Insurers plan to cover withdrawal of wind and solar subsidies.

July 6, 2014 Clean Energy, Finance 

FT: “Insurers are developing plans to protect investors in solar and wind power projects against the sudden withdrawal of crucial state subsidies that have battered the European renewable energy industry.”
Read more

National Grid chief calls for more interconnectors to UK.

July 6, 2014 Coal, Gas, Nuclear 

FT: “Energy prices for British consumers would fall by £1bn a year if electricity interconnectors between continental Europe and the UK were doubled by 2020, according to the operator of the UK’s gas and electricity networks.”
Read more

Dark snow accelerates glacial melting, accelerating sea-level rise.

July 5, 2014 Climate 

Guardian: “….The phenomenon of “dark snow” is being recorded from the Himalayas to the Arctic as increasing amounts of dust from bare soil, soot from fires and ultra-fine particles of “black carbon” from industry and diesel engines are being whipped up and deposited sometimes thousands of miles away.” Read more

Shell joins class action against BP over Gulf spill.

July 5, 2014 Oil 

Guardian: “Pension funds from London borough councils and even Shell are among a new group of shareholders suing BP in Texas over the Deepwater Horizon accident.”
Read more

California under “severe drought” as wildfire rages in Napa valley.

July 5, 2014 Climate 

Guardian: “California’s drought is intensifying, turning more farms to dust, fanning fires, draining fountains and driving “unbelievable” prices at water auctions.”
Read more

UK banks fake letters from non-existent law firms to harass debtors.

July 4, 2014 Finance 

Guardian: “Britain’s high-street banks are routinely issuing legal demands from what appear to be independent firms of solicitors designed to make struggling borrowers pay up. Yet the firms are not regulated by the legal profession’s watchdog, and are simply names used by banks’ in-house lawyers.”
Read more

British Gas to pay £1m for defrauding customers.

July 4, 2014 Gas 

Guardian: “British Gas has been forced to pay out £1m to customers after mis-selling energy deals to thousands of shoppers in Sainsbury’s stores nationwide and the Westfield shopping centre in Shepherd’s Bush, London.”
Read more

UK energy efficiency installations at lowest level for a decade.

July 4, 2014 Clean Energy 

Guardian: “The installation of measures to help homes save energy has collapsed as a result of government policies, campaigners have said.” Read more

Germany relaxes fracking ban to allow “scientific trials”.

July 4, 2014 Gas 

FT: “Germany is to relax its outright opposition to fracking by allowing field trials of the controversial technology in a step towards tapping the country’s vast reserves of shale gas.
Read more

German renewables in electricity generation exceeded 30% in first half.

July 3, 2014 Clean Energy 

Solarserver: “Energy generation of German solar PV installations increased by 28% compared to the first half of 2013, wind grew by around 19% according to new figures published by the Fraunhofer Institute for Solar Energy Systems (ISE, Freiburg).”
Read more

UK’s geology means fracking threatens drinking water, developers warned.

July 3, 2014 Gas, Oil 

Guardian: “The UK’s complex geology will pose challenges for fracking companies wanting to avoid water contamination in some parts of the country, according to the British Geological Survey (BGS).”
Read more

Shell is wrong to accuse Carbon Tracker of “trivialising the climate debate”.

July 3, 2014 Climate, Coal, Commentaries, Finance, Gas, Oil 
Jeremy Leggett in Recharge: “A debate is growing in the capital markets about whether carbon-fuel assets are at risk of being stranded — rendered unuseable by trends and events, including policies to combat global warming. ExxonMobil and Shell are to be congratulated for recently injecting a much-needed degree of transparency into the argument.”
“Carbon Tracker, the financial think-tank that I chair, has stimulated much of this debate with a series of reports since 2011. We argue that significant elements of fossil-fuel resources are at risk, particularly if policymaking continues to focus on a 2°C global-warming ceiling, and that capital expenditure planned for developing these resources is in danger of becoming money wasted.
ExxonMobil and Shell have responded to these ideas in open letters to stakeholders. Although ExxonMobil made its case in measured language, Shell accused those of us who worry about the potential for carbon-fuel asset-stranding of trivialising the climate debate and of “alarmist” arguments.
The fossil-fuel industry allocates nearly $700bn a year to access and expand oil and gas reserves, while handing out dividends of much less than this. Given such sums, if there is any risk at all of wasted capital, investors would do well to scrutinise these plans carefully.
Some are doing so. Shareholder questions about the wisdom of expenditure plans and the adequacy of dividends have already caused Shell to cancel plans for exploring in the Arctic in 2014. Its involvement in the $50bn project at Kashagan, in Kazakhstan’s zone of the Caspian Sea — an oilfield once deemed a profitable supergiant but now showing every sign of becoming a record white elephant — will add to those pressures in future years. So will the recent writing off of at least $2bn invested in US shale.
Carbon Tracker’s latest report, published on 8 May, shortly before the Shell letter, tries to help investors analyse risk in these matters. Our team, led by former Citigroup head of research Mark Fulton and supported by HSBC’s former head of oil and gas, Paul Spedding, used supply-cost analysis to dive deep into potential capital expenditure, province by province and company by company. They looked at high-cost projects that would be vulnerable to weaker demand for hydrocarbons, driven by climate policy, slowing economic growth, energy efficiency and the rapid rise of renewables.
The research identified many of the domains targeted by the oil majors as being at some risk if costs of exploration and extraction rise, among them Canadian oil sands, ultra-deep water in the Atlantic, and the Arctic.
Since the majors’ letters came out, the International Energy Agency has warned that Opec production must rise if we are not to risk an oil shock this year. Militias are running amok in Iraq, jeopardising production. Accordingly, the threat to oil majors may not just be limited to the lower oil-price scenarios that the latest Carbon Tracker report focuses on, but to high-price scenarios too.
This is not to trivialise the climate debate, it is to open a new dimension of it — one that links it to the capital markets, an element that has essentially been missing hitherto.
As for the alarmism that Shell sees in this approach, the key thing is that investors will be able to judge for themselves, given the long essays the hydrocarbon majors have now provided for shareholders to sift through and follow up on.
The core of the ExxonMobil and Shell arguments is that they completely discount the risk of policymakers acting to set the world on a road map to the 2°C ceiling. Hence, they claim, their existing reserves are not at risk, and, by implication, nor are any resources they target their exploration at, for decades to come.
Really? Former Deutsche Bank head of energy research Mark Lewis, now with Kepler Cheuvreux and a leading light on the Carbon Tracker advisory board, immediately responded that this thinking was naively binary and complacent. Climate policy is much more nuanced than the oil giants wish to think, he argues, and it is not limited to international agreements.
Am I alarmist, or trivialising debate, in raising this? Time will tell. On all our watches.”

 

“Oil explorers hit rock bottom”: FT headline.

July 2, 2014 Finance, Oil 

FT: “The $250m price tag attached to the sale of a 50 per cent stake in a key project should have given a big boost to the share price of Africa-focused oil explorer Bowleven last week. It failed to.
Read more

Renewables to win two-thirds of energy investment by 2030: Bloomberg.

July 1, 2014 Clean Energy, Climate, Coal, Finance, Gas, Nuclear, Oil 

Bloomberg: “Renewable energy may reap as much as two-thirds of the $7.7 trillion in investment forecast for building new power plants by 2030 as declining costs make it more competitive with fossil fuels.”
Read more

BNP Paribas “regrets” over criminal behaviour & record $8.8bn fine.

July 1, 2014 Finance 

Guardian: “France’s biggest bank, has said it deeply regrets the misconduct that led to a record-breaking fine of $8.83bn (£5.2bn) for dealing with countries that were subject to US sanctions.”
Read more

Estimate of shale gas and oil in place in Midland Valley “modest”.

June 30, 2014 Gas, Oil 

DECC: “The British Geological Survey’s report of the resources in the Midland Valley, Scotland, suggests a modest amount of gas and oil in place. The central estimate of shale gas in place is 80 trillion cubic feet. The central estimate for shale oil in place is 6 billion barrels of oil.”
Read more

In latest Arctic setback for oil industry, Statoil delays key project.

June 30, 2014 Oil 

FT: “Statoil delayed the development of its showcase Arctic oil project for a second time after a string of disappointing drilling results in the Norwegian Barents Sea.”
Read more

Global capital expenditure by cash-rich companies still stalling.

June 30, 2014 Finance, Gas, Oil 

FT: “An expected pick-up in global investment spending by cash-rich companies has failed to materialise so far this year. Although companies continue to have historically high levels of gross cash at $4.5tn for the top 2,000 capex spenders in 2013, spending is likely to decline 0.5 per cent this year in real terms, according to Standard & Poor’s forecasts based on first-half data.”
Read more

New York towns can prohibit fracking, state appeals court rules.

June 30, 2014 Climate, Gas, Oil 

Guardian: “Opponents of hydraulic fracturing celebrated a major victory over the oil and gas industry on Monday after the highest court in New York state agreed that cities and towns can prohibit drilling within their boundaries.”
Read more

“Sectarian genie is out of the bottle from Syria to Iraq.”

June 30, 2014 Gas, Oil 

Reuters: “As jihadists storm through the Sunni heartlands of Iraq towards Baghdad, where a Shi’ite government they regard as heretic clings on, they have lifted the veil on deep sectarianism which has also stoked the fires of Syria’s civil war and is spilling over into vulnerable mosaic societies such as Lebanon.”
Read more