MonitorsPublished on Aug 25, 2009
Energy News Monitor I Volume VI, Issue 10
Climate and the Clash between the Diversely Developed

Lydia Powell, Observer Research Foundation

Introduction

N

ineteenth century Social Philosophers like Herbert Spenceri  saw ‘energy’ not just as a physical variable that described the means to accomplish work but also as the key to higher stages of social evolution. The ability to produce and harness greater and greater quantities of energy was believed to lie at the foundations of society.  In fact, Wilhelm Ostwald, winner of 1919 Nobel Prize in Chemistry saw the transformation of ‘crude’ energy into ‘useful’ energy at the base of all societal changeii. 

All living organisms captured the needed energy in energy transformation, but only human beings were capable of developing cumulative surpluses. These surpluses propelled economic production and therefore the ‘progress’, of societies. The transition from food gathering and primitive farming to industrial production increased the surplus energy that was converted into more surpluses.  Thus crucial to ‘progress’ symbolized by surplus accumulation was a rational economic system that could maximize economic surplus and transform them into vital uses. Capitalism which was the embodiment of material and physical efficiency was such a system. 

This endless growth paradigm that feeds on the utilization of abundant supplies of energy to transform materials for consumption by ever growing populations has been questioned by, among others, Thomas Malthus (1798), the Second Law of Thermodynamics (1800s) and the Club of Rome (1972) and yet it has not only survived for over three hundred years but also emerged as the most successful means of social transformation. ‘Growth’ interpreted in terms of Gross Domestic Product has been the underlying basis of health, education and advancement of any ideological form of social equality. Despite the persistence of extreme inequality, the ‘growth’ paradigm is perceived to be the necessary precondition for civil coexistence and governance of humankind today. 

Will the phenomenon of climate change succeed in replacing this consumptive growth paradigm with a more sustainable and equitable one? If so how will this extremely difficult social and political task be accomplished? How painful will this transformation be and what kind of a revolution will it entail? Will ‘climate change’ succeed in inducing a dramatic change in social, political and economic relationships or will climate change be turned into an excuse for preserving existing relationships?  

This paper is an attempt to probe further into these questions.  Population, Affluence and Technology identified by Commoner, Ehrlich & Holdreniii  in their well known equation as factors having the greatest impact on the environment and the interpretation of these factors by the ‘affluent’ and ‘aspiring to be affluent’ nations serves as the basis for analysis. Though the IPAT formulation is a rough estimate of factors affecting the environment, it is a very effective framework to understand competing narratives on climate change. The IPAT formulation also facilitates crossing over from the realm of engineers and economists to the realm of social scientists, politicians and people, their needs, wants and aspirations which are more important from the perspective of policy making.   

Background

The mathematical identity I=PAT says that the product of Population (P), Affluence (A) and Technology (T) measure environmental impact (I).  What is interesting is that the equation essentially represents a compromise between views of the environment movement of the 1970s which blamed post war production technologies and material affluence (A & T) for environmental damage and the neo-Malthusian view that argued that the Earth’s carrying capacity was stressed primarily because of rapid population growth (P). The original formulation of Ehrlich and Holdreniv was intended to assign almost the entire blame for environmental degradation on population growth which the authors called ‘the most unyielding of all environmental pressures’. It was Commonerv who introduced Technology of Production as one of the most important factors in causing environmental damage. A decade later Ester Boserupvi  raised the interesting question as to whether technology increased the carrying capacity of the Earth thereby facilitating population growth or whether population growth necessitated advancement of technology. Affluence was treated as an economic factor (output per capita) by Ehrlich and Holdren but Commoner distinguished between affluence that contributed to human welfare and ‘cultural’ affluence that did not necessarily contribute to human welfare.

Despite its simplicity, the IPAT equation has been enduring enough to play a prominent role in research compiled by the Intergovernmental Panel on Climate Change (IPCC). Most emissions scenarios for the reports by the IPCC are based on the IPAT identityvii. In the context of generating emission scenarios, the ‘impact’ is the rate of Green House Gas (GHG) Emissions, ‘technology’ is the rate of green house gas emissions per unit of gross domestic product (GDP) and ‘affluence’ is GDP per person. World population growth today is approximately 1.18 percent per yearviii, per capita GDP varies widely over time and country but recent estimates show that world GDP per capita growth is approximately 1.4 percent per yearix. CO2 emissions per unit GDP output display a well documented long term decline, persistent over the past century of about – 1.3 percent per yearx. The IPAT model indicates that adding these three rates should yield CO2 emissions growth rates. The sum is about 1.2-1.5 percent per year growth rate of world CO2 emissions and this is what is seen, albeit with significant inter-annual variations, when using estimates of CO2 emissions inventories. 

Parameters in the IPAT equation dominate even the non technical global debate over climate change.  Though hardly noticed, the so called ‘north-south’ divide in the climate dialogue is characterized by the difference in interpretation of the factors, ‘population’, ‘technology’ and ‘affluence’ by the developed (‘affluent’) and the developing (‘aspiring to be affluent’) nations. The key argument put forth by the developing nations’ against uncompensated mitigation action being imposed on them invokes the principle of equity in the context of ‘affluence’ and asks as to why developing nations should pay for the consequences of unrestrained emissions of green house gases (GHG) during the industrial era by the developed nations that contributed to climate change and defends the right of developing nations to become ‘affluent’. The argument of the developed nations traces the neo-Malthusian line that essentially attacks population numbers in less affluent nations. The low per capita GHG emissions from developing nations is brushed aside and the aggregate emission level which tends to be high on account of the population numbers is targeted for attack.  Technology is used by all parties albeit from different perspectives. In complete contrast to the radical environmental movement of the 1970s which saw environmental decline as an anomaly of the indiscriminate use of modern technology for economic progress, technology is seen as the ‘saviour’ by both developed and developing nations.  The disagreement is only over how technological change will be facilitated.   

Notes:

i.       Rosa, E A, Machlis, G E & Keating, K M. 1988. ‘Energy & Society’. Annual Review of Sociology. Vol 14 (1988) pp 149-172. 

ii.      Ibid

iii.     Holdren, J & P Ehrlich. 1974. Human Population and the global Environment. American Scientist 62: 282-292. 

iv.     Ehrlich, P & Holderan . 1972. Impact of Population Growth. Science 171: 1212-1217

v.      Commoner, B., Corr, M & Stamler, P.J. 1971. The Closing Circle: Nature, Man & Technology. New York.

vi.     Boserup, E. 1981. Popluation & Technological Change.  The University of Chicago Press. 

vii.    Radiative forcing of Climate change: Expanding the concept and addressing uncertainties, Committee on Radiative Forcing   Effects on Climate, Climate Research Committee, Board on Atmospheric Sciences and Climate, National Academic Press. 2005  Division on Earth and Life Studies

viii.   Average population growth rate between 2005 and 2010 from the United Nations Population Database

ix.     Human Development Report 2007/2008

x.      Nakićenović, N. 1996. Freeing energy from carbon. Daedalus 125(3):95-112

to be continued…

Views are those of the author

You can reach the author at [email protected]

Gas in India – Issues, Opportunities and Challenges (part – III)

Continued from Volume VI, Issue No. 9…

T

he energy industry faces a multi-dimensional crisis. On the one hand, there is price volatility of crude along with a global catastrophe in banking institutions. On the other hand, the industry faces supply chain constraints and the shortage of technical and skilled manpower. Yet the hunger for growth has not slowed down. How will the energy industry address these challenges?

In India, historically there have been fewer resources and significantly more claimants. Be it school admissions, hospital beds, sleeper berths in trains, jobs in the government offices, residential plots within municipal limits, engineering college seats, all that one could find was a ‘shortage’. Energy was no different. It was widely believed that in deeper water sedimentary basins in India lacked hydrocarbon potential. Even if resources existed, it was believed that India did not have technology to access it. Today the reality is that in the last four years India has been featured twice in the American Association of Petroleum Geologists discovery hit list, something that has never happened before. 

In 2002, there was the KG basin find and in and in 2006-07 there was the Cauvery oil find. The pessimism is converting to prospectivity and the myths are being replaced by prosperous reality today. North Mahanadhi, middle Krishna Kodhavari and South Cauvery form a golden triangle in the East Coast and that golden triangle has started giving India gold. It is possible that this is just the tip of the ice berg.  In the West Coast, Gujarat Suarashtra, and Kerala Konkan are also emerging as rich prospects. Most of the exploration & production activities so far have been confined to conventional reservoirs of gas. But looking beyond conventional reservoirs, one comes across vast unconventional reservoirs which are closely associated with the conventional system. The reservoirs that cannot be produced at economic flow rates unless supplemented by a special recovery process and technologies are known as unconventional reservoirs. Gas cells, coal bed methane, basin centred gas, tide gas and gas hydrates are unconventional gas resources in the Indian context. 

Conventional and Unconventional Gas Resources

If you put India’s natural gas resources in a resource triangle and map them with the increasing price and technology, conventional reservoirs fall at the top of the triangle and large volumes of unconventional gas fall at the bottom.  Most of India’s natural gas resources fall in the bottom category [Figure1]. 

Figure 1: Resource Triangle

 

 

 

 

 

 

 

 

 


Source: Presentation by Dr. Rabi Bastia at 7th Petro India Conference on 25th & 26th September 2008, New Delhi 

Figure 2 is a schematic showing conventional and unconventional oil and gas prospects. Oil cells are generally very close to either the seabed or close to the landmass. Shallow methane too is very close to the landmass but it is possible to find methane deeper down. 

Figure 2: Unconventional EXPLORATION

Source: Presentation by Dr. Rabi Bastia at 7th Petro India Conference on 25th & 26th September 2008, New Delhi 

When we start moving from conventional to unconventional gas resources, the permeability reduces from gradually. Even at very low permeability levels, resources can flow if it is a gas reservoir [Figure 3]. 

Figure 3: Comparing Conventional and Unconventional Gas

 

 

 

 

 

 

 

 

 

 

 

 


Source: Presentation by Dr. Rabi Bastia at 7th Petro India Conference on 25th & 26th September 2008, New Delhi

 

to be continued…

Summary of proceedings at the 7th Petro India Conference on ‘Gas in India – Issues, Opportunities and Challenges’ organized by the Observer Research Foundation (ORF) and the India Energy Forum (IEF) on 25th & 26th September 2008, New Delhi. 

 

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

Cairn, ONGC to invest $4 bn in Rajasthan

August 19, 2009. Cairn India and ONGC will jointly invest US$4bn to scale up the production capacity of their oil fields at Barmer in Rajasthan by 25,000 barrels of oil per day (bopd) to two lakh bopd. They had earlier revised their production target from 1.50 lakh bopd to 1.75 lakh bopd. By 2011, Cairn and its joint venture partner will invest up to US$4bn on the development of Mangla, Bhagyam and Aishwarya fileds. The investment will be shared between Cairn India and ONGC in the ratio of 70:30 in line with their equity holding in the oil fields. The commercial production at the Mangla field in the Barmer basin is expected to begin by the end of this month with an initial capacity of 30,000 bopd. The production will be increased by a further 100,000 barrels per day in the first half of next year.

HOEC says PY-3 production to resume in September

August 19, 2009. Hindustan Oil Exploration Co. Ltd. (HOEC) has announced that Hardy Exploration & Production (India) Inc., the Operator of PY-3 Field, has inter-alia made the following announcement as part of their interim results for the six months ended June 30. 

Production from the PY-3 field was shutdown, on July 5, due to unscheduled repairs and maintenance of the offshore mooring facility. Adverse marine conditions have frustrated efforts of the contractor to assess and undertake necessary repairs to commence production, Hardy said in the interim results. PY-3 production is expected to re-commence in September, it added.  Hardy is the operator of the PY-3 Field. HOEC has a 21% non-operating participating interest in the field.

Downstream

Essar Oil in talks for $750 mn loan

August 24, 2009. Essar Oil Ltd is in talks with UBS, Citigroup and JPMorgan for a loan of up to $750 million if it wins the bidding for three European refineries put up for sale by Royal Dutch Shell. Essar Oil, which placed bids earlier this month for the three refineries, hopes to win at least one of them and is finalising its funding structure.  UBS is advising Essar on the acquisition. Last week, Essar is said to have submitted bids for Shell's 267,000 barrels-per-day Stanlow refinery, Britain's second biggest according to a 2007 study, and two German sites.

Refiners worried more about fuel losses than crude price spurt

August 24, 2009. The steady climb in crude prices could be of some concern to the public sector refiners but what is causing them a lot more anxiety are the growing losses on subsidised fuels and the absence of a clear-cut compensation mechanism. Globally, crude is inching towards the $75/barrel mark but the PSU trio of IndianOil, Hindustan Petroleum Corporation and Bharat Petroleum Corporation believes that it will not breach the $85-mark, at least not in a hurry. The same sentiment, however, does not hold true for losses on the four subsidised fuels: diesel, petrol, kerosene and LPG (liquefied petroleum gas, better known as cooking gas). During the space of three weeks, petrol and diesel have seen a sudden spurt in prices which have increased the margin of losses, commonly referred to as under-recoveries. Losses on these two fuels were made good in the first quarter of this fiscal by Oil and Natural Gas Corporation with a little support from Oil India and Gail (India). These were roughly around Rs 600 crore for the three oil majors with ONGC’s contribution alone, by way of discounts, at nearly Rs 450 crore.

Indian Oil to buy petrol, diesel from local refineries

August 21, 2009. Indian Oil said that diesel sales growth is in double digits because of the weak monsoon. Indian Oil Corp. plans to buy petrol and diesel from domestic refineries and also plans not to import fuels this year to cope with increased demand.   

Transportation / Trade

Petronet to sell 2.2MT of LNG to NTPC

August 24, 2009. NTPC Ltd.,will reportedly secure 2.2MT a year of liquefied natural gas from Petronet LNG Ltd. for a power plant in the southern state of Kerala. NTPC will sign an initial contract for 1.2MT a year and Petronet will supply the rest in the future, add reports.  Petronet is said to commission a LNG terminal with 2.5MT a year capacity in Kochi in 2012.

Punj Lloyd bags order from Gail

August 24, 2009. Punj Lloyd Ltd. said it has secured an order from GAIL (India) Ltd for a value of over Rs 167 crore for laying, testing and commissioning of 145.43 km pipeline for Dahej Vijaipur Pipeline Upgradation Project.

Kencana Petroleum bags contract from Afcons-Gunanusa JV

August 19, 2009. The Board of Directors of Kencana Petroleum Berhad has announced that its wholly owned subsidiary, Kencana HL Sdn. Bhd. has been awarded with a contract from Afcons-Gunanusa Joint Venture, a company based in Mumbai, India for the construction of jackets for offshore process platform The Contract comprises the scope of fabrication, load out, sea-fastening and transportation of the ICP-R main jacket and ICP-F3 flare jacket to offshore India. The project owner is Oil and Natural Gas Corporation Ltd., India.The Contract value is estimated at approximately RM50.5 million. The Contract is a one-off construction contract and is expected to be delivered within the third quarter of 2010.

GAIL restores supply to Gujarat Gas

August 19, 2009. Gujarat Gas Co. Ltd. announced that the volume of gas supplied by GAIL to the company from the Panna and Mukta fields have been restored. The volume has been restored approximately to the levels of gas supplies prior to the notification of the Force Majeure (FM) event at the oil evacuation system of the PMT fields.

Policy / Performance

Oil India IPO to open on September 7 ’09

August 25, 2009. The government has fixed a price band of Rs 950-1,050 per share for the initial public offering of Oil India Ltd. The company will raise up to Rs 49.82bn in the initial public offering. The company will offer fresh equity of 2.64 crore shares or 11%, while the government will put on offer 10% of its stake in the company to state refiners.

RIL hits back, says KG cost among world's lowest

August 25, 2009. Reliance Industries (RIL) has informed the oil ministry that the development cost of its famous Krishna Godavari basin project is among the lowest in the world.  India’s largest private sector firm rebutted Reliance Anil Dhirubhai Ambani Group’s advertisement campaign which claimed the “shockingly disproportionate” increase in the capex of KG gas field could result in a loss of up to Rs 30,000 crore to the government. The advertisement also alleged that RIL’s agreement with the government may lead to a hike in retail power tariff by Re 1 per unit. Terming the campaign as “malicious, baseless, mischievous and ill-informed” RIL wrote to the oil secretary on August 20, saying the hike in capital expenditure from Rs 12,000 crore to Rs 45,000 crore was due to a combination of factors, such as an increase in reserves by over 2.5 times, trebling of production facilities, doubling of peak production, increase in the number of wells, field life and inflation in equipment and services industry.

NTPC to file SLP in SC for gas at contracted price from RIL

August 25, 2009. State-run NTPC will file a special leave petition in the Supreme Court for procuring gas from Reliance Industries' KG-D6 at the contracted price of USD 2.34 per mmBtu.  NTPC is fighting a case in the Bombay High Court to get gas from RIL at a committed price of USD 2.34 per mmBtu. 

Oil majors shrug off gas price shadow on NELP

August 25, 2009. Global energy majors will take investments decision based on the prospectivity of Indian sedimentary basins and the country's competitive business environment rather than an one-off issue of the gas dispute, senior executives of some leading multinational firms said after the road show of eighth round of new exploration licensing policy (NELP-VIII) at Houston. The road show was also attended by some senior US government officials as they are interested to explore India's hydrocarbon potential, petroleum secretary RS Pandey said. The Houston road show was the second in the promotional series. The first one was held in Mumbai on August 8. The government is inviting global firms to bid for 70 exploration blocks and 10 coal bed methane (CBM) blocks. The government is planning similar road shows at Calgary, London, Perth, and Brisbane. At present, only 50% of Indian sedimentary basins are under exploration. In the Eleventh Five-Year Plan (2007-12), the country plans to cover 80% of its basins. 

IGL receives first supplies of RIL gas from KG-D6 fields

August 24, 2009. Reliance Industries' Bay of Bengal gas has reached the national capital with CNG retailer Indraprastha Gas Ltd receiving the first supplies from KG-D6 fields.  IGL had earlier this month signed a Gas Sales and Purchase Agreement (GSPA) to buy 0.308 mmscmd of gas from RIL. The KG-D6 gas would meet the increased demand for compressed natural gas (CNG) by automobiles and piped natural gas by households and industries.  The delivered cost of KG-D6 gas will be about Rs 12 per cubic metre as against Rs 13.40 per cubic metre of LNG.  Volume will increase to 0.5 mmscmd by March 2010 and in five years the KG gas requirement would be 2.1 mmscmd. The delivered price of RIL gas, after including taxes and transportation charges including those paid to GAIL, will be USD 6.7-6.8 per million British thermal unit as against the liquefied natural gas (LNG) price of USD 7.25 per mmBtu. IGL is the first city gas company to sign the GSPA with RIL.

Deora rules out immediate hike in petroleum prices

August 23, 2009. Petroleum Minister Murli Deora ruled out any immediate hike in the prices of petroleum products and said that a call would be taken after the crude prices stabilise. On July 1, the Government increased the petrol and diesel prices by Rs four and two per litre respectively to cut losses of oil companies.

GSPC to bid ‘selectively’ in NELP-VIII

August 22, 2009. The Union Government’s recent decisions, which might impact the return on gas production, has set Gujarat State Petroleum Corporation (GSPC) mulling to participate selectively in the ensuing NELP-VIII bidding round for oil and gas E&P assets. The quality of blocks on offer too, has proved to be a dampener, it is learnt. It is felt that GSPC’s role might be limited in the forthcoming bidding round.  A major player in the domestic gas vertical, GSPC is credited with one of the major gas discoveries in KG basin in recent years.

‘Not carrying on any propaganda against govt’: ADAG

August 22, 2009. Reliance Anil Dhirubhai Ambani Group (ADAG) said that it is committed to upholding the dignity of the legal system in the country, and has not made any comments on matters that are sub-judice. There is no question of carrying on any propaganda against the Government or public misinformation, ADAG said in response to the Centre's displeasure over RNRL's advertising blitzkrieg. The facts relating to certain actions of the Petroleum Ministry alone have simply been stated in public and national interest, the ADAG said in a statement.

GAIL to set up Radiation Oncolgy Center in Maharashtra

August 22, 2009. The Foundation Stone of a GAIL sponsored Radiation Oncology Center at the Cama & Albless Hospital was laid by Murli Deora, Union Minister for Petroleum & Natural Gas. B.C. Tripathi, Chairman and Managing Director, GAIL, other senior officials of the state government and GAIL were also present on the occasion. GAIL has made a contribution of Rs200mn for setting up of the Radiation Oncolgy Center. The project would involve procurement of a Linear Accelerator machine for treatment of cancer patients. This state-of-art machine would enable more precise targeted destruction of cancer cells.

AP likely to reduce VAT on natural gas

August 21, 2009. The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, has agreed in-principle to reduce VAT on natural gas sales from the present 12 per cent to 4 per cent. This follows a meeting the Chief Minister with the Chairman of Petroleum and Natural Gas Regulatory Board (PNGRB), Mr. L.Mansingh. It is learnt that the latter advised Dr Reddy to consider reduction in VAT rate. Dr Reddy and the Board Chairman discussed issues relating to gas distribution through a pipeline grid and status of the bidding process.

NTPC to buy gas from GAIL at $8 per mmBtu

August 21, 2009. State-run power utility NTPC Ltd has signed an agreement to buy gas from GAIL India for 10 years at a delivered price of close to USD 8 per million British thermal unit.  NTPC will buy 2 million standard cubic meters per day of gas for 10 years beginning fourth quarter of 2009, a company official said.  

GAIL has committed to sell the liquefied natural gas (LNG) to be imported from Qatar at Petronet LNG Ltd's Dahej terminal in Gujarat. The ex-terminal price will be the pooled price or the average of long-term and short term LNG being imported by PLL.  The pool price currently is USD 6.29 per mmBtu without including the cost of transportation, taxes and marketing margins. The delivered price at NTPC plants, the official said, will be close to USD 8 per mmBtu.

The price is higher than USD 4.2 per mmBtu rate at which Reliance Industries sells gas from its KG-D6 fields. The delivered price of KG-D6 gas at NTPC's plants in Delhi would be USD 6.7 per mmBtu.

Industry sources said government has offered KG-D6 gas to NTPC but the firm has chosen to buy expensive imported fuel. It has in fact floated another tender to buy 1.9 mmsmcd of gas for six months beginning September. Besides GAIL, Indian Oil and Bharat Petroleum are likely to bid for the tender quoting the R-LNG pooled price.

AP Gas Corp at NELP roadshow

August 21, 2009. The newly carved out state-owned AP Gas Infrastructure Corporation interacted with several petroleum majors, including British Gas, at Houston in the US, to explore the possibility of collaboration for oil and gas exploration and production.

The Andhra Pradesh Government also announced its foray into oil exploration and production at Houston coinciding with the NELPVIII roadshow. Officials from the State Government, who are touring the US, held parleys with representatives of major oil companies including British Gas, BHP Billiton, Conoco Philipps, British Petroleum, Noble Energy for potential partnerships and for bidding new blocks together. They also wanted some of the petroleum majors to consider investments in the Petroleum, Chemical and Petroleum Investment Region (PCPIR) proposed between Vizag and Kakinada corridor.

RIL expands board, appoints two new Directors

August 21, 2009. The Board of Directors of Reliance Industries announced the appointment of R. Ravimohan and P.M.S. Prasad as Executive Directors on the Board with immediate effect. With this, the Board will expand to 14 members with 7 members on the Board being Independent Directors. R. Ravimohan is the former Chairman of CRISIL Ltd and the Managing Director and Region Head of Standard & Poor's for South & South East Asia. Recognised as one of the finest professionals in the energy industry, Prasad has been with Reliance Industries for over 28 years. Presently, he heads the upstream and refining businesses, which comprises of exploration and production and refinery Supply and Trading.

GAIL to make gas available in Rajasthan

August 20, 2009. To attract new investments in Rajasthan, land allotment will be at 10% discount in non-saturated industrial areas of Manda, Ramchandrapura, Sitapura and Kaharani (Bhiwadi).

Gas Authority of India (GAIL) has also assured availability of gas, an industrial fuel in Rajasthan NCR (Neemrana, Bhiwadi and Khushkhera) by January 2010.  Reasonable land and gas availability, the two most important ingredients for setting up of industry is bound to attract major industries to invest in Rajasthan.

Oil Ministry pledges support for NTPC in legal fight with RIL

August 19, 2009. The Petroleum Ministry is believed to have told the Power Ministry that it would support NTPC Ltd in the state power firm's legal fight to get natural gas from Reliance Industries at prices the Mukesh Ambani-led firm had quoted in the 2004 tender.

NTPC is seeking gas for its Kawas and Gandhar expansion projects in Gujarat at the USD 2.34 per million British thermal unit, rates which are 44 per cent lower than the Government approved price for RIL's KG-D6 fields. The Oil Ministry said it was only fighting to protect the Government's right to approve price of gas and fix usage of the fuel as per national priorities.

RIL open to CAG audit on gas field expenditure

August 19, 2009. RIL has reportedly written to the government that it has no objection to the Comptroller and Auditor General of India auditing its gas field costs and said that it is operating the field in compliance with rules.  As a follow up of the meeting called by the oil ministry to tell private operators that it can appoint CAG to audit their oil and gas field costs, RIL wrote saying that the company had no objection to any special audit of KG-D6 PSC (production sharing contract) by CAG as desired by the government. The PSC gives government the right to audit records of operators within two years from the end of a financial year and in case of KG-D6 the same has been exercised until 2006-07.

POWER

Generation

BGR Energy bags contract from Nuclear Power Corp

August 24, 2009. Electrical Projects Division of BGR Energy Systems Ltd, the EPC Company for Power projects has secured a turnkey contract from Nuclear Power Corporation of India Ltd, for implementation of 415 V Motor Control Centers (MCC) package for Bharatiya Nabhikiya Vidyut Nigam Ltd (BHAVINI), the 500 MW Prototype Fast Breeder Reactor (PFBR) Project at Kalpakkam, Chennai. The contract is valued at Rs271mn and will be completed over 12 months. The scope of the contract includes supply of complete 415 V MCC Panels and associated Automation Systems for the 500 MW Plant. BGR Energy was successful against the only other qualified bidder viz., Larsen & Toubro in this tender.

Adani Power may commission second unit at Mundra soon

August 24, 2009. Adani Power Ltd (APL) is likely to commission its second 330-MW unit at Mundra towards the end of September or early October. Meanwhile, the generation from the existing 330-MW unit was stabilised at full capacity. The unit was brought on stream in May. However, the existing unit is now undertaking rectification of ‘minor problems’ in the sea water processing equipment. The work is expected to be over in a couple of days. It is said that in the absence of any supply commitment till February 2010, APL was selling its entire generation as merchant power on spot basis through the power-trading arm of its parent, Adani Enterprises. Though details of power sales are not available, unconfirmed sources said that parts of generation were sold to Punjab state utility at approximately Rs 6.5/unit.

JSW Energy to commission 300 MW power plant at Jaigarh in January

August 22, 2009. JSW Energy plans to commission the first phase of its 300 MW power plant at Jaigarh in Maharashtra by January. The Sajjan Jindal-led company is currently developing a 1,200 MW coal-fired plant at Jaigarh, which it expects to fully commission by September 2010. The company aims to install 11,000 MW of capacity in the next five-years at an estimated investment of Rs 55,000- crore in different states.  JSW Energy is also setting up a 3,200-MW super critical thermal power plant entailing an investment of Rs 15,000-crore at Ratnagiri in Maharashtra.

BHEL bags orders worth Rs 2630 cr

August 21, 2009. Shares of BHEL picked up momentum after the power and engineering equipment firm has secured an order for a power project in eastern India.  The contract is worth Rs 2630 crore where BHEL will design and commission two generation units of 525 megawatts each, it said in a statement.

Era Infra bags contract from BHEL

August 19, 2009. Era Infra Engineering Ltd. said it has secured a contract from Bharat Heavy Electricals Ltd. (BHEL) valued at Rs460mn for the construction of General Civil Works for the Main Plant and Auxiliary Plant Buildings for Unit No. 1 of 2 x 600 MW North Chennai TPS, Athipattu, Tiruvallur.

Transmission / Distribution / Trade

ABB India bags Rs 128 cr power project from Power Grid

August 25, 2009. Power and automation technology provider ABB said it has bagged an order worth Rs 128.3 crore from state-run Power Grid Corporation of India (PGCIL) for setting up a sub-station in Gujarat.     ABB India has won a Rs 128.3-crore order from PGCIL for a 400-kV gas insulated switchgear sub-station to strengthen the power transmission network in the country's western grid, the company said in a filing to the Bombay Stock Exchange (BSE).    

Transmission woes take fuse out of traded power

August 25, 2009. Inadequate power transmission capacity, one of the worst fears of operators of the Indian power exchanges, has finally come alive. While volumes of electricity traded at the electronic platform have jumped multifold in the past one year, the absence of a comparable increase in the transmission capacity to support the evacuation of such huge volumes is leading to their curtailment. While this could further increase the gap in the demand and supply of power especially for shortage prone areas like the northern region, experts believe that the continued pressure on market volumes could choke the growth of the power market in the country. It is said that more than 20 per cent of the volume of power scheduled at the exchange every day is getting curtailed (not getting evacuated) due to lack of transfer capacity. While bids are placed for over 20 million units of power daily, anything above 14 million units is unable to flow.  The remaining 6 MUs of curtailed power translates to a daily revenue loss of over Rs 4 crore for the Indian power market. In order to evacuate the 20 MUs of power transacted at the exchange, IEX requires a transmission capacity of up to 1,000 Mw on a daily basis. As against this requirement, a grid capacity of only 400 Mw becomes available.

Power equipment industry rose 1.24 pc growth in June

August 21, 2009. The power equipment industry has clocked 1.24% growth in the June quarter.  The highest on-year segmental growth in the equipment industry was reported in the transmission lines segment at 18.44%, while capacitor segment grew at 12.39% in April-June, data from IEEMA showed. The growth in transmission sector is largely attributed to orders to conductor and tower makers by state-run Power Grid Corp, IEEMA statement said.

Power cuts set to get longer in Hyderabad

August 20, 2009. The power situation in the state is worsening with the domestic sector facing the brunt by being subjected to three hours or more power cut in the Greater Hyderabad region and more than five hours in rural areas.  

The euphoria generated by the heavy rains across the state turned out to be shortlived as the demand continues to hover around 8,869 MW per day. The shortfall was 786 MW and the supply is largely being catered to by thermal units (4,000 MW), naphtha and gas-based units and power purchase from the Power Trading Corporation.  

Adani makes lacklustre Bombay debut

August 20 2009. Adani Power, which raised $630m in one of the biggest initial public offerings in India in the past 18 months, made a disappointing market debut on the Bombay Stock Exchange, with shares in the power generation group falling below the offer price at one stage. The group, which delayed its share sale last year following the global stock market rout, is testing the water for Indian IPOs after the market all but dried up amid the global economic downturn.

Jaiprakash Hydro Power to raise up to Rs 15 bn

August 19, 2009. Jaiprakash Hydro Power would raise up to Rs15bn through various means, including stake-sale or issue of securities in domestic as well as global markets for funding its projects, according to a report. Shareholders of the company have approved the proposal for raising funds up to Rs 15bn through FPO (follow-on public offer) or ADRs and GDRs among others, Jaiprakash Hydro said in a filing to stock exchanges. Further, they have also approved the change in the company's name to Jaiprakash Power Venture Ltd, after its amalgamation with Jaiprakash Power, report stated.

Policy / Performance

Himachal approves 311 mini-hydro projects since December ’07

August 25, 2009. Himachal Pradesh has approved 311 mini-hydroelectric power projects with a combined generation capacity of 608 MW since December 2007. Out of these projects, 273 have been allotted to those who are natives of the state, 19 to the Himurja (state energy development agency) and 19 to those living outside the state, he said. Himachal Pradesh has abundant water resources, with five major rivers flowing down the slopes of the Himalayas. Its power generation potential is 20,416 MW, about 25 percent of India's total hydropower potential.

Govt may divest stake in Satluj Jal Vidyut Nigam

August 25, 2009. The government may sell 10 percent of its stake through a public offering in power producer Satluj Jal Vidyut Nigam Ltd.  The Himachal Pradesh government holds 25 percent stake in the firm, while the remaining 75 percent is held by the federal government. 

Himachal Pradesh government has given NOC (to the federal government) and has supplied them a roadmap for disinvestment in seven months. The company currently has a capacity to generate 1,500 megwatt of hydro power and it aims to raise the capacity to 4,800 MW by 2017.

Govt plans power plant in Iran

August 24, 2009. India is planning to build a 4,000-megawatt (MW) capacity electricity generating plant in Iran costing at least Rs200bn. Public sector NTPC Ltd. may build the power plant. Power Grid Corporation of India may build the transmission network, which may cost Rs120bn.

Power-starved Bihar sends SOS to Centre

August 24, 2009. Reeling under massive power cuts, the Nitish Kumar-led Bihar government has sent an SOS to the Prime Minister’s Office (PMO) for additional central sector power allocation. Since the bifurcation and creation of Jharkhand, Bihar doesn’t have any thermal stations and is entirely dependent on central sector drawals. Following Bihar’s SOS, the Centre has formed a four-member committee with members from coal, power and railway ministries as well as senior officials from NTPC to examine the issue. The committee members recently made its first visit to Coal India’s Rajmahal mines and NTPC’s Farakka power plant to take stock of the situation.

Tax sops for supercritical tech

August 21, 2009. The government has proposed to extend the excise waiver and income-tax holiday benefit to power projects based on supercritical technology, including large-sized energy-efficient power equipment. The proposal is part of the new mega power policy being worked out. The existing policy has no provision for giving incentives to the new-generation supercritical power projects. In addition, the new policy would also allow projects that have completed financial closure but have not tied up requisite long-term power purchase agreements (PPAs) to apply for mega power status and avail incentives. A committee of secretaries (CoS) cleared the new mega power policy early this month. The power ministry would include the changes in the draft policy before putting it before the Cabinet for approval, the official said, requesting anonymity.

NTPC appoints Macquarie to advice on Indonesia coal mine buy

August 20, 2009. NTPC Ltd has appointed Australian advisory and investment services firm Macquarie to advise it on buying a stake in a coal mine in Indonesia. The company is currently evaluating options of picking up a minority stake in the Kalimantan mine in Indonesia and is likely to go solo for the bid. Indonesia is the world largest exporter of thermal coal and rising coal prices have prompted flurry of investment and acquisition in coal mining.

REC mulls FPO in Oct-Nov to finance electrification projects

August 20, 2009. The Government is likely to divest some of its holding in public sector Rural Electrification Corporation (REC) through a follow-on public offer by October-November, a senior government official said. A senior company official had earlier said that the company was looking at raising Rs 2,000-crore through the QIP (Qualified Institutional Placement) route. The proceeds of the FPO will be deployed to refinance existing rural electrification projects and ultra-mega power projects, Brahma said.

No move to privatise Singareni Collieries

August 19, 2009. The Andhra Pradesh Finance Minister denied any moves to privatise the State-owned Singareni Collieries Company Ltd.  Answering queries in the State Legislative Assembly Mr Rosaiah said that SCCL was a major turnaround story and plans to produce about 50 million tonnes of coal during 2009-2010, up from 44.5 million tonnes last year.

The loss-making company has moved into profitability mode over the last few years and continues to invest in expansion and new mines, he said.  In fact, if one goes by the performance in the recent past, it has managed to do better than the Coal India Ltd, he told the House.

Kakodkar rules out FDI in nuke plants

August 19, 2009. India's atomic energy chief Dr Anil Kakodkar has ruled out Foreign Direct Investment (FDI) in the nuclear power plants but said there are no restrictions for the private sector to carry out manufacturing of nuke equipment and construction. Kakodkar's comments came close on the heels of Economic Survey making a pitch for greater private participation even in the sensitive sector of nuclear power generation.

The Survey called for allowing up to 49 per cent FDI in nuclear power and amending the Atomic Energy Act to allow private companies in the sector.  In an interview to Asian Nuclear Energy, a portal dedicated to nuclear commerce, he said India's capability to independently design and build thorium-based Fast Breeder Reactors (FBRs) will make the country a global technological leader in this crucial area in the future.

Power majors vie for MahaDiscom’s supply contract

August 19, 2009. Seven private power generators, including Reliance Power, Adani Power, Essar Energy and the state-owned power trader PTC India, have evinced interest in supplying 2,000 mw to Maharashtra State Electricity Distribution Company (MahaDiscom).

The technical bids of the companies were opened and they have been asked to submit the supporting documents.   The winning bidders will sign long-term agreements with the state distribution unit for supplying around 2,000 mw for 25 years.  In order to ensure serious participation and timely completion of commencement of power supply for the bidding process, the central government has added new clauses in the Electricity Act, 2003.  This includes the bidder acquiring at least 50% of the land and submitting the required proposal for environmental and forest clearance, apart from securing a firm arrangement of fuel and water.

INTERNATIONAL

OIL & GAS

Upstream

Capacity of CNPC's oil fields to hit 100 million tons

August 25, 2009. The exploitable quantity of CNPC's petroleum and natural gas will retain a double-digit growth this year, and the capacity of crude oil from the firm's oversea oil fields will top 100 million tons.  CNPC boasts six oil fields with an oil and gas equivalent exceeding 10 million tons, the Daqing oil field boasts a capacity of 40 million tons, and the Qinghai oil field, and Jilin oilfield are expected to hit 10 million tons. CNPC has greatly contributed to the demand of oil equipment with an annual addition of 13 million tons of crude oil and 10 billion cubic of meters natural gas.

Daewoo to spend $1.68 bn on Myanmar Gas Project

August 25, 2009. Daewoo International Corp., a South Korean trading company, said that it will invest US $1.68 billion to build facilities that produce and transport natural gas at its offshore gas field in northwestern Myanmar.  Daewoo International will make the investment from October this year to September 2014, the company said in a regulatory filing.

Mitsubishi joins South Gas Utilization Project in Iraq

August 25, 2009. Following the agreement made between a wholly-owned affiliate of Royal Dutch Shell plc and Mitsubishi Corporation ("MC"), MC has accepted an invitation letter issued by the Iraqi Ministry of Oil ("MoO") and Shell to take a 5% interest in the proposed South Gas Utilization Project Joint Venture ("JV") currently under development by the MoO and Shell.

As a new partner in the proposed JV, MC brings knowledge of the existing South Gas Company facilities and complementary technical and commercial capabilities in order to enhance the value of the project. In September 2008, MoO and Shell signed a Heads of Agreement that sets out the commercial principles to establish the joint venture with the Iraqi South Gas Company, an affiliate of MoO.

Eni fires up gas production in Mediterranean Sea

August 25, 2009. Eni started up subsea gas production in North Bardawil field, within the North Bardawil Concession, located in the Mediterranean offshore of Egypt. The expected maximum production rate will be 2.7 million scm per day, approximately 17,000 boe/day, of which about 6,000 boe/day as Eni equity share.

Iraq’s second oil bidding round needs higher fees to succeed

August 24, 2009. Iraq, which awarded only one oil field contract in June because of disagreements over fees, needs to pay more to attract foreign bidders in the second round of licensing, according to former state officials and analysts. 

International companies vying for the untapped deposits, including Majnoon, Iraq’s largest undeveloped field, want higher returns for working in a country lacking security and an oil law. Contracts to be awarded in November may be delayed until after a January election and revised if the government changes.

Bangladesh awards exploration rights in three offshore gas blocks

August 24, 2009. Bangladesh awarded three offshore gas blocks to two international oil companies for exploration and extraction of hydrocarbon in its territorial waters in the Bay of Bengal, officials said.  US oil company ConocoPhillips will explore two blocks while Irish firm Tullow will explore the third, reported the government.  Contracts with both countries include provisions for export of gas in liquefied from. 

Indonesia's Cepu oil field to start production late August

August 21, 2009. Indonesia's Upstream Oil and Gas Regulating Agency (BP Migas) has assured that the Block Cepu of the Banyu Urip oil field in Bojonegoro, East Java, will start its initial production at the end of this month.  Cepu Block was one of the government's reliable wells in 2009 in the face of the declining of national oil production of late. 

But the Cepu oil production which is planned at 20,000 barrels per day is initially expected to be started at the end of 2008 but had been delayed for several times. Of the 20,000 barrels, some 14,000 barrels are planned to be channeled to the joint Petrochina-Pertamina tanks while the remaining 6,000 barrels will be processed in a refinery plant belonging to PT Tri Wahana Universal (TWU).

Rosneft fires up O&G production at Vankor field

August 21, 2009. An official ceremony was held in Turukhansky District (Krasnoyarsk Territory) to mark the launch of commercial production at the Vankor oil and gas field. Launch of Vankor represents the first step in implementation of Rosneft plans for development of the East-Siberian oil and gas province. Vankor is an integral development project for East Siberia and the Far East. Oil from the field will be the main input to the East Siberia -- Pacific Ocean pipeline and the primary feedstock for unique petrochemical complex planned for construction in the Russian Far East. Development of the field, which currently has estimated recoverable reserves of 520 mln tonnes (3.8 bln barrels) of oil and 95 bln cubic meters of gas, is being carried out by a Rosneft subsidiary, Vankorneft.

Petrobras digs deep, hits black gold in Campos post-salt layer

August 21, 2009. Petrobras has announced a new oil discovery in carbonate reservoirs in the Campos Basin post-salt layer. The discovery was made by drilling well 1-BRSA-713-RJS (1-RJS-661), informally known as Aruanã, in Exploratory Concession BM-C-36 (block C-M-401), which is operated exclusively by Petrobras. Preliminary analyses indicate not only the estimation of recoverable volumes around 280 million barrels of light oil (28 degrees API), but also good productivity.

Pertamina repeats plan to takeover Mahakam gas block

August 21, 2009. Indonesia's state oil and gas company PT Pertamina has repeated showing its interest in taking over the Mahakam gas block in East Kalimantan after Total E&P Indonesie ends its contract.  Pertamina is keen on taking over the block, currently turning out 2.6 trillion cubic feet of gas per day, Pertamina said.  Pertamina wants to have control of the gas block to better guarantee supply of gas for domestic consumption, analysts said.  The block is now operated by the French company , which jointly owns it with Japan's Inpex, but its contract will expire in 2017.

First Hungarian gas development on stream

August 19, 2009. JKX Oil & Gas has announced the commencement of commercial gas production from the Hajdúnánás field in northeast Hungary. The field has come on-stream at an initial rate of 3.5 MMcfd from the Hajdúnánás -1 well, following its initial discovery in August 2008. The Hajdúnánás -2 well is scheduled to come on-stream within one month and, together, production is expected to increase to approximately 8.5 MMcfd.

Kuwait says OPEC should keep output steady next month

August 19, 2009. OPEC should agree to maintain oil production targets when it meets next month to decide quotas, Kuwait’s oil minister said.  Oil prices are “not too bad, not too bad at all,” Sheikh Ahmed al-Abdullah al-Sabah said. OPEC should keep quotas unchanged, he said. Al-Sabah favors an oil price of $70-$80 a barrel. Members of the Organization of Petroleum Exporting Countries agreed in December on record production cuts of 4.2 million barrels a day in an attempt to support oil prices that slumped 69 percent after reaching a record $147.27. The group is scheduled to discuss quotas in Vienna on Sept. 9 after leaving output unchanged at its last two meetings.

Angola’s oil exports set to rise to highest this year

August 19, 2009. Angola’s daily crude oil exports are scheduled to rise to the highest this year, signaling that Africa’s second-biggest producer continues to pump more than its OPEC quota. Sixty-two cargoes totaling 59.1 million barrels, or an average of 1.903 million barrels a day, are scheduled to load in October, preliminary shipping programs show. That is the highest since December 2008 and compares with 58 cargoes, or 1.854 million barrels a day, planned for September. Preliminary schedules are subject to change.

Chevron hits gas offshore Australia

August 19, 2009. Chevron Australia Pty Ltd, a subsidiary of Chevron Corporation, announced two natural gas discoveries in the Carnarvon Basin offshore Western Australia. The discoveries are located in Australia's premier hydrocarbon basin, where Chevron is the leading lease holder.  The Clio-2 well, located 90 miles (150 kilometers) off the coast of Western Australia, is situated in 3,200 feet (990 meters) of water and drilled to a total depth of 14,400 feet (4,405 meters). The well discovered 375 feet (115 meters) of net gas pay.

Pemex plans 200 oil wells in southern district

August 19, 2009. Petroleos Mexicanos is seeking contractors to drill 200 oil wells in the southern district as the state oil company struggles to stabilize plummeting oil production. Drilling is scheduled to start in early October and last for three years. Pemex has ramped up investments despite the oil price crash of late 2008 and early 2009, providing opportunities for oil services companies such as Halliburton Co. and Schlumberger Ltd. at a time when activity has slowed in major markets such as the U.S. and Canada.

Petrobras' national oil production up 3.8 pc in July

August 19, 2009. Petrobras' average oil and gas production in Brazil, in July, topped out at 2,254,409 barrels of oil equivalent per day (boed), 2.7% more than a year ago (2,195,855 boed). The exclusive domestic field oil production, 1,937,587 barrels per day, was 3,8% higher than July 2008. July's 11,000-barrel-per-day higher average volume was the outcome of production going back on line after scheduled shutdowns and of increased production at wells that are interconnected to the P-35 platform, in the Marlim field, and to the P-53 platform, in the Marlim Leste field, both in the Campos Basin.

Downstream

Aker Solutions, IHI partnership completes Cameron LNG Terminal

August 25, 2009. The Aker Solutions and IHI partnership has received a signed Notice of Substantial Completion for Sempra LNG's Cameron LNG liquefied natural gas (LNG) receipt terminal near Lake Charles, Louisiana, USA. The Cameron LNG terminal project combined Aker Solutions' expertise in regasification engineering, construction management, commissioning and start-up with IHI's design and manufacturing knowledge of LNG storage and processing systems.

Sinopec says Addax deal got Iraqi approval

August 25, 2009. China Sinopec Group's $7.24 billion acquisition of Swiss oil firm Addax Petroleum Corp was approved by the Iraqi government, a local paper quoted a senior Sinopec official as saying. The remark came in response to a Reuters report that Iraq's Oil Ministry said it would blacklist Sinopec and bar it from new oilfield tenders if it confirmed the purchase of the Swiss firm, which is active in the semi-autonomous Kurdistan region in northern Iraq. Analysts have warned that Addax's assets in the Kurdish blocks, including the Taq Taq field that has the potential for a sharp production increase, carry political risks that could prompt Sinopec to sell them to another party.

PetroChina’s stake in Singapore Petroleum exceeds 90 pc

August 25, 2009. PetroChina Co.’s stake in Singapore Petroleum Co. reached more than 90 percent, which will lead to a suspension in the trading of the Singapore refiner’s shares at the close of the takeover offer.  PetroChina, which offered S$6.25 in cash per Singapore Petroleum share under the buyout offer, received acceptances for 91.3 percent of Singapore Petroleum’s equity as of yesterday, the Singapore refiner said in a statement to the city-state’s exchange.

Exxon has emergency shutdown of Texas hydrocracker

August 25, 2009. Exxon Mobil Corp. reported to state regulators an emergency shutdown of a hydrocracker at its 365,000-barrel-a-day Beaumont, Texas, refinery. The shutdown caused the release of more than 30,000 pounds of sulfur dioxide, according to a filing with the Texas Commission on Environmental Quality.  The 65,000-barrel-a-day hydrocracker at the refinery converts heavier oils into diesel and gasoline, for sale in the Gulf Coast spot market.

Sinopec to boost overseas expansion as profit

August 24, 2009. China Petroleum & Chemical Corp., Asia’s biggest refiner, plans “rapid” overseas expansion to secure oil supplies after profit reached a record and as the nation’s economic recovery spurs fuel demand. Chinese energy companies have spent at least $13 billion on overseas assets since December as they take advantage of lower valuations caused by the global recession to meet energy demand in the world’s fastest growing major economy. Sinopec will invest in oil and gas fields overseas and expand refining ventures while focusing on cost reduction as it expects oil prices to rise in the second half.

Ahmadinejad dismisses Iran gasoline sanctions talk

August 20, 2009. President Mahmoud Ahmadinejad shrugged the impact of any sanctions targeting Iran's gasoline imports and suggested it would soon be able to meet its own needs, Iranian media reported. U.S. President Barack Obama has given Iran until September to take up a six-power offer of talks on trade benefits if it shelves sensitive nuclear enrichment, or face harsher sanctions. Iran is the world's fifth-largest crude exporter but its refineries lack the capacity to meet domestic fuel demand so it imports up to 40 percent of its gasoline.

Kuwait may revive La. Refinery plans

August 19, 2009. Kuwait may revive plans to build a joint venture refinery in Louisiana after the Gulf Arab state canceled last year a joint venture deal with U.S. petrochemical giant Dow Chemical Co. The joint-venture refinery project in Louisiana would be considered compensation to the U.S. for canceling the Dow project, the paper reported, citing unidentified sources.  Kuwait and the state of Louisiana signed in 2006 a memorandum of understanding to add refining capacity in the southern state.

Construction on new PetroChina refinery set to start in November

August 19, 2009. The feasibility study on PetroChina's 20-million-tons/year Jieyang Petrochemical refinery in Guangdong province has been completed and construction is expected to start in this November. PetroChina's Jieyang Petrochemical has a designed refining capacity of 20 million tons/year for the first phase and is planned to enter operation in 2013. Its second phase will expand capacity to 40 to 50 million tons/year.

Transportation / Trade

Dolphin constructs Taweelah-Fujairah gas pipeline

August 25, 2009. Dolphin Energy announced that works on the cross-country gas pipeline to pump gas from Qatar to the east coast of the UAE would be finished by Q3 2010.  The project is part of the Abu Dhabi's strategic plan, "Plan Abu Dhabi 2030", aimed at providing all necessary infrastructures needed for economic development, decreasing dependency on oil revenues and diversification of the income resources.  Dolphin is an entity of Abu Dhabi Government, which owns 51% of Mubadala's shares, and the remaining shares are equally divided between France's Total and US Occidental Petroleum.

Turkey aspires to be world energy hub

August 24, 2009. Turkey, which is short of gas and oil, is trying to turn itself into the largest energy hub in the world through forging a series of high-profile transit agreements.  First, Turkey signed with four European countries a deal on the Nabucco gas pipeline in Ankara on July 13. The Nabucco gas pipeline is intended to transfer natural gas from Caspian region, Iran, Iraq and Egypt to Europe through Turkey. The primary goal for Europe in establishing Nabucco was to reduce its dependence on Russia. The 11.6 billion dollar EU-backed pipeline is expected to become operational in 2014.  Twenty-four days later, Turkey hosted Russian Prime Minister Vladimir Putin to sign a deal on the South Stream gas project, which aims to bypass Ukraine and possibly render the Nabucco gas pipeline ineffective. A few days earlier, three energy protocols between Qatar and Turkey were signed. Turkish Energy Minister Taner Yildiz also went to Syria to conclude a deal on a gas pipeline transferring Syrian gas to Turkey.  All these energy agreements put Turkey in an important position in global energy geopolitics. The unique position of Turkey as a bridge between the East and West created new avenues for improving regional relations.

Woodside’s world-record LNG targets ‘not a stretch’

August 21, 2009. Woodside Petroleum Ltd., operator of the A$12 billion ($10 billion) Pluto liquefied natural gas project in Western Australia, said “world-record” targets for the pace of development at the venture are achievable.  The first LNG from Pluto is due to be shipped in 2011, just six years after gas was discovered, and faster than any project of its type.  Pluto is due to start production from a second unit in 2013, and a third in 2014, with two more to follow as the Perth- based company targets Asian demand for cleaner-burning fuels, Woodside said. The timeline for the third plant is “ambitious,” analysts.

Construction set to start on Rizhao-Dongming crude oil pipeline

August 19, 2009. PetroChina has seen the preliminary design for the Rizhao-Dongming crude oil pipeline in Shandong accepted, and construction is expected to begin in the second half of this year.  The 462-km pipeline will start from Lanshan port of Rizhao, a coastal city in Shandong, via Linyi, Jining and Heze, and terminate at Dongming Petrochemical in Heze. The first phase has a designed transmission capacity of 10 million tons/year and should enter operation before the end of 2010. Its second phase will expand the capacity to 20 million tons/year.

Syrian, Turkish ministers sign protocol on building gas pipeline

August 20, 2009. Turkey and Syria signed a protocol regarding construction of a natural gas pipeline. Turkish Energy and Natural Resources Minister Taner Yildiz and Syrian Oil Minister Sufyan Allaw signed the protocol in Damascus. Syrian minister said Turkey and Syria have initiatives to explore oil jointly and noted that talks were under way to establish a joint company.

Exxon Mobil and China ink $41 bn LNG deal

August 19, 2009. Exxon Mobil and PetroChina signed a US$41bn liquefied natural gas (LNG) supply deal. PetroChina will buy 2.25 million tonnes per annum (mtpa) of LNG from the Gorgon LNG project for 20 years. The gas sale agreement between Exxon and PetroChina comes just weeks after the US oil major signed a A$10bn Gorgon LNG sales deal with India's Petronet LNG, which marked Australia's first ever LNG contract with India. The two deals, along with regulatory approvals process from the government now nearing completion, means that the Gorgon project partners could approve the massive LNG project, located off Western Australia, by early as next month. Construction of the Gorgon project has been delayed. Exxon Mobil owns a 25% interest in the offshore Gorgon LNG facility, while Chevron Corp. holds 50% and Royal Dutch Shell has the remaining 25% stake. Under the joint-venture agreement between the oil majors for the project, each will compete to market their gas separately.

Policy / Performance

Zambia extends deadline for petroleum exploration bids

August 25, 2009. Zambia's government has readvertised the invitation for bids for petroleum exploration due to overwhelming response from international firms to explore oil and gas in 23 blocks in three provinces. The deadline has now been extended to November 6. In its invitation for bids, the ministry indicates that the 23 blocks are in North-Western, Western and Eastern Provinces and bidders should demonstrate a proven ability to raise the necessary funds, assets, machinery and equipment.

RJ Governor opposes Brazil's oil royalties bill

August 24, 2009. Rio de Janeiro state Gov. Sergio Cabral said he would oppose a new bill governing oil royalties, Brazilian media reported.  Cabral, a friend of Lula's and one of the most influential members of the PMDB party, said he would lead protests against the "unfair" reduction in revenues for his state, which has Brazil's largest offshore oil reserves, including those in the so-called "pre-salt" layer.  Discovery of the pre-salt oil reserves, so called because they are located under a thick layer of salt under the ocean floor, was first announced in late 2007.  

State Department gives green light to Canada-U.S. oil pipeline

August 21, 2009. The State Department has approved the construction of a multibillion-dollar pipeline from Canadian oil sands to refineries in the United States, prompting an outcry from environmental groups opposed to oil sands development. Extraction of the oil in Alberta has drawn opposition because it scars vast tracts of land and uses large quantities of energy and water. The projects have contributed to a sharp increase in greenhouse gas emissions by Canada, which as a result will not meet its own climate change targets.  Environmental groups also said U.S. refineries would have to deal with high levels of toxic chemicals such as mercury, nickel and lead in petroleum from the oil sands.

8 Cos on Tullow's list to join Uganda oil project

August 21, 2009. Tullow Oil has compiled a shortlist of eight prospective partners to join its development of oil resources discovered in the Lake Albert region of Uganda. Italian oil company Eni SpA, which was in Uganda for talks with the government, is on the list, it is said. Major Chinese, Indian and Western oil companies are also on the list. Tullow is preparing to send a letter of invitation to the shortlisted companies, marking the "first formal step" in the process to select a partner for the oil development.

Natural gas falls below $3, first time since ’02, on supply glut

August 20, 2009. Natural gas futures fell below $3 per million British thermal units for the first time in more than seven years after a government report showed rising supplies of the industrial and power-plant fuel. U.S. gas inventories rose 52 billion cubic feet to 3.204 trillion in the week ended Aug. 14, the Energy Department said. Supplies were 19 percent higher than the five-year average. The September gas contract fell 17.4 cents, or 5.6 percent, to settle at $2.945 per million Btu on the New York Mercantile Exchange, the lowest close since Aug. 14, 2002. Futures, based on the contract closest to expiration, last traded below $3 on Aug. 15, 2002. Demand from factories, steel mills and chemical plants tumbled 13 percent in the first five months of 2009 because of the recession, department figures show. Industrial users account for about 29 percent of gas demand.

U.S., U.K. regulators to boost supervision of markets

August 20, 2009. The U.S. Commodities Futures Trading Commission and the U.K. Financial Services Authority said they are boosting cooperation in their supervision of energy markets in an effort to limit speculation and manipulation. The CFTC will be able to inspect Intercontinental Exchange Inc.’s London market and the FSA can gather information at the New York Mercantile Exchange, according to the terms of the arrangement, which covers U.S.-linked energy futures contracts. The two agencies will also coordinate any “emergency action.”

Gas industry girds to fight in the senate over climate

August 20, 2009. The U.S. natural-gas industry, disappointed by the climate-change bill passed by the House of Representatives in June, is counting on new Democratic allies and a stepped-up lobbying campaign to push measures through the Senate that will favor gas over coal and oil. The climate-change debate in the Senate, which is expected to involve several committees after Labor Day, comes at a critical time for the gas industry. It faces a glut that has driven natural-gas prices below $3.20 per million British thermal units, their lowest level since 2002. In addition, huge new gas discoveries in Texas, Louisiana, Pennsylvania and elsewhere have produced a surge in supply. The House bill, known as the American Clean Energy and Security Act, focuses on "clean coal" research rather than encouraging natural-gas use. Many in the gas industry concede they were caught off guard by both the coal industry's intensive lobbying campaign and the speed with which the House acted.

Oil industry backs protests of emissions bill

August 19, 2009. Hard on the heels of the health care protests, another citizen movement seems to have sprung up, this one to oppose Washington’s attempts to tackle climate change. But behind the scenes, an industry with much at stake - Big Oil - is pulling the strings. Since the House passed the bill, oil executives have repeatedly complained that their industry would incur sharply higher costs, while federal subsidies would flow to coal-fired utilities and renewable energy programs. For its part, the oil industry plans to raise the pressure in coming weeks through its public rallies so that it can negotiate more favorable terms in the Senate than it got in the House. The strategy was outlined by the American Petroleum Institute in a memorandum sent to its members, which include Exxon Mobil, Chevron and ConocoPhillips.

CFTC muscles into emerging U.S. carbon market

August 19, 2009. A proposal by the U.S. Commodity Futures Trading Commission to oversee a greenhouse gas contract on a voluntary Chicago trading exchange shows the agency is staking out its territory before Congress decides which agencies should regulate the country's burgeoning carbon market. CFTC officials have long indicated they think the United States' carbon market will be huge. CFTC Commissioner Bart Chilton reiterated in June he expected carbon futures to become a $2 trillion market in five years, based on an assumption that the cash market would be about $200 billion.

Vietnam's refinery budget balloons to $3.1 bn

August 20, 2009. The investment package for Vietnam's Dung Quat oil refinery project will be increased to US$3.1 billion from the original investment of $2.5 billion. The budget, newly approved by the Government, includes almost $2.5 billion for engineering, procurement and construction (EPC) contracts, $215.6 million for non-EPC contracts and $200 million for working capital. The budget will also be allocated to feed a hedge fund of more than $67.4 million for ground clearance, as well as financial support for displaced residents.  

Egypt inks 3 oil agreements with Apache to dig in Western Desert

August 20, 2009. Egypt signed three oil agreements with the US Apache Corp worth $30 million to dig 14 wells in the Western Desert. The first agreement between the government-owned Egyptian General Petroleum Corporation (EGPC) and Apache, worth $15 million, involves digging six wells in Siwa Oasis to search for oil and gas.  The second and third agreements, worth $7.5 million each, involve digging for four oil and gas wells Gharb Ghazalat and another four in Saloum in the Western Desert.

Africa oil farms-out East African block interests to Raytec

August 20, 2009. Africa Oil has entered into a farm-out agreement with Raytec Metals Corp., previously announced on May 28, 2009. The Agreement relates to production sharing contracts in which Africa Oil has an interest in both the State of Puntland, Somalia and the Republic of Kenya. In Puntland, Somalia, Africa Oil will transfer a 15% (fifteen percent) license interest to Raytec in the Nogal and Dharoor Petroleum Production Sharing Agreements.

Bolivia gas sector says certainty lacking in Argentine market

August 19, 2009. BoliviaEnergy companies in Bolivia urged President Evo Morales' government on to do more to ensure Argentina remains a dependable market for natural gas produced in the Andean nation. The current energy contract between Bolivia and Argentina establishes maximum shipments this year of 7 million cubic meters (246 million cubic feet) of gas per day, although an agreement is in place to gradually raise that ceiling over the long term to 27.7 million cmd.  The current gas pipeline linking the two countries will not allow larger shipments and therefore La Paz and Buenos Aires are planning a new pipeline that would run from the gas fields of southern Bolivia to northeastern Argentina.

POWER

Generation

US Grays Harbor PUD may join nuclear plant project

August 25, 2009. The Grays Harbor Public Utility District is considering taking part in an Energy Northwest plan to build a new nuclear power plant near Richland. KXRO reports PUD commissioners were presented with a plan for a plant that could be producing electricity in about nine years. 

Mindoro hydro project gets funding

August 22, 2009. The development bank of the Philippines has extended a P490-million loan to a local cooperative for the construction of the 4.2-megawatt Linao Cawayan mini-hydropower project in San Teodoro, Oriental Mindoro. According to DBP, the term loan was granted to the province’s distribution utility Oriental Mindoro Electric Cooperative (Ormeco). The mini-hydropower plant is expected to generate an average of 19.8 gigawatt-hours of electricity per year, which is equivalent to the consumption of 37,375 barrels of oil.

Transmission / Distribution / Trade

US States must cooperate on power lines

August 25, 2009. The Western electrical grid in the US is said to be woefully inadequate for future energy needs. And so far, efforts to beef up and modernize the grid are bogged in the myriad authorities shared by federal, state and local entities, a new report concludes. If Western states want to retain a significant role in siting transmission for renewable fuels, things have to change or the feds will have to take over a report said. At least seven major electrical transmission proposals would enable some 15,000 megawatts of new electrical generation in and around Wyoming, according to the Wyoming Infrastructure Authority. Much of the capacity is in anticipation of renewable energy.

Uganda: Hoima Plant to supply electricity

August 23, 2009. The construction of the Buseruka hydro power dam in Hoima district will be completed in January next year. The project was part of the President's election promises in 2006 under the rural electrification programme. Hydromax Power Company engineer said the $27m project would produce 9 MW of power, which will be connected to the national grid at Kinubi substation in Hoima.  Hydromax is the company constructing the dam. The project, which is being constructed on River Wambabya in Buseruka sub-county, will have three turbines, each producing three megga watts.

Kenya: Consumers to pay 37 pc more for electricity

August 22, 2009. Kenyans are set to pay the highest price for power ever after recent contracting of 140 emergency megawatts (MW) brought the thermal (fuel) production portion to one third of the total.  The cost of contracting UK temporary power vendor, Aggreko, will raise unit cost by 37 per cent or Sh3 per unit. That means a consumer of 100 units will pay Sh300 more around October when the power is fully installed according to sources involved in the contracting. On average, domestic consumers pay Sh8.10 per unit but will pay at least Sh11.10. These are customers who use between 51 to 1,500 units. That means power bills will effectively go up by 37 per cent. Huge industrial users will pay over Sh7 per unit although they have to grapple with higher fixed charges normally levied on large consumers.

Policy / Performance

Italian Cabinet acts on power prices

August 25, 2009. The government called on an Extraordinary Cabinet Council to take action against recent about recent increases in electricity bills, after President Ricardo Martinelli had promised decreases.  A resolution was passed ordering measures like revising the tariff on water used for hydro-electric generation to establish a rate non transferable to the consumer. The suspension of demand charge to all residential users was also ordered. The Energy Secretariat and the Authority of Public Services (ASEP) must check all public tender procedures to buy power and energy from the energy distributors so this clarification guarantees separate formulas for tenders on hydraulic and thermic plants.

Australia's Macarthur Coal doubles yr profit

August 25, 2009. Australia's Macarthur Coal Ltd reported an 132 percent rise in annual net profit, at the top end of its forecast range, partly on stronger sales volumes to steel mills and power generators. The rise in profit is in stark contrast to Macarthur's bleak outlook in December, when it cut its first half profit guidance terminated 180 jobs, and suspended its interim dividend as sales slumped at the height of the global commodities bust.

GE Energy lands $45M Dubai contract

August 25, 2009. GE Energy inked a $45 million-plus, multi-year service contract with Dubai Aluminium Company Limited (DUBAL) to trim the cost of aluminum production while boosting reliability and performance of 19 GE gas turbines at the DUBAL production complex. As part of the service agreement, the nitrogen oxide emissions of certain units will be reduced by 15 percent, Atlanta-based GE Energy said. The deal also covers the supply of parts, performance uprates, repairs and field services for planned outages for the gas turbines over seven years. The DUBAL aluminum-producing complex can produce more than 960,000 tons of hot metal aluminum annually for customers in more than 48 countries.

Entergy nuclear spinoff won't be decided in ’09

August 24, 2009. New York utility regulators likely will not decide the fate of Entergy Corp.'s plan to spin off its wholesale nuclear power generators into a separate company until at least early in 2010. New Orleans-based Entergy had hoped for a decision in November on whether it put six nuclear reactors under a separate publicly traded company known as Enexus Energy Corp. But administrative law judges for the New York Public Service Commission have proposed a schedule under which regulators would make a final decision in January.

Power cuts may threaten S. African economic rebound

August 24, 2009. The pace of South Africa’s recovery from its worst economic recession in 17 years is threatened by the inability of its national power utility to raise funds to build the power plants needed to keep the world’s biggest precious metal mines running. State-owned Eskom Holdings Ltd. may on Aug. 27 give details at its annual results presentation on the progress it has made in sourcing financing for a five-year, 385 billion rand ($50 billion) expansion program. Already Eskom has deferred several projects, citing funding difficulties.  Underinvestment led to the near collapse of the country’s power system in January last year, closing most mines and metal smelters for five days. That was preceded by months of intermittent power cuts in the country’s biggest cities and resulted in electricity rationing to Eskom’s biggest customers, curbing economic output.

Coal rally ending as China Shuns imports, opens mines

August 24, 2009. China’s unprecedented appetite for imported coal is about to be sated, jeopardizing a five-month rally in prices by adding to a global surplus of the fuel used in power plants from Perth to Chicago. After importing a record 48 million tons in the first six months, China is opening mines idled by worker deaths this year following safety upgrades in a bid to bolster economic growth. Huadian Power International Corp. expects China’s largest coal- mining province, Shanxi, to boost output by 60 percent in the second half of the year. That would mean an increase of 150 million metric tons, almost twice what Germany burns annually.  With little need to buy coal outside the country, prices may tumble, falling as much 7 percent in Europe alone, Barclays Capital says. China’s purchases will plunge 33 percent between June 30 and Dec. 31, based on the median estimate of four analysts surveyed by Bloomberg.

Southern Co. seeks funds for carbon capture project

August 24, 2009. Southern Co., the second-largest burner of coal for power in the U.S., plans to seek funding from the Energy Department for a project in Mississippi to capture carbon dioxide emissions. Southern will ask the government to help support its proposed Kemper County power plant. The Energy Department has a deadline today for companies to apply for matching funds under the $1.4 billion Clean Coal Power Initiative, a program funded partly by $800 million from the U.S. economic stimulus law in February. American Electric Power Co., the largest burner of coal for power, said last week it will seek $334 million for a plant in New Haven, West Virginia.

Tanzania: Vast electricity potential lies in sisal waste

August 22, 2009. Tanzania lacks adequate technical know how to exploit fully its vast power potential in the sisal sub-sector which could significantly reduce electricity shortages. The sub-sector produces almost 40, 000 tonnes annually of sisal biomass which could be harnessed to produce gas that can generate more than 45MWof electricity from the private sisal plantations. The electricity produced can be used primarily by the sisal estates themselves, which need only 30 per cent of the 45MW, meaning the surplus can be rerouted to the national grid or utilized locally. But if small sisal holders' capacities in other regions where sisal is not formalized are improved, the country can get 1 million tonnes of sisal waste that can generate 500 MW of electricity that can be distributed to the national grid.

Ofgem warns gas and electricity suppliers over small businesses

August 22, 2009. Ofgem, Britain’s energy regulator warned Britain’s big six gas and electricity suppliers that it would launch a full investigation unless action was taken to ease new credit restrictions on 250,000 small businesses. The power companies have told some of these customers that they must pay their energy bills seven months in advance. Small business organisations have voiced concern that this could push many into bankruptcy. Ofgem said that in addition to its own inquiry, it could refer the industry to the Competition Commission if suppliers did not act voluntarily to relax the new harsher payment terms.

Nigeria: NERC says subsidy on electricity to gulp N177 billion in three years

August 21, 2009. The Federal Government will pay N177 billion as subsidy for electricity consumers nationwide in the next three years. The amount, which had already been submitted to the Federal Executive Council for approval, represents the N5.20 tariff increase expected to be paid by consumers for the next three years.

Germany launches CO2 scrubbing at RWE plant

August 19, 2009. German companies launched carbon dioxide scrubbing from flue gases at a coal fired power station operated by utility RWE in western Germany. The launch of the pilot plant to test the process at RWE's Niederaussem brown coal plant signifies another step toward coal generators' aims to capture climate-harming CO2 emissions, and in another step burying them safely underground.  

The EU wants all new coal-to-power plants after 2020 to be equipped with carbon capture and storage (CCS) technologies. Germany is Europe's top greenhouse gas emitter. The 9 million euros ($12.72 million) pilot unit was 40 percent funded by the Berlin ministry, said RWE and its partners chemicals group BASF and Linde. If it works successfully, the process will be transferred to existing coal and gas fired power plants after 2020.

Renewable Energy Trends

National

Rajasthan hospitality sector to adopt alternative energy sources

August 25, 2009. The hospitality sector, a major area of Rajasthan’s economy, has pledged before the Union Minister for New and Renewable Energy Farooq Abdullah to adopt techniques for alternative energy sources.

The hotel industry, especially the heritage hotels, can be vanguards in the movement for green energy in a sun-rich State like Rajasthan, they said. For his part Dr. Abdullah said it was for the doyens of the hospitality industry, among whom were many former rulers of the erstwhile princely States, to show the way.

The captains of the hospitality sector in the State identified solar water heating, solar air-conditioning, geo-thermal cooling and adaptation of wind energy devices as areas they can try out if the Government comes up with adequate incentives.

Bharat Forge to foray into wind energy

August 25, 2009. Bharat Forge Ltd (BFL), the flagship company of the $2.4-billion Kalyani Group, is set to enter the wind energy business.  The company will be supplying 1.5 mw wind turbines for Tata Power's upcoming 10 mw power plant to at Satara.  The company's client base in the renewable energy sector includes GE and Siemens. In the thermal energy sector, BFL works with BHEL and in oil and gas with clients such as Cameroon and FMC.

Central govt to develop solar cities in Himachal

August 25, 2009. The central government has decided to develop two Himachal Pradesh towns as solar cities and two educational institutes as energy parks. The central government has agreed in principle to develop Shimla and Hamirpur towns as solar cities and the Dr.Y.S. Parmar University of Horticulture and Forestry at Nauni in Solan district and the National Institute of Technology at Hamirpur as energy parks under the Ministry of New Renewable Energy's programmes,' said the statement. As many as 292 micro projects up to 5 MW have been allotted during the past one year of which 273 projects, with aggregate capacity of 456 MW, have been allotted to those entrepreneurs who are natives of the state.

PM approves national mission on energy efficiency

August 24, 2009. The Prime Minister’s Council on Climate Change has given an in-principle nod to the National Mission on Enhanced Energy Efficiency. According to an official communiqué approving the Mission, the Prime Minister said that, “This Mission will enable about Rs 75,000 crore worth of transactions in energy efficiency. In doing so, it will, by 2015, help save about five per cent of our annual energy consumption, and nearly 100 million tonne of carbon dioxide every year.”  The Mission is the second of the eight under India’s National Action Plan on Climate Change to be approved by the Council.

Gujarat tops on solar projects with $2.4 bn investment

August 23, 2009. The Gujarat government has approved 34 solar power projects at an investment of Rs.12,000 crore (Rs.120 billion/$2.4 billion) over the next few years, to rank it the top Indian state for this clean energy, a senior official has said.  Many of the firms setting up solar power plants are also keen to start manufacturing various components of these plants within the state. India is among the countries suffering the worst effects of climate change. The latest annual Economic Survey says the country is spending 2.6 percent of its gross domestic product (GDP), estimated at $1.2 trillion, to cope with climate change effects.

Sharp fall in wind power generation in TN

August 22, 2009. Going by the generation figures, it appears to be the end of the season for wind power in Tamil Nadu. After hitting highs of 46 million units a day early this month, wind power generation began dropping, to 41 MUs on August 11, and then to around 13 MUs on August 16. But since then, the generation has been hovering around 3 MUs a day, picking up slightly to 10 MUs. This is not good news for the Tamil Nadu Electricity Board, which had targeted generation of 1,315 million units for August, against which the achievement has been 630 MUs.  To add to the State’s woes, hydel power generation too thus far in the current financial year has been lower than in the corresponding period last year.

India: Betting big on solar power

August 21, 2009. The government's proposal to roll out a plan by the year-end to raise solar power generation capacity to 20,000 mega watts (MW) by 2020 is laudable but could be a case of vaulting ambition, and therefore not very realistic. The Prime Minister's council on climate change has approved the setting up of a national solar mission for this purpose. If this goal is to be met, it would mean generating 10 per cent of the country's total power by tapping sunlight.  Such a massive production capacity would be sufficient to meet the electricity needs of three of the country's biggest cities. There is no doubt that the country needs more power, and producing it from clean sources is the way to go when environmental pollution and global warming have become major issues. But the record of tapping solar energy does not inspire much confidence. No more than 500 MW of solar power production capacity has yet been installed. A sizeable part of even this is said to be lying unused. Considering the high initial cost of harnessing solar energy, the target will require investment in excess of Rs 90,000 crore (Rs 900 billion), most of it in the private sector. This may be difficult to arrange.

Global

Mitsubishi Gas Chemical eyes synthesizing DME from natural gas

August 25, 2009. Mitsubishi Gas Chemical Co. is building on the experience it has gained with natural gas and chemicals to branch out into new energy fields.  As a first step, it will participate in two research projects: an environmental impact study regarding the synthesis of dimethyl ether (DME) in Papua New Guinea, and a business feasibility study for a geothermal power plant in Japan.  DME is a promising next-generation clean fuel that burns without releasing particulate matter and can be synthesized from natural gas, coal and biomass. Mitsubishi Gas Chemical, together with Itochu Corp. and other investment partners, has already set up a research company to explore a business for synthesizing DME in Papua New Guinea. The goal is to obtain local government approval in a year or two and begin a 500 million yen (US$5.28 million) environmental impact study on using Papua New Guinea's abundant natural gas resources to synthesize DME for shipment to Indonesia and other Asian markets.

$290 mn sought to capture carbon at Va. power plant

August 25, 2009. A Virginia Tech center is leading a coalition seeking $290 million in federal stimulus money for a six-year project to capture and store carbon dioxide from a new power plant in Virginia's coalfields.  If approved, the government money would pay half the cost of the demonstration project at the Dominion Virginia Power plant being built in Wise County, Dominion announced.  Dominion would provide nearly $200 million, with the rest supplied by members of the coalition spearheaded by the Virginia Center for Coal and Energy Research at the university in Blacksburg.  Plans call for sequestration of up to 1,500 tons of carbon dioxide a day from the plant in unmineable coal seams and underground saline formations in the area. The plant would emit about 14,500 tons of carbon dioxide daily if it burns coal full time when it goes into operation in 2012. But Dominion spokesman Greg Edwards said greenhouse gas emissions will be less because carbon-neutral biomass will be in the fuel mix.

Pakistan seeks US, China aid on energy

August 25, 2009. Energy-deficient Pakistan is seeking help from the United States and China to help it overcome its energy crisis through a long-term upgrade and diversification of the antiquated power sector as larger cities suffer power cuts on a daily basis. A team of American experts arrived in Islamabad to assess the ailing energy sector and help the government overcome electricity loadshedding and outages. US trade promotion agencies are expected to provide financial backing for some of the projects in the power sector.  At the same time, President Asif Ali Zardari, who is on a five-day visit to China, has sought Chinese assistance in hydro, thermal and solar power generation to overcome the power crisis and has invited Chinese firms to carry out a feasibility study.

China racing ahead of U.S. in drive to go solar

August 24, 2009. President Obama wants to make the United States “the world’s leading exporter of renewable energy,” but in his seven months in office, it is China that has stepped on the gas in an effort to become the dominant player in green energy - especially in solar power, and even in the United States.

Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation.

As Japanese automakers did decades ago, Chinese solar companies are encouraging their United States executives to join industry trade groups to tamp down anti-Chinese sentiment before it takes root. Since March, Chinese governments at the national, provincial and even local level have been competing with one another to offer solar companies ever more generous subsidies, including free land, and cash for research and development. State-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the United States.

Farmers that plant trees new allies in climate-change battle

August 24, 2009. Farmers willing to plant trees to absorb carbon dioxide from industrial pollutants as well as provide alternative sources of fuel are new potential allies in the fight against greenhouse-gas emissions. A study from the World Agroforestry Center in Nairobi, the first to assess global tree coverage on farmland using satellite imagery, said more farmers need to understand the economic benefits of planting trees.

Almost half of the world’s total farmland has at least 10 percent tree-cover, researchers say. Cutting down trees and letting them rot or burn accounts for about a fifth of the greenhouse-gas emissions blamed for global warming, according to the United Nations International Panel on Climate Change. In December, more than 180 countries will meet in Copenhagen to work on measures including slowing deforestation and land management in a climate-change treaty.

China mulls renewable energy development fund

August 24, 2009. Chinese lawmakers are considering a government fund for renewable energy development, in a move to support the industry and strengthen governmental macro-economic regulation. The draft amendment to the renewable energy law was submitted to the country's top legislature, the Standing Committee of the National People's Congress (NPC), for its first reading.

The 10th meeting of the Standing Committee of the 11th NPC, scheduled from August 24 to 27, is also to focus on a State Council (Cabinet) report on tackling climate change and the second draft of a law regulating armed police.

 Under the current Renewable Energy Law (2005), the State set up a special fund for renewable energy development. If the draft amendment is approved, a new fund with two sources of income will be set up -- one from the special fund and one from the income deriving from surcharges on renewable energy electricity prices.

Ohio researchers hike butanol production

August 24, 2009. Ohio State University engineers say they have found a way to double production of the biofuel butanol, which might someday replace gasoline in automobiles. The OSU researchers said their process improves on the conventional method for brewing butanol in a bacterial fermentation tank.  Normally, bacteria could only produce a certain amount of butanol -- perhaps 15 grams of the chemical for every liter of water in the tank -- before the tank would become too toxic for the bacteria to survive. Butanol is mainly used as a solvent, or in industrial processes that make other chemicals. But experts believe once developed as a fuel, butanol could potentially be used in conventional automobiles in place of gasoline.

Waxman-Markey would outsource US refining - study

August 24, 2009. The United States will be more dependent on imports of gasoline and other petroleum fuels while U.S. refining production would be shifted overseas if a climate change bill passed in the U.S. House of Representatives becomes law, a study shows. An analysis by global consulting firm EnSys Energy of the impact of the "American Clean Energy and Security Act", which passed by a narrow 219-212 vote in the House in June, on the U.S. refining sector showed that investment in U.S. refining capacity could plummet because the cost of doing business could soar. Production at U.S. refineries would drop while production at refineries in countries that do not limit their own greenhouse gas emissions would rise. The impact on global refinery greenhouse gas emissions would be minor as reductions in U.S. emissions mostly would be offset by increases in emissions in other countries.

Dear Reader,

 

You may have received complimentary copies of the ORF Energy News Monitor. Our objective in bringing out the newsletter is to provide a platform for focused debate on India’s energy future. You could be a partner in this effort by becoming a subscriber. You could also contribute recommendations for India’s energy future in the form of brief insightful articles.

 

We look forward to receiving your patronage and support.

 

ORF Centre for Resources Management

 

ORF ENERGY NEWS MONITOR

 

Subscription Form

Please fill in BLOCK LETTERS

Subscription rate slabs for Commercial entries, Research Institutes, Academics and Individuals will be provided on request. The subscription can be made for soft copy or for hard copy or for both. Selected ORF publications as well as advertising space in one issue of the ORF Energy News Monitor are offered as introductory free gifts for Commercial Sector only.

Yes! I/we would like to receive copies of the weekly ORF Energy News Monitor for a period of ______year(s).  I/we shall be entitled to one hard copy along with the option of soft copies to a list of e-mail addresses provided by me/us for the period of subscription.  I/we also note that I/we shall get select ORF publications brought out during the period of subscription free. 

 

Name……………………………Address…………….………………………Telephone……………………Fax………………….E-mail…………………

Please find enclosed cheque/Bank Draft No.........................dated …………………drawn at New Delhi for Rs.........……….favouring ‘Observer Research Foundation

 

Please fill in this form and mail it with your remittance to

 

ORF Centre for Resources Management

OBSERVER RESEARCH FOUNDATION

20 Rouse Avenue

New Delhi - 110 002

Phone +91.11.4352 0020 extn 2120 (Vinod Tomar)

Fax: +91.11.4352 0003

E-mail: [email protected]

 

Registered with the Registrar of News Paper for India under No. DELENG / 2004 / 13485

 

Published on behalf of Observer Research Foundation, 20 Rouse Avenue, New Delhi–110 002 and printed at Times Press, 910 Jatwara Street, Daryaganj, New Delhi–110 002.

 

Disclaimer: Information in this newsletter is for educational purposes only and has been compiled, adapted and edited from reliable sources.  ORF does not accept any liability for errors therein.  News material belongs to respective owners and is provided here for wider dissemination only.  Sources will be provided on request.

 

Publisher: Baljit Kapoor                           Editor: Lydia Powell

 

Production team: Akhilesh Sati, Manish Vaid & Vinod Tomar

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.