Tue 16 Feb 2010

Peak Oil & Uncle Sam: Do as I do, not as I say…

Posted by Manfred Kissling under Peak oil
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  • For Darpa, the support for algae is part of a broader mission for the US military to obtain half of its fuel from renewable energy sources by 2016. That time line meant that the Pentagon needed to develop technologies to make its hardware “fuel agnostic”, capable that is of running on any energy source including methane and propane.
  • The US Air Force wants its entire fleet of jet fighters and transport aircraft to test-fly a 50-50 blend of petroleum-based fuel and other sources – including algae – by next year.

Defense Advanced Research Projects Agency (Darpa) that helped to develop the internet and satellite navigation systems, has taken industry insiders by surprise. A cheap, low-carbon fuel would not only help the US military, the nation’s single largest consumer of energy, to wean itself off its oil addiction, but would also hold the promise of low-carbon driving and flying for all.

Darpa’s research projects have already extracted oil from algal ponds at a cost of $2 per gallon. It is now on track to begin large-scale refining of that oil into jet fuel, at a cost of less than $3 a gallon, according to Barbara McQuiston, special assistant for energy at Darpa.

“Darpa has achieved the base goal to date,” she said. “Oil from algae is projected at $2 per gallon, headed towards $1 per gallon.”

McQuiston said a larger-scale refining operation, producing 50 million gallons a year, would come on line in 2011 and she was hopeful the costs would drop still further – ensuring that the algae-based fuel would be competitive with fossil fuels. She said the projects, run by private firms SAIC and General Atomics, expected to yield 1,000 gallons of oil per acre from the algal farm.

Unlike corn-based ethanol, algal farms do not threaten food supplies. Some strains are being grown on household waste and in brackish water. Algae draw carbon dioxide from the atmosphere when growing; when the derived fuel is burned, the same CO2 is released, making the fuel theoretically zero-carbon, although processing and transporting the fuel requires some energy.

Source: The Observer

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Sat 13 Feb 2010

Electric vehicles vrs. H fuel-cell vehicles

Posted by Manfred Kissling under Hybrid / EV
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  • EV are a short term tip of the iceberg solution to our energy challenges
  • Lithium-ion is a non-renewable natural resource with limited supplies
  • The future is Hydrogen fuel cells

Major carmakers as Toyota, Honda, Daimler, General Motors, and Hyundai/Kia are deep into plans for commercial production of cars powered by hydrogen fuel cells starting in 2012.

Like natural gas, hydrogen can be used as a car fuel with engine modifications. But carmakers think fuel cells are the better, more efficient, silent, clean power source for transportation. They function somewhat like a battery, except that their fuel is constantly replenished, reacting electrochemically with the air’s oxygen to make electricity to drive an electric motor.

Today, such vehicles are hand-built and expensive, but costs will come down once series production gets underway: Toyota says that it expects to “shock” the industry with its cost reduction as much as 90%.

As for hydrogen fuel costs are expected to be $2-3 per kilogram by around 2018 (a kilogram of hydrogen has about the same energy content as a gallon of gasoline), but because fuel cells are about twice as efficient as internal combustion engines, the effective cost per unit of distance would be about half that.

It is worth noting that hydrogen’s supporters do not oppose battery-powered cars, and they embrace biofuels as another renewable source of hydrogen. But because of the weight of electric batteries, their limited range, cost, and other considerations, batteries are best suited primarily for short-range city cars.

Source:  Project Syndicate &  Ecobella Blog

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Wed 10 Feb 2010

Short-Term Energy Outlook

Posted by Manfred Kissling under Oil
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February 10, 2010 Release

Highlights

  • Crude oil prices continue to fluctuate.  The West Texas Intermediate (WTI) spot price increased from $69.48 per barrel on December 14 to $83.12 on January 6 and then fell to $72.85 on January 29.  EIA expects the crude oil market to strengthen again this spring with WTI rising to an average of about $81 per barrel over the second half of this year and $84 per barrel in 2011.  The crude oil price forecast is unchanged from last month’s Outlook.  EIA’s forecast assumes that U.S. real gross domestic product (GDP) grows by 2.3 percent in 2010 and by 2.5 percent in 2011, while world oil-consumption-weighted real GDP grows by 2.7 percent and 3.6 percent in 2010 and 2011, respectively.
  • EIA forecasts that the annual average regular-grade retail gasoline price will increase from $2.35 per gallon in 2009 to $2.84 in 2010 and $2.97 in 2011 because of the rising average crude oil price forecast.  Pump prices may exceed $3 per gallon at times during the approaching spring and summer.  Projected annual average retail diesel fuel prices are $2.95 and $3.16 per gallon, respectively, in 2010 and 2011.
  • EIA expects this year’s annual average natural gas Henry Hub spot price to be $5.37 per million Btu (MMBtu), a $1.42-per-MMBtu increase over the 2009 average of $3.95.  EIA projects continuing price increases in 2011, averaging $5.86 per MMBtu for the year.  EIA expects working gas inventories to end the first quarter at about 1,644 billion cubic feet (Bcf) compared with 1,734 Bcf in the previous Outlook, because of colder-than-normal weather in early January.
  • The annual average residential electricity price changes only slightly over the forecast period, falling from 11.6 cents per kilowatthour (kWh) in 2009 to 11.5 cents in 2010, and then rising to 11.7 cents per kWh in 2011.  These projections are unchanged from the previous Outlook.
  • Projected carbon dioxide (CO2) emissions from fossil fuels, which declined by 6.3 percent in 2009, will increase by 1.5 percent and 1.3 percent in 2010 and 2011, respectively, as economic recovery contributes to higher energy consumption.


Crude Oil and Liquid Fuels Overview. The world oil market should gradually tighten in 2010 and 2011, as the global economic recovery continues and world oil demand begins to grow again.  Continuation of the production targets set by the Organization of the Petroleum Exporting Countries (OPEC), as well as lower overall growth in non-OPEC supply over the 2010-2011 forecast period, would also contribute to a firming of crude oil prices to above $80 per barrel this summer.  However, the combination of high commercial inventories among members of the Organization for Economic Cooperation and Development (OECD) and ample OPEC surplus production capacity should help dampen the likelihood of any large upward swings in prices.

Global Crude Oil and Liquid Fuels Consumption. EIA has revised upward slightly its projections for global liquid fuels consumption growth in this Outlook, as the Asian-led recovery continues.  China’s apparent liquid fuels consumption in December increased by 0.9 million barrels per day (bbl/d), or 12 percent, above year-earlier levels, as China’s economic stimulus package continued to help push up both oil usage and economic growth. While Japan is expected to continue its long-term decline in consumption, signs of an economic turnaround in that country lead EIA to be less pessimistic about the Japanese decline in liquid fuels consumption for 2010-2011.  EIA’s revised outlook is for global liquid fuels consumption to grow by 1.2 million bbl/d in 2010 and 1.6 million bbl/d in 2011 after showing annual declines in 2008 and 2009.  Non-OECD countries are expected to account for the majority of this growth in both 2010 and 2011.

Non-OPEC Supply. Non-OPEC supply increased by 560,000 bbl/d in 2009, the largest annual increase since 2004.  However, EIA does not expect this level of supply growth to continue during the forecast period. Non-OPEC supply is projected to increase by 430,000 bbl/d in 2010.  The largest source of growth in 2010 is the United States, followed by Brazil and Azerbaijan.  Offsetting this growth, production is forecast to decline in Mexico, the United Kingdom, and Norway.  Non-OPEC supply is expected to fall by 120,000 bbl/d in 2011, as declining production in mature areas overwhelms any new production growth.

OPEC Supply. OPEC cut its crude oil production by 2.2 million bbl/d in 2009, one reason why WTI crude oil prices stabilized between $70 to $80 per barrel since the middle of last year.  This range is consistent with the “fair price” range for crude oil proposed by King Abdullah of Saudi Arabia at the beginning of 2009.  Oil prices hovered in this range despite sustained high levels of oil inventories and rising spare production capacity, which rose, in part, because of cuts in OPEC production. OPEC surplus crude oil production capacity currently stands at about 5 million bbl/d and could grow to 6 million bbl/d by the end of the forecast period.  However, most of this surplus capacity is concentrated in Saudi Arabia, which is not likely to use it as long as the oil market is stable and its price target range is being met.  In contrast, OPEC surplus crude oil production capacity averaged 2.8 million bbl/d during the 1999-2009 period.

EIA expects annual OPEC crude oil production will increase by an average of 0.4 million bbl/d in 2010 and again in 2011 as global oil demand recovers. In addition, EIA expects OPEC non-crude petroleum liquids, which are not subject to OPEC production targets, to grow by 0.6 to 0.7 million bbl/d each year through 2011, for a total of up to 2.2 million bbd/d of increased OPEC liquids production over the next two years. OPEC is scheduled to meet in Vienna on March 17, 2010, to reassess market conditions.

OECD Petroleum Inventories. EIA estimates OECD commercial oil inventories were 2.69 billion barrels at the end of 2009, equivalent to about 58 days of forward cover, and about 90 million barrels more than the 5-year average for the corresponding time of year.  Projected OECD oil inventories remain at the upper end of the historical range over the forecast period.

Crude Oil Prices. WTI crude oil spot prices averaged $78.33 per barrel in January 2010, almost $4 per barrel higher than the prior month’s average and matching the $78-per-barrel forecast in last month’s Outlook.  The WTI spot price peaked at $83.12 on January 6 and then fell to $72.85 on January 29 as the weather turned warm and concerns about the strength of world economic recovery increased.  EIA forecasts that WTI spot prices will remain near current levels over the next few months, averaging $76 per barrel in February and March, before rising to about $82 per barrel in the late spring and to $85 by late next year.

Expected WTI price volatility was fairly steady over the month.  April 2010  implied volatility (based on options prices)  averaged 35 percent per annum during January, and, over the 5 days ending February 4, 2010, it was slightly over 34 percent.  April 2010 WTI futures averaged $75 per barrel over that same 5-day window, yielding a lower and upper limit for the 95-percent confidence interval of $60 and $94 per barrel, respectively.

One year ago, April-delivered WTI into Cushing, Oklahoma, was priced at $45 per barrel, and implied volatility, at 74 percent, was more than twice the rate now trading in the options markets.  Thus, the 95-percent confidence interval for April 2009 WTI futures had lower and upper limits of $28 and $72 per barrel at that time, respectively.

Source: EIA

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Thu 4 Feb 2010

World Oil Capacity to Peak in 2010 Says Petrobras CEO

Posted by Manfred Kissling under Peak oil
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Mr. Gabrielli, the CEO of Petrobras, gave a presentation in December 2009 in which he shows world oil capacity, including biofuels, peaking in 2010 due to oil capacity additions from new projects being unable to offset world oil decline rates.

Gabrielli states in his presentation that the world needs oil volumes the equivalent of one Saudi Arabia every two years to offset future world oil decline rates.

This is a stronger statement than the one he gave in January 2009 in an interview with Business Week when he said the following.

According to the company’s projections, production from existing fields will fall from a little over 80 million barrels a day to maybe half of that even if new techniques are used to slow their rate of decline. So just keeping global production flat is going to require lots of new fields and requires the world to replace one Saudi Arabia per three years.

Gabrielli is clearly concerned about declining future world oil production. His statements are now in alignment with those of other oil company executives including Sadad al-Husseini, former Aramco executive, who states that world oil production is on a peak plateau, and Total’s CEO, Christophe de Margerie who doesn’t see global oil production ever exceeding 89 million barrels per day (mbd). World oil production in December 2009 was only slightly lower at 86 mbd.

Source: The Oil Drum

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Tue 2 Feb 2010

Faster Growth of U.S. Trees Due to Higher Levels of CO2

Posted by Manfred Kissling under Climate Change
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Increased levels of carbon dioxide in the atmosphere are apparently causing forests in the eastern United States to grow faster, a new study says. Trees observed along the Chesapeake Bay in Maryland are growing two to four times faster than during earlier periods, and mixed hardwood forests are packing on an additional two tons of growth per acre, according to a report published in The Proceedings of the National Academy of Sciences. After controlling for other variables, researchers say the likely cause is higher levels of CO2. Because trees absorb and store carbon dioxide, they are an important factor in counteracting global warming. “My guess is that they are already sopping up some of the extra carbon,” said Geoffrey G. Parker, an ecologist at the Smithsonian Environmental Research Center and co-author of the study. The rate of growth is tracked by measuring tree diameter. How long this accelerated growth can be sustained is uncertain, however, since the growth rate depends on other factors, including water availability and soil nutrients. Since 1987, Parker has studied 55 stands of trees that are representative of other forests in the eastern United States.

Source: Yale 360

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Thu 28 Jan 2010

Iceland, Switzerland, Costa Rica, Sweden and Norway top of 2010 Environmental Performance Index

Posted by Manfred Kissling under Sustainable Development
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Davos, Switzerland – Iceland leads the world in addressing pollution control and natural resource management challenges, according to the 2010 Environmental Performance Index (EPI) produced by a team of environmental experts at Yale University and Columbia University. This is the third edition of the EPI, which has been revisited biannually since 2006.

Released today at the World Economic Forum Annual Meeting 2010, the EPI ranks 163 countries on their performance across 25 metrics aggregated into ten categories including: environmental health, air quality, water resource management, biodiversity and habitat, forestry, fisheries, agriculture, and climate change.

Iceland’s top-notch performance derives from its high scores on environmental public health, controlling greenhouse gas emissions, and reforestation. Other top performers include Switzerland, Costa Rica, Sweden, and Norway – all of which have made substantial investments in environmental infrastructure, pollution control, and policies designed to move toward long-term sustainability.

The United States places 61st in the 2010 EPI, with strong results on some issues, such as provision of safe drinking water and forest sustainability, and weak performance on other issues including greenhouse gas emissions and several aspects of local air pollution.

Of the newly industrialized nations, China and India rank 121st and 123rd respectively – reflecting the strain rapid economic growth imposes on the environment. However, Brazil and Russia rank 62nd and 69th, suggesting that the level of development is just one of many factors affecting placement in the rankings.

Source: YALE

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Wed 13 Jan 2010

Two Cheers for China’s Climate Obstruction

Posted by Manfred Kissling under Climate Change, Energy, Sustainable Development
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China is aggressively protecting the economic growth that is transforming the lives of its citizens, instead of spending a fortune battling a problem that is unlikely to affect it negatively until next century. Little wonder, then, that Ed Miliband, Britain’s Secretary for Energy and Climate Change, found “impossible resistance” from China to a global carbon mitigation deal.

A global deal in which countries committed to spending 0.2% of GDP to develop non-carbon-emitting energy technologies would increase current spending 50-fold, and it would still be many times cheaper than a global carbon deal. It would also ensure that richer nations pay more, taking much of the political heat out of the debate.

Most importantly, such an approach would bring about the transformational technological breakthroughs that are required to make green energy sources cheap and effective enough to fuel a carbon-free future.

By: Bjorn Lomborg

To read full article: Project Syndicate

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Wed 13 Jan 2010

U.S. Climate Bill in Doubt; Lobbying of EPA on CO2 Intensifies

Posted by Manfred Kissling under Climate Change
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Faced with a faltering economy, fatigue over the health care fight, and the prospect of congressional elections this November, proponents of a carbon cap-and-trade bill in the U.S. Senate face high hurdles when Congress returns from its winter recess next week. The Obama administration and Sen. John Kerry of Massachusetts, the lead author on the climate bill, insist that they are proceeding with plans to pass climate and energy legislation this year. The House of Representatives passed a bill last fall that would put a price and a cap on carbon. But some political analysts say that with the political environment shifting against the Democrats, the most that Congress may accomplish is to pass an energy bill that stimulates development of renewable sources of energy, nuclear power, and offshore drilling, while shelving plans for a cap-and-trade plan. With prospects for a climate bill in doubt, environmental and industry groups are stepping up political pressure on the Environmental Protection Agency (EPA), which has said that it will begin regulating greenhouse gases under the Clean Air Act. Meanwhile, Tom Donohue, the head of the U.S. chamber of Commerce, has said that his organization might launch a legal challenge to the EPA’s effort to regulate CO2 emissions. Prospects for such a maneuver succeeding, however, are slim, as the U.S. Supreme Court has ruled that the EPA has the right to regulate greenhouse gases as a threat to human health.

Source: Yale Environment

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Tue 5 Jan 2010

U.S. Car Fleet Shrinks For First Time in 50 Years

Posted by Manfred Kissling under Uncategorized
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The number of cars on U.S. roads dropped by 4 million in 2009, the only large decline in the nation’s car fleet since the government began keeping records in 1960. While consumers bought 10 million cars during the year, another 14 million vehicles were scrapped, dropping the total to 246 million vehicles, despite the government’s “cash for clunkers” program that gave individuals as much as $4,500 to exchange older cars for more fuel-efficient models.

Analysts cited numerous factors for the decline, including high gasoline prices, improved public transportation, and the popularity of online social networking, which for many teens has replaced the automobile as a way to socialize.

Other people attribute the decline on the economic downturn and the tight credit.  Americans leased automobiles more than anywhere else.  But leasing requires credit – and the credit crunch has changed the landscape for consumer credit. Leasing is not as popular now.

Currently, there are 117 vehicles for every 100 licensed Americans, but high debt and other costs of car ownership will make consumers less likely to keep more cars than they use, said Lester Brown, president of the Earth Policy Institute. Many families with three cars will likely cut back to two, he predicts, and those with two may cut back to one or none.

Source:  The Globe and Mail

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Fri 1 Jan 2010

Spain stops wind turbines to balance supply

Posted by Manfred Kissling under Energy
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LONDON (Reuters) – Spain had to shut down some of its wind turbines on Wednesday as wet and windy weather caused a surge in green electricity generation at a time of low demand, grid operator Red Electrica said.

The country’s thousands of wind turbines supplied a new record of 54.1 percent of demand early on Wednesday, forcing gas- and coal-fired power plants to run at minimum output to avoid system overload as hydropower companies drained brimming reservoirs.

“High wind output in the early hours of this morning, together with the high level of hydropower generation, due to reservoirs opening up after recent rains, forced the control center to cut thermal power to a technical minimum,” Red Electrica said in a statement.

“Due to low demand at the moment this was not enough … So the control center had to order wind power production to be cut between 4 am and 7 am this morning by 600 megawatts.”

Spain has invested heavily in wind power generation over the last decade to cut carbon emissions and reduce its reliance on imported fuel.

It now has over 18,000 MW of turbines installed, out of a total power generation capacity of about 93,000 MW, and first produced over half of its electricity with them early on November 9.

Wind turbines are seen as a key technology for producing electricity without emitting climate-warming carbon. But the Spanish experience highlights the difficulties for grid and other plant operators in balancing the system when the wind blows hard and there is little demand, especially early in the morning.

Greater numbers of electric cars charging up overnight could help absorb some of the extra output in future but there are still too few to make a difference.

Wind power output hit 54.1 percent of demand at around 0350 local time (0250 GMT) on Wednesday, or over 10,000 megawatts.

Even after the order to cut output the remaining turbines were still producing around 40 percent of Spain’s power at around 7 am, reducing the contribution of coal and gas plants to under 5 percent in the hours in between, according to Red Electrica data.

Source: REUTERS

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