MonitorsPublished on Mar 16, 2010
Energy News Monitor I Volume I, Issue 39
The Two Sides of the Nuclear Liability Bill

Rajeev Sharma, Senior Fellow, Vivekanand International Foundation

A lot of heat and dust has been raised about the UPA government’s move to introduce in Parliament the Civil Liabilities for Nuclear Damage Bill 2009, a pre-condition for the entry of American companies in the Indian civil nuclear sector. The government is for now holding its horses due to stiff resistance from the Opposition. It is not clear when the government would finally pilot the Bill in Parliament, though the government has agreed to have a discussion on the bill's constitutional validity and competence of the House. Let us have a close look at why the Opposition is against the Bill and what the government has to say about it.

The main Opposition party, the Bharatiya Janata Party, has termed the Bill “unconstitutional” and “a sell out to US nuclear companies”. The four Left parties-- Communist Party of India (Marxist), Communist Party of India, Revolutionary Socialist Party and All India Forward Bloc – see the Bill as “a harmful piece of legislation” meant to serve the interests of the United States and its nuclear industry. They allege that the UPA government is seeking to fulfill a hidden commitment to deliver a legislation which safeguards the interests of the US at the expense of the safety of the Indian people.

The Opposition parties see a red rag in the Bill because of its following features:

·       It allows the foreign reactor suppliers to rake in unlimited profits while transferring their liabilities to the Indian exchequer.

·       Financial liability for a nuclear accident will be capped at only 300 million SDRs (Rs. 2142.85 crore). Beyond this cap, the affected people will not get any compensation for either loss of life, health damages or damages to property and environment.

·       The liability of the Indian operator of nuclear plants will be limited to only to Rs. 500 crore. The Central Government can decrease the amount of liability to a minimum of Rs. 100 crore.

·       The difference between the two – Rs. 2142.85 and Rs. 500 crore, i.e. of about Rs. 1642 crore – is the Government’s share of the liability.

·       There is no legal liability of the foreign reactor supplier even if it supplies faulty and substandard equipment.

·       Any liability for foreign reactor suppliers can at best be included in private contracts between the suppliers and the Indian operator.

The Left parties in particular have gone hammer and tongs against the Bill saying the Bhopal Settlement of $470 million (Rs. 2152 crore) reached between the Central Government and Union Carbide and accepted by the Supreme Court, has proved to be totally inadequate. Even today, lakhs of gas victims are suffering and have received only meagre compensation. “It is completely unconscionable of the UPA Government to suggest that all nuclear accidents, which have the potential of being much larger than the Bhopal tragedy, be capped at a figure that has already been shown to be a gross underestimate. Apart from this, the minuscule liability of Rs. 500 crore for the Indian operator – currently the state owned Nuclear Power Corporation of India Limited – is tantamount to encouraging the operator to play with plant safety,” the four Left parties’ top leaders said in a signed statement.

to be continued…

Views are those of the author

Author can be contacted at [email protected]


Note: Part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones, part XIII of the article on Gas in India – Issues, Opportunities and Challenges will be published in Volume VI, Issue 40


Subpriming the Pump

Mahmoud A. El-Gamal, Amy Myers Jaffe

For years, oil wealth was mostly a danger to those, paradoxically, who possessed it. Resource-rich Middle Eastern countries, and their labor-exporting neighbors, failed for decades to invest adequately in their people or to diversify their economies. A massive influx of oil receipts and worker remittances discouraged investment in sectors conducive to steady long-term growth, fostered corruption and patronage, inflated regional real estate and stock markets, and provided irresistible incentives for governments to spend with wasteful, shortsighted abandon.

But today, the Middle East's resource curse is spilling over into the international financial system. Unanticipated petrodollar flows are fueling financial bubbles, financing a Middle Eastern arms race, and damaging the global economy through speculative oil-price feedback loops. All the elements of previous boom-and-bust cycles in the 1970s and 1980s and again in the past decade remain in place.

What's happening is both comfortingly familiar and terrifyingly new. Sudden surges in oil-revenue flows to and from the Middle East -- known as "petrodollar recycling" -- have certainly been a problem before. But in the last few years, they have become critically destabilizing. Today's Great Recession has generally been understood as a story about real estate excesses and regulatory shortcomings. But it's also a cautionary tale about the increasingly pernicious role that oil is playing in the global economy.

Into the middle of this decade, economists' worries were focused on global imbalances between China and the United States. For Harvard University economist Lawrence Summers, now a top White House advisor, the world was caught in the grip of "a balance of financial terror." Deutsche Bank researchers argued that this temporary imbalance, wherein Chinese excess savings financed excess consumption in the United States, constituted nothing less than an informal sequel to the Bretton Woods international financial system, one they thought would be sustainable for a few more years.

But this optimistic analysis overlooked a major piece of the global economic puzzle: oil receipts. Leading into 2006, the capital exiting Saudi Arabia and Kuwait alone matched the funds leaving China (approximately $200 billion per year). For five years, from 2003 to 2008, the Middle East's massive petrodollar outflows, combined with excess liquidity due to low interest rates and a voracious appetite for credit risk, fueled bubbles in global financial markets, including real estate, credit derivatives, and ultimately commodity prices. The investment frenzy pushed markets into what the late economist Hyman Minsky called "Ponzi finance." Unsustainable serial financial bubbles distorted incentives toward the financial sector and away from investments more conducive to long-term economic growth, such as infrastructure and research and development, especially for alternative-energy fuels.

In this way, interconnected financial markets have globalized the resource curse, and all countries with relatively open economies and limited capital controls are now exposed to energy-market risks as a result -- even ones as diverse as Britain, Russia, and the United States, which are blessed with their own plentiful supply of fuels. As we saw last year in spectacular fashion, financial contagion feeds back and amplifies demand-driven spikes in oil prices, exacerbating the eventual real-economy slowdown that economist James Hamilton and others have noted.

How did this happen? Capitalist economic systems, as Minsky, Charles Kindleberger, and other economists have argued, are intrinsically unstable. Prolonged periods of economic growth invite growing appetites for risk, as optimism about rising profits and lower rates of bankruptcy lull investors into a false sense of security. Optimism ultimately grows into euphoria, which former U.S. Federal Reserve Chairman Alan Greenspan famously called "irrational exuberance," as investors bid up asset prices with ever increasing leverage. Meanwhile, financial-sector lobbyists convince legislatures to ease or underexpand prudential regulations and "unleash the power of laissez-faire capitalism." Myopically, the seeds for financial disaster are sown.

Mahmoud A. El-Gamal is chair and professor of economics at Rice University. Amy Myers Jaffe is Wallace S. Wilson fellow at Rice University's Baker Institute for Public Policy.

to be continued…

Views are those of the author

Courtesy: Foreign Policy, Sept. / Oct. 2009  






RIL out of race for Canada's Value Creation

March 16, 2010. Energy major Reliance Industries Ltd was out of race for the Canadian firm Value Creation, which it had bid for $2 billion. BP Canada has taken the controlling stake of the oil-sands company. RIL had expressed its desire to buy Calgary-based Value Creation, which holds oil sands assets. Value Creation’s subsidiary Technoeconomics is the owner of a technology that helps produce oil from sand and upgrade bitumen - a major feed stock for petroleum - at a relatively lower cost. Value Creation Inc's largest block of leases, Terre de Grace, covers about 290 square miles in the Athabasca region of Alberta.

RIL to buy oil from OVL's Venezuela project

March 15, 2010. Reliance Industries and Mangalore Refinery and Petrochemical Ltd (MRPL) have committed to buy up to 45 per cent of the crude oil ONGC Videsh Ltd and its partners plan to produce from a Venezuelan oilfield.  The overseas arm of Oil and Natural Gas Corp (ONGC) and partners - Spain's Repsol YPF, Malaysian state Petronas, Indian Oil Corp and Oil India Ltd, had last month won the Carabobo-1 heavy oilfield in Venezuela.  The consortium would invest USD 8.8 billion in developing the oilfields and another USD 12.1 billion in the upgrader.  OVL, Repsol and Petronas all have an 11 per cent stake each in the project, while IOC and OIL have 3.5 per cent each. The rest 60 per cent is held by Petroleos de Venezuela (PDV).

ONGC to invest $20 bn on assets abroad

March 14, 2010. India's energy behemoth, the Oil and Natural Gas Corporation (ONGC), will invest $20 billion (Rs.900 bn) in assets abroad over the next decade.  ONGC, a hydrocarbon exploration and production company, has invested $10 billion globally so far including its largest investment of $5 billion in Sakhalin, Russia.  The progress of ONGC Petro-additions Ltd (OpaL) on the basis revenue earnings of the assets acquired in Russia, Kazakhstan, Sudan, Nigeria, and others was satisfactory.  Policy priority is access to risk capital investment as India with 17 percent of global population possessed only 0.5 percent of global hydrocarbon reserves.

RIL leases ultra-deepwater drillship for exploration

March 10, 2010. Reliance Industries has leased a brand new ultra-deepwater drillship to boost its eastern offshore exploration campaign. RIL had awarded a five-year drilling contract to a joint venture of Transocean and Pacific Drilling to construct and operate the drillship. RIL will pay USD 495,000 per day for the Samsung-design drillship for first six months and USD 510,000 per day for the remaining period of the contract. Transocean is also building an enhanced Enterprise-class drillship, named Discoverer India, for RIL. Operations are expected to commence during the fourth quarter of 2010. RIL will pay a day rate of USD 537,000 for the first six months for Discover India and USD 557,000 for the remainder period of the initial five-year contract. The company can extend the term of the drilling contract to seven or 10 years.  It currently has four deepsea drill rigs from Transocean for exploratory and development drilling in its portfolio of blocks that includes gas discovery blocks D6 and NEC-25. 


Reliance to shut VGO unit in Apr-May: Report

March 15, 2010. India's top refiner, Reliance Industries, plans to shut 100,000 barrels per day vacuum gas oil (VGO) hydrotreater for 15-20 days in April-May to change the catalyst. Reliance Industries operates the world's biggest refining complex at Jamnagar, with the capacity of processing 1.24 million bpd of crude. The VGO is one of two such units of the same capacity at Reliance's old 660,000 bpd refinery at Jamnagar in western Gujarat state.  A VGO hydrotreater removes sulphur from heavy feedstock to produce naphtha, jet fuel and LPG. The source said the duration of the shutdown might be shortened, depending on the nature of the job. 

Essar Oil may see steady profits

March 15, 2010. After a long phase of investment, India’s second-largest private refiner Essar Oil is slowly seeing some light at the end of tunnel. The company had invested over Rs 61 bn in its business between FY06 and FY09, without a single year of profits. However, with its Raniganj coal-bed-methane (CBM) block in West Bengal set to commence operations, the company could see a steady and growing line of profits. The company has already drilled 15 wells and is laying the infrastructure. It is targeting test production by the end of March 2010 and commercial production is scheduled to begin by December 2010. As more wells are drilled, the peak output could touch 3.5 million cubic meters a day (mmscmd) in FY13 — equivalent to around Rs 8 bn in annual revenues at current prices.

Transportation / Trade

Oil firms hike jet fuel price by 2.4 pc

March 15, 2010. For the second time this month, state-owned oil retailers raised aviation turbine fuel price by 2.44 per cent in step with firming global rates. Jet fuel, or ATF, rates in Delhi were raised by Rs 961 per kilolitre, or 2.44 per cent, to Rs 40,268 per kl with effect from midnight tonight, an official of the Indian Oil Corp, the nation's largest oil firm, said.  The rate hike comes on back of a 3.5 per cent increase on March 1, when rates were raised to Rs 39,307.07 per kl. Last month ATF price were cut by 5.5 per cent on February 1 and 2.5 per cent on February 16.  Jet fuel constitutes roughly 40 per cent of the operating cost of an airline and today's increase in fuel rates would put extra burden on Indian carriers.  In Mumbai, the rates were raised by Rs 1,015 to Rs 41,561 per kl.  IOC and sister PSU fuel retailers Hindustan Petroleum and Bharat Petroleum revise jet fuel prices on the first and the 16th of every month based on the average global oil price in the previous fortnight.

NACIL floats jet fuel tender to lower costs, cut losses

March 13, 2010. In an attempt to not only get better levels of discount but also extended credit period from oil companies, the National Aviation Company of India (NACIL) has floated a tender inviting oil companies to bid for supplying fuel to the airline from April. The annual contract is worth about Rs 35 bn.  Air India is trying to get discounts at levels being offered to some private sector airlines but not to the state-owned airline. Fuel constitutes almost 38 per cent of the total cost of operations of the airline and an additional 3-5 per cent reduction will amount to a saving of Rs 3.5-5 bn annually. The move comes in the backdrop of the airline getting clearance from its board to increase its working capital limit by Rs 10 bn to Rs 180 bn on February 20 after oil companies threatened to stop supplying it fuel on credit.  The airline is attempting to make best use of the fact that at the moment there are 21 airports around the country where there are more than one aviation fuel supplier.

GAIL giving final look to price report

March 13, 2010. An expert group examining feasibility of a uniform natural gas pricing policy in the country is expected to submit its final report to the oil ministry next month. The government has asked country’s largest gas transportation & marketing company Gail India to prepare a feasibility report. Gail has already engaged a Spanish consultant Marcados Energy Market Pvt Ltd to help it in finalising the draft. The report is also expected to address legal and technical issues arising due to a uniform pricing regime.  Currently, natural gas prices varies from $2 per million British thermal unit (mBtu) to $7 per mBtu. India has different prices for natural gas sourced differently. While natural gas sold from nomination blocks are sold at government-determined rates, gas produced from blocks offered under the new exploration licensing policy (Nelp) is priced on the basis of so called market-determined rates which is vetted by an empowered group of ministers. Gas produced under a joint venture between a public sector oil firm and a private oil company has a different pricing system and gas produced by re-gassification of imported liquefied natural gas has another price. 

Policy / Performance

Govt not planning to market RIL gas from KG basin

March 16, 2010. Minister of State for Petroleum and Natural Gas Jitin Prasada replied in the negative when suspended Samajwadi Party MP Amar Singh in the Rajya Sabha asked if the "government proposes to take over the distribution and marketing of gas produced by RIL."  RIL, which currently produces around 62 million standard cubic meters per day of gas from KG-D6, sells the fuel to customers identified by the Government and at rates approved by the Government.  Prasada said the Production Sharing Contract (PSC) like the one Mukesh Ambani firm signed with the Government for exploring and producing hydrocarbons from Block KG-DWN-98/3 or KG-D6, gives marketing freedom to the contractor (RIL in this case), subject to the Gas Utilisation Policy framed by the Government.

Deora does his bit, makes wives partners in rural LPG outfits

March 16, 2010. Oil minister Murli Deora has demonstrated that his support of the Women’s Reservation Bill goes beyond mere lip service.   While the Congress leadership is struggling to evolve a consensus over the much-anticipated legislation, Mr Deora has made 50% female ownership mandatory for cooking gas dealership in rural India.  The ministry is targeting to double the number of dealers in rural areas in the next financial year, he said, requesting anonymity. The government plans to appoint over 2,000 dealers in rural India under the Rajiv Gandhi Gramin LPG Vitrak Yojana by March 31, 2010. It plans to provide 55 million new cooking gas connections by 2015, mostly to rural households. Currently, 83% of the over 110 million cooking gas connections are given in urban areas.  Mr Deora had announced the scheme in October 2009. According to the plan, the government will waive Rs 1,400 security deposit and regulator cost for below poverty line (BPL) consumers. The subsidy will be met through state-owned oil companies’ corporate social responsibility (CSR) funds.  The government had made it mandatory for public sector oil companies to invest 2% of their previous year’s profit in CSR activities. The combined CSR fund for a year is estimated to be around Rs 10 bn. A distributor is expected to earn up to Rs 8,000 per month on the sale of 600 refills. Three state-owned oil marketing companies — Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) — have so far appointed dealers in 45 villages located in West Bengal, Madhya Pradesh, Bihar, Chhattisgarh, Rajasthan and Jharkhand.

ONGC FY10 output may be lower than target

March 15, 2010. Explorer Oil and Natuarl Gas Corp's domestic oil output is seen at 24.9 million tonnes in the current financial year ending March 31, lower than the 25.76 million tonnes target, an official said.

SMEs in Guj not allocated KG basin gas: Guj govt

March 13, 2010. The Gujarat government said that despite representation by the state, the Centre has not allocated gas for small and medium enterprises of the state from D-6 block of KG basin.  In a written reply to the question asked by BJP MLA Vallabhbhai Kakadia, the government said that the state-based small and medium enterprises (SMEs) require five million cubic metre (MCM) of gas and demand for the same quantity was made in a letter written to the Prime Minister by the Chief Minister in September, 2009.   Moreover in December, 2009, the Chief Minister had written a letter to the Petroleum Minister and Minister of State for Petroleum for allocation of gas for the SMEs.  The state government has stated in the reply that the central government has made allocation of gas to be produced from D-6 field of KG basin for fertilisers 15.5 MCM, 31.

Gujarat invests over Rs 60 bn in KG basin

March 12, 2010. Gujarat has so far invested Rs 6,190.93 crore in the Deendayal block in the KG basin where Gujarat State Petroleum Corporation (GSPC) is engaged in gas and oil exploration works. In reply to a question asked by Congress MLA Amit Chavda, the state government said in the assembly that it has got as many as 9 blocks spread over 60,363 sq km in the KG basin. Presently, exploration is underway in GSPC operated block KG-OSN 2001/3 located in Deendayal West field and so far 16 wells have been drilled in the area. According to the state government, commercial production of oil and gas from the field is scheduled to begin from 2012-13.  In the four wells in which drilling work is over, around 200 million metric standard cubic feet per day gas will be produced which is worth Rs 345.39 bn going by the current market price, it said. The exploration works in Deendayal North, North-East and East will be undertaken in phased manner, it added. 

Oilcos may get freedom to price 5 kg gas cylinder to cut losses

March 12, 2010. The oil ministry has allowed state-run fuel retailers to sell 5 kg cooking gas cylinders at market-determined prices to help them reduce losses incurred in selling fuel below cost.  The blue cooking gas cylinders will be sold to millions of street vendors and dabhawalas who currently pay a huge premium for gas bought from the black market, a senior oil ministry official said. An HPCL executive said the company is preparing a marketing plan for the product. The cylinders — marketed also by Indian Oil Corp (IOC) and Bharat Petroleum Corp (BPCL) — will be safer to use unlike similar cylinders available in the grey market. It can be used for both cooking as well lighting purposes. The PSUs will also supply compatible regulator, stove and lamps, the executive said.  The small cylinder, a brain-child of minister of state for oil & natural gas Jitin Prasada, is government’s second marketing innovation to stop misuse of highly subsidised cooking gas.  The ministry has already allowed marketing of translucent cooking gas cylinders for affluent households.  Launch of such cylinders will help OMCs minimise their losses for selling cooking gas at subsidised rates. Combined losses of IOC, BPCL and HPCL on the sale of cooking gas in April-December 2010 was Rs 84.29 bn. For the same period, the three companies lost Rs 32.99 bn on petrol, Rs 50.65 bn on diesel and Rs 126.50 bn on kerosene. The government controls retail prices of the four petroleum products sold by the three state-owned oil companies. 

Upstream oil cos may have to rescue refiners again

March 12, 2010. In 2008-09, the Oil and Natural Gas Corporation along with Oil India and GAIL (India) contributed nearly Rs 330 bn to ensure that their public sector refining counterparts did not sink into the red.  This fiscal has seen a much lower outgo from these upstream companies, thanks largely to more benign crude prices in the earlier months (at $40 per barrel compared to levels of $147/bbl in 2008-09) coupled with the fact that they were only asked to make good petrol and diesel losses.  Thus far, ONGC, OIL and GAIL have coughed up barely Rs 90 bn in the first three quarters of this fiscal but may end up being poorer by at least Rs 100 bn in the fourth quarter alone. The only way this can be alleviated is by the Finance Ministry providing additional cash support to the refiners or by the Petroleum Ministry going in for another fuel price hike.  For the moment, neither option looks likely, which means that the upstream oil companies may end up throwing the last-minute lifeline to Indian Oil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation.  This would be pretty much on the lines of 2008-09 when they coughed up Rs 9.43 bn in the fourth quarter (after forking out Rs 320 bn between April and December 2008) to keep the refiners afloat.

Govt gives in-principle nod for translucent LPG cylinders

March 11, 2010. The public sector oil marketing companies (OMCs) have been given ‘in-principle' nod for introducing composite (translucent fibre glass) cylinders for marketing domestic LPG. This information was given by the Minister for Petroleum and Natural Gas, Mr Murli Deora, to Lok Sabha. The Minister said that the “Government has conveyed “in-principle” approval to the public sector OMCs for expanding the product line by way of introduction of composite cylinders for marketing domestic LPG, subject to there being no subsidy element in the LPG to be marketed through these composite cylinders.”  Initially, it is planned to be launched as a pilot in Bangalore, Chennai, Mumbai, and Pune, the Minister said adding that “If successful, translucent LPG cylinders will be launched throughout the country.” The Minister also said that at present there is no proposal for introducing composite cylinders for marketing LPG for commercial purposes. He further said that global tender for procurement of translucent LPG cylinders has been invited by OMCs which is under evaluation. “Only after finalisation of the tender and placement of purchase order, the cost of the proposed translucent fibre glass cylinders will be known.” These cylinders are being introduced in selected markets as a separate package and not as replacement of existing cylinders, the Minister said. The composite cylinders are translucent and will show the level of LPG present in the cylinder. Handling of these cylinders would be easier as they are lighter in weight than steel cylinders.

Essar-led group protests fresh levy on oil exploration

March 11, 2010. The government will consider signing a contract with Essar-led consortium to produce oil from Ratna & R-series fields only when the bidder agrees to pay statutory levies at current rates. Essar is insisting to pay cess and royalty at old rates, which would mean about $1-billion loss to the public exchequer, two government officials close to development told ET. Essar wants to pay cess at the rate of Rs 528/metric tonne and royalty at Rs 900/MT. But prevailing rate of cess is Rs 2,500/MT and royalty is almost six-times higher than old rates, officials said requesting anonymity. Other members of the consortium are state-owned Oil & Narural Gas Corp (ONGC) and UK-based Premier Oil.  Essar had said that production sharing contract for Ratna & R-series was “expected to happen shortly.” As per its claim, the field “has reserves and recoverable resources of 81 MBOE (million barrels of oil equivalent)” Essar engaged Netherlands Sewell & Associates, RSP Energy and Advanced Resources to prepare the report.

NTPC trebles natural gas procurement from RIL

March 11, 2010. State-owned power utility NTPC Ltd has tripled the volume of natural gas it buys from Reliance Industries at the government-approved price of $4.2 per mmBtu, to 1.81 million standard cubic meters a day.  NTPC, which till last month was taking 0.61 mmscmd from RIL's eastern offshore KG-D6 field, has begun drawing an additional 1.2 mmscmd of gas to boost power generation, sources in know said. In October, the government had allocated an additional 3.85 mmscmd gas to NTPC. Since NTPC did not want to use the KG-D6 gas at its Kawas and Gandhar power plants in Gujarat that are connected with pipelines ferrying KG-D6 gas from the Andhra coast, a complex swap arrangement was worked out with state-owned gas utility GAIL India. Under this arrangement, GAIL diverted gas from other sources to NTPC plants and supplied RIL gas to its existing customers. However, limitations in GAIL's pipeline capacity restricted the swap to just 1.2 mmscmd, sources said, adding that additional gas supplies have begun to NTPC.

Russia may invite ONGC to energy projects: Govt

March 11, 2010. Russia is considering inviting India's state-run Oil and Natural Gas Corp to develop oil and gas fields in Russia, the government said. ONGC has already agreed to cooperate with oil-to-telecoms group Sistema, which controls assets in the Russian republic of Bashkortostan, and may also gain access to lucrative oil and gas projects in Russia's far north, the government said.  Sistema, in turn, was looking to deepen investment in its Indian mobile unit, Sistema Shyam TeleServices, with more than $600 million, the government said in a statement.  Russia aims to more than double trade with India to $20 billion by 2015. Putin is expected to preside over deals worth more than $10 billion, spanning defence, nuclear power and fertilisers, when he visits this week. The government said talks would take place with a view to ONGC's participation in development of the Trebs and Titov oil and gas fields in northwest Russia and deposits on the Arctic peninsula of Yamal. Putin hosted the heads of foreign energy majors in Yamal in September, where he invited "stable and long-term" partners to help develop a region with enough gas in the ground to satisfy world demand for five years.

IOC proposes share sale to shore up its finances

March 10, 2010. Indian Oil Corp plans to sell shares to shore up its finances as it prepares to face competition from private companies. The proposal comes as the governments talks of doing away with subsidies on petroleum products.  If the company manages to convince the government of its need for funds, it could also provide an opportunity to the government to sell some of its holdings in the company.

State oil marketing companies, such as IOC, BPCL and Hindustan Petroleum, are forecast to incur a loss of Rs 474 bn in the fiscal year on account of subsidised sale of petrol, diesel and cooking gas. Besides, the finance ministry may discontinue with the practice of compensating companies for subsidised sales. Currently, the government is examining the recommendations of a Kirit Parikh panel on raising oil prices.  But for the share sales to be favourably received by investors, the government should show that is committed to freeing up of the prices of petroleum products and that oil marketing companies won’t remain vehicles to promote government’s populist measures.

No follow-on offers in IOC, ONGC for now

March 10, 2010. The Government has ‘no immediate plans' to offload stake in public sector undertakings ONGC and Indian Oil Corporation Ltd (IOC) through follow-on-public offerings. This was said by the Petroleum Secretary, Mr S. Sundareshan said. The Government holds 74.14 per cent stake in ONGC and 78.92 per cent in IOC.  On the financial health of the public sector oil marketing companies (OMCs), he said: “The challenge before us is that the OMCs do not suffer under-recoveries.'' He said that maintaining the financial health of the OMCs, that currently incur a loss of Rs 1.90 bn a day on sale of petrol, diesel, domestic LPG, and PDS kerosene, was important to ensure supply lines do not run dry and investments are made for expansion. The OMCs incur under recoveries as they sell petroleum products below the market price.



BHEL bags Rs 33.48 bn contract from IOC

March 15, 2010. State-run power equipment maker BHEL said it has won a Rs 33.48 bn contract to set up 376 MW captive power plant at the upcoming Paradip Refinery Project of Indian Oil Corp in Orissa. BHEL has won a turnkey contract for setting up an energy efficient and environment-friendly 376 MW captive power plant at the upcoming Paradip Refinery Project of Indian Oil Corporation Limited (IOC) in Orissa, a company release said.  BHEL's scope of work in the Rs 33.48 bn project envisages design, engineering, manufacture, supply, erection and commissioning of the captive power plant, in addition to associated civil works, it further said. The equiment for the project will be supplied by BHEL's plants in Hyderabad, Trichy, Ranipet, Bhopal, Jhansi and Electronics Division, Bangalore.  Civil works and erection and commissioning of the captive power plant will be carried out by the company's Power Sector - Southern Region.

Pvt firm to set up 225 MW power plant at Kashipur

March 15, 2010. With the Gas Authority of India (Gail) approving plans to bring gas pipeline to Uttarakhand, the state government has approved plans by a private company to set up 225 Mw gas-based power plant at the industrial town of Kashipur in Kumaon region.  Shrawanti Energy Pvt Ltd, a Gurgaon-based company, is setting up the gas-based plant at Kashipur where GAIL plans to bring gas pipeline from the neighbouring Uttar Pradesh. This has led to a lot of resentment among the Congress party with three of its MLAs opposing the project, alleging that the government accorded industrial status to the company by compromising the interests of the state.  Significantly, the new controversy has erupted at a time when the state government is already facing allegations of irregularities in the allotment of some hydel projects to liquor and new companies.  The three MLAs also alleged the government for according industrial status to Shrawanti Energy due to which the state lost the leverage of getting 13 per cent of the free power as royalty.

Transmission / Distribution / Trade

Areva T&D bags Rs 4 bn power project from UP Power Trans Corp

March 11, 2010. Energy transmission and distribution firm Areva T&D India said it has bagged a contract worth Rs 4 bn from Uttar Pradesh Power Transmission Corporation Ltd for building a substation. The company's transmission and distribution division will build a 765 KV extra high voltage substation at Anpara thermal plant in Uttar Pradesh, Areva T&D said in a filing to Bombay Stock Exchange (BSE).  The new substation would help in improving power transfer capacity from eastern UP to western part of the state.  The project is scheduled for completion by the end of 2011, the filing added.

Crompton Greaves gets order worth 3.02 bn rupees

March 11, 2010. Crompton Greaves Ltd has won an order worth 3.02 billion rupees from the Uttar Pradesh Power Transmission Corp Ltd for construction of a power substation in the state. The 765/400 kilo volt substation is expected to be commissioned in July 2011, it said in a statement. 

ICSA says gets 1.3 bn rupees order from Power Grid

March 11, 2010. ICSA (India) Ltd said it received orders worth 1.3 billion rupees from the Power Grid Corporation of India Ltd. The orders are for substation and transformer work in north eastern India, it said in a statement to the exchange. 

Thermax to float JV with US-based Babcock & Wilcox Power

March 10, 2010. Power solutions provider Thermax Ltd said it has entered into an agreement with the US-based Babcock & Wilcox Power Generation Group (B&W PGG) to set up a joint venture company in India for manufacturing supercritical boilers.  Thermax will own 51 per cent stake in the JV, whereas the remaining 49 per cent would be held by the US partner, the Indian company said in a statement.  B&W PGG is a global power generation technology firm. The joint venture will engineer, manufacture and supply supercritical boilers for the Indian power sector, the company said, adding that it will also make sub-critical boilers over 300 mw in size. The supercritical boilers will be manufactured in a new facility that is being planned, it said.  

Policy / Performance

Few takers for Coal India's thermal coal import plan

March 15, 2010. Coal India Ltd's plan to enter into thermal coal import business is yet to find many takers in the power sector. According to company sources, so far only Damodar Valley Corporation (DVC) – a major power producer in Eastern India – has indicated to CIL its estimated requirement of 0.8 million tonnes of imported coal, beginning second quarter of 2010-11. The coal major was previously expecting to start its innings in international trade with a firm four-million-tonne order from India's largest user of imported coal, NTPC which consumes nearly one third of an estimated 40 million tonnes of thermal coal imported into the country. However, CIL sources now confirm that the negotiations with NTPC did not reach a conclusive stage. Coal import has become critical for the power sector due to the widening demand supply gap in thermal coal, and that too, at a time when emphasis is being laid on enhancing generation capacity in the country.  The Centre has already made it mandatory for new projects to be set up in the coastal areas to meet a third of its coal requirements through imports. The power sector also imports low-ash thermal coal for blending with the domestic coal to meet the emission control norms.  DVC, for example, uses imported coal primarily on environmental considerations. DVC is a statutory body set up jointly by the Central Government and State Governments of Jharkhand and West Bengal. All its generating units are located in the coal-bearing areas of Damodar Valley.

No proposal to allow NTPC to sell power in open market: Govt

March 15, 2010. The government said that it has no proposal to allow NTPC, the country's largest power producer, to sell electricity in the open market.  At present, NTPC sells 100 per cent of its power to the state power utilities, distribution companies through long- term power purchase agreements. This exchange takes place as per allocation finalised by the Ministry of Power and based on the tariff determined by power sector regulator CERC. As per Electricity Act, 2003, a generating company can supply electricity to any licensee. It can tie up part- capacity of its generating station in long-term power purchase agreement (PPA).  And as far unallocated power is concerned, it is sold to the states at the rates determined by CERC. 

Two UMPP bids in April as govt plugs power gaps

March 15, 2010. The government will bid out at least two ultra mega power projects (UMPPs) of 4000mw each in April 2010 to make up for the slippage in power capacity addition in previous years. The ministry has asked the nodal agency for UMPPs, Power Finance Corporation (PFC), to complete formalities for inviting bids at the earliest. Besides the two projects, the government is all set to invite bids for Chhattisgarh UMPP this month. It took almost four years to award four UMPPs mainly due to policy and regulatory hassles. But now the government has put power projects on the fast track and is confident of awarding three more UMPPs by 2010-11, another official in power ministry said. While clearance for Orissa UMPP is in advanced stage, the Andhra project still has to get several regulatory clearances pertaining to land and environment. The PFC has also not formed a special purpose vehicle with respect to this project. The government is hopeful to fast-track approvals at Kotipalli as identified site is largely free from encumbrances.

NTPC plans doubling gas-based power generation capacity by 2017

March 15, 2010. State-owned NTPC plans to double its gas-based power generation capacity to over 8,000 MW by 2017, a move that would facilitate the company's endeavour to become a 75,000-MW firm by that time.   NTPC would be able to ramp up its existing 3,955-MW electricity generation capacity from gas once the Petroleum Ministry assures supply of the fuel from all sources, including Reliance Industries' KG-D6 fields.

Last month, the company signed an agreement to buy additional gas of 1.2 million cubic meters a day from Reliance Industries' eastern offshore KG-D6 fields at the government- -approved price of USD 4.2 per mmBtu. The company is mulling mega expansion of its functional gas-based stations in the country. NTPC plans to add 1,000 MW to its existing 350 MW gas-based plant at Kayamkulam in Kerala, 700 MW to the one at 403 MW Anta (Rajasthan), 1,400 MW to the 652 MW at Auraiya (Uttar Pradesh) and 1,400 MW to the 430-MW Badarpur plant.

NTPC has signed Gas Sale Agreements (GSAs) with GAIL, Indian Oil and BPCL for supply of around 1.2 million tonnes per annum of re-gasified LNG (RLNG) for a period of 20 years for its Rajiv Gandhi Combined Cycle Power Project at Kayamkulam in Kerala.

The company would add about 520 MW generation capacity to the existing 1,480 MW at the Ratnagiri Gas and Power Pvt Ltd, a joint venture between GAIL (India) Ltd, NTPC Ltd, Indian financial institutions like IDBI, SBI, ICICI Bank and Canara Bank and MSEB Holding Company Ltd, in which the power firm holds 29.65 per cent equity.

PFC to raise $300 mn from SBI, London

March 15, 2010. State-owned Power Finance Corp is believed to have tied up with State Bank of India's London branch for raising USD 300 million (about Rs 14 bn) to finance power projects in the country.  PFC has tied up USD 300 million from SBI London branch under the External Commercial Borrowing (ECB) route, a source close to the development said.

Kerala electricity board sweats it out as consumption peaks to new highs

March 14, 2010. The Kerala State Electricity Board (KSEB) is sweating it out literally as an unusually hot summer ratchets up power consumption in the State and resources drain just as fast. The daily consumption has been showing a rising trend over the years but the public utility did not evidently bargain for the peak 54.9 million units (mu). Last year, the daily consumption had ranged between 40 mu and 49 mu during this phase. The KSEB fears that the intense heat this year would create new daily records going forward, given that it is still early summer days. The thermal power stations in the State produce five to six million units daily, while the allocation from the Central pool is of the order of 20-21 mu. Another six million units are being purchased from the power exchange.

ADB loan for hydropower in Himachal Pradesh

March 14, 2010. Himachal Pradesh will soon get another tranche of a multimillion-dollar loan from the Asian Development Bank (ADB) for the construction of four hydropower generating plants in the northern Indian state.  The second tranche was part of the ADB's sanctioned loan of $800 million. Earlier, the lender bank had sanctioned $150 million to HPPCL.

The projects being financed are Sawara-Kuddu (111 MW) in Shimla district, Kashang (195 MW) and Shongtong-Karchham (402 MW) in Kinnaur district and Sainj (100 MW) in Kullu district.  The loan has a 25-year repayment period. Construction work on all the projects has been started and these are likely to be executed by early 2015. Besides these four projects, HPPCL has three other mega projects in hand, including the Rs.27-billion Renuka Dam project in Sirmaur district that will provide drinking water to Delhi and generate 40 MW power for the hill state. The government has begun acquiring private land for construction of the Renuka dam.

NTPC to commission projects of 4.1 GW capacity in FY10-11

March 12, 2010. State-run NTPC said it would commission projects of 4,100 MW capacity in financial year 2010-11.   The 4,100 MW project include the 7th unit of Corba power plant, 2 units of Jhajjar power plant, 1 unit of Farrakka power plant and 2 units of Sipat power plant. 

Govt may clear Technoprom's NTPC contract

March 11, 2010.  The Indian government is likely to accede to the Russian government’s demand of allowing Russian equipment supplier Technoprom Exports to go ahead with the Rs 20.66 bn contract it had bagged from NTPC.   Interestingly, both the power ministry and NTPC are in favour of revoking the contract given to Technoprom Exports because of allegations of pay-offs and a huge escalation in project costs. The ministry is said to be of the opinion that there is no ground for renegotiating the terms of equipment supply by Technoprom Exports (TPE) for NTPC’s Barh project but conceded the decision is now a political one.  Russia has been holding up decision to give India a stake in its Sakhalin-3 crude oil fields until the dispute over the boiler deal is resolved.

The power ministry has cited several reasons for terminating the contact. It says Technoprom hid material facts about the deal with regard to involvement of an agent in the entire process; it also went back on the terms of the contact seeking close to 90% increase in the price of boilers midway of the process and also delayed its supply obligations. There were allegations of kickbacks as well.   The issue pertains to NTPC’s 1980 MW Barh power project (phase-I) in Bihar. NTPC started Barh phase-1 (3X660 MW) in 1999 and placed order for supply of boiler to Technoprom in February 2005.

Coal piles up at pit-head, sidings on wagon shortage

March 10, 2010. At the start of the current fiscal, Coal India was asked to step up its production by 31 million tonnes (mt), an increase by over 7.5 per cent from 404 mt in 2008-09. The power sector had pointed out that even this incremental production was not sufficient to keep up with the country's energy need that was spiralling at the rate of nearly nine per cent. A year later, CIL is now set to restrict the production to approximately 428 mt (up six per cent from last year's level). The reason: Nearly half of its incremental production so far is piled either at the pit-head or at railway sidings. The output could not be sold due to reduced availability of railway wagons.  Between April and December 2009, the company loaded 152 rakes (each consisting of 59 wagons) a day, only about one per cent higher than the daily availability of 150 rakes during the corresponding period of the previous year.  Compared with the requirement to dispatch coal, the availability fell short by nearly eight rakes a day. The lower availability of rakes resulted in a mere 4.3 per cent growth in sales against seven per cent increase in production in the first quarter.  The supply crisis had hit a further low in the peak mining season of the fourth quarter, beginning January 2010, when the wagon availability dropped from the last year's level of 180 rakes a day leading to a decline in sales (volume) compared with the corresponding period last year.




Saudi Oil Minister sees no need to Alter OPEC production now

March 16, 2010. Saudi Arabia, the biggest and most influential member of the Organization of Petroleum Exporting Countries, said oil prices are in the right range and there’s no need to change production policy. OPEC members are set to continue exceeding production quotas even though the group’s own analysis shows it is pumping more oil than is needed by the market, because supply reductions would risk sending prices soaring, endangering the global economic recovery, ministers and analysts said.   OPEC, supplying about 40 percent of the world’s oil, is meeting as production exceeds its quotas by the equivalent of a supertanker of crude a day. Still, 42 of 44 analysts surveyed predict the organization will maintain its official quota at 24.845 million barrels a day.

OPEC expands oil rig drilling the most since 2007

March 15, 2010. OPEC is increasing oil drilling at the fastest rate in 2 1/2 years, even as production exceeds its quotas by the equivalent of a supertanker of crude a day and delegates prepare to pledge no increase in output.  The 12-nation group boosted its number of oil and gas rigs by 8.4 percent in January and February, the biggest two-month gain since June 2007, data from Baker Hughes Inc. show. OPEC members excluding Iraq pumped 26.8 million barrels a day last month, 1.9 million more than targeted, data compiled by Bloomberg show. Shipments will rise again this month, according to tanker-tracker Oil Movements.  While oil prices recovered from a four-year low at the end of 2008 as OPEC announced a record supply cut, excess production means the doubling in oil prices since then may have run its course, according to the Centre for Global Energy Studies and Commerzbank AG. The premium charged for crude deliveries in 2015 has plunged 43 percent in three months, indicating investors are less concerned of future shortages.

Statoil ups Oseberg production

March 12, 2010. Extensive modifications to the process facility on the Oseberg Field has increased oil production. The modifications enable the recovery of an additional 20 million barrels of oil from Oseberg. This corresponds to a value of nearly NOK 10 billion at the current oil prices. Total investments in Oseberg low-pressure production were NOK 1 billion. The project was completed NOK 200 million below budget. Low-pressure production from Oseberg is the solution to a challenge which is common in mature fields on the Norwegian continental shelf. The pressure has been reduced in the Oseberg reservoirs, after 20 years of oil production and nine years of gas exports. In order to maintain a high level of oil production, it became necessary to rebuild the process facility to reduce the platform back pressure.

Ghana, I.Coast to draw border of oil-rich sea zone

March 12, 2010. Ghana will set up a commission by the end of the month to begin talks with Ivory Coast over their maritime border, negotiations that could be complicated by Ghana's big offshore oil finds. Ivory Coast has for years sought to clarify its offshore border with Ghana, but recently renewed its efforts by petitioning the United Nations after Ghana discovered additional oil reserves off its coast. Ghana, the world's second-biggest producer of cocoa behind Ivory Coast, is set to become a commercial oil producer by the end of this year as production from the giant offshore Jubilee oilfield comes on line.

Gabon opens 42 offshore oil blocks to exploration

March 12, 2010. Gabon, Africa's seventh largest oil producer, is offering 42 additional offshore deepwater and ultra-deepwater oil blocks for exploration. The West African nation, which currently produces roughly 250,000 barrels of crude oil per day and relies on energy for about half of its gross domestic product, is seeking bids from international firms by May 5, it said. Gabon's oil sector, one of the continent's most mature and already home to several international oil companies including France's Total, has been in decline since the late 1990s when output was over 350,000 bpd.

IEA raises 2010 oil demand estimate on developing economies

March 12, 2010. The International Energy Agency raised its forecast for global oil demand this year for a second month as fuel consumption in Asia rises more than expected. The IEA increased its estimate for world demand in 2010 by 70,000 barrels a day to 86.6 million barrels a day. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, it said. Economies outside the Organization for Economic Cooperation and Development continue to lead the recovery in consumption, the IEA said. China will account for almost a third of global oil demand growth this year, according to IEA estimates, offsetting stagnant consumption in developed economies, particularly Europe. This growth could be revised upward as the Chinese government signals it will continue to foster economic growth as long as inflation pressures remain moderate, according to the agency.  Oil consumption in non-OECD countries is forecast to average 41.2 million barrels a day in 2010, an increase from last year of 1.7 million barrels a day, or 4.3 percent, according to the IEA. That is 190,000 barrels a day more than the agency estimated last month.


Shell to trim refining capacity, exit retail markets

March 16, 2010. Royal Dutch Shell plc announced updates to its strategy, including plans to reduce its worldwide refining capacity by 15% and exit 35% of its current retail markets. Although oil companies have been cushioned from the recession by OPEC's action on quotas and oil prices, Shell has been disadvantaged recently, due to our higher exposure to refining and natural gas, where margins are hard-wired to the economy. This has come in a period where its spending is at historically-high levels, as it invests for medium-term growth. In terms of narrowing its near-term performance focus, Shell plans $1 billion of cost savings this year as well as the reduction of some 2,000 positions by the end of 2011. Also, it intends to exit from non-core positions companywide via $1-3 billion of asset sales. Finally, the company is pursuing new initiatives designed to improve its downstream business by focusing on its most profitable positions and growth potential. This will translate into an exit from 15% of its worldwide refining capacity, from 35% of its current retail markets, and various steps to further improve its chemical assets.

Russian ESPO oil heads to US West Coast -trade

March 12, 2010. Three cargoes of Russian East Siberian Pipeline oil are coming in April and May to a U.S. West Coast refiner, possibly the first to reach the U.S. mainland, traders said. Neither the price nor the name of the buyer were disclosed. Russia has been marketing the medium heavy sweet crude blend, dubbed ESPO, since late last year, loading tankers at the Far Eastern port of Kozmino.  The first cargo shipped in December 2009. March loadings were expected to top 7 million barrels, about 1 million tonnes.

Skanska to build refinery unit for Petrobras

March 11, 2010. Skanska has been awarded a contract to construct the first phase of a new refinery for crude oil in Brazil. The total contract value is USD 623 M, of which Skanska's share is 40 percent, corresponding to about USD 250 M, or about SEK 1.8 billion, which will be included in order bookings for the first quarter. The customer is Petrobras, one of the world's leading energy companies and one of Skanska's repeat customers.  The contract is for the first processing unit of a new oil refinery at Petrobras Petrochemical Complex in the Rio de Janeiro state. The project relates to a crude and distillation unit for crude oil entering the refinery. The unit will have the capacity to process about 150,000 barrels a day.  Skanska will head the consortium responsible for design, detailed engineering executions and construction of the facilities, including electromechanical installations. The contract also encompasses the procurement of material and equipment and Skanska will also provide assistance in connection with start up and operation.

Valero: Still considering options for Aruba refinery

March 10, 2010. Valero Energy Corp. Chief Executive Bill Klesse said that he is considering selling the Aruba refinery or taking on a partner in the money-losing operation that has been shut down since last year.

Valero could also decide to keep and restart the 235,000 barrel-a-day plant, Klesse told reporters on the sidelines of the IHS Cambridge Energy Research Associates energy conference in Houston.  

Valero has been able to improve the future of the plant by settling a tax dispute with the Aruba government, the chief of the San Antonio-based company said. The agreement spans 20 years and is subject to approval by the country's parliament.

KBR wins Toledo Refinery contract

March 10, 2010. KBR announced that it has been awarded a contract with BP-Husky to provide engineering, procurement and other project related services for BP-Husky Refining LLC's $400 million Reformer 3 equipment upgrade of its Toledo Refinery located in Oregon, Ohio.   KBR will provide design and support services needed for the project, replacing two existing naphtha reformers and a hydrogen plant with a single, state-of-the art reformer. The new unit is expected to increase the refinery's gasoline yields, increase co-product hydrogen production and improve overall plant reliability.

Additionally, the new equipment will assist the refinery in meeting future environmental regulations, with an anticipated air emissions reduction of more than five percent. The award of this work follows KBR's completion of front end engineering for the project for BP-Husky. Work will be executed out of KBR's Houston and Monterrey, Mexico offices.

Transportation / Trade

Proposed Gladstone LNG takeover terminates Golar deals

March 16, 2010. Golar LNG Energy Limited announced the termination of the various agreements relating to the Gladstone LNG Project as a function of the recent announcement of a conditional takeover proposal of Arrow Energy by Royal Dutch Shell and PetroChina. The agreements terminated are Golar Energy's shipping and marketing agreement HoA with Arrow, the HoA with Toyota Tsusho Corporation in respect of the LNG supply and the original HoA with LNG Limited for the offtake of LNG from the Gladstone LNG Project.  Golar Energy remains of the view that the Gladstone LNG Project site at Fisherman's Landing, the mid-scale nature of the LNG plant and all the work undertaken to date, renders the Gladstone LNG Project with the potential to be developed and commercialized, in a much shorter time frame and at a lower cost per produced tonne of LNG than other, much larger, LNG projects proposed by others in the Port of Gladstone.

Telvent to install SCADA system for Pemex pipelines

March 15, 2010. Telvent has signed a new contract with Pemex, the national energy company in Mexico. Telvent will install its supervision, control and data acquisition system OASyS SCADA to manage seven multiproduct pipelines of the National Oil Pipeline Network of Pemex Refinacion. Unlike oil pipelines that transport crude oil only, product pipelines transport various liquid hydrocarbons.  One of the main strategy aims of Pemex is enhanced efficiency and productivity through a centralized management of its entire gas and oil transportation pipeline network.

Nord Stream set to sign $5.4 bn loan

March 15, 2010, The consortium set to build a gas pipeline from Russia to Germany via the Baltic will this week sign a contract for a 3.9 billion euro (5.4 billion dollars) loan.  The Nord Stream consortium will borrow the money from 27 different banks, including German, French, British, Spanish and Japanese establishments, the paper wrote, though no specific names were mentioned.  Building work on the 7.5-billion-euro pipeline is scheduled to begin in April.  The pipeline will stretch 1,200 kilometers from the Russian town of Wyborg on the Baltic Sea to the German state of Mecklenburg- West Pomerania. It is scheduled to be finished by the end of 2011 and will transport some 27.5 billion cubic meters of gas per year. Work on the second leg, which would double capacity, is scheduled to begin in 2013.  Experts do not foresee any problems with the first line but are not ruling out a delay with the second, the Kommersant reported.

Papua New Guinea LNG project gets final green light

March 14, 2010. The consortium behind a $15 billion liquefied natural gas (LNG) project planned for Papua New Guinea gave a final green light to the development on Monday, saying it had secured $14 billion in debt funding. The project is 33.2 percent owned by ExxonMobil 29 percent by Oil Search 16.6 percent by the Papua New Guinea government and 13.5 percent by Santos.

PetroVietnam announces $1 bn gas pipeline project

March 12, 2010. Petrovietnam Gas Corp., Chevron Vietnam Ltd. (US), Mitsui Oil Exploration Co. Ltd. (MOECO) (Japan), and PTT Exploration and Production Public Co. Limited (PTTEP) (Thailand) signed a business cooperation contract (BCC) for the Block B Gas Pipeline Project, with the participation of representatives of the Government of Vietnam and related ministries and agencies. The ceremony was held in Petrovietnam's Head Office in Hanoi. The Block B Gas Pipeline Project, which will be operated by PV Gas, will have a total investment of approximately US$1 billion, of which PV Gas holds 51 percent, and foreign partners including Chevron, MOECO and PTTEP hold 49 percent. The project, when completed, will transport natural gas from Block B&48/95 and Block 52/97, off the Southwest coast of Vietnam, with a capacity of 18.3 million cubic meter per day (equivalent to 6.4 billion cubic meter per year) to power plants at the O Mon Power Complex, Tra Noc of Can Tho City (total capacity of 3,000 MW), and to the power and fertilizer plants in southernmost province of Ca Mau Province, as well as to other consumers in the South Western Region.

ABB wins safety project in Qatar

March 12, 2010. ABB, the leading power and automation technology group, has signed a USD $2.8 million deal with leading Contractor BlackCat Engineering & Construction to design and develop a major integrated Safety Integrity Level 3(SIL 3) and process control solution for a gas pipeline project in Dukhan, Qatar. Dukhan is home to one of Qatar's large oil fields and is located in the western part of the country. The Dukhan field encompasses four reservoirs, three of which are oil reserves and one containing associated gas. The production facilities located in the oil field produce over 335,000 barrels per day.

Policy / Performance

Iran, Pakistan sign gas pipeline deal

March 16, 2010. Iran and Pakistan signed a deal in Turkey paving the way for construction to start on a much-delayed natural-gas pipeline connecting the two nations in a move which has been opposed by Washington as undermining sanctions efforts against Tehran. Pakistan has argued the pipeline, which will connect Iran's South Pars gas field with Pakistan's Baluchistan and Sindh provinces, is crucial to averting a growing energy crisis that is already causing severe electricity shortages.  Iran and Pakistan signed an initial pact in June last year and reached agreement on pricing in September. Under the terms of the final deal signed Tuesday, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years. The pipeline has been on the drawing board since the mid-1990s, when Iran and India signed a deal to transport gas through Pakistan.  Dubbed the "Peace Pipeline" because of hopes it would lead to a detente between rivals India and Pakistan, the $7 billion, 2,700-kilometer pipeline project was stalled as the two nations almost went to war in 2001.  India dropped out last year amid continued security concerns in Pakistan's Baluchistan province, home to a militant Islamist separatist movement, and over disagreements between the parties on pricing. The scaled-down project could still face further delays. Militants blew up another gas pipeline in Baluchistan in August, highlighting the difficulties Pakistan's government faces in operating in the poor but resource-rich province. Some details of the Iran-Pakistan pipeline also remain unclear, including how much it will cost and how the countries will finance the project given U.S. opposition.

Judge orders Port of Astoria to renew Oregon LNG lease

March 15, 2010. A federal judge has ordered the Port of Astoria to renew a controversial 30-year lease with the state on a spit of land in Warrenton. The decision could boost efforts to build a proposed LNG import terminal there and a pipeline connecting it to customers in the Willamette Valley and beyond. The Port leased 92 acres from the Oregon Department of State Lands for $38,400 annually in 2004 and subleased it to the developer of the terminal project, Oregon LNG, for the same amount. That price was based on an appraisal that assumed the land would be used for a golf course instead of a $1 billion LNG plant. Critics have long argued that the deal was too generous, and it became part of an investigation by the state attorney general into misconduct by the former port director.  When Oregon LNG went to renew its sublease on the land last year for a term of 30 years, the Port decided to extend its master lease with the state for only two years, with the option for subsequent 30-year extensions. Oregon LNG filed suit for breach of contract.

Indonesian govt to call tender for pipeline construction

March 15, 2010. Indonesia's government will soon call a tender for the construction of gas pipelines according to the master plan of national gas transmission and distribution networks in the 2010-2025 period. According to the master plan, the tender would be conducted by the Downstream Oil and Gas Regulatory Agency (BPH Migas. The agency would put the project to tender after receiving the green light from the energy and mineral resources minister in this case the director general of oil and gas.

Petrobras may appeal Pasadena Refinery Ruling

March 15, 2010. Petrobras announced that on March 10, 2010, the United States District Court for the South District of Texas confirmed an arbitration award issued on April 10, 2009 that found that Petrobras America Inc. (PAI), an indirect affiliate of Petroleo Brasileiro S.A. - Petrobras, acquired 100% of the interest held by Astra Oil Trading NV (Astra) in the Pasadena Refining System, Inc. (PRSI) and PRSI’s related trading company (Trading Company).  In October 2008, an arbitration panel issued a preliminary decision establishing the validity of certain put-options exercised by Astra and its affiliates in PRSI and the Trading Company. The preliminary arbitral decision found that a closing should have occurred as of September 17, 2008, resulting in PAI, an indirect subsidiary of Petroleo Brasileiro S.A. owning 100% of PRSI and the Trading Company and controlling such entities.

ConocoPhillips to spend up to $12 bn offshore Norway

March 15, 2010. ConocoPhillips (COP) has presented plans to the Norwegian government to further develop the North Sea Ekofisk South and Eldfisk offshore fields with an estimated investment of up to $12.2 billion. The plans, submitted last week to the Norwegian Oil Ministry and posted on Conoco's Norwegian Web site on Friday, signal that the oil giant is still planning to boost investment in projects that can increase its oil production, which is seen by analysts as more profitable than natural gas output. It comes months after the company announced a sharp reduction in operations that included $10 billion in assets sales and a 12% reduction on its 2010 capital expenditure budget to $10.5 billion. ConocoPhillips, the third largest U.S. oil company by market value after Exxon Mobil Corp. and Chevron Corp, said final investment decisions for both fields will be made in 2011 and that the scale of investment could be $4.28 billion to $5.14 billion on Ekofisk South field and $6 billion to $7.1 billion at Eldfisk II.

Alberta to cut royalties amid competition

March 12, 2010. The Alberta government announced plans to cut the royalty rates it charges natural gas and oil producers in an effort to make the province more attractive to investment. The government said it will cut the maximum royalty rate on conventional and shale natural gas wells to 36% from 50% and on conventional oil wells to 40% from 50%. It will also make permanent a temporary incentive it introduced last year that reduces the royalty on new natural gas and conventional oil wells to 5% for one year. The permanent incentive takes effect immediately, while the new royalty curves will be finalized by May 31 and made effective on Jan. 1, 2011.

Keystone XL construction could start in early 2011

March 12, 2010. TransCanada announced the National Energy Board (NEB) has approved the company's application to construct and operate the Canadian portion of the Keystone Gulf Coast Expansion Project. The NEB stated in its release that it found, "the proposed pipeline to be in the public interest and accepted that the project would connect a large, long term and strategic market for Western Canadian crude oil with the U.S. Gulf Coast in a manner that would bring economic and other benefits to Canadians."  When completed, the expansion will increase the capacity of the Keystone Pipeline System from 590,000 barrels per day to approximately 1.1 million barrels per day. The US$12 billion system is 83 per cent subscribed with long-term commitments of 910,000 barrels per day for an average term of approximately 18 years.

Venezuelan oil would still flow should power system collapse – Ramirez

March 12, 2010. Venezuela, one of the top five suppliers of petroleum to the U.S., would continue producing crude oil even if its ailing electricity system were to suffer a collapse, the country's oil minister said. Venezuela has been in a self-declared "electricity emergency" for months due to a long-running drought that has reduced the capacity for the country's hydroelectric plants to supply the national grid. Venezuela, though rich in oil, relies on water-driven hydropower for more than 70% of its electricity needs. President Hugo Chavez has repeatedly warned that a collapse of the electricity system is possible if the drought were to continue and if residents don't cut back on power usage. The government has forced drastic measures to prevent any possible collapse, including rolling blackouts in parts of the country for up to four hours a day. It has also forced government offices, shopping malls and other major consumers of power to close early, and is ordering steep fines on households that use more than their fair share of electricity.

Exxon boosts 2010 capital spending to $28 bn

March 12, 2010. Exxon Mobil Corp will increase capital spending nearly 4 percent this year to $28 billion in part as the largest U.S. oil company seeks to increase its share of the global market for natural gas. Exxon, with huge liquefied natural gas projects in Qatar and its planned deal to buy U.S. gas producer XTO Energy Inc in a $28 billion, all-stock deal, has been placing big bets on future demand for natural gas and that spending will continue. Natural gas is expected "to contribute more significantly to the energy mix over the coming decades.

IEA Chief: US unlikely to import LNG

March 11, 2010. The avalanche of shale gas that has flooded the U.S. oil market is having a "huge impact" in the global market for the commodity, International Energy Agency's Executive Director Nobuo Tanaka said. The supply boon brought by shale has helped delink the pricing of gas, which has sunk globally, from crude oil, which had remained relatively high across the globe. It may also affect the global market for liquefied natural gas. The official said that more investment in oil and gas is needed, but that some countries are still limiting access to their oil reserves.  Increased investment is particularly necessary in the midst of a budding economic recovery. China, a big driver of global oil demand, has seen its automobile fleet skyrocket, recently becoming the largest car market in the world, surpassing the U.S. Tanaka said that the growth of China's automobile fleet is huge and will continue, but poses an "interesting kind of riddle," as demand for gasoline "hasn't increased that much."

Governors ask Congress to stop GHG rules

March 11, 2010. Governors of 18 U.S. states urged Congress to stop "harmful" Environmental Protection Agency regulation of greenhouse-gas emissions, saying the agency isn't equipped to deal with "the very real potential for economic harm." The governors, led by Mississippi Gov. Haley Barbour, made their request in a letter to Senate Majority Leader Harry Reid (D., Nev.), House Speaker Nancy Pelosi (D., Calif.) and their Republican counterparts. The letter was also signed by Minnesota Gov. Tim Pawlenty, a Republican who has been cited as a possible contender in the 2012 presidential election. The Obama administration's EPA fired back that it "rejects the premise that addressing greenhouse gases threatens the economy," saying that other EPA actions "have led to innovations and the creation of new markets that can spur economic growth." The EPA "will continue to follow the law and the science, which overwhelmingly indicates climate change is a real and growing threat to the American people," spokesman Brendan Gilfillan said in a statement.



Tohoku Elec nuke plants operating normally after quake

March 15, 2010. Japan's Tohoku Electric Power Co's Onagawa nuclear power plants are operating normally after a strong quake hit northern Japan. Two of the three nuclear plants located in Miyagi prefecture, northeast Japan, are operating normally after an earthquake with a preliminary magnitude of 6.6 jolted the area.

Siemens unit joins Dutch power plant project

March 10, 2010. An investment arm of German electrical and engineering group Siemens has taken a 50 percent stake in a 1.2 billion euro power plant project in the Netherlands, developer Advanced Power said. Siemens Project Ventures (SPV) has acquired the stake in Advanced Power's project company, Eemsmond Energie, which is building a 1,200 megawatt gas-fired power plant in the port of Eemshaven in the north of the Netherlands. Eemsmond Energie applied for environmental and water infrastructure permits in November 2009 and expects to receive them in the middle of the year, it said in a statement. Construction of the plant is due to get underway in the first half of 2011.

Aksa Enerji applies to triple Turk power plant capacity

March 10, 2010. Privately held Aksa Enerji applied to Turkish energy watchdog agency EPDK to boost the capacity of one of its power plants in southern Turkey to 2,600 megawatts (MW) from 800 MW.

The upgrade of the natural gas fired plant would be the largest private investment in a power station in Turkey, representing an investment of approximately 1.6 billion lira ($1.04 billion), the EPDK source said. Analysts say Turkey needs between $3-5 billion of annual investment over the next five years in its power production and distribution facilities to keep the country from suffering chronic power shortages as economic activity drives consumption back up this year.

Transmission / Distribution / Trade

Developers say timing key to Wyo.-Colo. power line

March 15, 2010. Developers of a proposed power transmission line linking southeast Wyoming wind fields and the Colorado Front Range say they believe in the project and are forging slowly ahead, despite a Colorado utility's rejection of Wyoming wind.  New Jersey-based LS Power and the Wyoming Infrastructure Authority are partnering to develop the 180-mile line between substations at Wheatland, Wyo., and Brush, Colo. It's one of six major transmission lines proposed by developers hoping to tap Wyoming's potential wind power resources.

Vattenfall sells German power grid to Elia, IFM For EUR810M

March 12, 2010. Utility Vattenfall Europe AG said it has agreed to sell its German power transmission grid to a consortium comprising Belgian electricity grid operator Elia System Operator and Australian infrastructure fund Industry Funds Management. The transaction is the second cross-border electricity grid sale announced in Germany in three months, opening the way to promote the further convergence of European energy markets--a declared goal of the European Union. Vattenfall Europe, a unit of Swedish state-controled Vattenfall AB, previously said such investment would total around EUR3 billion through 2016. Contrary to E.ON, which sold the grid on pressure from the European Commission in an antitrust dispute to promote competition and the creation of a single European energy market, Vattenfall sold the grid voluntarily as it no longer considered the business part of its core operations.

Los Angeles drops plan to build 85-mile power transmission line across the desert

March 11, 2010. Facing enormous costs and fierce opposition from environmental groups, the Los Angeles Department of Water and Power announced that it has dropped plans to build an 85-mile-long "green" power transmission line across desert wilderness preserves and scenic ridgelines. 

Controversy surrounding the proposed Green Path North Transmission Line had tarnished Mayor Antonio Villaraigosa's bid to portray himself as the leader of the "cleanest, greenest big city in America." The DWP submitted a right-of-way grant application to the U.S. Forest Service in 2007 for the project, designed to bring electricity generated by solar, geothermal, wind and nuclear power to Los Angeles from the southeastern California deserts and Arizona.

Power supply may suffer in Nigeria as Shell closes gas plants

March 11, 2010. Power supply in the country may take a dip again as the major gas supplier to the Power Holding Company of Nigeria said it will close two gas plants.  The Shell Petroleum Development Company of Nigeria (SPDC) said it will, again, temporarily close the Sapele and Oben gas plants as part of the re-commissioning of the Trans Forcados Pipeline (TFP) which has now been repaired following numerous attacks. 

Last month, Shell warned of an imminent nationwide blackout if it has to shut down four of its gas plants; Utorogu, Ughelli, Oben and Sapele.  On March 1, the company shut down the Sapele and Oben gas plants. The result was a nationwide drop in power generation output from 3,362MW to a dismal 2,427MW particularly from the Egbin thermal station whose output dropped to 200MW from 800MW. 

Policy / Performance

China Shenhua Energy still bidding for Mongolian project

March 16, 2010. China Shenhua Energy Co Ltd , the world's most valuable coal producer, said the company is still bidding for Mongolia's Tavan Tolgoi project.

In February, sources said Mongolia's government cancelled the auction of an estimated $2 billion stake in Tavan Tolgoi, one of the world's largest untapped coal deposits. The government had decided to keep 100 percent of the huge coal deposit, according to the sources.

Renewables take a bigger share of power sector M&A, PWC says

March 16, 2010. Renewable energy, fueled by hydro power, grabbed a bigger share of mergers and acquisitions in the electric industry last year, PricewaterhouseCoopers said. Alternative energy transactions accounted for $33.4 billion of the total $131 billion of electricity and gas mergers and acquisitions carried out in 2009, the global accounting company said today in a report.

The 25 percent share was up from 17 percent in 2008, PWC said. Renewables were boosted by hydro power deals, which grew to $15 billion in 2009 from $10 billion a year earlier. Those included the purchase by Verbund, Austria’s largest utility, of E.ON AG hydro plants, and the transfer of power units in the Three Gorges dam to China Yangtze Power Co.

2 power plant projects opposed in Philippines

March 16, 2010. Residents of at least three Mindanao provinces in Philippines are cold to the idea of constructing more power plants in their areas despite the power crisis hounding Mindanao. Projects that have met opposition from groups representing the residents are the construction of another hydropower plant at the Pulangi River in Bukidnon, aimed at boosting the supply of electricity on the island, and the coal-fired power plant in Davao del Sur.  Residents of President Roxas and Carmen towns in North Cotabato joined those in the southern part of Bukidnon in opposing the proposed construction of the Pulangi 5 hydroplant.

Illinois Senate approves bill to allow new nuclear power plants

March 15, 2010. With little debate, the Senate voted to drop the ban on building nuclear power plants in Illinois. The measure was sent to the House on a bipartisan 40-1 vote, with two lawmakers voting present. Sen. Mike Jacobs, the East Moline Democrat who sponsored the proposal, said Illinois should take advantage of the efforts by President Barack Obama, a former Illinois state senator, to back some nuclear power projects, citing federal support for a power plant in Georgia.   

The lone opposition came from Sen. Jeff Schoenberg, D-Evanston, who maintained there is no political consensus on whether to reopen shuttered nuclear power plants or build anew.  Business and labor groups supported the legislation, but similar proposals have failed to make it through the legislature in the past.

Brazil's Eletrobras to invest $5.1 bn in 2010

March 15, 2010. Brazilian state-owned power utility Eletrobras will boost investment by about two-thirds this year mainly for the some of the largest hydropower dam and electricity transmission projects in the nation. Eletrobras, Latin America's largest power holding utility, plans to increase investment to 9 billion reais ($5.1 billion) this year from 5.4 billion reais in 2009. Investments would total around 15 billion reais for 2011-2012, excluding new projects in which the company could take part. 

The investments to be made this year would go mainly to the Santo Antonio and Jirau hydroelectric power stations and to transmission lines that link Porto Velho in the north of Brazil to Sao Paulo in the southeast. A planned capital injection of around 14 billion reais by Brazil's government, to enable the company to pay dividends owed to shareholders since the 1970s, would not happen until at least 2011 by when a new government will have been installed.

Load-shedding hiked to 84 hrs per week in Nepal

March 12, 2010. Nepal Electricity Authority (NEA), the monopoly of hydropower in the country, increased the weekly load-shedding from the current 77 hours to 84 hours, citing depleting water levels in the major hydel projects. As per the schedule issued by NEA, the Valley denizens will now have to cope with 12 hours of power-cut daily in two intervals. Earlier, the government had announced that the power-cut would not exceed 12 hours a day in the dry season. NEA increased the load-shedding hours over technical hitches in Bhotekoshi Hydro Electricity Project. With the problems in the hydel project, the NEA was cutting the power without prior notice, from 30 minutes to an hour daily for some days.

E.ON, Scottish Power win U.K. funding for carbon capture plant

March 12, 2010. E.ON AG and Iberdrola SA’s Scottish Power unit won an undisclosed amount of U.K. government funding to study technology that captures carbon dioxide from power plants and pumps it underground. The utilities will receive the money from a 90 million- pound ($136 million) pot that the government set aside in April 2009, the Department of Energy and Climate Change said. E.ON, Germany’s biggest utility, and Scottish Power are the only remaining contenders in a government competition to develop a demonstration project for carbon-capture and storage, or CCS. RWE AG withdrew on Nov. 9, saying the timetable for the competition didn’t fit in with its coal-development plans.

NY water plan could cost power generators billions

March 12, 2010. New York environmental regulators released a plan to protect aquatic life in the state's rivers that could cost power generators billions to upgrade their facilities.  The plan, which still needs final approval, would affect most of the state's six nuclear power plants and several facilities powered by fossil fuels that use water for cooling. The state Department of Environmental Conservation (DEC) wants the facilities to recycle and reuse the water in a closed-cycle cooling system rather than discharging the heated water into rivers.  One of the first plants to face the proposed regulations would be Entergy Corp's 1,910-MW Indian Point, located about 45 miles north of New York City where it draws water from the Hudson River. Entergy has already asked the DEC for a new water permit and requested that the federal government renew the license for both of its reactors.

Russia willing to build more nuclear plants in India

March 11, 2010. Russia is willing to build nuclear power plants of up to 15,000 megawatts over the next 10 years in India, the Russian ambassador said. Mr. Kadakin added that Russia is willing to add another 4,000 MW to 6,000 MW capacity to the Kudankulam nuclear power plant, which it is building for India's monopoly nuclear power generator Nuclear Power Corporation of India Ltd.  He also said Russia has been allocated a site in the state of West Bengal, where it can build a nuclear power plant of up to 6,000 MW capacity.

Korea, Turkey to cooperate on Sinop nuclear power plant 

March 11, 2010. An agreement of cooperation to complete feasibility and technical studies for a nuclear power plant planned for the province of Sinop on Turkey’s Black Sea coast was signed by South Korea and Turkey during the Turkey-South Korea Business Forum in Istanbul. The agreement was drafted by Turkey’s Electricity Generation Holding Company and Korea Electric Power Corp (KEPCO), a state-controlled utility provider. South Korea’s 40-year-long experience with nuclear power plants has resulted in 20 nuclear power plants and eight more currently under construction, with at least 55 percent of its energy by 2020 planned to be covered by nuclear power alone. 

Finland to invest in Nigeria’s energy sector

March 11, 2010. The government of Finland said that it had concluded plans to invest in Nigeria ’s energy sector. To this end, the country would be sending a business delegation to Nigeria for a four-day meeting with key players in the energy sector. The country’s business delegation expected in Nigeria hopes to utilise the opportunity of the visit to assist in reviving the country’s energy sector, which had been a source of serious challenge to successive administrations in the country.  The delegation would be made up of representatives of 14 small and medium size high technology operators in the energy and environmental technology, information and communications technology, infrastructure and construction, metal industry, mining, machinery technology, financing and healthcare sectors, among others.

China Jan-Feb power output up 22.1 pc on yr

March 11, 2010. China's power generation in the first two months surged 22.1 percent from a year earlier, official data showed, extending a recent trend of fast rises as the economy gathers growth momentum.  But the rate may have been exaggerated because of a low base figure a year earlier, when the country had yet to pull out of the shadow of the global financial crisis. Power output in February rose 7.9 percent from a year earlier after surging 39.5 percent in January. The uneven year-on-year growth in January and February was distorted by the Lunar New Year holidays which fell in February this year but in January last year, a period when economic activities slow.

Renewable Energy / Climate Change Trends


ONGC get its Bhuj project registered with UNFCC

March 15, 2010. State run, Oil and Natural Gas Corp (ONGC), has got registered its Clean Development Mechanism (CDM) of 51 MW Wind Power project established in Kutch district of Gujarat with United Nations Framework Convention (UNFCC. This sixth CDM project of ONGC is estimated to fetch an annual accruable Certified Emission Reduction (CER) of 85,762 for a period of 21 years, with an estimated earning of around Rs 66.9 mn per annum, it added. This is ONGC's first CDM project on renewable energy, company statement said. Renewable energy projects are an excellent option for mitigating green house gas emission as well as for ensuring a sustainable model of economic development, it added.

Tatas may invest Rs 130 bn on wind, solar power by 2017

March 14, 2010. Aiming to produce 25 per cent power from green sources by 2017, Tata Power plans to increase its wind and solar energy generation capacity to 2,000 MW and 250 MW respectively, which could entail an investment of over Rs 130 bn.

Tata Power has two wind power generation projects each in Maharashtra and Gujarat and one in Karnataka with a cumulative capacity of 195 MW. An additional 100-MW plant is under construction in Gujarat.  The company, the largest private sector thermal power generator in the country, also plans to its increase solar energy capacity to 250 MW by 2017.  

According to industry thumb-rule, a company requires to invest Rs 60 mn and Rs 100 mn for generating a mega watt of wind and solar power, respectively. The total installed capacity of Tata Power is 2,971 MW, of which 1,838 MW is coal-based. It is executing projects totalling 5,470 MW that includes the 4,000 MW ultra mega power project (UMPP) at Mundra in Gujarat. The first 800-MW unit of the UMPP is likely to go on stream by the end of 2012.

Solar energy powers remote branches of KVGB

March 12, 2010. Ingali, a remote village in Belgaum district of Karnataka, is financially included and connected to the grid power supply. But the problem is the lack of quality power, thus affecting the day-to-day activities of the villagers, including their banking operations. Till two months ago, erratic power supply often caused trouble for customers of Karnataka Vikas Grameen Bank (KVGB) — a regional rural bank sponsored by Syndicate Bank — in the village. They were at the mercy of grid power.  But now, the sun has come to their rescue. The branch is running its day-to-day operations with the help of solar power units.  Operations at nearly 10 per cent of the branch network of the Dharwad-headquartered bank are now being done with the help of solar energy.

Vikram Solar to invest Rs 5 bn in West Bengal

March 11, 2010. Vikram Solar Pvt Ltd, a part of the Vikram group of industries, would invest Rs 5 bn to manufacture wafer and photovoltaic cell (PV) at its plant in Falta SEZ in West Bengal. Chairman of Vikram group H K Chaudhury said to start with, the company had already invested Rs 1 bn to produce PV modules with a generation capacity of 25 MW.

Villages to get solar-powered biometric ATMs

March 11, 2010. To expand ATMs into villages, Vortex Engineering, a venture capital-funded company, bets on solar-powered biometric ATMs. These ATMs do not need air conditioning and their maintenance cost is marginal as they consume less electricity. Solar-powered ATMs can save about Rs 10,000 a month on electricity bills as they consume only 72 units of power compared with conventional ATMs which consume 1,800 units.

Govt's solar mission aims adding 22 GW by 2022

March 10, 2010. Mr Bibek Bandyopadhyay, Advisor on the Solar Thermal Programme of the Ministry of New and Renewable Energy, has said that the Jawaharlal Nehru National Solar Mission aims at setting up 20,000 MW grid solar power and 2,000 MW of off-grid solar power by 2022.  He said that the mission will be implemented in three phases.  The first phase of three years up to fiscal 2012-13 has a target to set up 1,100 MW grid connected solar plants and 200 MW capacity off-grid solar applications.  It will focus on capturing the low hanging options in solar thermal and on promoting off grid systems to serve populations without access to commercial energy and modest capacity addition in grid based systems. In the second phase, capacity will be aggressively ramped up to create conditions for up scaled and competitive solar energy penetration in the country after taking into account the experience of the initial years. The target of the mission is to create favourable conditions for solar manufacturing capability, particularly solar thermal for indigenous production and market leadership. It will also try to promote programmes for offgrid applications, reaching 1,000 MW by 2017 and 2,000 MW by 2022. The mission objective is to achieve 15 million sq metres of solar thermal collector area by 2017 and 20 million by 2022.

ANERT prepares plan for micro power projects

March 10, 2010. The Agency for Non-conventional Energy and Rural Technology (ANERT) is ready with a master plan for development of micro-hydel power projects, Power Minister A.K. Balan said. Replying to a submission by P.C. George (KC-M), the Minister said the agency had also got a detailed project report prepared by the World Institute of Sustainable Energy (WISE) for setting up gas-fired power plants by panchayats using solid waste. The project outlay was around Rs.1.41 bn.  Mr. Balan rebutted Mr. George's allegation that the functioning of ANERT was marked by corruption and the agency had siphoned off Rs.290 mn from local self-government institutions with the offer to supply alternative energy equipment.


UN climate envoy expects dual-track negotiations

March 16, 2010. Talks on a new global climate change accord, bogged down for years in contested negotiations among nearly 200 countries, will increasingly move outside the sluggish U.N. framework and focus on a streamlined group of countries, special U.N. envoy Gro Harlem Brundtland said. The disappointment of the Copenhagen summit last December, which failed to come up with binding rules on reducing pollution blamed for global warming, likely will bring a shift in the way countries view the cumbersome U.N. process and the need for more informal contact among key players, Brundtland said.  Copenhagen concluded with a nonbinding three-page paper hammered out in an all-night private meeting among President Barack Obama and a handful of leaders, most importantly from China, India, Brazil and South Africa. It fell far short of the summit's original objective, a full-fledged and legally binding accord setting emission reduction targets for major countries.

UK government rebuked on climate change ads

March 15, 2010. Britain's independent advertising watchdog agency has criticized a government ad campaign that highlights the dangers of climate change. An Advertising Standards Association spokesman says nearly 1,000 complaints about the ads have been received.  The government campaign is based on the children's poems "Jack and Jill" and "Rub-A-Dub-Dub." The watchdog agency believes the ads exaggerate the threat Britain faces as the planet heats up. It says uncertainties about climate change were not taken into account.

CO2 at new highs despite economic slowdown

March 15, 2010. Levels of the main greenhouse gas in the atmosphere have risen to new highs in 2010 despite an economic slowdown in many nations that braked industrial output, data showed. Carbon dioxide, measured at Norway's Zeppelin station on the Arctic Svalbard archipelago, rose to a median 393.71 parts per million of the atmosphere in the first two weeks of March from 393.17 in the same period of 2009, extending years of gains.  The rise in concentrations, close to an annual peak before carbon-absorbing plants start to grow in the northern hemisphere spring, was below the average gain over the year of around 2 parts per million.  Carbon concentrations have risen by more than a third since the Industrial Revolution ushered in wider use of fossil fuels. A 2009 study of the ocean off Africa indicated carbon levels in the atmosphere were at their highest in 2.1 million years.

EU backs U.N. climate report despite skepticism

March 15, 2010. U.N. climate scientists attacked by skeptics after they published an erroneous global warming forecast won support from European Union environment ministers.  Climate skepticism has gathered pace since the U.N.'s Intergovernmental Panel on Climate Change (IPCC) admitted in January that its latest report in 2007 had exaggerated the pace at which Himalayan glaciers were melting.  Last month, it also said it had overstated how much of the Netherlands was prone to sea flooding. The EU ministers said they considered the IPCC's science "solid and robust" despite the errors, and were convinced it offered the most authoritative assessment of climate change.  In their conclusions, the ministers also called for the rapid mobilization of the $10 billion a year that rich countries have promised to give poor nations to help them tackle climate effects in 2010-2012.

Japan faces rocky path to emissions trading system

March 15, 2010. Japan faces a rocky path to launching an emissions trading system after the government approved legislation that was vague on how the scheme would set limits on emissions.  The proposed climate bill, set to be enacted in parliament by mid-June, set a one-year deadline for the world's fifth-largest greenhouse gas emitter to draft legislation outlining details for a mandatory trading scheme.  A national scheme setting emissions targets could be a major boost for carbon trading in Japan, which only has a voluntary carbon market at the national level based on companies' pledged goals.  But designing the new market risks becoming complicated as the climate bill leaves room for the trading system to set caps on emissions per unit of production, which would allow rises in emissions when output grows. While an early draft of the bill by the Environment Ministry proposed a "cap-and-trade" scheme that sets absolute volume caps on emissions, the bill was watered down after complaints from businesses that volume caps would stifle growth. Environment Minister Sakihito Ozawa tried to play down worries on Friday that the bill risked doing little to lower emissions.

Climate Exchange swings to profit on higher volumes

March 15, 2010. Carbon emissions exchange operator Climate Exchange turned its first pretax profit, of 2.2 million pounds ($3.3 million) against a 2.5 million pounds loss in 2008, thanks to higher trading volumes. Climate Exchange owns and operates emissions trading marketplaces, including the European Climate Exchange (ECX), where annual volumes increased 82 percent to 5.1 billion metric tons. It said average daily volume at its Chicago Climate Futures Exchange increased 183 percent to 5,406 contracts in 2009. The company said that while 2010 had begun with modest improvements in European volumes, the U.S. market continued to lag compared to the first half of 2009. Analysts were on average expecting the group to report a pretax profit of 2.6 million pounds, with estimates ranging from a loss of 0.8 million to profit of 6 million.

Chinese premier says he was snubbed at Copenhagen climate summit, fires back at critics

March 14, 2010. Chinese Premier Wen Jiabao said he was snubbed at last year's Copenhagen climate change conference and fired back at critics who accuse China of arrogance. China was blamed by some for undermining efforts to reach a binding agreement at the December conference and Wen was himself criticized for skipping a meeting of top leaders attended by President Barack Obama. However, Wen says he was never formally notified of the late-night Dec. 17 event and sent Vice Foreign Minister He Yafei to register a protest. Wen said no explanation had been given about the lack of a formal invitation. Wen said China remained fully committed to the nonbinding Copenhagen Accord that requires developing countries to propose voluntary actions to combat climate change.

German state premier Seehofer objects to solar cuts

March 12, 2010. Bavaria state premier Horst Seehofer said that the German government's plans to cut state-mandated solar power incentives are excessive.  Seehofer's Christian Social Union (CSU) is the Bavarian sister party to Chancellor Angela Merkel's Christian Democrats -- and one of three parties in her center-right coalition.  Merkel's cabinet agreed last week to a proposal to cut state-mandated incentives in July. The government wants to cut the incentives for rooftop solar power by 16 percent from July 1 and eliminate support for converted farmland. The cuts in the "feed-in tariff" will also include a 15 percent cut for non-agricultural fields. After passing the cabinet, the measure will head to the Bundestag, or lower house of parliament, where Merkel's center-right coalition has a majority. But it is unclear what would happen if Seehofer's CSU refuses to back the measure.

Maize-based biofuel unlikely to reduce global production of CO2

March 12, 2010. New economic analysis has confirmed that maize-based biofuel is unlikely to reduce global production of carbon dioxide (CO2). The analysis, conducted by Thomas W. Hertel of Purdue University and five co-authors, focuses on how mandated increases in production of the biofuel in the United States will trigger land-use changes domestically and elsewhere. In response to the increased demand for maize, farmers convert additional land to crops, and this conversion can boost carbon dioxide emissions. The analysis combines ecological data with a global economic commodity and trade model to project the effects of US maize ethanol production on carbon dioxide emissions resulting from land-use changes in 18 regions across the globe.  The researchers' main conclusion is stark: these indirect, market-mediated effects on greenhouse gas emissions "are enough to cancel out the benefits the corn ethanol has on global warming."

Scientists urge Senate action on global warming

March 12 2010. Two thousand U.S. economists and climate scientists, including eight Nobel laureates, sent a letter to the Senate urging lawmakers to require immediate nationwide cuts in greenhouse-gas emissions tied to global warming. Emerging from a wintertime blizzard of bad press, U.S. and international climate scientists are in damage-control mode, holding press conferences, firing off press releases, and affirming that global warming is quite real and that climate change science is up to snuff.  Despite the "climate-gate" hacked e-mail scandal and embarrassing mistakes in previous scientific reports, the bulk of research shows climate change is incontrovertible, they say.

Big auto and EU face off over green van targets

March 12, 2010. Europe's vanmakers have gone a long way toward meeting proposals to curb climate-warming emissions, but as debate on the 2016 targets kicks off big auto is seen digging its heels in over the last mile. European Union ministers meet next week to start the debate, with automakers saying it will be a costly burden at a time when Europe is struggling to emerge from the deepest economic crisis in 80 years. Manufacturers have been asked to cut van emissions to an average of 175 grams of carbon dioxide per kilometer by 2016, a cut of around 14 percent compared to the 2007 benchmark of 203 grams. But that could be weakened before powerful automaking nations France, Germany, Britain and Italy give their final approval to the European Commission's proposal.

LANXESS starts up "sugar cane” power plant

March 11, 2010. LANXESS has started up a new on-site power plant at its location in Porto Feliz in Brazil. This will increase the efficiency and environmental compatibility of the on-site production of iron oxide pigments, which are marketed globally as Bayferrox and regionally as Po Xadrez. The innovative, highly efficient cogeneration plant for the production of electricity and steam has a capacity of 4.5 MW and achieves an efficiency of up to 90 percent. It is powered by bagasse, a fibrous component of sugar cane that is left over after sugar production. Thanks to the use of this renewable, environmentally friendly raw material, energy can be produced on a CO2-neutral basis. The amount of CO2 released is exactly the same as that previously absorbed by the sugar cane crops during growth.

World forest panel boosts budget to fix key climate issue

March 11, 2010. A conference bringing together more than 60 nations added $1 billion to the fight against deforestation and boosted the morale of those hoping to save the world's forests — a key defense against global warming. Three months after a morose ending to climate- change talks in Copenhagen, the ministerial meeting in Paris attended by heavily forested countries such as Indonesia and those in the Amazon and Congo basins amounted to a confidence-builder for nations wondering what comes next in the battle against deforestation, many delegates said.

Carbon traders fear pink slips

March 11, 2010. Wall Street was supposed to become the capital of a global carbon trading market worth a trillion dollars a year but now many who thought green trading desks would be the next big thing are fearing the pink slip.  U.S. banks had looked forward to a huge "cap-and-trade market" a system where companies would buy and sell the right to emit gases blamed for warming the planet. Many hired carbon traders, picked up assets, and trained members of energy desks to deal in emissions markets.  But prospects for a broad U.S. carbon market have dimmed. U.S. Senator Lindsey Graham, a Republican working on a compromise climate bill, declared economy-wide cap-and-trade "dead" this month.  At least one bank with carbon trade assets has already been hit. EcoSecurities, a clean energy project developer and carbon trader, bought by JP Morgan Chase last year has closed its New York-based U.S. office leading to a loss of up to 20 jobs.

China 'not suitable' for wind power generation

March 10. 2010. A fast expansion in wind power generation projects is not in accordance with China's reality, as sandstorms always go with wind, which would cause serious damage to the wind power equipment, said Miao Wei, vice minister of Industry and Information Technology said. Miao said a wind power generator can usually run for 20 years, but the life expectancy would be greatly reduced if it were eroded by sandstorms. Many wind power projects are just vanity projects, he said, pointing out the 10 million-kilowatt wind power project in Northwest China’s Gansu province. Construction of the Jiuquan, Gansu-based wind power project kicked off in 2008. It has a designed total installed capacity of 35.65 million kW, with 10.65 million kW in the first phase. He said one of the problems in the distribution of power was that the country failed to strike a balance between suppliers and users, citing central China's Hubei province as an example.

SunPower Teams with K6 for Italy solar projects

March 10, 2010. American solar power equipment maker SunPower Corp. and Italian investment and management firm K6 S.a.S. said they have reached an agreement under which the companies will build two one-megawatt photovoltaic solar power plants in the Puglia region, Italy.

The two plants are located in Casamassima and Conversano and are scheduled to be complete by August 2010. According to the companies, the power generated by the plants will provide electricity locally, and contribute to Italy's national electric grid.

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