FT: “US natural gas companies are heading for large writedowns in their reported reserves as a result of the slump in gas prices – in some cases, putting their finances under pressure. …Last year, the Securities and Exchange Commission wrote to dozens of shale gas companies, calling on them to clarify how they had been reporting their reserves. The scope for views to differ means revisions are difficult to predict.”
Archive for August, 2012
Guardian: “…a scheme with enough capacity to power 40% of Scottish households was submitted for planning permission. The £4.5bn complex would have 339 turbines covering 300 square kilometres off Caithness, making it 50% bigger than the giant London Array scheme off Kent. It is expected to be the first in a series of deep water schemes under “Round 3″ licensing. ….The 1.5-gigawatt farm is being developed by Moray Offshore Renewables, a joint venture between Spanish oil company Repsol, and an arm of Portuguese power group EDP, which has recently become partly owned by China’s state-owned Three Gorges Corporation.”
Barclays: “We map the longer-term supply/demand picture, and the signals here are stark. Oil supply from existing fields is falling by close to 4m bls/d per year due to natural decline; global demand is rising by more than 1m bls/d each year, even in the current weak environment. Hence, the supply gap that needs to be filled each year from new fields is more than 5m bls/d. This presents a material challenge for the energy industry. While this long-term supply squeeze may have been less apparent in the quarter just past, 3Q12 looks as if it will see a significant tightening of the oil market, with a 2m bls/d upswing in demand and falls in both OPEC and non-OPEC supply. To this we can add minimal spare capacity and heightened geopolitical tensions in several regions. A release of US strategic reserves would provide only a slight and temporary respite. Thus, we continue to have strong oil price conviction, and our Brent forecast for 2013 is $125/bl. For the longer term, we expect prices to follow an inexorable, if volatile rise to above $180/bl before the decade closes.”
But only a quarter of the way to the potential reservoir it is targeting off Alaska, and they may not be able to continue without an extension to the allowed drilling season. FT: “Mr Salazar [Interior Secretary] said the company would not be allowed to go any further until it had secured final approvals for the Arctic Challenger, the 300-foot barge converted to carry a containment system for catching oil in the event of a spill. He suggested those approvals could come next week, at the earliest. “We are holding Shell’s feet to the fire,” Mr Salazar said. “We don’t know whether Shell will be able to complete a well in the Arctic this year”.”
Jonathan Verenger on Seeking Alpha: “It remains to be seen if the entire shale gas industry is a Ponzi scheme. More likely is the possibility that it is overhyped by Wall Street and Natural Gas firms, who bought up large plots of land and issued optimistic projections to suck other companies and investors into buying that same land from them at higher prices. It is looking highly likely that once again the public will get the short end of the stick in a few years as the supply of gas from these shale formations runs out much faster than estimates, leaving the public with a large glut of natural gas fueled cars and trucks and natural gas fueling stations, all of which were built on the promise of 100+ years of supply at cheap prices and the dream of energy independence.”
Reuters: “Coalgate” is a short-hand reference to a state auditor’s report published on August 17 that questioned the government’s practice of awarding coal mining concessions to companies without competitive bidding, potentially costing the treasury billions of dollars in lost revenues.” PM Singh is shouted down in Parliament trying to refute allegations.
Shell also plans a $12.6bn refinery and petrochemical complex – which could become China’s single largest foreign investment.
Cleantech Finance: “As the SEC continues to develop the rules and regulations regarding debt and equity based crowdfunding, many in the industry are trying to help entrepreneurs get ready for the changes. For those that have developed projects for donation based platforms such as Kickstarter and Rockethub it will be important to become educated on the complex process for debt and equity based projects. …..Within the cleantech sector, there is potential for companies and entrepreneurs to take full advantage of debt and equity based crowdfunding.”
Guardian: “The US wind energy industry is now providing enough capacity to power 13 million homes, equivalent to all of Nevada, Colorado, Wisconsin, Virginia, Alabama, and Connecticut combined. The American Wind Energy Association (AWEA) used the annual National Clean Energy Summit in Las Vegas last week to confirm that the sector had passed the 50GW installed capacity milestone after yet another quarter of rapid growth. The trade body said the 50GW of capacity was equivalent to the generating power of 44 coal-fired power stations or 11 nuclear power plants, resulting in emission reductions that would equate to taking 14 million cars off the road.” But the PTC is still in doubt for year-end renewal, placing 37,00 jobs at risk.
The Vampire Squid no longer faces the prospect of criminal proceedings.
After a speech by Nick Clegg a few days ago asserting that the coalition is not split on clean energy, George Osborne will send a different message today. The FT reports “Mr Osborne will cite a new £500m tax break for shallow-water gas fields – made a fortnight ago – as evidence of the government’s support for the fossil fuels industry. That announcement prompted Centrica and GDF Suez to pledge to open up a big new North Sea gas field, Cygnus. The chancellor will say that Cygnus will create 300 engineering jobs in Hartlepool and Fife.”
Business Green: “The US Defense and Interior departments have signed a deal to boost the use of renewable energy on military land, to help strengthen energy security and reduce the military’s $4bn annual utility bill. ….The partnership will build on existing plans by the DoD to increase its use of onsite renewables to improve energy security and to reduce its $4bn annual utility bill. Each of the military services has committed to deploying 1GW of renewable energy on or near its installations by 2025.”
FT: “Wall Street banks are increasingly telling counterparties and borrowers to restructure contracts or find another bank as they prepare for the potential exit of a country from the eurozone. Using hedges, such as credit default swaps, US banks have reduced their net exposure to troubled eurozone countries.”
Central and southern Italy is deriving nearly all its electricity needs from renewables at present. Italy is on track to meet its EU quota of 26% of total electricity output from renewable sources by 2020. FT: “These fast-moving developments, unforeseen by big industry, have been driven by a collapse in demand due to Italy’s double-dip recession and a four-fold increase in solar energy capacity over the past year. As a result major utilities have lobbied to win subsidies known as “capacity payments” for their conventional and semi-idle thermal power stations after over-investing in new plants.”
In the Washington Post: “When I testified before the Senate in the hot summer of 1988 , I warned of the kind of future that climate change would bring to us and our planet. I painted a grim picture of the consequences of steadily increasing temperatures, driven by mankind’s use of fossil fuels. But I have a confession to make: I was too optimistic. My projections about increasing global temperature have been proved true. But I failed to fully explore how quickly that average rise would drive an increase in extreme weather. In a new analysis of the past six decades of global temperatures, which will be published Monday, my colleagues and I have revealed a stunning increase in the frequency of extremely hot summers, with deeply troubling ramifications for not only our future but also for our present. ….The odds that natural variability created these extremes are minuscule, vanishingly small. To count on those odds would be like quitting your job and playing the lottery every morning to pay the bills.”