Friday, January 25, 2013

The Peak Oil Crisis: Looking at 2013 - By Tom Whipple

We are only a few weeks into the New Year and already the shape of the next 11 months is starting to form.

To start, the U.S. Department of Energy sees two good years in front of us, with increases in domestic tight oil (also known as "shale oil") production and falling demand in Europe offsetting what now looks like a million barrel per day increase in global demand in each of the next two years. Demand for oil in the U.S., which has been falling pretty steadily in recent years, is forecast to increase a bit in 2013.

The Paris-based International Energy Agency, however, is not so sure about the next two years. The Agency recently started talking about coming “tightness” in the oil markets as economic growth in China gives indications of starting to revive, increasing its demand for oil. If you want a really pessimistic forecast, you might be impressed by the Goldman Sachs chief commodity strategist who told a conference in Frankfurt that he would not be surprised to see oil prices reach $150 a barrel this summer from the current $112.

Needless to say, oil at $150 a barrel would cause serious economic dislocations. Back in 2008 when oil prices got into the $140 range all sorts of bad things happened, many of which are still with us.

Now everybody knows that a major reduction of oil exports could easily drive prices up by tens of dollars a barrel in short order. Last spring, when the rhetoric between the Iranians and Israelis reached a zenith, prices were driven up by threats to close the Strait of Hormuz. Although the current rhetoric is much lower, the Iranian nuclear confrontation is still with us.

There are other, more likely ways that oil exports could be curtailed. It is hard to believe that Iraq is not sinking into civil war. Bombs are going off nearly every day in Iraq and tensions between the Sunnis, Kurds, and the Shiite-controlled government in Baghdad are increasing with every passing week. Oil production is already slipping, several big western oil companies are pulling out of the oil fields under Baghdad’s control, the Kurds will no longer ship oil through Baghdad’s pipeline, and tanker shipments to Jordan have been halted.

It is difficult to foresee Baghdad increasing its oil production by any significant amount in the next two years, but easy to see domestic chaos increasing to the point where production starts to slip or even stops.

Another possibility for oil supply disruption could be the transition from a Chavez-dominated Venezuela to whatever follows. The U.S. is importing roughly a million barrels of oil a day from Venezuela. While the post-Chavez transition, whenever it comes, may take place without problems, it could be a difficult one involving coups and counter coups which would curtail oil exports for years.

In recent days the situation in Algeria and by implication Libya has come to the fore. So far the Algerian government has used oil revenues to keep discontent under control, but Libya is far from stable and accordingly the country’s oil production is 500,000 b/d lower than a few years ago. Given the instability there it could go even lower.

There has been little change in the Sudanese and Syrian situations. The chances that either will resume normal exports in the coming year range from low to non-existent.

Finally we have the trend to more extreme weather to consider. So far, most of the weather-related effects on oil production and distribution have been storms in the Gulf of Mexico; however, last year we saw a major disruption to the oil distribution system in the New York region. As floods and droughts become more prevalent, these too could impact oil production and distribution around the world, especially as more oil and gas production moves offshore.

If there are major export disruptions in the year ahead, prices obviously will go up – perhaps way up. If, however, the world manages to muddle through the next 11 months with the oil still flowing at roughly current rates, then the question of where oil prices go becomes more complicated. Conventional wisdom says European oil demand will go down this year and possibly next, U.S. oil demand will remain about the same, and demand from China and other developing and oil-exporting countries will go up by about a million barrels a day. We should all keep in mind that the Saudis are currently building three large oil refineries so that in 3 to 4 years their export of crude will be about 1.2 million b/d lower than it would have been otherwise. More


Monday, January 21, 2013

Solar PV power in harmony with nature - New WWF report says land requirements are insignificant

Abu Dhabi, UAE- A new report released on the sidelines of the World Future Energy Summit here today, shows that even if all electricity is to be generated through renewable energy (RE) sources, and with solar photovoltaics (PV) alone, it would take up only an insignificant amount of total land area, contrary to common perception.

The report, Solar PV Atlas: solar power in harmony with nature, shows through seven cases- six countries and one region- less than 1% of the total land mass would be required to meet 100% of projected electricity demand in 2050, if generating electricity only with solar PV .

WWF teamed up with First Solar, 3TIER and Fresh Generation to develop the report. It looks at Indonesia, Madagascar, Mexico, Morocco, South Africa, Turkey, and the Indian state of Madhya Pradesh.

The regions represent diverse geographies, demographics, natural environments, economies and political structures. They receive different but good average levels of sunshine, and all show vast potential for widespread development of solar PV, a well-established, commercially available and reliable technology today.

The report illustrates that PV technology, when well-planned, does not conflict with conservation goals and clarifies that no country or region must choose between solar PV and space for humans and nature.

”Research has found that PV power plants provide considerable environmental benefits, including a low carbon footprint and a short energy pay-back time.

Replacing existing grid electricity with PV arrays significantly reduces greenhouse gas and heavy metal emissions as well water usage,” says Lettemieke Mulder, First Solar vice president for Sustainability.

This new report supports WWF’s vision of 100% RE by 2050. “We are actively promoting investments and measures in Renewable Energy technologies that help to make this happen,” according to Jean-Philippe Denruyter, WWF’s manager Global Renewable Energy Policy. More


France eyes Saudi nuclear reactor sales

A top French minister and the chief executives of French utility EDF and reactor builder Areva are visiting Saudi Arabia this weekend to build a case for selling French nuclear reactors to the oil-rich country.

Industry Minister Arnaud Montebourg will meet with Saudi officials and with representatives of EDF and Areva, who opened a joint office in Riyadh six months ago to lay the groundwork for a French nuclear offer.

Montebourg will build on a November 4 visit by French President Francois Hollande to Saudi Arabia's King Abdullah and a 2011 agreement between France and Saudi Arabia that offered the Saudis atomic know-how and training for local staff.

The kingdom has not yet launched a formal tender offer but is widely expected to do so, and nuclear equipment vendors worldwide are gearing up for when it does.

"We are still in a very early stage of the game in Saudi Arabia," an EDF spokeswoman told Reuters.

Eager to reduce domestic consumption of oil and diversify its energy mix, Saudi Arabia is considering building 17 gigawatts of nuclear capacity by 2032, the King Abdullah City for Atomic and Renewable Energy (KACARE) says on its website.

That is the equivalent of about 17 standard nuclear reactors, or about 10 of the 1600 megawatt European Pressurised Reactors (EPR) that Areva sells.

EDF CEO Henri Proglio and Areva CEO Luc Oursel will accompany Montebourg, putting up a united front despite years of acrimony between the two state-owned companies.

France plays a strong hand in Saudi Arabia, which has no nuclear capabilities of its own but has deep pockets and wants to acquire the most modern technology.

"Saudi Arabia will only deploy the most advanced and thoroughly tested technologies, paying maximum attention to safety, security and safeguards of the highest international standards," KACARE said on its website.

The third-generation EPR is one of the most modern reactors on the market. Conceived following the 1986 Chernobyl disaster, it has a double containment wall, a "core catcher" to contain core meltdown and multiple backup and cooling systems.

Unlike other suppliers, Areva also sells uranium, offering utilities long-term supply contracts.

EDF positions itself as the only utility company that can lead the complex civil engineering project involved in building a nuclear power plant and can also offer help with operating the plants. More


Tuesday, January 8, 2013

Oil sands' toxins 'accumulate in freshwater ecosystems'

Toxic pollutants released by oil sands mining operations are accumulating in freshwater ecosystems, research by Canadian scientists suggests.

A study of sediment in nearby lakes showed the level of pollutants, known as PAHs, had risen since the 1960s when oil sands development began.

However, the researchers added that PAH concentrations were still lower than those found in urban lakes.

The findings appear in the Proceedings of the National Academy of Sciences.

PAH refers to polycyclic aromatic hydrocarbons - a group of chemicals that have been shown to affect aquatic organisms and birds. PAHs have also been described as being responsible for damaging food crops.

The chemicals occur naturally in coal, crude oil, and petroleum; they are also present in products made from fossil fuels, such as creosote and asphalt.

PAHs also can be released into the air during the burning of fossil fuels and organic matter - the less efficient the burning process, the more PAHs are given off. Forest fires and volcanoes produce PAHs naturally.

Digging the dirt

Using sediment cores from five lakes within a 35km (22-mile) radius of major oil sands facilities and one remote lake (90km/56 miles from the facilities), the researchers assessed the ecological impact of oil sands developments on freshwater ecosystems.

Analysis of the samples showed that PAH levels were now 2.5-23 times greater than levels from about 1960. More