EcoRadio

Category: Energy Matters

The twentieth century way of life has been made available, largely due to the miracle of cheap energy. The price of energy has been at record lows for the past century and a half.As oil becomes increasingly scarce, it is becoming obvious to everyone, that the rapid economic and industrial growth we have enjoyed for that time is not sustainable.Now, the hunt is on. For renewable sources of energy, for alternative sources of energy, for a way of life that is less dependent on cheap energy. 

  • “Fire Ice” impact on oil spill, Containment and Energy Future

    What makes methane hydrate and recent Gulf events so remarkable is that this substance, formed by high pressure and cold temperatures and discovered only in the 1960s, has more potential energy than all the world’s coal, natural gas and oil combined.
    energyfromice.jpg

    The US Department of Energy (DOE), China and India have all been pursuing methane hydrate deposits and research because of its potential as the ultra high-powered energy source. Russia (in conjunction with Japan) has been the first country to successfully harvest this game-changing energy source.

    Oil companies and drilling operations, however, have been wary of its dangers before the Deepwater Horizon event, according to the DOE’s Oak Ridge National Laboratory: “(The oil and gas) Industry has concerns about drilling through hydrate zones, which can destabilize supporting foundations for platforms and production wells. The disruption to the ocean floor also could result in surface slumping or faulting, which could endanger work crews and the environment.”

    The happy ending of our Sci-fi flick: The Gulf oil spill is stopped by drilling a relief well; the millions of gallons that did “spill” are not as damaging as thought; and methane hydrate is safely harnessed and sequestered of carbon worldwide, which phases out oil and natural gas as energy sources. Oil wars largely cease as a result, as methane hydrates are bountiful enough for most coastal nations to secure their own 100+ year energy supply.

    Let’s see what the focus groups think.

    Originally posted May 9, 2010 on the Green Flow blog of commoncurrent.com.

  • The Peak Oil Crisis: The Deepwater Horizon

     

    From what is known so far, it is clear that offshore drilling came to be seriously under-regulated in recent years with few inspections and little or no penalties for violations. Deepwater offshore drilling has become so expensive – the Deepwater Horizon costs on the order of $1 million a day to operate – that site managers are under heavy pressure to complete projects as quickly as possible and move to the next job.

    The oil industry is said to have largely written the regulations and the government simply ratified what was presented. The Obama administration has already moved to split the regulation function from the Mineral Management Service and place it in a separate agency dedicated to safety and the prevention of further accidents. Although there will be much raucous discussion, It seems likely that heavier regulation, with higher, more expensive, standards, is on the way and that could delay future deepwater drilling projects by months or years.

    Shell, which is about to start drilling in Alaska’s Chukchi and Beaufort Seas, has filed new safety plans for their proposed projects. The administration is obviously going to take a very hard look at drilling in areas that are hundreds or even thousands of miles from help if something should grow wrong. It is one thing to drill in the Gulf of Mexico where all sorts of emergency equipment is available within a matter of hours and quite another to drill in the sparsely settled polar regions. The Norwegian and Canadian governments are starting to raise questions about the standards for offshore drilling and are likely to adhere to whatever recommendations come out of the investigations of the Deepwater Horizon disaster.

    Yet another serious problem for the prospects of future oil production is starting to emerge. The deepwater wells, on which we are basing much of our energy future, may not be as productive as previously thought. Until recently the poster child for deepwater oil production was BP’s Thunderhorse platform that, after years of delay, started producing in 2008 and was supposed to produce a billion barrels of oil at the rate of 250,000 barrels a day (b/d). At first all seemingly went well with production reaching 172,000 b/d in January of 2009, but then production started falling rapidly to a low of 61,000 b/d last December. BP refuses to comment publicly on what is happening at Thunderhorse, but outside observers are growing increasingly skeptical that the platform will ever produce the planned billion barrels. At least 25 other deepwater projects are said to be facing problems of falling production, raising the question of just how much oil these very expensive deepwater projects will ever produce.

    Pressure for regulatory reforms is likely to be based on just how much environmental and economic damage the Deepwater Horizon blowout ultimately causes. If BP contains the leak in a relatively short period of time and there is minimal damage to the seafood industry and coasts, then new drilling could resume shortly. However, if the situation deteriorates further and major coastal damage ensues, then offshore drilling is likely to slow significantly until new regulations are approved and more reliable blowout preventers are developed and deployed.

    The battle over tougher regulations is likely to be prolonged and nasty. President Obama has vowed to end the “cozy relationship” between companies and regulators. Testifying before Congress earlier this week, Interior Secretary Salazar said that the oil industry is already characterizing efforts to reform regulations as “impediments and roadblocks to the development of our domestic oil and gas resources.” The Secretary called for federal regulation of blowout preventers which are supposed to ensure that spills of the scale of the Deepwater Horizon incident can’t happen.

    Recommendations stemming from the recently announced independent Presidential Commission on the tragedy will likely have much influence on the course of deepwater drilling and thus the availability of oil in the future. Should the Commission conclude that much tougher regulation is necessary, it is difficult to see how the oil industry, even with its considerable clout in the Congress, can resist the calls for reform. Oil might just become far scarcer and more expensive five years from now than most of us think.

    Originally published May 19, 2010 at Falls Church News Press

  • Kevin Rudd to backflip on mining tax rate

     

     

    BHP Billiton chief executive Marius Kloppers declared last night that any thought the petroleum tax would work for minerals was “naive” and demonstrated “a lack of knowledge as to how investments are made”.

    “Most importantly, we must understand that for each mineral we are competing against other investment destinations, and each set of minerals has a different set of competitors and those competitors set the price,” Mr Kloppers told The Australian.

    And Xstrata chief executive Mick Davis said from South Africa: “The government needs to do what it should have done all along and enter into full and open consultations with the industry where every aspect of the super tax is open for debate. Tinkering at the margins will not avoid the significant long-term damage this tax could do to mining investment in Australia.

    “The government should stop negotiating with itself and start consulting with the industry.”

    Rio Tinto chairman Jan du Plessis told the company’s shareholders that Australia’s reputation had already been damaged by the super-profits tax proposal.

    “We are concerned that the proposed resources super tax will erode Australia’s competitiveness, severely curtail investment and limit jobs growth,” Mr du Plessis said yesterday. He said that some of the government’s arguments for the tax and some of the statistics that had been produced to support them “could only be described as scandalous, totally scandalous”.

    Wayne Swan continued his criticisms of the mining companies yesterday, telling parliament they were still paying only 17c in the dollar in tax compared with the “headline rate” of 30 per cent. The Treasurer vowed to keep the 40 per cent rate for the new RSPT.

    “What we have to do is extract the maximum value for the Australian people as we go forward to reform our economy, to invest in our economy and to ensure our prosperity as we go forward,” Mr Swan said.

    Earlier, he said the government was “interested and fair dinkum about consultation”.

    “The government is involved in consultation,” Mr Swan said. “First of all, we have our consultation panel. Over 80 companies have been through that panel process and are talking to that panel. In addition to that, the government is continuing to talk to many mining companies about their views.

    “What we are going to get for the Australian people is a fair share of the resources they own 100 per cent, a fair share – a tax which encourages investment and growth in the industry.”

    The government’s consultation panel, headed by Treasury deputy secretary David Parker, will give its first report to the government tomorrow. It is expected to go beyond its strict limits for discussion and recommend the raising of the threshold for the super-profits tax to be lifted from 6 per cent, the long-term government bond rate, to about 11 or 12 per cent, the bond rate plus five or six percentage points.

    As reported in The Australian on Monday, the lost revenue would be covered by the withdrawal of the 40 per cent compensation for failed projects to enable the government to keep its budget projections, including a $1bn surplus in 2012-13, intact.

    Mr Parker said yesterday the proposed RSPT as a result of the Henry tax review was “the architecture of reform, not the engineering drawings”.

    “With such reforms, there will always be winners and losers, with some groups more vocal than others,” Mr Parker said. “The challenge is to work together to address the issues that will inevitably arise.”

    Government sources confirmed that the panel was expected to recommend major changes to the proposed RSPT, including raising the threshold, but others warned it was unlikely there would be an early settlement of the negotiations with the mining companies.

    In Adelaide, Mr Kloppers said a 40 per cent tax rate may have been considered appropriate when it was devised for the petroleum industry in the 1980s after two years of consultation but it was “a giant, naive extrapolation to think miraculously the same one is the appropriate rate for every mineral in 2010”.

    “BHP Billiton, being in the oil and gas industry and in the minerals industry, has experience on both sides and, more than other players, we understand the difference between the products themselves and between minerals more broadly,” he said.

    “Retrospectivity on this tax is the key determinant for Australia as a destination for investment.

    “It goes against the core offering that Australia has, which is being a stable place for investment.”

  • Plugs replace pumps at car recharging station

    Plugs replace pumps at car recharging station

    Updated 22 minutes ago

    A hybrid car gets charged on the street

    The modified hybrid cars can be charged at the station. (ABC News: Jesse leary)

    New South Wales’ first public electric car charging station has been opened in Sydney.

    The charging point in Glebe is available to customers of a hybrid car rental company.

    Sydney’s Lord Mayor Clover Moore says it is part of a pilot program testing the viability of charging stations.

    “The city is very interested and supportive of this project,” she said.

    “I made a commitment last november at a climate change summit in Copenhagen that we would accelerate the introduction of electrical vehicles into Sydney and that we would deploy our first charging station in 2010.”

    The Lord Mayor says she wants Sydney to be ready when electric cars start arriving in 12 to 18 months.

    Tags: community-and-society, environment, climate-change, government-and-politics, local-government, human-interest, environmental-impact, australia, nsw, glebe-2037

    First posted 24 minutes ago

  • Super tax has damaged Australia’s global invstment reputation :Rio Tinto

    “From my own perspective, this is my number one sovereign risk issue on a global basis,” he said.

    Mr Albanese flew into Australia over the weekend for Rio’s Australian annual general meeting in Melbourne, which is scheduled for Wednesday.

    Related Coverage

    Rio iron ore boss and chief executive for Australia, Sam Walsh, said the uncertainty over the tax proposal was delaying investment decisions.

    But neither he, nor Mr Albanese, would list any that would be delayed.

    “The problem we have is until we have certainty as to how this tax is going to be calculated, what it actually is, it actually makes it very difficult to make decisions,” Mr Walsh said.

    He pointed out that after the consultation period, there would be a federal election and then a further wait before it was legislated.

    “We are facing an extended period of certainty here and that in itself is a bad thing in that it is delaying projects,” he said.

    Mr Albanese said new tax did not hurt the case for the proposed $US116 billion ($141bn) tie up of its iron ore operations with those of BHP Billiton, saying that the $US10bn-plus of synergies expected were more important than ever.

    He again rejected government claims the tax would have reaped an extra $35bn in tax if it was put in a decade ago, saying Rio’s investments in the Pilbara would not have been as great had the tax been in place earlier.

    His comments came as the resources industry said it was willing to negotiate over the resources tax with the federal government, as it was flagged that amendments to the controversial proposal were likely to be made.

    Woodside Petroleum chief executive Don Voelte said today that the industry was ready to negotiate a different tax and wanted to give a fair share back to Australians.

    “The key is how you balance the right amount of money back to the citizens, versus the economic return on billions and billions of dollars of investment,” Mr Voelte told ABC Radio today.

    “People keep saying those are our resources but those resources aren’t worth anything in the ground, it takes billions of dollars by those companies at great risk.”

    Mr Voelte’s comments followed a report in The Australian today that suggested the mining tax consultation panel would urge the government to reconsider the 40 per cent tax refund for failed projects.

    Fortescue Metals chief executive Andrew “Twiggy” Forrest stepped up the campaign against the super tax yesterday, highlighting that the 40 per cent refund on failed projects did not benefit miners when trying to attract capital for new mines and expansions.

    Australia’s leading public economist, Ross Garnaut, backed the miners’ concerns about the risk to their financing abilities under the government’s proposal to have a 40 per cent interest in each project and offering to repay a miner for 40 per cent of the loss should the mine fail.

    “Mr Forrest was saying that although he’ll be getting what is in effect a government bond equal to 40 per cent of his negative cashflows, he won’t be able to fund that,” he told Inside Business yesterday.

    “Well, if that really is the case, then that’s something that has to be examined.”

    Any move to wind back the tax break on losses would save the government hundreds of millions of dollars, delivering flexibility to address one of the key complaints about the tax — the 6 per cent profit threshold after which the super-profits tax applies.

    Treasurer Wayne Swan said today mining companies were acting “hysterically” by exaggerating the amount they would pay under the tax.

    “Miners have access to a range of generous deductions, which means that they are paying well below the official (corporate tax rate) of 30 cents in the dollar. So those companies are not telling the truth,” Mr Swan told ABC Radio.

    But the federal opposition said the government’s claim that mining companies paid an effective tax rate of between 13-17 per cent was based on a working paper by a graduate student at an American university.

    “This is the shonkiest piece of work you’ve ever seen,” opposition finance spokesman Andrew Robb told ABC radio.

    Mr Robb rejected as a “classic piece of spin” the government’s argument that the figures, contained in the Henry tax review, were sourced from National Bureau of Economic Research in the United States.

    Queensland Premier Anna Bligh, who held discussions with the treasurer on Friday, said today there was some need to reconsider the rate at which the super-profits tax cuts in.

    “We’ve made that clear, we’ve put that to the federal government,” she said.

    It was not in the national interest that the government and miners were campaigning against each other, Ms Bligh said.

    The government was widely expected to make changes to the proposal, with Resources Minister Martin Ferguson saying yesterday that there were refinements that could be made to make the tax more appropriate and balanced from a mining point of view.

    But he said the headline rate was going to be 40 per cent.

    The mining sector has stepped up its campaign against the proposal, with Rio Tinto urging its London investors to voice concerns about it and the Minerals Council of Australia launching a radio advertising campaign today against the tax.

    Mr Albanese told The Times that institutional investors in London needed to add their voices to the growing anger over Australia’s proposed super tax on mining profits.

    Additional reporting: AAP

  • BP swamped by criticism

    BP swamped by criticism

    Anna Driver and Matthew Bigg, Reuters May 22, 2010, 6:40 am

     

    HOUSTON/VENICE, Louisiana (Reuters) – Anger, scepticism and accusations of lying washed over energy giant BP Plc on Friday as it desperately pursued efforts to contain a month-old seabed well leak billowing crude oil into the Gulf of Mexico.

    U.S. lawmakers and scientists have accused BP of trying to conceal what many believe is already the worst U.S. oil spill, eclipsing the 1989 Exxon Valdez accident in Alaska. It represents a potentially environmental and economic catastrophe for the U.S. Gulf coast.

    The London-based energy giant, facing growing federal government and public frustration and allegations of a coverup, said its engineers were working with U.S. government scientists to determine the real size of the leak, even as they fought to control the still-gushing spill with uncertain solutions.

    President Barack Obama’s administration was keeping up the pressure on BP to do everything possible to stop the leak.

    “We are facing a disaster, the magnitude of which we likely have never seen before, in terms of a blowout in the Gulf of Mexico,” White House spokesman Robert Gibbs told reporters. “And we’re doing everything humanly possible and technologically possible to deal with that.”

    BP’s next planned step is a “top kill” — pumping heavy fluids and then cement into the gushing well to plug it. That operation could start next week, perhaps on Tuesday, BP Chief Operating Officer Doug Suttles said.

    Adding to the confusion, BP revised downward on Friday an estimate from Thursday that one of its containment solutions — a 1 mile (1.6 km)-long siphon tube inserted into the larger of two seabed leaks — was capturing 5,000 barrels (210,000 gallons/795,000 litres) of oil per day.

    A BP spokesman said the amount of crude oil it sucked from the leak fell to 2,200 barrels (92,400 gallons/350,000 litres) a day in the 24-hour period ended at midnight on Thursday.

    “The rate fluctuates quite widely on this tool,” Suttles told reporters at a briefing in Robert, Louisiana.

    Many scientists dismiss an original 5,000 bpd estimate of the total leaking oil — often defended by BP executives — as ridiculously low and say it could be as high as 70,000 barrels (2.9 million gallons/11 million litres) per day or more.

    “There’s a huge amount of uncertainty around that number and it could have a fairly wide range,” Suttles said. A federal panel will release its estimate of the actual flow rate as early as next week, a Coast Guard official said.

    “HOT POTATO”

    “It’s very clear that BP has not been telling the truth,” Massachusetts Democratic Representative Ed Markey told CNN.

    BP denied any coverup and said some third-party estimates of the leak were inaccurate. The company’s shares fell more than 4 percent in London.

    Michael Gordon, chief executive of Gordon Strategic Communications, a corporate and crisis public relations firm in New York, called BP’s handling of the spill “a case study in failed crisis communications.”

    “It would not have been possible for them to handle this worse. They are not taking sufficient responsibility for what happened. They’ve played a game of ‘hot potato’ with the other companies involved,” he said, referring to BP’s public trading of blame with its partners in the drilling of the well.

    A month after the well blowout and rig explosion that unleashed the catastrophic spill, sheets of rust-coloured heavy oil are starting to clog fragile marshlands on the fringes of the Mississippi Delta, damaging fishing grounds and wildlife.

    Scientists fear parts of the huge fragmented surface slick will be sucked to the Florida Keys and Cuba by ocean currents.

    At a briefing in Mobile, Alabama, Coast Guard Incident Commander Captain Steven Poulin said an overflight on Thursday of the oil slick showed that while “minor portions of sheen” were in the Loop Current there was “really no trail or elephant trunk” of oil extending down into the moving current flow.

    Markey said it was clear BP was only siphoning off “just a small fraction.”

    “BP has mismanaged this entire incident from day one,” he said. “They should not be trusted.”

    BP spokesmen say the original leak estimate came from the U.S. National Oceanic and Atmospheric Administration, one of its federal partners in the joint spill response.

    “I understand the frustration,” Suttles told CBS. “We’re supplying information.”

    LIABILITY ISSUE

    “It’s obvious they are trying to limit information to protect their economic liability,” said Markey, chair of the Select Committee on Energy Independence and Global Warming.

    In a sign of the Obama administration’s mounting anger and frustration, senior U.S. official have demanded BP share more data on the spill with them, accusing the company of falling short in keeping the government and public informed.

    There were signs of growing tension between BP officials and the U.S. government at the briefing in Robert. As Suttles described the “massive amount of information being gathered through this exercise,” Coast Guard Rear Admiral Mary Landry interrupted.

    “I have to challenge the word ‘exercise,’ Doug,” Landry said. “This is a full response.”

    BP said it was working with a newly created Flow Rate Technical Team to determine the exact amount of oil escaping.

    Suttles said BP had spent almost $700 million on the spill response and had “thrown absolutely everything” at the job. BP also is drilling a relief well to try to plug the leak but it probably would not be finished until August.

    On the Louisiana coast, fishermen counted the cost to their livelihoods. “This is going to keep killing stuff and it will make whole areas incapable of supporting marine life,” said George Barisich, president of the United Commercial Fishermen’s Association.

    BP has promised to pay legitimate damages claims and faces billions of dollars in expected cleanup and damages costs.

    (Additional reporting by Anna Driver and Chris Baltimore in Houston, Matt Spetalnick in Washington; Tom Bergin in London; Writing by Pascal Fletcher; Editing by Bill Trott)