Trying to stop the eurozone contagion, they have agreed a further €109bn plus called in private bondholders, to contribute a further #37bn under conditions that amount to a partial default. Sarkozy says that the EU has effectively created a European Monetary Fund. Will they succeed? In the FT, Philip Stephens asks whether this crisis, and the US equivalent, are a spasm or a spiral. He concludes it is too early to panic: bold leadership could solve both crises.
Archive for July, 2011
John Elkington on the CarbonTracker report: “Having written my first report on climate change in 1978, I have been dutifully tracking the evolving science for half a lifetime, but only on Friday 15 July 2011 did I truly feel that the climate, carbon and financial agendas had been spot-welded in a way that potentially brings all of this right home to people such as asset owners, rating agencies, brokers, analysts, investment bankers, accountants, data providers and financial regulators.”
EDF says completion of its first French next-generation EPR nuclear reactor will now be in 2016, not 2014. In July 2010, if delayed the start of the 1,600 megawatt nuclear reactor from 2012 to 2014 and raised its cost estimate from 4 to 5 billion euros. It now expects the cost to rise to 6 billion euros ($8.52 billion). EDF blames complex engineering and Fukushima. The project will take almost twice the time originally announced and nearly twice the budget. The company hopes to build two of these at Hinckley Point and two at Sizewell.
Export began last month via the longest pipeline in the world (8,700 km). Turkeminstan will export 40 bcm pa, around half its production, 30 of which will be delivered by this pipeline.
Saudi Arabia is on course to consume an average 2.8 m barrels a day this year. This would make it the world’s sixth-largest oil consumer behind the US, China, Japan, India and Russia. On a per capita basis, consumption is set to jump by 5.6 per cent against the global average of 1.4 per cent. Demand is up 75% in the last ten years. The IEA estimates that more than 0.5 mbd are being burned in electric power plants.
The National Snow and Ice Data Centre reports that Arctic sea ice extent declined rapidly through the first two weeks of July, at a rate averaging nearly 120,000 square kilometers (46,000 square miles) per day. Ice extent is now tracking below the year 2007, which saw the record minimum September extent.
Friends of the Earth ask MPs to reject the UK government’s energy plan on the basis that the big energy companies are planning dozens of new fossil-fuel stations that will impede the development of renewables.
Andrew Smithers in the FT: “Financial crises occur when debt levels are excessive and asset prices fall. The severity of the recession that ensues can then be mitigated by large increases in government deficits and large cuts in interest rates. / Today the conditions for the next financial crisis are already in place. Debt remains at pre-crisis levels and US equities and UK property are seriously overpriced. But the ability to reduce the impact of the next recession with large increases in government deficits and sharp falls in interest rates has vanished.”
Will Hutton walks through the drama in the Observer: “When President Obama, the supreme rationalist, says that there are just days to avert Armageddon, everyone should sit up and listen. For months, Republicans have used their new majority in the House of Representatives to block any move to lift the artificial cap on the amount the US government can borrow. If by this Friday they still refuse – insisting on up to $4trillion of spending cuts, excluding defence, and no tax increases as the price of their support – then the US will be unable to service its public debts. The biggest economy on Earth will default. / The results will be catastrophic…. The US government will have to start to wind down: soldiers’ wages and public pensions alike will be suspended. But in the financial markets there will be mayhem. Interest rates will shoot up and there will be a flight from the dollar. Banks, uncertain about their expected income from their holdings of US Treasury bonds and bills, will call in their loans, creating a second credit crunch.”
Standard & Poor’s warning: a 50-50 chance it could cut its triple-A status within the next three months. The trigger is the deadlocked talks between the White House and Republicans on raising the government’s $14.3tn (£8.9tn) borrowing limit.
This out of 91 undergoing them: a failure rate lower than predicted that prompts questioning of the severity of the testing. Failed banks have to raise more capital.
A Treehugger.com editorial blog based on a 2 minute video: “Once you get to the interview with Jeremy Leggett, he says something very simple, but very profound—as soon as people see solar energy at work, they want to see more of it.”
Investment in conventional assets accounted for 63% of the Majors’ total capital expenditure between 2001 – 2005. Wood Mackenzie calculates that the proportion falls to 40% in 2011 to 2015. Increasing investment in the deepwater (23% vs. 17%) and LNG sectors (18%vs. 11%) makes up the largest difference, with heavy oil/oil sands (9% vs. 6%) and unconventional oil/gas (9% vs. 3%) most of the remainder.
Now one in five, 5.5 m homes, pay more than 10% of income on energy bills. And four of the Big 6 have yet to announce their price rises.
In particular, regulators should require reporting of reserves and potential CO2 emissions by listed companies and those applying for listing. They should aggregate and publish this data. My Guardian blog on the CarbonTracker report.
In the Renewables Roadmap produced by DECC alongside the White Paper on electricity market reform, 8 renewable technologies expected to “key” by 2020 are listed. They are onshore and offshore wind, marine energy, biomass electricity and biomass heat, ground and air source heat pumps, and renewable transport technologies such as biofuels and hydrogen fuel cells. Solar industry representatives are surprised and disappointed.
Premiums are high, and insurance trade press is on the case: “The (oil and gas) industry claims they are following all applicable laws, which they probably are. But that doesn’t mean a whole lot when drinking water is only required to be tested once every six, eight or 10 years. There’s no way gas companies are being charged the proper liability premiums to cover the environmental risk.” – Cyril Tuohy, Managing Editor, Risk and Insurance, April 1, 2011
American Electric Power has come to the conclusion that it would not be allowed to add the $668m costs for a full-scale CCS system at its Mountaineer coal plant in West Virginia to consumer bills.
Ecotricity are powering G24i’s manufacturing plant for dye-sensitized cells in South Wales with a 2.3MW turbine.