arizona plant will generate roughly 1.8 billion kWh per year.

Let’s give this quantity some perspective. EIA statistics for renewable energy in 2007 show that wind-generated energy in Texas was 8.1 billion kWh. Thus it would take four and one-half plants the size of the Arizona plant to match Texas wind energy for 2007.

A more telling comparison is with the recent growth of electrical consumption in the U.S. EIA statistics show that the U.S. consumed 2,885 billion kWh of electricity in 1992; in 2002 consumption was 3,660 kWh. Average growth, then, was 77 billion kWh per year over the 10 years. Thus the electrical energy that would be generated by the Arizona plant would supply only 2.3% (1.8/77) of one year’s growth of U.S. electrical consumption. I do not have electrical consumption broken down by state, but I would guess that Arizona could build a solar plant of equal size every year, and they would barely cover their own growth in electrical consumption.

PV Potential

I have not touched on PV, but there is much to discuss. NREL data is so extensive that there is almost no limit to analyses that could be done. For now, I should only refer you to an article that I published in the Oil and Gas Journal, June 25, 2001 issue. I graphically displayed annual insolation curves for a wide range of locations. At a glance the reader can see how insolation varies with latitude, longitude, and collector orientations. I also ran through sample calculations to see how much energy can be generated. An important finding is that insolation for most of the eastern half of the U.S. stays within a narrow range: 4.6 to 5.2 kWh/ (m²-day), with fixed collectors facing south, tilted at latitude for maximal exposure.

The above calculations are purely rational, using insolation data and general assumptions in design. Actual practice shows that solar installations typically generate 10 to 15% less energy than what the calculations show.

http://feedproxy.google.com/~r/EcoGeek/~3/AuLR4DHW0nQ/

Well, it was bound to happen...another round of bad news, and suddenly I feel like I'm writing a series on the deflation of clean technology.

Today we received reports that Aptera (which was supposed to begin delivering vehicles before the end of 2008) won't be delivering vehicles until October 2009. Aptera is blaming the delay, basically, on their own short-sightedness. They weren't prepared to deliver the sorts of things car buyers might want...windows that roll down...for example.

Slightly more disturbing is the request for those who have submitted their $500 refundable deposit to convert that to a non-refundable deposit. This will (according to them) let them gauge true demand for the vehicle better. It will also let them spend that money, which is currently being held in escrow.

They also, of course, cited the economic climate for their lack of ability to meet their goals more quickly, but that seems somewhat secondary to me. Aptera will be producing a few units for internal testing between now and October, but won't be letting any of them into buyers hands.

To me, October still seems like an ambitious goal, and I hope that Aptera's ambitious goals won't come back to bite them (in the form of skeptical buyers asking for their deposits back.)

Full email from Aptera is available below.

Via AutoBlogGreen

http://feedproxy.google.com/~r/theoildrum/~3/8qE_i3_Jjy4/4951

Michael T. Klare - Oil 2009: Be Careful What You Wish For

Only yesterday, it seems, we were bemoaning the high price of oil. Under the headline "Oil's Rapid Rise Stirs Talk of $200 a Barrel This Year," the July 7 issue of the Wall Street Journal warned that prices that high would put "extreme strains on large sectors of the U.S. economy." Today, oil, at over $40 a barrel, costs less than one-third what it did in July, and some economists have predicted that it could fall as low as $25 a barrel in 2009.

Prices that low -- and their equivalents at the gas pump -- will no doubt be viewed as a godsend by many hard-hit American consumers, even if they ensure severe economic hardship in oil-producing countries like Nigeria, Russia, Iran, Kuwait, and Venezuela that depend on energy exports for a large share of their national income. Here, however, is a simple but crucial reality to keep in mind: No matter how much it costs, whether it's rising or falling, oil has a profound impact on the world we inhabit -- and this will be no less true in 2009 than in 2008.

Shell Stops Supplying Big West California Refinery With Oil

(Bloomberg) -- Royal Dutch Shell Plc, Europe’s largest oil company, stopped supplying crude oil to Big West of California LLC’s Bakersfield, California, refinery after the bankruptcy of Flying J Inc., Big West’s parent company.

“We stopped selling crude oil to them Dec. 23, a day after the bankruptcy,” Shell spokeswoman Alison Chassin said today in a telephone interview.

Shell normally supplied about 10,000 barrels of oil a day to the 68,000-barrel-a-day refinery, Chassin said.

Oil sands admits PR failure

CALGARY — Canada's oil sands industry admits it has “dropped the ball” in terms of informing the public about the environmental effects of its developments.

Dave Collyer, president of the Canadian Association of Petroleum Producers, says the industry has not engaged effectively with Canadians, as the group presents results of a months long public outreach campaign.

UK: Gas 'secure' but prices increase

Energy Minister Ed Miliband has said UK gas supplies are secure despite the continuing gas wrangle between Russia and Ukraine reducing supply to Europe.

But he told the BBC the longer the dispute lasted, the greater the risk that prices would continue to rise.

As the gas shortfall hits the rest of Europe, wholesale prices in the UK have risen by 26% in three days.

Richard Heinberg: The shape of the recovery

An article on the Bloomberg website today suggests that Asia will have a "V-shape" recovery from the current economic crisis, rebounding in 2010. This is opposed to a "U-shape" recovery, which would presumably take a little longer.

May I suggest another alphabetic possibility? What if the "recovery," not just in Asia, but globally, is shaped more like a big capital L?

No doubt the suggestion that we have reached fundamental limits to economic growth is as unpalatable today as was the initial forecast, issued back in 1972, that such limits would be met during this century. The famous Club of Rome report, which sold more copies than any other environmental book in history, was vilified almost immediately by pro-growth think tanks in Washington, which organized a highly successful PR takedown during the 1980s. Today, it is impossible to mention the phrase "limits to growth" in public without hearing a dismissive outburst from somewhere within earshot. Never mind the follow-up studies that have shown that the primitive computer-based analysis on which the original report was based was on the right track—which is to say that the freight train of industrial civilization is on the wrong track, and headed for history's biggest "splat."

Keen for a Revival, the Nuclear Industry Eyes the Stimulus Package

With President-elect Barack Obama signaling that energy issues should be at the core of any economic stimulus package, the resurgent U.S. nuclear industry—like so many others—is pushing to make sure it's well represented.

Industry representatives and lobbyists are asking lawmakers to use the economic stimulus package, estimated to be in the range of $700 billion to $800 billion, to help revive the country's long-dormant nuclear manufacturing sector, as well as to train workers for jobs within the industry, which is now precariously poised for an expansion. In recent years, more than two dozen applications for new reactors have been filed with federal regulators, after a 30-year drought in which no nuclear reactors were approved.

Recovery of US Economy Crucial to Increase Crude Oil Demand

"The recovery of the US economy is crucial for crude oil demand to increase as the US imports far more crude oil than China or India. Demand from these two countries alone is not enough to keep prices above US $100 per barrel as was earlier speculated when oil prices were at a peak of US $147 per barrel," Bettadapura said.

In terms of industry specifics, Bettadapura says that there will be cancellation of large oil & gas projects across the globe because of the decrease in crude oil prices. "However, the Southeast Asian region is not affected as most of the investments in oil & gas projects are government funded," he adds.

China Plans to Double Natural Gas Output by 2015, Eyes More Oil

China aims to more than double its annual natural gas output to 160 billion cubic meters by 2015.

The country also wants to increase its annual production of crude oil to 200 million tonnes by 2015, said chief planner Hu Cunzhi of the Ministry of Land and Resources at a press conference on Wednesday.

Gazprom Pledges to Restore Gas Supplies to Europe

Gazprom said Thursday it would restore supplies to Europe once international monitors were in place to check the flows in Ukraine. The announcement promises an end to the conflict which has cut off supplies to several European countries.

Ukraine sets conditions for Russian gas transit

BRUSSELS, Belgium — Ukraine's natural gas chief says he wants Russia to provide extra fuel to boost the flow of gas before his company can allow Russia to send the fuel back into a freezing European Union.

Steve LeVine - Ukraine and Russia: The Role of a Middleman

Russia has prickly relations with several of its neighbors, but all pale in comparison with its friction with Georgia and Ukraine. Last August, the former resulted in a full-fledged war, and pessimism about the security of the U.S.-backed oil and natural gas corridor connecting the Caspian Sea with the West. Now, the latter — Russia’s long antagonism with Ukraine — is provoking a similar recalibration of energy security, this time about natural gas supplies to Europe.

Analysis: Money at root of Russia's gas war

MOSCOW: Five months after Russia crushed the Georgian army in the foothills of the Caucasus, Moscow is once again embroiled in a conflict with a former Soviet neighbor — waging an economic war with Ukraine that has disrupted gas supplies across Europe.

This time, though, the Kremlin may be looking more for cash than political clout.

Pipe down

IT STARTED as an ordinary gas dispute between Russia and Ukraine, of the sort that has occurred every winter since January 2006, when Russia first cut off gas supplies to its neighbour. But it has since grown into the biggest energy emergency the European Union has seen in years.

WWF Turns Against Natural Gas Amid Russia-Ukraine Crisis

“So far, comparably clean natural gas has been broadly supported by WWF as a logical mid-term alternative to high-polluting coal in the power sector and oil in the heating sector,” the statement said. But “the Russian gas policy is highly risky as it fully undermines the public confidence in this low-carbon fossil fuel” and that made it “time to reconsider the role for natural gas as a bridging fuel to sustainable energy.”

WWF said it now wanted new laws in place mandating energy efficiency in buildings and far more promotion of renewable energy for the electricity sector.

Pertamina still in denial about fuel shortages

Jakarta - Despite a recent rare, strong public rebuke by President Susilo Bambang Yudhoyono, state oil and gas firm PT Pertamina remains defiant there was never a widespread scarcity of Premium gasoline and diesel.

Dominican Republic: Electricity theft must be punished, Bonetti says

SANTO DOMINGO.- Young Industrialists Association (Anje) president Ricardo Bonetti today said the must penalize law electricity theft, because the measure would significantly invigorate the sector.

Boxer Calls for Standards on Coal Ash After Tennessee Spill

(Bloomberg) -- U.S. Senator Barbara Boxer said she would press for regulations on coal ash, after 1 billion gallons of sludge were dumped from a Tennessee Valley Authority coal plant Dec. 22.

“It is critically important that protective standards for coal-ash waste be created,” Boxer, the chairman of the Environment and Public Works Committee, said at a hearing today.

Laurel bus, shuttle lines service cut

Laurel commuters relying on public transit to get to Baltimore or Washington, D.C., may have to get creative as the Maryland Transit Administration announced several reductions in its commuter bus and train services to begin Monday.

BMW Works to Clean Up Diesel's Rep

Convincing Americans that diesel isn't a dirty word won't be easy. While Europeans have embraced diesel cars, thanks to tax breaks and a cleaner emissions profile than in years past, Americans haven't yet warmed up to the idea. Never mind that overall car sales have been anemic.

"When people think of diesel, they think dirty, noisy and smelly. It's the complete opposite of anything that is associated with green," says David Matathia, planning director at GSD&M Idea City, the ad firm owned by Omnicom Group that crafted the campaign. It's an image that has been cemented into the psyche of Americans since the 1970s, when demand for diesel cars briefly surged because of the energy crisis.

Smart Seeds, Smart Crops

New drug- and drought-tolerant crops could mitigate the growing food crisis, according to Syngenta CEO Mike Mack.

As global crunch squeezes Gulf, debt defaults and ratings outlook downgrades mount

CAIRO, Egypt (AP) — Kuwait's biggest investment bank on Thursday said it had defaulted on the majority of its debt while Bahrain's two biggest commercial banks saw their ratings outlook downgraded, as the global financial meltdown pummeled an oil-rich Gulf Arab region that months ago was the focus of a much-hyped economic boom.

Further reflecting the troubles facing the region, Standard Chartered Bank on Thursday sharply revised down its outlook for economic growth in the region, citing the current global meltdown.

The announcement by Kuwait's Global Investment House marked a sharp blow for the firm, which had been meeting with creditors about restructuring what its managing director said in December was $3 billion in loans.

StatoilHydro shuts down Norway's Kristin gas field due problems with new lifeboat type

OSLO, Norway (AP) — Norwegian state-controlled oil company StatoilHydro ASA on Thursday temporarily shut down its Kristin natural gas field after tests revealed problems with a new type of lifeboat installed to help crew escape in emergencies.

The shutdown comes as parts of Europe struggle with energy supplies because all Russian gas deliveries through Ukraine were cut off this week due to a pricing dispute.

Cause of wind turbine damage unknown

LONDON (Reuters) - Green energy company Ecotricity is investigating what mangled a wind turbine in England over the weekend, a spokeswoman for the company said.

Press cited locals reporting a bright light at the time of the incident, in which one of the blades snapped off, and speculation that unidentified flying objects may have been responsible.

A $2 trillion bet on powering America: The stimulus plan might jump-start investments, which could drastically change how we use electricity

NEW YORK (CNNMoney.com) -- For years we've been hearing about the nation's crumbling and outdated electricity grid.

The 2003 blackout that plunged 50 million people into darkness was a wake-up call. Then this summer T. Boone Pickens, who's planning on investing billions in building wind farms, called for massive investments to revamp our nation's aging grid, so that it can handle wind power distribution.

More recently, Vice President-elect Joe Biden called for a similar investment, perhaps billions, to begin work on a new "smart" electric grid to replace the nation's old, fragmented and inefficient system, and it will likely be part of the stimulus bill expected from lawmakers in the next couple weeks.

Norway Sees Oil Production Falling 9.7% This Year

(Bloomberg) -- Oil production on the Norwegian continental shelf may fall 9.7 percent this year, declining for a ninth year, the country’s Petroleum Directorate said.

Crude output will fall to about 110.8 million standard cubic meters, or 1.9 million barrels a day, in 2009, from about 122.7 million standard cubic meters, or 2.11 million barrels a day, last year, the directorate said in a report. Production will drop to 94.4 million standard cubic meters in 2013.

Lower oil prices curtail Chávez's global, domestic influence

Caracas, Venezuela – High oil prices allowed Venezuelan President Hugo Chávez to spend freely to spread his Socialist gospel and challenge the US role as the dominant player in Latin America and the Caribbean.

The sharp drop in oil prices is imperiling those ambitions, analysts said Tuesday, a day after the Venezuelan government announced that it's suspending free heating oil to poor people in the US. Oil accounts for 93 percent of the government's export income and some 50 percent of its overall income.

Venezuela to keep sending free fuel to US poor

CARACAS, Venezuela – President Hugo Chavez will keep donating heating oil for poor American families in a costly decision that suggests the Venezuelan leader wants to keep to his pledges — and buttress his image — in spite of falling oil prices.

Strike hits India's fuel supply, delays flights

NEW DELHI (Reuters) – India's energy supply was squeezed further and flights delayed at the country's busiest airport as a strike by officials at state-run oil companies that dominate domestic fuel supply entered a second day.

Unions leaders representing firms such as refiner Indian Oil Corp (IOC) and explorer Oil and Natural Gas Corp said, no solution was in sight for the strike over higher wages that has cut natural gas supplies by a third and reduced output at refineries and oilfields.

Russia and Ukraine still deadlocked after gas talks

MOSCOW/BRUSSELS (Reuters) – Russia and Ukraine failed to resolve a gas row at a meeting in Moscow but will continue talks to end the dispute which has choked off supplies to Europe, a senior Ukrainian gas official said on Thursday.

"We are in negotiations," Ukraine's Naftogaz chief Oleh Dubyna told the European parliament after an overnight meeting with Alexei Miller, head of Russia's state-controlled gas monopoly Gazprom.

"I can see just purely economic gaps between Naftogaz and Gazprom."

Gazprom fully suspended supplies of transit gas toward Ukraine on Wednesday, saying there was no longer any point delivering the gas because Kiev had shut down the pipelines.

Italy Gas Reserve Levels Not Alarming, Scajola Says

(Bloomberg) -- Italy’s gas reserves are not at emergency levels and Russian supplies will resume before they are depleted, Industry Minister Claudio Scajola said today.

“It’s a delicate situation, but there’s no reason to be alarmed,” Scajola told reporters in Rome following a meeting with energy industry representatives. “We have enough gas reserves to get us through the crisis.”

Russian gas supplier warned to honour obligations

The head of Russia's monopoly gas supplier was warned today to honour the company's obligations to the European Union or face the loss of reputation and revenues as western customers looked elsewhere.

Factories shut, many without heat across Balkans

SOFIA/BELGRADE (Reuters) - Hundreds of thousands of people across the Balkans went without heating on Thursday and more factories closed as the impact on the hardest-hit region in the Russia-Ukraine gas row continued to grow.

Around 100,000 households in Bosnia were left in cold, about 80,000 people in Serbia's second largest city Novi Sad had their gas heating cut off and other Serbian cities were hit.

In Bulgaria, at least 65,000 households were without central heating when temperatures hit minus 10 degrees on Thursday morning. Some shops said they had run out of electric heaters, causing concern for electricity supplies.

Brussels to host emergency talks as tens of thousands lose heating in their homes

The EU, Russia and Ukraine will today hold top-levels talks in a last-ditch effort to resolve the increasingly angry political dispute that has cut off all Russian gas supplies to Europe through Ukraine.

Russia accused Ukraine of "blackmail" and Kiev blamed Moscow for halting supplies without warning as a routine price dispute spiralled into all-out political conflict - and tens of thousands, mainly in eastern Europe, shivered in sub-zero temperatures without heating in their homes.

Slovenia expects no gas from Russia till early Friday

LJUBLJANA, Jan 8 (Reuters) - Slovenia's main gas supplier Geoplin said on Thursday the country can expect no gas from Russia at least till 0500 GMT on Friday after the gas supply from Russia was cut off on Wednesday.

"We were informed by the dispatchers that there will be no gas supply from Russia at least until 6 o'clock (0500 GMT) Friday morning," head of Geoplin Alojz Stana told Reuters on the phone.

Cutoff highlights Europe's reliance on Russian natural gas

Despite the vitriol, most analysts anticipate an eventual compromise. Russia has been hurt by the global financial crisis, and Gazprom needs Europe's cash.

Ukraine — though buffered by a two-month supply of stored gas — is being pressured by the EU, which it aspires to join.

Why Has the Price of Oil Decreased So Significantly?

Why has the price of gas decreased so significantly? This seems way more than an incremental adjustment to supply and demand. Is there something non-linear going on?

Long term fundamentals favor oil and gold price rises

Crude may not see the highs of last year but will trade higher as 2009 ages and gold could test the highs as a result of actions being taken to deal with the financial crisis in America and the stimulus plans to restart the economy. While demand has fallen due to the current global economic crisis, the fundamentals for crude favor price increase rather than much lower pricing. Some of the same fundamentals that favor a price increase for crude will also have a similar effect on the price of gold.

Oil giants top dirty tanker charter table

SHELL, ExxonMobil and BP remained the world’s largest charterers of dirty tankers in 2008, responsible for 17% of all reported fixtures.

Analysis by New York-based Poten & Partners showed that the three oil giants were the charterers of just over 1,600 of around 5,400 spot fixtures for crude oil tanker transport.

US to head anti-pirate patrols off Somalia

DUBAI, United Arab Emirates – A new international force to battle pirates off the Somali coast is being formed under American command in a bid to focus more military resources to protect one of the world's key shipping lanes, the U.S. Navy said Thursday.

But the new mission, expected to begin operations next week, will have no wider authority to strike at pirate vessels at sea or move against havens on shore. That raises questions whether it can significantly curb pirate flotillas after more than 110 ships were attacked last year.

Why you can't trust your gut in this market: Look closely. Do you see the onset of another Great Depression? Maybe it's all in your mind.

These studies reconfirm what psychologists have been saying for years now: The more we feel out of control, the more our brains imagine patterns that don't really exist.

Doing that, the theory goes, helps us manage our stress. Maybe we haven't come so far from the rain dances common in agricultural societies. It's precisely because they don't control the drops falling from the sky that many people construct elaborate rituals to pretend that they do.

China aims to increase coal production 30 pct by 2015: govt

BEIJING (AFP) – China is aiming to increase its coal production by about 30 percent by 2015 to meet its energy needs, the government has announced, in a move likely to fuel concerns over global warming.

Beijing plans to increase annual output to more than 3.3 billion tonnes by 2015, said Hu Cunzhi, chief planner of the land and resources ministry, said on Wednesday.

That is up from the 2.54 billion tonnes in produced 2007, according to the ministry.

Energy 2.0

Forget Web 2.0. Content generated by unpaid volunteers? That’s so 2007. It seems 2008 was a banner year for what you might call Energy 2.0 — electricity generated by unpaid volunteers.

Tokyo to exempt tax for next-generation green cars

TOKYO (AFP) – Tokyo's local government, seeking to fight global warming, said Thursday it planned to exempt taxes on next-generation green vehicles such as electric cars and plug-in hybrids once they hit the market.

Japanese automakers are aiming to put out electric cars -- which emit no carbon blamed for global warming -- as early as this year despite the global slowdown that has battered the auto industry.

Other ways of going green

'Greening" the automobile usually refers to improving its fuel economy and reducing carbon emissions. But there other things to be greened as well, particularly plastics.

Toyota plans to replace 20 per cent (by mass) of the plastics used in its cars with bio-plastics by 2015. Mazda has said it will make 30 per cent of the interior parts of the Mazda5 from bio-materials as soon as it sees higher strength and heat thresholds, which it identifies as bio-plastic's weak points.

Ford has begun its use of renewable bio-material by using soy-based foam in seat backs and cushions in vehicles. By the end of the 2009 model year, more than one million Ford vehicles will contain soy foam — which will decrease its use of petroleum oil by nearly half a million kilograms annually.

Auto sales outlook: Running on empty

More bad news for Detroit. Rising unemployment is likely to keep a lid on demand for cars and trucks throughout 2009.

Sustainable studying

The academic environment tends to be a sustainable one, for various reasons. Students surviving on government loans are usually forced to share living space, cook their meals at home, walk or cycle to class and lug around coffee Thermoses and reusable water bottles to save money. Also, whether you're learning or teaching, there's generally a heightened level of awareness about global issues, such as climate change.

At the same time, however, there are other aspects of university life that are inherently un-green, such as the paper waste that comes from thousands of essays, tests and notebooks, the energy that's drained from 24-hour computer labs and science equipment, the junky cafeteria food, vending machines and so on.

Environmental group backs canal for Calif. delta

SACRAMENTO, Calif. – A national environmental group recommended Wednesday that California overhaul its water-delivery system by building a canal around the Sacramento-San Joaquin River Delta.

A report by The Nature Conservancy endorsed piping Sacramento River water around the delta, which is suffering from degraded water quality and declining fish populations. The conservancy said a canal could help restore the region's natural habitat.

NY Gov targets clean energy, health despite deficit

NEW YORK (Reuters) – New York state should fight obesity, help more residents get health insurance and revive the upstate economy with a research consortium for hybrid car batteries and energy storage, Governor David Paterson proposed on Wednesday.

Can technology clear the air?

THREE hundred and eighty-five parts per million: that's how much carbon dioxide there is in the atmosphere now. Just 100 parts per million more than before we started mucking things up, yet the Arctic ice cap is already melting, weather patterns are changing, and plants and animals are migrating towards the poles to find their comfort zones.

We can't go on like this. In fact, some climate scientists, notably James Hansen of NASA, say that 385 parts per million is too high and that we need not just to slow the increase in CO2 but to clean up the mess we've already made. Three hundred and eighty-five invisible, colourless needles for every million stalks in the haystack. What are the chances that we can find and remove them?

Despite deep chill, global warming is still a peril: scientists

PARIS (AFP) – A cold front is sweeping across Europe after gripping swathes of North America last month, but the deep freeze does not mean the threat of global warming has abated, caution scientists.

"The major trend is unmistakably one of warming," Michel Jarraud, secretary general of the World Meteorological Organisation (WMO), told AFP.

"If we look at the trajectory over the last 160 years, it overlays a large natural variability, and that's what causes confusion."

http://feedproxy.google.com/~r/theoildrum/~3/sRvxqL6n93A/4944

LATEST Russia will resume gas exports to Europe as soon as EU monitors arrive at gas compressor stations along the route, Prime Minister Vladimir Putin said.

With news breaking that Russia has just suspended all exports of gas to and through Ukraine, what will the impact be on Europe and why has Russia chosen once again to take such drastic action?

Exports of gas from Russia fell 6% between 2006 and 2007 according to the BP statistical review of world energy. Production fell from 612.1 to 607.4 billion cubic meters (bcm) per annum and domestic consumption rose from 432.1 to 438.8 bcm per annum leading to a fall in exported gas.

Is Russia withholding gas supplies leading to higher prices and manipulation of its market position? Or is the Russian gas supply system unable to meet demand?

A couple of days ago I asked Jerome and Rune to write short posts on the unfolding Russian - Ukrainian gas crisis. Jerome's response was that this is not news - "it happens every year". But with Russian gas supplies now reported to be halted to and through Ukraine in the dead of winter the consequences for Europe are not good. Even if the dispute gets resolved within a few days.

The background to this long running dispute is complex, but put simply:

• The Russian gas supply and transit system is inherited from the Soviet era when Ukraine was an integral part of that system.


• Much of Russian gas exports to Europe must transit Ukraine, placing Ukraine in a position of power and influence well beyond the courtesy of allowing pipelines to transit its territory.


• Ukraine is essentially bankrupt and unable to pay full rates for Russian gas and is thus reported to help itself to some of the in-transit gas.


• Russia has hit economic hardship with the fall in oil prices and can likely ill-afford to subsidise gas supplies to Ukraine.


• Russia and Europe are mutually dependent upon each other in the energy market and both are dependent upon Ukraine for transit of much of Russian gas exports.

Has Russian Gas Production Peaked?

This is impossible to answer. However, this chart from Jean Laherrere shows the three super giants - Yamburg, Urengoy and Medvezhye - in decline and that new projects will only compensate for decline going forward.

Russian gas production forecast by Jean Laherrere showing how second tier fields may compensate for decline in the three giants - Yamburg, Urengoy and Medvezhye.

Russia planning to develop the remote Shtockman Field in the Barents Sea tends to suggest that all is not well on the supply front.

Falling Oil Production

Russian oil production has shown signs of falling. And this combined with recent moves to cut oil production in coordination with OPEC may lead to a fall in associated gas production. This could add further strain to gas supplies.

Who imports Russian Gas?

The chart shows the destinations of Russian gas pipeline exports in 2006. And so these are the countries that may be affected by reduced gas supplies from Russia. The larger West European nations have diversified sources with Norway and Algeria being the principal alternatives. They also have large gas storage facilities that will keep the gas flowing for a while at least. Turkey receives gas via a separate pipeline and is thus unaffected directly by the Ukrainian dispute.

Its Winter Time

Needless to say these disputes arise in winter when demand is high for heating - in Russia and Europe - and supplies are strained.

Russia and Europe are in the deep freeze, 7 January 2009. Source BBC World weather and UK MET office.

Conclusion

Russia has been a reliable long term energy supplier to Europe and will likely continue to be so for the foreseeable future. At the same time, Russia has rights to maximise returns on its main asset which is energy.

When Russia and Ukraine go through their annual ritualistic gas spat, analysts should begin to question Russian ability to supply peak gas demand in the dead of a cold winter.

It seems that Russia is ultimately aiming to have the EU countries pay for the gas borrowed by Ukraine in leu of transit privileges. This will lead to Russia receiving full market value for gas exports and rising energy costs in Europe that will of course lower demand making it easier for Russia to meet its export obligations.

Some of Jerome's views are published here on European Tribune.

http://feedproxy.google.com/~r/EcoGeek/~3/5BOrsJg4h2w/

Toshiba has just announced that it is entering the photovoltaics business, joining fellow high tech giants such as Sharp and Sanyo, who already have significant market share. But it appears that Toshiba will be servicing the industrial market rather than the commercial or residential one. Companies like Sharp and Sanyo mostly make rooftop modules that can power anything ranging from a house to a factory. Toshiba, on the other hand, intends to build photovoltaic power plants.



Consequently, Toshiba will be establishing its photovoltaics department within its Transmission Distribution & Industrial Systems business unit, a division that already works with industrial-scale energy distribution technology. That means that the people who are going to be designing these photovoltaic power plants already have extensive experience when it comes to engineering energy storage and distribution.



This is good for the future of photovoltaics. As of now, it is still unclear whether PV power works best as a distributed or centralized power source – i.e. when/where is it more efficient to put individual solar panels on rooftops versus building large desert-based power plants. As mentioned above, Sharp is pushing the distributed model as far as it can go. Maybe Toshiba will push the centralized model. Personally, I’m more interested to see if one model works better, or if they each work equally well under specific circumstances (or if one of them flops).

http://feedproxy.google.com/~r/theoildrum/~3/3AX5_BHgh9w/4947

Below the fold is a TOD:Campfire post on Passive Solar, from longtime TOD reader Will Stewart. Will is a Systems Engineer in the Energy industry - he will have a follow up post in the near future. Please add your own experience and expertise with passive solar, including links and images in the comment section - the sun is as close as we get to a perpetual energy subsidy.....how we best access and take advantage of it is the subject of tonights post. For submissions to this series, please email campfire@theoildrum.com or todcampfire@gmail.com.





Passive Solar Design Overview – Part 1

Passive solar refers to the design and placement of a building to enable solar heating without the need for sensors, actuators, and pumps, in contrast to active solar, which utilizes pumps/blowers, sensors, and logic control units to manage collection, storage, and distribution of heat. The two techniques are not exclusive, however, and can work together effectively.


As solar radiation (insolation) is a diffuse energy source, and not at the beck and call of a thermostat, passive solar design techniques are at their best when combined with other related methods, such as energy efficiency (insulation, weatherization, building envelope minimization), daylighting, passive cooling, microclimate landscaping, and a conservation lifestyle (i.e., temperature settings, raising and lowering of insulated shades, etc). Most of these topics will be covered in other articles, though passive cooling will be addressed in this series, which is intended as an overview, as a complete engineering treatment on passive solar design would require several dozens of articles.

Even though solar insolation is diffuse, and generally weaker the further away from the equator, it can be the basis for the majority of a building's heat energy input even in high latitude places such as Canada, Norway, Germany, the Northern US (Maine, New Hampshire, Michigan, Wisconsin, Minnesota, North Dakota, Montana, Idaho, Washington state, etc), Scotland, the Netherlands, etc. Even the US Department of Defense has a passive solar design guide. Design approaches such as Passivhaus have achieved up to 90% reduction in energy use over traditional building methods. In areas with reasonably consistent winter insolation, well insulated passive solar buildings with sufficient thermal mass storage can approach 100% of their space heating needs with passive solar. Enhancements can be added to existing buildings, through major or minor renovations, or through simple additions (Part 4 of the series).

History

The Greeks faced severe fuel shortages in fifth century BC, resorting to arranging their houses so that each could make maximum use of the sun’s warming rays. A standard house plan emerged, with Socrates noting, “In houses that look toward the south, the sun penetrates the portico in winter.” The great Greek playwright Aeschylus even proclaimed only primitives and barbarians "lacked knowledge of houses turned to face the winter sun”. The Romans picked up on this technique, and improved it by adding windows of mica or glass to better hold in the heat. They passed laws to protect the solar access rights of owners of solar homes from shading by new buildings. In the Americas, the Pueblo and Anazazi took advantage of solar insolation in their adobe and cave dwellings, respectively.

In the 18th and early 19th centuries, solar greenhouses became popular for those of means to grow exotic tropical plantlife in temperate climes. In the 20th century, German architects such as Hannes Meyer, director of the influential Bauhaus architectural school, urged the use of passive solar design techniques that began to flourish in the 1930s, only to be pushed aside by the Nazis and WWII. Many German architects made their way to the US, and a small solar market developed. Built in 1948, Rosemont elementary school in Tuscon obtained over 80% of its heat via solar means, but in 1958, with cheap energy now available and an extensive addition planned, the school district chose to go with a gas-fired furnace. The 1970s saw more emphasis on renewable energy, and passive solar became a household word, though still only penetrating a very tiny percentage of builders’ visions for the new homes market. More in-depth passive solar history details can be found at the California Solar Center.

The Basics

Location and Orientation

To assess whether passive solar is advantageous to a location, one must first find out the amount of winter sunlight that is available. The simplest way is to find solar insolation data for the site under consideration, ideally collected over a series of decades (noting that a changing climate can mean the data may need to be extrapolated). The data can come in tabular or map form, with the latter providing a quick indicator of the amount of winter insolation in one's area. Tabular data, however, is more precise, giving one the best information available about trends in their area. A note of caution: the data is usually an average of conditions, and does not necessarily take into consideration unusual weather years or how the climate may change in one's area of consideration.


Interpretation of Data:

Most of the maps and tabular data measure solar insolation as kWh/m2/day, which is roughly the number of kilowatt hours of energy striking a square meter of surface in a day. This is also referred to as a Sun Hours on some maps, and we will refer to it as such throughout this series. Important note: Since virtually all modern passive solar design focuses on vertical windows, data must be specified or converted to a vertical orientation. Some of the data currently available is for collectors tilted at an angle equal to the site's latitude (L) or a horizontal surface (H), which would need to be converted to a vertical surface (V). The table below contains a partial list of solar maps and data, though make sure any source you use focuses on winter data, as other maps/data are used for year around solar photovoltaic projections.

Region	Maps	Data
World	- Solarex (L)- FirstLook (Americas only currently)(H)	- WRDC (select Global)
Canada	- Solarex (L)	- WRDC (select Global)
Europe	- Satellite data map (H)	- WRDC (select Global)
US	- National Renewable Energy Labs (select Vertical surface) (V)	- Many US cities (H)- Detailed data (H) (manual)- Other sources
Australia	- Aus BOM June Map (L)	- Aus BOM site data (L)

The orientation of the building will determine how much solar insolation is captured during the desired period of the day. For example, a passive solar house facing the equator will receive an equal amount of solar heat before and after noon. The more a building is oriented away from true south (or north in the southern hemisphere) the less winter solar insolation it will be able to capture, and it becomes more susceptible to undesirable summer solar energy that is harder to shade with a properly sized overhang.

In addition to direct solar insolation beaming from the sun, there is also diffuse radiation from the sky, and reflected radiation from the ground.

Figure 1 - Types of solar input


Design Aspects:

Passive solar building design revolves around 5 main aspects;

Aperature: The set of windows and overhangs that determine how much sun enters the building.
Absorber: The material that the sun’s ray come into contact with.
Thermal Mass: The material that stores the sun’s thermal energy for re-release after sundown.

Distribution: The means by which the thermal energy is released to the living/working spaces.
Control: The techniques used to control the collection and distribution of the sun's thermal energy.

These aspects can be configured by the designer/architect into roughly three main design themes (with endless variations);

1. Direct Gain: Sunlight shines into and warms the living space.


2. Indirect Gain: Sunlight warms thermal storage, which then warms the living space.


3. Isolated Gain: Sunlight warms another room (sunroom) and convection brings the warmed air into the living space.

Figure 2 - Direct solar gain



Figure 3 - Indirect solar gain



Figure 4 - Isolated Gain

In Part I of this series, we will cover the Aperature;

Aperture:

The first step in passive solar design is determining how to collect the sun's energy. In most climates that passive solar is employed, this means windows of one form or another. An important metric of a window is its Solar Heat Gain Coefficient (SHGC) that measures how much of the sun's energy passes through the window without reflection or absorbtion and re-radiation. The higher the SHGC, the more solar energy a window will allow through. A plain single pane window normally has a SGHC of 0.86 while a plain dual pane window is about 0.72.

In order to reduce heat loss in cool and cold climates, windows are normally at least dual pane, if not triple pane. The dead air space between window panes helps to increase the insulation factor, call the R-value (or its inverse, the U-value). One single pane of ordinary glass has an approximate R-Value of 0.85. A dual pane window with 3/8 inch of air space typically has an R-value of 2.1. The substitution of less viscous gases such as argon and krypton allow greater distances between panes before the gas begins to convect (tranferring heat at a much higher rate), increasing their insulating effect. Each pane added, however, blocks/absorbs/reflects more solar energy, which effectively reduces the window unit's SHGC. Additionally, low-E coatings that help to reduce the amount of infrared heat radiated out of a room through a window also reduces SHGC (amount dependent on the type of low-E coating). So a balance must be struck by the designer/architect between the amount of energy received during winter sunlight hours vs. the amount of energy lost 24 hours a day. There are windows available that have been designed for passive solar applications to provide sufficient SGHC while still providing adequate insulation (e.g., one such window has a SHGC = 0.56 and an R-value = 5).

There is ongoing research to bring aerogel windows to commercial production, as these windows provide extremely high R-values (approximately R-10 per inch) while having SHGCs of .52 or greater.

The orientation of the window is just as important; windows facing the equator receive the greatest amount of sunlight. And this orientation also greatly reduces unwanted solar collection during the warmer days of the year, as windows facing East and West are difficult to shade effectively with simple overhangs, requiring larger and/or view blocking awnings.

References:

California Solar Center: Passive Solar History
US DoE Passive Solar Home Design

http://feedproxy.google.com/~r/EcoGeek/~3/RpeDx2sgz_E/

Toshiba seems to be pushing its green image pretty dang hard at this year's Consumer Electronics Show. Not only are they showing off everything from a battery-powered bicycle to carbon sequestration technology. It's not all what you'd expect at CES...but it is all green.

This battery assisted bicycle (PDF), actually, is pretty freaking cool. It uses Toshiba's new SCiB batteries, which recharge to 90% capacity in ten minutes, and can hold enough power to power the bike for 20 to 30 miles. Of course, it's no where near as green as your average bicycle, but it's a heck of a lot greener than your average motorbike. A good compromise, I'd say.

They're also talking about traditional electronics, of course. Toshiba is showing off it's EPEAT Gold laptops including a disassembled (so you can see why it's green, we assume) Portégé.

They're also touting their LCD TVs which, while not as efficient as LGs new concept, will be 100% Energy Star 3.0 compliant.

And, if that's not enough, they're showing off their LED illumination lamps, their recycling system (now available in all 50 states) and their  initiative to plant 1.5 million trees.

Full Toshiba press release below.

http://feedproxy.google.com/~r/EcoGeek/~3/E_SiLhBLFME/

Exxon is not known for being a friend to the environment, but for the past couple of decades they have been researching and implementing carbon capture and storage technology. Now, they're investing $170 million towards furthering what they've already accomplished.



The oil company will spend $70 million on a project to capture six million metric tons of emissions per year at their La Barge, Wyo. natural gas plant, two million more tons than they are already capturing every year. Another $100 million will be spent testing new technologies for removing carbon from natural gas by 2010.



Now this doesn't make them heroes. They still do enough damage to negate the good and carbon capture and storage is still controversial, but this does put them way ahead of other companies who will be clamoring for the same technology if the new administration puts a price on carbon emissions. Also, they could spend more. This is Exxon. If they wanted to invest in capturing all of the emissions they produce, they probably have the money to do it. But ultimately, if carbon capture and storage turns out to be truly viable, their research could end up helping in the fight against climate change.



via Earth2Tech

http://feedproxy.google.com/~r/EcoGeek/~3/idzddbcz2hM/

The Chevy Volt is continuing it's path to the showroom floor today with it's first ever test drive by a member of the press. CNBC got a chance to take the car for a spin and the result seems pretty positive.

Lyle Dennis of GMVolt.com was able to talk to Phil LeBeau who drove the car, and LeBeau at this to say:

 

Impressive. Very impressive. I spent part of Wednesday afternoon tooling around GM’s tech center in a “mule” version of the Volt. When I hit the gas, the acceleration was instant. Like all electric cars, the torque and response from the car is immediate. The Volt will deliver the same performance you would get from a car with 250 horse power.

The other thing that stands out about the Volt is how smooth and quiet it is. There is not the whirring sound that I have heard in other electric cars I have driven. It also feels effortless when you are driving it. All around, I can see why executives at GM have growing confidence the Volt will deliver everything that’s been promised.

Sounds good to us...now let's hope GM can get the car out before the go bankrupt, and without raising the price too high above their original $30,000 goal.

 

Via GM-Volt

http://feedproxy.google.com/~r/theoildrum/~3/TlyMVhq5G0Q/4952

Here is a recent talk given by Fatih Birol to the Council of Foreign Relations:

http://feedproxy.google.com/~r/theoildrum/~3/v4aWwoB-j3c/4942

The European Commission published the Second Energy Review (SER-2) November 2008. Entitled “Securing our Energy Future”, it was made available during the same week the IEA's World Energy Outlook was released, which stole much of the impact it could have had and delayed serious insight up to now.

This Strategy attempts to set a Course of Action towards three main Goals:

• Sustainability


• Competitiveness


• Security of Supply

This log entry is the first of a series that will try to build a critical but constructive review of this crucial element of future Energy Policy in Europe.

An audio version of this log entry can be downloaded here.

SER-2 is a set of ten documents of different scopes and purposes. They are gathered at the Strategy's web page, where a plethora of other supportive documents can also be found. The amount of information gathered at this web page is quite considerable, making it a very useful resource, something that by itself is already a positive result of the effort put into this Strategy.

The first document to be reviewed is the press release that serves as a sort of Executive Summary to the full Strategy.

Securing your energy future: Commission presents energy security, solidarity and efficiency proposals

“Securing your” is an unfortunate way of starting. The implied gap between policy makers or technocrats and commons citizens is in stark contrast to what the EU should aim to be. In any event this is just a detail, but illustrative.

The opening paragraph contains a few key ideas and shows up front the main areas of action:

The European Commission has proposed today a wide-ranging energy package which gives a new boost to energy security in Europe, supporting the 20-20-20 climate change proposals which should be agreed by December. The Commission puts forward a new strategy to build up energy solidarity among Member States and a new policy on energy networks to stimulate investment in more efficient, low-carbon energy networks. The Commission proposes a new EU Energy Security and Solidarity Action Plan which sets out five areas where more action is needed to secure sustainable energy supplies. The Commission also looks at the challenges that Europe will face between 2020 and 2050. In addition, a package of energy efficiency proposals aims to make energy savings in key areas, such as reinforcing energy efficiency legislation on buildings and energy-using products, and enhancing the role of energy performance certificates as well as inspection reports for heating and air-conditioning systems.

SER-2 puts flesh on the bones set out by the 20-20-20 agenda. But it is clear that the Strategy's scope is going beyond Climate concerns. “Security and Solidarity” sounds virtuous. Conceptually, member states should be able to address threats to foreign energy supplies better by cooperating among each other. Some expectation builds up on knowing exactly what this plan is. Of positive note is also the intent to look into the long term and the focus on Efficiency, a chapter where the Commission can have a decisive and swift impact.

Quotes worth noting:

54% of Europe's energy is imported at a cost of €700 for every EU citizen. We have to address this urgently, by taking measures to increase our energy efficiency and reduce our dependence on imports. We have to invest and diversify. The proposals adopted today represent an unequivocal statement of the Commission's desire to guarantee secure and sustainable energy supplies, and should help us deliver on the crucial 20-20-20 climate change targets.

José Manuel Barroso, Commission President

But we have to do more, be more ambitious, and be even bolder to avoid the risk of energy disruption in the future. This means investment. Investing in energy, including energy efficiency, means giving our economy the push it needs at this uncertain time.

Andris Piebalgs, Energy Commissioner

The development of strong and reliable energy partnerships with suppliers, transit countries and other major energy consumers is key, and therefore the new generation energy interdependence provisions proposed today is an important step forward.  Today's review also proposes steps to strengthen the EU's capacity to mobilise in support of essential infrastructure to bring supplies from third countries.

Benita Ferrero-Waldner, Commissioner for External Relations

Urgency. The role of Energy in our society and the menaces posed by internal depletion seem to be now grasped, if not fully at least in good measure. Too bad that this Commission hadn't the same thinking when it took office in 2004, but better late than ever. It is also worth pointing out that this Commission is not dreaming about “energy independence” and acknowledges healthy foreign relations as an important pillar of the Union's energy predicament.

Implementing the measures to reach the targets set by the European Council towards the 20-20-20 agenda is the first priority of SER-2, with the security of supply relegated to second place. But, the scenario is painted clearly:

Even when the renewable energy policy goals are reached, Europe is likely to be dependent on more imports than today. The EU needs to improve the current policies to achieve its energy efficiency objective. Moreover, the ability of the EU to respond together in a crisis needs to be strengthened.

Such sobriety is encouraging. But it should be made more clear that a scenario where the EU imports more energy by 2020 than now is very unlikely; the exact opposite is what should be expected – hence the concern.

One more point worth highlighting:

Greater focus on energy in the EU's international relations, including through [sic] establishment of relationships with supplier, transit and consumer countries based on interdependence will contribute to the achievement of the EU energy policy goals and also increase the EU's influence on international energy developments. Closer coordination among Member States and with the Commission in external energy relations will be particularly important in this regard.

This acknowledges that Energy will henceforth have a pivotal role in geopolitics and that an integrated European Energy Policy will naturally require an integrated European Foreign Policy. This is one point that still haunts the EU (also evident when Kosovo declared independence) and once more stresses the need for an update of European Institutions.

Finally some interesting things can be read between the lines of the closing paragraphs:

Background

The first Strategic Review led to the European Council agreement in March 2007 on energy policy targets for Europe. Since then, the Commission has proposed a number of measures to deliver these goals, including a package of proposals to open up the EU energy market further, now close to adoption, a Strategic Energy Technology Plan to promote clean energy technology, new measures to improve the energy consumption of consumer goods and proposals for new compulsory targets on renewable energy and greenhouse gas emissions.

The March 2007 European Council invited the Commission to bring forward an updated Strategic energy Review in early 2009. The proposals adopted today respond to that request.

From this stems the idea that the previous proposals directed at deregulating the Energy Market failed to address either Climate concerns or Energy Security, eventually leading to this second Strategy. SER-2 represents a re-formulation of the Energy Policy defended during the first half of this Commission's office, that in face of events had this time to address reality.

Earlier articles on EU energy policy

The EU Strategic Energy Review: maybe not so depressing after all

Andris Piebalgs on European Energy Security

Andris Piebalgs on Bio Fuels

Eco-Driving promoted by the European Commission

EU Commission's Energy Strategy for Europe

Andris Piebalgs: Nuclear and the EU's Energy Policy

Andris Piebalgs' priority number one

Andris Piebalgs : getting a sense of proportion

What A Difference Two Years Makes

http://feedproxy.google.com/~r/EcoGeek/~3/3ZnUcmMdNOI/

The NYT Freakonomics column is attempting to figure out what affect the economic downturn is going to have on the clean technology industry. By asking three of the leading experts in the field (George Tolley, Professor Emeritus of Economics at the University of Chicago and president of RCF Inc.; John Whitehead, professor in the Department of Economics at Appalachian State University and contributor to the blog Environmental Economics; and Ethan Zindler, head of North American research at New Energy Finance) Freakonomics has done a pretty good job of summarizing what 2009 will probably look like.

If you're looking for a great wealth of analysis, head to the original article. But if you don't have time for that, here's a quick summary:

The cost of fossil fuel is dropping once again, so the cost differential between renewables and fossil fuels is widening, not closing (like it was for years.) In short, that's bad news. It's also bad news that people will have less disposable income with which they will choose renewables (when given the choice.)

And, in the short term, there's less capital for investments and IPO's, for certain. But the fundamentals of the sector are extremely strong. Oil and natural gas prices remain historically high, state and federal renewable energy mandates remain in place, and the possibility for further carbon regulation is extremely strong.

In short, everyone expects things to stagnate for a little while, but the sector will remain an important growth industry, and the possibilities for exponential growth in wind, solar and other renewables remain strong.

Via Freakonomics

http://feedproxy.google.com/~r/theoildrum/~3/tg4ZQ4zgM5U/4954

Saudi Arabia Can Raise Capacity a Third, Saleri Says

(Bloomberg) -- Saudi Arabia, the world’s biggest oil producer, could raise its oil production capacity to 15 million barrels a day, a former Saudi Aramco official said. That would be almost one-third above the current level.

“The resources are there, the organizational capability is there,” Nansen Saleri, president and chief executive officer of Houston-based Quantum Reservoir Impact and former head of reservoir management at Saudi Arabian Oil Co., said in an interview today in New York.

Scientists Refute Argument Of Climate Skeptics

ScienceDaily — Scientists at the GKSS Research Centre of Geesthacht and the University of Bern have investigated the frequency of warmer than average years between 1880 and 2006 for the first time. The result: the observed increase of warm years after 1990 is not a statistical accident.

Bruce Sterling’s Annual Report on ‘Things in General’

Then there’s energy. I’m not a Peak Oil guy, but of course wild turbulence in energy prices is gonna put people on edge. How can any person of reasonable prudence invest, plan and build with that kind of uncertainty?

Oil Price Volatility and Economic Chaos

When oil was trading at $40/barrel, no one believed the claim that it would hit $60 per barrel. When oil passed $60/barrel, no one believed it would break $100/barrel. When it shot past $100/barrel, no one believed it would get close to $150/barrel.

And when peak oil theorists warned that persistent high and rising oil prices would destroy demand for oil by triggering a major economic recession, no one believed us then, either.

Yet the arrival of that recession more or less on cue has done little to increase the respectability of peak oil in the mainstream media. With the exception of Dyer, who also wrote about it in his December 23 column, no one in the mainstream is even talking about peak oil anymore.

Venezuela faces racing inflation, slowing growth

CARACAS, Venezuela – Analysts predict Venezuela's economy is headed for a worse year than the government admits, as falling oil prices stall growth and inflation soars in the import-dependent country.

Takeover talk returns to oil patch

CALGARY, Alberta (Reuters) - Shares of Canadian oil producers, hard hit by crashing commodity prices and the credit crunch, have staged a quiet comeback since bottoming out in November and observers say the takeover chatter that roiled the market late last year may return as conditions improve.

Colo. company raises $34 million for biofuel plant

DENVER (AP) - A Colorado company that developed a process using bacteria to convert wood to fuel has raised $34 million to build its first biorefinery.

Saudi official says global oil demand could fall 45 percent

DUBAI (Reuters) - Oil demand could fall 45 percent due to the global financial crisis, but investments should be increased to ensure supplies are maintained, a senior Saudi government official said in remarks published on Thursday.

Majid al-Munif, an adviser to Saudi Arabia's oil minister, said the global financial crisis may cut oil demand by 23 percent to 45 percent, pan-Arab Al-Hayat reported, citing remarks made at a conference on Wednesday.

Algeria's Disappointing Gas-Plots Auction

The North African country saw scant interest in a recent auction of gas rights, a sign of weaker investment appetite among energy majors

TVA: Waste pond in Alabama ruptures

STEVENSON, Ala. (AP) — The Tennessee Valley Authority says a waste pond at its Widows Creek power plant in northeast Alabama has ruptured but the spill is contained.

The spill comes after a major rupture last month in Tennessee, when a dike released nearly a billion gallons of toxic-laden ash.

Tennessee Valley Authority Sued Over Coal-Ash Spill

(Bloomberg) -- The Tennessee Valley Authority, the federally owned utility, was sued on behalf of residents and property owners in eastern Tennessee affected by a coal-ash spill that dumped 1 billion gallons of sludge.

The Amish Flock From Farms to Small Businesses

The Amish move into the world of commerce has been more out of necessity than desire. Over the last 16 years, the Amish population in the United States — mostly in Pennsylvania, Ohio and Indiana — has nearly doubled, to 230,000, and the decreasing availability and increasing cost of farmland has forced many of these agrarian families, especially the younger generation, to gravitate to small business as their main source of income.

Recession resistant coal industry cuts back

CHARLESTON, W.Va. -- The ailing economy has left a big question mark hanging over the U.S. coal industry: will last year's high-priced contracts and today's declining costs be enough to offset rapidly falling world demand this year?

Already, mine operators have scaled back production plans for 2009, namely coking coal used for steelmill blast furnaces as manufacturing grounds to a halt.

Peabody Energy Corp., one of the world's largest coal miners, said this week it was cutting its production in Wyoming and Australia because of the economic downturn.

Investors have pulled billions out of the market and coal companies have not been immune.

Credit crunch may lead to another rice crisis

MANILA, Philippines (AP) — A drop in oil and fertilizer costs has halved the price of rice — a staple for almost 700 million of Asia's poorest — but it could jump again this year as farmers struggle to secure loans amid the credit crunch, experts said Friday.

The price of the regional benchmark, Thai 100 percent Grade B rice, fell to $575 per ton last October from a record high $1,080 per ton in April — a result of record production and declining oil and fertilizer costs.

Farmers, however, suffered losses because they were left with a lower-priced crop produced with high-priced fuel and fertilizer, said the Philippines-based International Rice Research Institute.

The outcry is muted, but the food crisis is getting worse

The financial debacle has drowned out coverage of food shortages. Where are the billion-dollar bailouts for the hungry?

OPEC President Says Oil Trend “Not Comfortable”

(Bloomberg) -- Angolan Oil Minister and OPEC President Jose Maria Botelho de Vasconselos said the current oil “price trend is not comfortable”, as crude fell for a fourth day.

“We know the price had a significant decrease and the trend is not comfortable,” he said today in the capital, Luanda. He did not clarify his comments further.

Ecuador Seeks $280MM Line of Credit from Iran for Oil Projects

Ecuador plans to seek a $280 million line of credit from Iran to finance pipeline and other oil-sector related projects, Mining and Oil Minister Derlis Palacios told Dow Jones Newswires Thursday.

"We are asking for a credit line of $280 million, especially to invest in our pipelines. We are sure that this money will come," Palacios said in a telephone interview.

Canada's oil sells for less

CALGARY — A supply glut has jammed up Canada's pipeline system, driving the price of Canadian crude below global benchmarks in an anomaly expected to cut into fourth-quarter profits in the oil patch.

The short-term aberration, caused in part by new output from the oil sands, comes as energy companies grapple with unprecedented swings that have seen the price of crude soar to a record $147 (U.S.) a barrel in July and sink to a close of $41.70 Thursday.

At times in December, the price of a barrel of West Canadian light crude fell almost $10 below that of benchmark West Texas intermediate crude (WTI), but the gap has since narrowed to about $2.50. The two usually trade at similar prices, or even a slight premium for the Canadian blend.

Era of cheap energy 'will never return'

The era of cheap energy is over and will never return as Britain pays the price of turning into a low-carbon economy, the former chairman of the Environment Agency has warned. Sir John Harman accuses politicians of failing to be honest with people about the costs of developing and delivering new forms of clean energy.

And he calls for measures to combat fuel poverty, through price controls, subsidies or higher state benefits to prevent the creation of a new class of low-carbon poor.

Steve LeVine - Falling Oil Prices: Again, Blame Speculators

Hedge funds and other speculators have had a hand in oil's price decline, just as they did in its rise. But don't expect congressional hearings now.

Russia-Europe Gas Spat Ends — For Now

The two sides are still unhappy. Putin has portrayed Ukraine as a flaky transit country, while Ukrainians say Russia is simply a bully. Over the next few weeks, Moscow and Kiev still have to agree on a price for Russian gas deliveries, subsidized since Soviet times. And even if that happens, there's no guarantee this same dispute will not flare up again in the coming months, as it regularly has over the past few years.

Hungary’s Car Workers Desperate as Gas, Recession Threaten Jobs

(Bloomberg) -- It’s 10 a.m. on a Thursday and Janos Oklos would normally be on the assembly line, installing dashboards at Suzuki Motor Corp.’s factory in northern Hungary.

Instead, he’s in his slippers, taking out the garbage at the hostel where he and 300 co-workers live in sight of the car plant in Esztergom. A natural-gas shortage caused by the dispute between Russia and Ukraine, forced the factory to close until next week, raising concerns about jobs cuts a month after Suzuki said it was reducing the local workforce by 20 percent.

Turkey aims to be alternative gas route to ease Europe's reliance on Russia, but problems loom

ANKARA, Turkey (AP) — As Europe is once again held hostage to the gas quarrels between Ukraine and Russia, Turkey is hoping to become an alternative route for the continent's energy imports — but its ambitions face tough practical and political challenges.

Analysis: Gas crisis forced a reluctant EU to act

VIENNA, Austria: Just a few days ago, the European Union was doing its best to stay out of the natural gas standoff between Ukraine and Russia.

On Friday, it was deeply — if belatedly and reluctantly — involved: It dispatched observers to Ukraine as part of a deal aimed at getting the gas flowing back into the 27-nation bloc again.

EU monitors typically keep tabs on border disputes, not pipelines. But Russia's cutoff was seen by many as an act of economic warfare — threatening millions of Europeans in the depths of winter.

Guaranteeing reliable energy supplies then came to be seen as a vital strategic interest.

Political fallout of Bulgaria's gas crisis

On Thursday, the crisis became so severe the ministry of energy issued an "austerity ordinance" which made major cuts to usage of natural gas to keep essential services like hospitals and schools open.

This in a fully-fledged member of the European Union.

Not surprisingly, the Bulgarian public is deeply unimpressed by their politicians.

Press reports have surfaced suggesting the government was warned by the Russians in the middle of December that there could be a disruption in gas supplies, yet no action appears to have been taken.

Baker Hughes announces December 2008 Rig Counts

Baker Hughes Incorporated announced that the international rig count for December 2008 was 1,078, down 18 from the 1,096 counted in November 2008, and up 42 from the 1,036 counted in December 2007. The international offshore rig count for December 2008 was 291, down 6 from the 297 counted in November 2008 and unchanged from the 291 counted in December 2007.

Entergy downgraded to 'Sell' from 'Hold'

Deutsche Bank on Friday downgraded power provider Entergy Corp. to "Sell" from "Hold," citing natural gas and power price declines and a weakened growth outlook due to price drops and lower earnings expectations for regulated utilities.

Chesapeake Energy Chief to Remain for 5 More Years

Chesapeake Energy Corp. Chief Executive Aubrey McClendon agreed to remain at the helm of the natural gas producer for at least five years, under a new employment contract that provides him a $75 million bonus.

Mr. McClendon was one of the most prominent executives swept up in a wave of margin calls last fall, which forced him to sell 94% of his Chesapeake holdings, worth more than $2 billion at their peak. The forced sale had led some analysts to speculate that Mr. McClendon might leave the company he co-founded in 1989.

List of power plants with coal ash ponds

Power plants in each state with coal ash ponds and the amount in tons stored, according to an Associated Press analysis of Energy Department data from 2005, the latest year statistics were available.

Gree