Energy News Monitor I Volume VI, Issue 12

Kazakhstan: Is Astana Aiming to Broker USA-Iran Nuclear Deal? Joanna Lillis

azakhstan is trying to develop a diplomatic initiative that could both cement Astana's role as an important geopolitical player and defuse one of the world's most vexing dilemmas -- the matter of Iran's nuclear program. If successful, Kazakhstan would emerge as a global repository for nuclear fuel. President Nursultan Nazarbayev unveiled his initiative during Iranian President Mahmoud Ahmadinejad's visit to Kazakhstan. Given the Central Asian nation's vast territory, as well as its relatively central location on the Eurasian landmass, Kazakhstan would make an ideal host for a global nuclear fuel bank, a concept that has been touted by Washington as a way to control the proliferation of nuclear materials. "If a nuclear fuel bank is set up, we could examine the possibility of locating it here, as a country that is signatory to the Non-Proliferation Treaty and that voluntarily gave up nuclear weapons," Nazarbayev said, according to a transcript of his April 6 comments as posted on his presidential website. The Kazakhstani leader was referring to a 1991 move that he made to voluntarily give up the nuclear arsenal inherited by the Central Asian state following the collapse of the Soviet Union. Nazarbayev's initiative received lukewarm backing from Ahmadinejad, who described the idea as "a good one." The bank would offer nuclear fuel to countries that agree not to pursue enrichment on their own. In recent years, Iran has stoked suspicion about the motives of its nuclear program by continuing to enrich uranium, despite growing international pressure on Tehran to desist. The United States and European Union believe that Iran is intent on developing nuclear weapons, while Iranian officials insist that their program is designed for civilian applications only.

Media reports say Kazakhstani leaders have been promoting their plan behind closed doors in Washington in recent weeks, and that US officials are seriously mulling the possibility. To advance the process, Kazakhstani Senate Speaker Kasymzhomart Tokayev on April 7 invited US President Barack Obama to visit Astana. The two met briefly on the sidelines of the Alliance of Civilizations forum in Istanbul. "The speaker underlined that Kazakhstan remains committed to the policy of the non-proliferation of nuclear weapons and related material, as the results of recent talks in Astana with Iranian President Mahmoud Ahmadinejad testify in particular," the Senate press service said. Astana is set to assume the chairmanship of the Organization for Security and Cooperation in Europe in 2010. Developing the nuclear fuel bank initiative would reinforce Astana's aim to position itself as an honest broker that serves as a bridge between East and West. Kazakhstan is a close ally of Russia, but has also forged warm relations with other major powers, including the United States, European Union and China. After talks with Ahmadinejad, Nazarbayev welcomed recent statements by Obama that Washington is ready for dialogue with Iran and noted that Tehran has the same right as other states to pursue peaceful nuclear programs. Ahmadinejad, meanwhile, took the opportunity to call for a shift in US foreign policy. "We hope [Obama's] will lies in reforming and changing policy, and we hope he will manage to do this -- to forge relations with other nations and countries on an equal basis," Interfax-Kazakhstan news agency quoted him as saying. "Everyone knows that [former president George W.] Bush's policy ideas have not led anywhere and have become deadlocked, so we consider fundamental changes necessary: respect for nations and their rights and, of course, a rejection of expansion, and an adherence to justice," continued Ahmadinejad, who is facing a re-election challenge in June.

On a bilateral level, the Kazakhstani and Iranian leaders agreed to push ahead with a key regional transport project, a rail link between Uzen in western Kazakhstan and Gorgan in northern Iran, which is under construction and due to open in 2011. Ahmadinejad said Nazarbayev had backed his idea of building a highway alongside the railroad, though it was not immediately clear how feasible the project would be technically and financially. Nazarbayev and Ahmadinejad also discussed trade, agriculture and investment. Astana seeking Iranian investment in engineering, infrastructure projects, transport and telecommunications, while Kazakhstan's Eurasian Natural Resources Corp. mining and metals giant is reportedly interested in taking part in the privatization of metallurgy and aluminum plants in Iran. The leaders also agreed to pursue an agreement among Caspian Sea littoral states that would ban sturgeon fishing for 10 years.

Joanna Lillis is a freelance writer who specializes in Central Asia.

Courtesy: Eurasia Insight

Global Concern over Climate Change: Key Milestones

June, 1972

First UN Conference on the Human Environment, Stockholm

The conference provided a platform for intensive international consultations and the exchange of views regarding steps to be taken for establishing a balance between the maintenance of environmental quality and the needs for economic development of present and future generations.

February, 1979

First World Climate Conference, Geneva

The First World Climate Conference was sponsored by the World Meteorological Organization (WMO). Essentially a scientific conference, it was attended by scientists from a wide range of disciplines. In addition to the main plenary sessions, the conference organized four working groups to look into climate data, the identification of climate topics, integrated impact studies, and research on climate variability and change. The Conference led to the establishment of the World Climate Programme and the World Climate Research Programme. It also led to the creation of the Intergovernmental Panel on Climate Change (IPCC) by WMO and UNEP in 1988. It issued a declaration calling on the world's governments "to foresee and prevent potential man-made changes in climate that might be adverse to the well-being of humanity".

July 1984

International Conference on Environment and Economics, Paris

The Conference, organized by the OECD was attended by Leaders of Government, Industry, Trade Unions, non-Governmental Organizations and experts in economics, environment, science and other fields. Three directions that emerged out of the conference were fundamental at both national and international levels:

· Integration of Environment and Economic Policies

· “Anticipate and Prevent” Strategies

· More Cost-effective and Efficient Environmental Policies.

December, 1987

The Brundtland Report

This Report was the culmination of two and one half years of world-wide consultation that demonstrated the best intentions of the human race to live responsibly. The final report, “Our Common Future,” also referred to as the Brundtland Report identified three global crises, a development crisis, an environment crisis and a crisis of militarism. The conference sought agreement on concrete measures to reconcile economic activities with protection of the planet to ensure a sustainable future for all people. The report called for a major global summit to be held in 1992 to address the most pressing threats, of which climate change was seen as urgent.

June, 1988

First International Public Scientific Conference, Toronto

The "Toronto conference", as it was also known was sponsored by the Government of Canada, with the United Nations Environment Programme and the World Meteorological Organization. The conference brought 400 scientists and policy-makers from around the world to Toronto with the goal of initiating international action on climate change. The conference report, “Our Changing Atmosphere: Implications for Global Security” developed a call for a 20 percent reduction in greenhouse gases against 1988 levels, to be reached by 2005, as an interim step. The conference consensus statement began, “Humanity is conducting an unintended, uncontrolled, globally pervasive experiment whose ultimate consequences are second only to global nuclear war.”

1989

The Hague Declaration

The 1989 Conference at The Hague was proposed by France and organised with the help of Netherlands and Norway. Twenty Four nations participated in the conference. The United States, the former Soviet Union, China and Briton did not participate. On preserving the atmosphere and the climate the Hague Declaration stated that: ‘What is needed here are regulatory, supportive and adjustment measures that take into account the participation and potential contribution of countries which have reached different levels of development. Most of the emissions that affect the atmosphere at present originate in the industrialized nations. And it is in these same nations that the room for change is greatest, and these nations are also those which have the greatest resources to deal with this problem effectively. The international community and especially the industrialized nations have special obligations to assist developing countries which will be very negatively affected by changes in the atmosphere although the responsibility of many of them for the process may only be marginal today. Financial institutions and development agencies, be they international or domestic, must coordinate their activities in order to promote sustainable development’.

1990

Release of the First Assessment Report by the IPCC

The strong scientific concern over the dangers of climate change in IPCC’s First Assessment Report triggered the negotiation of the UN Framework Convention on Climate Change. The report played an important role in establishing the Intergovernmental Negotiating Committee (INC) for the UNFCCC which provided the overall policy framework for addressing the climate change issue. The report said that 60 to 80 percent cuts in CO2 emissions would be needed to stabilise the concentration of this green house gas in the atmosphere - already 25 percent higher than they were before industrialisation started the intensive use of fossil fuels.

November, 1990

Second World Climate Conference, Geneva

Sponsored by WMO, UNEP and other international organizations, this key conference featured negotiations and ministerial-level discussions among 137 states plus the European Community. The final declaration, adopted after hard bargaining, did not specify any international targets for reducing emissions. However, it did support a number of principles later included in the Climate Change Convention. These were climate change as a "common concern of humankind", the importance of equity, the “common but differentiated responsibilities" of countries at different levels of development, sustainable development, and the precautionary principle. The Ministerial Declaration converted the IPCC report into a major political push to negotiate a global response to the threat of climate change by calling for negotiations on a framework convention on climate change to begin without delay, and reaffirmed the wish that the convention "contain real commitments by the international community". This declaration reaffirmed that "where there are threats of serious or irreversible damage, lack of full scientific certainty should not be used as a reason for postponing cost-effective measures to prevent such environmental degradation." And further agreed that the "ultimate global objective should be to stabilise greenhouse gas concentrations at a level that would prevent dangerous anthropogenic interference with climate". The gathering became the largest summit of heads of government, to that point, in world history. The Earth Summit, as it became known, succeeded in approving two global conventions - one to protect biodiversity and the other, the U.N. Framework Convention on Climate Change (UNFCCC). The Intergovernmental Negotiating Committee for a Framework Convention on Climate Change (INC/FCCC) met for five sessions between February 1991 and May 1992. The first session of Intergovernmental Negotiating Committee (INC) on a Framework Convention on Climate Change, was marred by diplomatic squabbling over official arrangements and the outbreak of the Gulf War.

June, 1992

The Earth Summit, Rio de Janeiro

Twenty years after the 1972 Stockholm Declaration first laid the foundations of contemporary environmental policy, the Earth Summit became the largest-ever gathering of Heads of State. Among agreements adopted at Rio were the Rio Declaration, Agenda 21, the Convention on Biological Diversity, and Forest Principles. Negotiators from 150 countries finalized the UN Framework Convention on Climate Change (UNFCCC) in 15 months. In a hail of self-congratulation, the Framework Convention on Climate Change (FCCC) was opened for Signature at the Rio Earth Summit and was signed by 154 states (plus the EC).

March 1994

UNFCC entered into force

The FCCC entered into force on 21 March 1994, 90 days after receipt of the 50th ratification. By September 1994, developed country Parties started submitting national communications describing their climate change strategies. Meanwhile, the Intergovernmental Negotiating Committee (INC) continued its preparatory work, meeting for another six sessions to discuss matters relating to commitments, arrangements for the financial mechanism, technical and financial support to developing countries, and procedural and institutional matters. The INC was dissolved after its 11th and final session in February 1995, and the Conference of the Parties (COP) became the Convention's ultimate authority. The Framework Convention established several important points that have served as foundation for later action. The UNFCCC committed all Parties to a shared commitment to action “on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities”. It acknowledged that climate change was real, that human activities, from land use changes (deforestation) and burning of fossil fuels were the major sources of the problem, and accepted that awaiting 100 percent scientific certainty would be to ask for a post mortem. The Convention adopted the Precautionary Approach – that a lack of scientific certainty should not be used as an excuse for inaction. The Convention’s “ultimate objective” was to stabilize “greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system within a time frame to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner”. In other words, the consensus was that longer-term trends should be modified in order to achieve sustainable development.

March 1995

Alliance of Small Island States (AOSIS) submits a protocol proposal

The Alliance of Small Island States (AOSIS) submitted a protocol proposal for adoption in Berlin in March 1995, calling for industrialized countries to reduce their emissions of CO2 by 20 percent from 1990 levels by the year 2005.

December, 1995

Release of the Second Assessment Report by the IPCC

The Second Assessment Report (SAR) provided key input to the negotiations which led to the adoption of the Kyoto Protocol within the UN Framework Convention on Climate Change (UNFCCC) in 1997. One of its main conclusions was that, “the balance of evidence suggested a discernible human influence on global climate.” However, the Report did much more, for example confirming the availability of so-called no-regrets options and other cost-effective strategies for combating climate change.

April 1995

Conference of Parties 1 (COP 1), Berlin

Delegates from 117 Parties and 53 Observer States participated in COP–1, as did over 2,000 observers and journalists. They agreed that the commitments contained in the Convention for developed countries were inadequate and launched the "Berlin Mandate" talks on additional commitments. They also reviewed the first round of national communications and finalized much of the institutional and financial machinery needed to support action under the Convention in the years to come. It declared: “Protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse threats thereof.” The Berlin meeting found that the agreements of the Convention were too weak to meet the objective of protecting the planet from dangerous climate change, particularly as it said nothing about the post-2000 period. Parties agreed on the "Berlin Mandate"-to negotiate a Protocol or other legal agreement by the time of the third Conference of Parties (COP3) containing specific "emissions limitations and reductions" for developed countries. The AOSIS protocol was included only as an element in the negotiations.

to be continued…

ORF Energy Team

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

Continued from Volume VI, Issue No. 11…

t is known that production from existing sources is declining. In the future, new sources would be the largest source for domestic gas but LNG will play a role in the market. If domestic finds are higher than what they are anticipated in the public domain right now, then the amount of off take from LNG would decrease but nevertheless LNG will have a role to play. LNG re-gasification terminals are currently run at 100 percent plus utilisation basis. That is likely to move towards global averages of 60 – 70 percent. Rough estimates suggest that about $ 50 – 70 billion could be invested in LNG terminals in the next five to ten years.

Transnational pipelines have low probability of success. Gas is not available from many of the sources which were being considered. Gas from both Myanmar and Turkmenistan is likely to go to China and Russia. he Iran opportunity is also unlikely to be realized. In this scenario, LNG appears to be the only option for incremental gas. With increase in the number of LNG shippers, competition is likely to materialize. Efforts to tie up LNG supplies for Dhabol have not yielded positive results and the supply of LNG upto 20011-12 is likely to be very tight. Since incremental gas is likely to come from only one producer in the KG basin in the near future, it would be premature to talk of competition.

Pricing of Natural Gas

There is an evident shift away from APM gas albeit gradual, given the relative increase in new gas finds. In the next decade APM gas may account for a small part of total gas consumption. Production from the west coast basins will change relative positioning of players and this will have its own implications. On the infrastructure side there is rapid expansion and early signs of a nation wide network are emerging. With investments in infrastructure, the large central part of India has been brought into the gas network. Other parts of India will eventually join the gas network.

The link between gas demand and gas price is often ignored. Based on a price of $ 5-5.5 per mmbtu as the landfall price, gas demand could be somewhere between 85-90 BCM in about six to seven years from now. Obviously if gas is priced higher, some of the demand will be destroyed. In Gujarat certain industries were willing to buy gas even at a price of $ 22 per mmbtu but in the rest of the country it may be difficult to find consumers who are willing to part with more than $1-2 per mmbtu. There are suggestions that we could use the price in the North American market as the market price. America is a mature and liquid market for both natural gas and finance and it may be inappropriate to apply those prices in India.

On July 1, 2005 the government made a decision that gas from the nominated fields of ONGC and OIL which come under the Administered Price Mechanism (APM) would continue to have government interventions in pricing and that the price of the rest of the gas would be market determined. In 2005-06, around 60 percent of the total basket, about 92-93 mmscmd was accounted for by APM gas. By the end of the 11th Plan the share of AMP gas is expected to come down to 15-20 percent. Specifically the decision was that about 55 mmscmd of gas would be priced at around $ 2.2 dollars per mmbtu and allocated to power and fertilizer consumers. For small consumers and for CNG the decision was that the price would increase gradually in the next three to five years and reach the level of diesel.

No player is ever comfortable in a situation where the government or even any agency that is outside the market intervenes and decides what gas prices are going to be. If we are looking at a situation where we should allow open markets to operate, it is very important that pricing falls within this anvil. On the other hand, unfettered market operations and open competition often leads to volatility which, in the short run, are very difficult to adjust to. India has a history of gas pricing which has been incrementally decided over the last twenty-five to thirty years. First government gases came in, then different production sharing contracts started coming in, then the private sector gases started coming in and the LNG started coming in.

India has thus had gas coming in at different prices over different periods of time. Allowing the market to operate suddenly may not be a situation the industry can absorb in a very short period of time. India should go towards a market based gas-pricing regime but there must be a timeframe over which this happens. Advocates who call for immediately opening up gas prices as well as advocates who call for government allocation of gas to priority sectors along with government price interventions are both wrong. The time for government choosing winners and losers in terms of industries and economies is over. India is moving towards liberation of its financial sector and there is no reason why the rest of the economy should not move towards a liberal regime as well.

Since there is no competition to speak of in terms of supplies, one option being discussed is that of the Government taking ‘profit-gas’ in kind and auctioning it to non-producers to create more shippers of natural gas. The other option is to use the 90-10 formula which was followed in the UK when British Gas was the dominant producer. As per the formula, British Gas was allowed to sell 90 percent of its production at its discretion but forced to auction the remaining 10 percent to other shippers. While interventions in price is an unwelcome measure from the investors perspective, in a broader social perspective India ranks very high in terms of meeting its economic obligations. The necessary price for this has been that the sector has become unattractive for investors.

The implications of the Governments gas utilisation policy may not be clear at this point, but there is a feeling that it will affect the development of the market. In the power sector, gas utilization may be restricted to captive generation. In the fertilizer segment there is significant potential for immediate conversion to natural gas. After the initial two to three years of increased availability, demand from the fertilizer sector may stabilize with only marginal growth. It is possibly the industrial sector, which has long- term growth potential in natural gas consumption either as feedstock or process fuel. City gas distribution is going to be a very important part of the gas consumption portfolio in India, perhaps not as much in volume terms but as a balancing factor in the portfolio of any gas supplier.

Gas utilization policy reflects inconsistency in Government policy. While awarding NELP contracts the assurance was that gas sale would be based on arms length contracts between willing buyers and sellers. Now that unanticipated gas discoveries have been made, the Government wants to intervene in both whom the gas is to be sold and at what prices. The Government’s only legitimate interest in the matter is to maximize its returns in terms of profit gas and royalty. It could also use profit gas to influence pricing indirectly. The rest of the industry should be allowed to evolve independent of the government. The Integrated Energy Policy report prepared by the Planning Commission contains suggestions such as the ‘cost-plus’ method for pricing along with arguments favouring government allocation of supply. These would be the equivalent of introducing controls through the back door and would be detrimental to the development of natural gas markets. Both upstream as well as downstream investments will suffer.

There are four key aspects that need to be looked upon for value creation in the future. The first is creating and capturing demand. This point would probably be counter intuitive at this point in time as there is unmet demand but in the next two to three years creation of demand will become important. The second issue is the pricing of gas, which is one of the most critical aspects in value creation. If the price of gas is forced down, the sector is unlikely to realize its potential and is likely to run into problems in the future. If the price is set too high, the sector will again fail to realize its potential.

The third key area is about developing infrastructure. The shortfall of gas is estimated at about 20 – 25 BCM, but future potential could be much higher. More than 30 percent of the new demand by 2015 is expected to come from new geographical regions such as South India and parts of North India where there is no gas at this point of time. There could be some demand also from the East where the off take is below potential. Unless demand is created in all parts of the country there will be lopsided development of the sector that would probably not be in the best interest of the sector. The belt where there is a gas network right now needs to be expanded both in terms of reach and number of consumers.

In the absence of pipelines, it would be absurd to talk of a gas market since the opportunity cost for gas in the absence of evacuation infrastructure is zero. Once a network is in place, it would be possible to discuss market determination of price and competition. There is a pipeline policy in place. The policy that came out in December 2006 covered both transmission pipelines and city gas distribution networks. It stipulates that 30 percent of capacity must be allocated on common carrier basis. This is one of the reasons why gas pipelines got infrastructure status in the 2007-08 budget.

to be continued…

Summary of proceedings at the 7^th 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.

Note: Part III of the article on Climate and the Clash between the Diversely Developed will be published in Volume VI, Issue 13

NEWS BRIEF

NATIONAL

OIL & GAS

Upstream

OIL partners IOC to bid for Iraq blocks

September 8, 2009. OIL India (OIL) plans to bid for blocks in Iraq jointly with Indian Oil Corporation (IOC), as the government-owned exploration company that accounts for 20% of the country’s crude oil output looks to expand its oil and gas portfolio. The company was looking at exploration blocks where it could capitalise on its expertise in improving oil production from the existing fields. Iraq has qualified India's largest oil explorer ONGC to bid in the first round of auctions on the basis of the public sector firm's technical and financial strength. The country has included OIL and Cairn in the second round.

ONGC to ramp up oil production at Imperial

September 7, 2009. India's Oil and Natural Gas Corp (ONGC) plans to rapidly ramp up crude oil production of Imperial Energy, the firm it acquired early this year, and consolidate operations even as it looks at opportunities to expand its presence in western Siberia. ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, is currently in the process of consolidating operations.

As a confidence building measure, India's Petroleum Minister Murli Deora visited the Imperial Energy headquarters and met Tomsk Governor Viktor Kress. The visit was aimed at helping the transition of the company from British parentage to an Indian one. Though production has not matched the previously set targets by the British owners of Imperial, the oil reserves in the fields have gone up to 946 million barrels from 920 million barrels when OVL had bid for the company in August 2008, the presentation said. Imperial assets hold a large potential upside for OVL, which the company plans to tap going forward.

Videocon, to buy stake in Nunukan Block

September 7, 2009. Videocon Indonesia Nunukan Inc., an overseas wholly-owned subsidiary of Videocon Industries Ltd. executed a Farmout Agreement with Anadarko Indonesia Nunukan Co., a wholly owned subsidiary of Anadarko Petroleum Corp., USA. Pursuant to the agreement, Videocon is to acquire a 12.5% Participating Interest in a Production Sharing Contract (PSC) dated December 12, 2004 covering the area referred to as Nunukan Block, located offshore Indonesia and the related Joint Operating Agreement dated July 4, 2007 (JOA). The closing of the transaction under the agreement is subject to normal conditions precedent in these kinds of transactions, including consent and waiver of first right of refusal by P T Medco E&P Nunukan, a company existing under the laws of the Republic of Indonesia, the only other existing participating party, other than Anadarko under the JOA and subject to regulatory approvals of the Government.

Oil India seeks extension of expired PELs for 15 blocks

September 6, 2009. Oil India Ltd has pressed for extension of its expired Petroleum Exploration Licenses (PEL) for 15 blocks, without which it cannot hunt for hydrocarbons. The country's second-largest PSU explorer is engaged in exploration and development activities in 16 independently held blocks, covering an area of 5,367 sq km. However, its PELs in respect of 15 of those blocks (covering about 4,997 sq km) have expired, which forbids it from commencing or conducting further exploration activities.

A PEL is an exclusive right granted by the Government of India to oil explorers, allowing them to carry out geophysical surveys and drilling operations for the area covered under it. Over 90 per cent Oil India's blocks are scattered in the north eastern states of Assam and Arunachal Pradesh.

Essar Wildcat gears up to drill 2^nd well in KG Basin

September 4, 2009. Essar Wildcat, the semisubmersible rig of Essar Oilfields Services Limited (EOSL), has successfully completed the first well at the KG Basin location for GSPC, with the actual drilling time being well ahead of schedule. Further to this, Gujarat State Petroleum Corporation (GSPC) has allocated its second well at KG 20 to EOSL for drilling.

The Essar Wildcat semisub has now moved to this second well and has anchored up and is ready to drill for. EOSL is part of the diversified Essar Shipping Ports & Logistics Limited. In addition, Essar Wildcat had received excellent HSE recommendations on an independent audit conducted by IRCA.

Downstream

NRL records highest ever profit

September 5, 2009. Numaligarh Refinery Limited (NRL) has recorded the highest ever profit of Rs2.35bn with a sales turnover of Rs88.53bn during the financial year 2008-09. The sales turnover marked an increase of 1.02 per cent as compared to Rs87.64bn during the previous year, a release issued by NRL said. The refinery processed 2.25 million tonnes of crude oil, maximising production of distillates like petrol, diesel, and kersosene and achieving a distillate yield of 84.72 per cent which is the highest in the Indian oil industry, the release added.

Kerosene burns a hole in PSU refiners’ finances

September 4, 2009. Kerosene has emerged a “huge concern” for the public sector oil refining companies and now accounts for over 25 per cent of the projected fuel losses of Rs450bn this year. Liquefied petroleum gas (LPG), better known as cooking gas, has also seen its projected losses soar to Rs116bn while in terms of per cylinder, this is closer to Rs 159. As in the case of kerosene, the apprehension stems from the fact that world prices could firm-up which may put further pressure on the companies’ bottomlines. Diesel follows in the third position with losses of Rs107bn with added concerns that its consumption has been on the rise lately thanks to greater use in generator sets. Hence, even though the oil companies lose just a little over Rs 3 per litre in the retail business, they are constantly walking the tightrope on diesel because there is no telling when demand will shoot through the roof. Indian Oil Corp, (IOC), Bharat Petroleum Corp. (BPCL) and Hindustan Petroleum Corp. (HPCL) may lose Rs500bn in the financial year ending March 2010 after selling fuels at subsidized rates. The public sector refiners are reportedly losing Rs4 on every liter of petrol sold, Rs2 on every liter of diesel sold, Rs16 a liter of kerosene and Rs150 on every bottle of cooking gas. The industry would lose around Rs500bn in FY10 out of which Rs300bn would be on account of selling kerosene and LPG at subsidised rates. IOC is expecting to get oil bonds worth Rs60bn from the Finance Ministry.

BPCL may shut sulfer unit at Mumbai for 2 months

September 3, 2009. BPCL plans to partially shut its crude-oil processing plant in Mumbai in October for nearly 2 months to upgrade equipment that produces cleaner-burning fuels. The company plans to close a unit that reduces sulfur content in gasoline and diesel for an upgrade to produce fuels that meet Euro III and Euro IV specifications.

India’s July crude imports decline as processing dips

September 2, 2009. India's crude oil imports fell 16% in July, after climbing for two months, as refineries processed less oil, according to reports. Crude oil purchases in July were 10.02mn metric tons compared with 11.93mn tons a year earlier. The oil import bill fell 55.5 % to US$5.6bn, declining for the eighth consecutive month. Indian Oil Corp reported an 11.1 % decline in crude oil processing to 3.9mn tons during the month as its plant at Mathura, with a total capacity of 8mn tons a year, would be shut for a month from June 26.

Transportation / Trade

Gail to invest Rs35bn in city gas by 2012-13

September 8, 2009. Gail India aims to cross revenue of Rs500bn in the next few years. The company has approved Rs300bn of spending on new projects and seeks to double its gas transportation capacity to 300mn cubic meters a day. The company also plans to raise capacity at Pata Chemical plant to 1mn tons and plans to invest Rs35bn in city gas by 2012-13.

India quits Iran gas pipeline deal, says Pakistani diplomat

September 7, 2009. India has exited from a gas pipeline deal it earlier planned with Iran and Pakistan said a report citing a Pakistani diplomat. Iranian officials, however, said India has not yet officially declared its intention. In May this year, Tehran and Islamabad signed a $7.5-billion deal to supply gas from Iran to Pakistan. As per the deal, Iran would initially supply 30 million cubic meters of gas per day to Pakistan which would be later increased to 60 million cubic meters per day. Iran, Pakistan and India had conceptualised the project in the 1990s to help boost peace and security in the region, besides mitigating the power crisis.

CPCL to go ahead with alternative oil terminal, pipeline project

September 7, 2009. Chennai Petroleum Corporation, an Indian Oil group company, has decided to go ahead with the installation of a single point mooring (SPM) and off shore facilities for crude oil imports for its Manali refinery along with crude oil terminal and on shore pipeline. The SPM project is estimated to cost Rs8.5bn and it will be erected off Ennore coast along with crude oil terminal and associated facilities. They would ensure very large crude carrier (VLCC) handling and would result in savings on the freight for crude oil transportation for Manali refinery.

Policy / Performance

‘Cairn to pay sales tax only on crude sold in Rajasthan’: Centre

September 8, 2009. In an attempt to stop states from levying local sales tax on inter-state transactions, the Centre has told Rajasthan that only Central Sales Tax can be levied on crude oil sold from Cairn India's fields in the state to refiners elsewhere.

Rajasthan wants to charge 3 per cent higher state sales tax or VAT on 8.75 million tonnes a year of peak output from Cairn's Barmer district fields despite oil being consumed or processed at refineries outside the state. State refiners Indian Oil, Mangalore Refinery and Hindustan Petroleum have been nominated to buy crude from Cairn but none of them has refineries in Rajasthan and will necessarily have to transport the oil to their units outside the state for processing.

According to reports, Cairn India will pay the Government a US$9 a barrel levy on the crude oil it produces from Rajasthan field. The levy may amount to a payment of US$1bn over the life of the field, in which Cairn owns a 70% stake. Output started last month and may reach a peak of 175,000 barrels a day by 2011.

PNGRB levies turnover tax on retail CNG

September 7, 2009. In an unprecedented move, oil regulator PNGRB has levied a 'turnover' tax on the revenues companies will earn from retailing CNG and natural gas in cities, a move that the industry sees as exceeding its jurisdiction. The Petroleum and Natural Gas Regulatory Board (PNGRB), which as per its enacting legislation has powers to levy fee, has levied a minimum tax of Rs20mn per annum on turnover that companies like GAIL and Reliance Industries earn from selling CNG to automobiles and piped natural gas to households and industries.

As per the Gazette notification, PNGRB has asked entities to pay Rs20mn for turnover of up to Rs200bn under the head 'other charges'. For turnover of up to Rs500bn it has levied Rs20mn plus 0.008 per cent of revenues in excess of Rs200bn. For turnover up to Rs1000bn it will charge Rs44mn plus 0.005 per cent of revenues more than Rs500bn. Besides, 0.2 per cent of capital expenditure during construction period will be payable by entities, it said. Petrofed, a body of oil and gas companies, has opposed the move saying "other charges are similar to levy of turnover tax or sharing of revenue which are not provided for under the PNGRB Act."

Gujarat to bear burden of NTPC's gas bills, says RIL

September 7, 2009. Reliance Industries has told Gujarat that power consumers in the state may be laden with hefty bills due to power PSU NTPC's reluctance to buy relatively cheaper gas from it - a matter it had raised with the Power Ministry last month. In a letter to the state principal secretary (energy and petrochemicals) RIL said NTPC is currently buying natural gas on spot basis, which could potentially increase the cost of power by about Rs15bn per annum. He said RIL was in a position to supply 100 per cent of the quantity of gas requested by power plants in Gujarat, but NTPC was reluctant to lift gas and discussions have been going for over four months.

Petroleum Ministry proposes to hike APM gas price

September 4, 2009. The Petroleum Ministry is considering a proposal to increase the price of natural gas sold under a regulated regime to $2.6 for every million British thermal unit (mBtu) from $1.8/mBtu, currently. ONGC and Oil India Ltd (OIL) sell gas at a Government controlled price from blocks awarded to them on a nomination basis. 77 per cent of the gas produced in the country is sold under the administered price.

The Government regulates prices of gas produced from fields awarded before New Exploration Licensing Policy regime. According to the proposal, the price is expected to come into effect retrospectively from April 1, 2009. Before approaching the Cabinet, the Petroleum Ministry will seek views from a Ministerial Panel looking into the issue. The price is linked to India's wholesale price index.

Experts to look at petro product pricing policy

September 3, 2009. The Government has set up an expert group to examine the pricing policy of petrol, diesel, PDS kerosene and domestic LPG, and to recommend a viable and sustainable strategy. Dr Kirit S. Parikh, a former member of the Planning Commission, is going to head the five-member group, which is expected to furnish its report in three months. The group will make recommendations to rationalise the taxes levied by the Central and State Governments, the statement said. The terms of reference for the expert group include examination of the financial health of public sector oil marketing companies and recommendations to compensate them for under recoveries in case they are not permitted to charge market prices, as a result of Government intervention, in order to protect the consumers. The proposal to form an expert group was made in the Union Budget presented in July.

RIL says it signed gas contract, only NTPC did not

September 3, 2009. Reliance Industries has said that it had in December 2005 signed a contract to sell natural gas to NTPC at USD 2.34 per mmBtu price for 17 years, but it was the state-run firm that did not reciprocate. RIL said it had on December 14, 2005 sent a signed Gas Sales Purchase Agreement (GSPA) to NTPC committing to sell gas from its KG-D6 fields at a delivered price of USD 3.18 per million British thermal unit at its Kawas and Gandhar plants in Gujarat and asked the state-run firm to return two signed copies of it. NTPC has taken RIL to court seeking performance of the 2004 bid of USD 2.34 per mmBtu (landfall point price), as the Mukesh Ambani-led company insisted that the price needs nod of government, which in 2007 approved USD 4.2 per mmBtu as price of gas.

Govt alters SLP in SC in KG gas conflict

September 2, 2009. The Government has told the Supreme Court that it was not in favour of declaring the Ambani family tussle as “null and void”. The Centre said that the feud between the two estranged Ambani brothers, on the policy and the pricing front and allocation of gas from RIL's KG Basin block, was without prejudice to another legal case involving NTPC. In the application filed with the Supreme Court, the Centre said that it was not concerned with the private dispute between RIL and ADAG owned Reliance Natural Resources Ltd. (RNRL).

POWER

Generation

Nuclear Power Corp may increase generation by 50 pc

September 8, 2009. Electricity generation plants run by the public sector Nuclear Power Corp. of India have started producing more power after getting uranium from a mill in Jharkhand, according to a reprot. Nine plants, which can each generate 220 megawatts (MW), are operating at 70% of capacity compared with less than 50% before the Turamdih mill doubled fuel production, according to the report. Nuclear Power Corp. may increase generation by 50% to 22bn units in the year ending March, the report stated.

L&T is in talks to acquire thermal coal mine in Australia

September 7, 2009. Larsen and Toubro is in talks to buy a thermal coal mine in Australia for about US$300 mn, according to a report. The report stated that the company has shown interest in the mine at Queensland in north-eastern Australia, report stated. The mine has an estimated coal reserve of 250 million tonne (MT) that can generate enough electricity to meet the country’s needs for about seven months.

BHEL eyeing $2.5 bn orders in 4-6 weeks

September 4, 2009. India's largest power equipment maker, Bharat Heavy Electricals Ltd, expects to tie up orders worth about $2.5 billion in the next 4-6 weeks as private firms step up investment in the power sector, its chairman said. The state-run company, which the market values at $21.9 billion, has orders on hand worth 1.3 trillion rupees ($26.6 billion), including 150 billion rupees already signed this year.

IOC open to new tie ups for coal power project

September 4, 2009. With the joint venture with Tata Power for a 1,000 MW project not taking off as planned, Indian Oil Corporation is open to joining hands with other private sector companies for putting up coal-based power projects. Last year, IOC formed a joint venture with Tata Power for putting up a power project in Orissa. But there were delays in securing environmental clearances, partly because of the elections. Power from the project was to be supplied to the upcoming 15 million tonnes Paradip refinery. IOC has to complete the refinery by the first quarter of 2012 if it has to get incentives from the Government. Besides, there were also issues in securing coal linkage for the project. It has been put on the backburner.

Electricity generation growth up 9 pc in Aug 2009

September 2, 2009. The cumulative generation during the year 2009-10 (up to August, 2009) has been about 319 Billion units representing a growth rate of 6.3% despite decline in hydro generation (-11%). The electricity generation in August 2009 has been about 65bn units, recording a growth of 9% despite reduction in hydro generation to the tune of 12% due to poor monsoon, according to the Ministry of Power. High growth could be achieved due to an increase in thermal power generation by 15%, it added. The cumulative electricity generation during the year 2009-10 (up to August 2009) has been about 319bn units, representing a growth rate of 6.3% despite decline in hydro power generation (-11%), the Power Ministry said. There was a growth of 10.5% in thermal and nuclear power generation due to availability of natural gas from KG basin, enhanced availability of nuclear fuel and higher import of coal by power plants, the Power Ministry said. About 18 MMSCMD of natural gas had been allocated to the existing gas based power plants from KG basin by the Government of India to utilize the capacity stranded due to shortage of gas.

Transmission / Distribution / Trade

Kerala bets on hydel power despite clouds

September 8, 2009. Hydel-power dependent Kerala is smarting under 1,870 million units power deficit this season, following truant rains. But this has not deterred, Kerala State Electricity Board (KSEB) the least from putting its investment nest egg in the hydel power stream once again. Out of its Rs13.7bn investment plans (generation, transmission and distribution) for 2009-2010, as much as Rs4.03bn is earmarked for generation schemes, mainly hydel. The outlay for generation is mainly for five ongoing plus 16 new hydro-electric schemes and seven wind projects.

The state has just two thermal projects, since it usually pins its hope on surviving on an 80:20 (hydel power to thermal power) ratio. Kuttiyadi Extension (50 mw), Kuttiyadi Additional Extension (100 mw) and Pallivasal Extension (60 mw) are the hydel schemes getting additional investment this year. The outlay for these runs to Rs740mn. All this is when hydel power yield from KSEB's reservoirs have been at a low point eking out about 2,381 million units. If the second monsoon (North East monsoon) is good enough another 1,000-1,200 million units could be added. Even this is not sufficient as the state’s average daily consumption has spiraled to 46.56 million units per day.

Mundra Port scouts for projects along Bay of Bengal

September 7, 2009. The Adani Group-promoted Mundra Port and Special Economic Zone Ltd (MPSEZL), as part of its plans for pan-India presence, is now scouting for greenfield projects on the eastern coast along the Bay of Bengal. The group got the concession to develop a coal handling terminal at Mormuga Port, Goa, where it plans to invest Rs3.5bn in the next two years. The company would soon be bidding to acquire fresh concessions for ports along the eastern coast, an official said, while declining to identify the possible ports. A consortium-led by MPSEZL, the largest, multi-product private port company in India, had recently won the bid for development of a coal handling terminal at Mormugao on a design, build, finance, operate and transfer basis.

The terminal is scheduled to commence operations in the fiscal 2012 and is proposed to be funded by internal accruals and debt. As part of its plans to fan out of Gujarat and make MPSEZL a pan-India port and SEZ company, in view of its experience in port development and management at Mundra, the company is now focussing on the eastern coast as well, particularly since the Adanis have coal mining interests in Orissa and also import coal from Indonesia.

Tata Steel ships imported coal from Gangavaram to Haldia

September 7, 2009. Tata Steel has started coastal movement of imported coal from Gangavaram to Haldia. However, the first vessel, carrying 20,000 tonnes of coal, is waiting for berth at Haldia due to congestion, according to informed sources.

The company imported an estimated two lakh tonnes of coking coal at Gangavaram recently in view of acute congestion at Paradip where the average pre-berthing detention at one point of time was as high as 21 days. Of this, about one lakh tonnes have already been evacuated out of Gangavaram by rail. However, some railway bottlenecks and high cost of rail transportation from Gangavaram to Jamshedpur led the company to opt for coastal movement.

Policy / Performance

Tajikistan invites India to invest in hydro power

September 8, 2009. Tajikistan has invited India to explore the huge hydro power potential in the country as part of efforts to intensify bilateral economic cooperation and explore new areas of partnership between the two sides.

Addressing businessmen at the inauguration of India-Tajikistan Business Forum in the presence of President Pratibha Patil, Tajikistan President Emomali Rahmon said his country was also ready to cooperate with India in the field of mining, pharmaceuticals, agriculture product processing and other new areas. The Tajik President said his country was ready and open to invite India and its businessmen to explore possibilities of investing in hydro power projects.

Indian coal may not power new UMPPs

September 7, 2009. Bidders for new ultra mega power projects (UMPP) may not get assured coal supplies from domestic mines. As per the proposed changes in the UMPP policy, all future projects of 4,000 mw capacity will have to rely on imported coal.

The move is aimed at protecting the limited coal resources of the country for providing fuel linkages to small and medium-sized plants. Small and medium plants would not be economical if they were to rely on imported coal. According to policymakers, future UMPPs should be located in coastal regions to facilitate coal imports. Due to their large size they can achieve economies of scale even after importing coal.

India, Indonesia to form working group on coal sector

September 7, 2009. India and Indonesia are expected to form a joint working group for cooperation in the coal sector, the Coal Minister Mr Sriprakash Jaiswal, said. The move is aimed at streamlining and enhancing India’s coal import from the south-east Asian nation.

The two countries will form a joint working group to explore the possibility of buying more coal from Indonesia and to set up ventures with local companies there, Mr Jaiswal said. India’s coal demand for the financial year ending March may rise 10 per cent from a year earlier to 604 million tonnes, according to Government forecasts. About 70 mt will be met through imports.

Tata Power to bid for more UMPPs

September 6, 2009. Country's biggest private power producer Tata Power said it would bid for more ultra mega power projects but wanted complete transparency in bidding documents to avoid a Sasan-like situation.

At present Tata Power's generation capacity stands at 3,000 MW. The company is currently executing the 4,000-MW UMPP at Mundra in Gujarat and the first unit of the project is likely to be commissioned in the next two years.

Tata Power had objected to the government's decision to allow Reliance Power to divert surplus coal from the Sasan UMPP in Madhya Pradesh to another of its project in the state saying such parameters should be made clear in the bid document itself for investors to take right decision before bidding for UMPPs.

Hydel project curbs on foreign firms may go

September 5, 2009. The blanket ban on foreign companies and individuals from certain countries to undertake hydel projects in sensitive border areas may soon be lifted. A Cabinet note under circulation has suggested the government should deny visa to only specific foreign individuals or employees of specific companies that need to be watched instead of putting a blanket ban on all foreign firms from countries on the sensitive list by security agencies.

A power ministry official said it is not advisable to follow a country exclusion policy under which there is a blanket ban on companies or individuals from certain countries.

The move will help firms from across the border to undertake infrastructure projects. It is understood that many Chinese companies are interested in developing hydro-electric projects in India. Reliance Industries has already employed a large number of Chinese workers to execute its gas pipeline projects.

Karnataka industry writes to CM against power tariff hike

September 4, 2009. The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has written a letter to the Chief Minister, Mr B. S. Yeddyurappa, appealing to him to direct the five Electricity Supply Companies in the State to put the tariff revision proposals on hold as the State is reeling under severe drought.

In the letter dated September 3, the FKCCI sought to draw the Chief Minister’s attention to the fact that nearly 50 per cent of taluks (86 of the total 176 taluks) in the State have been declared as “drought-affected” and the entire State is facing the impact of drought.

The FKCCI pointed out that all the five Escoms in the State have filed tariff petitions before the Karnataka State Electricity Regulatory Commission seeking a tariff hike of about 20 per cent for all the consumer categories. Discussions on power sector held in various forums had emphasised that the Escoms should increase their efficiency so that the demand for tariff hike could be restrained, the letter said.

IOC to form joint venture with NPCIL for nuclear power plants

September 2, 2009. Indian Oil Corp (IOC), nation's largest oil firm, is likely to sign a joint venture agreement with Nuclear Power Corp of India (NPCIL) this month to foray into nuclear power generation. After the MoU is signed, the two companies will enter into confidentiality agreement wherein NPCIL will share details of the projects it is planning.

IOC may take 26 to 49 per cent stake in NPCIL's upcoming Rs280.5bn 3300 MW Jaitapur plant in Maharashtra, Rs 180bn 2000 MW Kudankulam unit in Tamil Nadu or a Rs140bn 1400 MW plant that may be located at Kakrapar in Gujarat or Rawatbhata in Rajasthan.

Based on the capacity of the plant, the ball park cost estimate per MW, varies from Rs80mn to Rs 100mn, depending upon whether the plant uses homegrown technology or sourced import technology.

Dr. Farooq Abdullah inaugurates hydel project in Leh

September 2, 2009. Dr. Farooq Abdullah, Union Minister for New & Renewable Energy inaugurated a 30 KW micro hydel plant at village Udmaroo in Nubra block of Leh district. Shri Omar Abdullah, Chief Minister of Jammu and Kashmir, Shri Chering Dorjay, Chief Executive Councillor, Ladakh Autonomous Hill Development Council (LAHDC), Shri Deepak Gupta, Secretary, MNRE and Shri S.S.Kapur, Chief Secretary, Government of J&K graced the occasion.

The village has about 90 households who had to use costly diesel generator sets to get access to electricity. With setting up of the micro hydel plant, the villagers are able to not only save money but also generate employment opportunities. They can now access basic services like electricity in the evenings and income generation activities through installation of end-use machines like flourmill, oil expeller and multi-purpose carpentry machine operated by the Micro Hydro Electrical Power Unit.

Stone laying for NTPC-BHEL project put off to Sept 17

September 2, 2009. The proposed visit of the Prime Minister, Dr Manmohan Singh, to lay the foundation stone for the NTPC-BHEL joint venture power project at Mannavaram in Chittoor district of Andhra Pradesh has been put off to September 17.

INTERNATIONAL

OIL & GAS

Upstream

Russia surpasses Saudi Arabia in oil exports

September 8, 2009. Russia is surpassing Saudi Arabia in oil exports for the first time since the Soviet Union’s collapse as Prime Minister Vladimir Putin exploits OPEC production cuts to gain market share.

Exports of crude and refined products from Russia rose to about 7.4 mbpd in the second quarter, according to Energy Ministry data. Saudi shipments fell to about 7 mbpd, International Energy Agency estimates of output and domestic demand showed.

Investors had expected Russian supplies to decline this year after Putin’s deputy, Igor Sechin, told the Organization of Petroleum Exporting Countries in December that his government was ready to limit production to support prices. Instead, the country is providing tax breaks for new fields in Siberia. OAO Rosneft, OAO Lukoil and BP Plc’s Russian venture TNK-BP pumped more as prices rose 54 percent to near $69 a barrel.

(mbpd) 3Q2008 4Q2009 1Q2009 2Q2009

Russia 6.87 6.91 7.14 n/a

Saudi Arabia 7.36 7.12 6.57 n/a

Source: Crude and oil products export data provided by the Joint Oil Data Initiative, which compiles information provided by the countries themselves.

Saudi Arabia’s Naimi says oil price is satisfactory

September 8, 2009. The global crude oil market is in “good shape,” with prices between $68 and $73 a barrel satisfactory for both consumers and producers, Saudi Arabian Oil Minister Ali al-Naimi said. Several members of the Organization of Petroleum Exporting Countries have said the group should keep its production target unchanged at 24.845 mbpd.

All of the 26 analysts surveyed by Bloomberg News predicted the organization will keep quotas steady. Saudi Arabia has led OPEC through the largest supply cut in its history to boost oil prices to the level publicly favored by Saudi King Abdullah, $75 a barrel. Oil reached that price on the New York Mercantile Exchange last month after trading as low as $32.70 in January.

StatoilHydro strikes oil at Nona prospect in Norwegian Sea

September 8, 2009. An oil and gas discovery has been made by StatoilHydro in the Nona prospect, ten kilometers south east of the Asgard field in the Norwegian Sea. Based on preliminary calculations the size of the find is between 13-31 million barrels of oil and 1-2 billion standard cubic meters of gas.

Qatar Petroleum, ExxonMobil start up Mega LNG facility

September 8, 2009. Qatar Petroleum and ExxonMobil have announced the completion and start-up of Qatargas 2 Train 5, one of the largest operating liquefied natural gas (LNG) production facilities in the world.This follows the start-up of the Qatargas 2 Train 4 in the second quarter of 2009.

Each is designed with the capacity to produce 7.8 million tons per year, approximately 50 percent larger than any other global liquefaction facility currently operating outside of Qatar.

New Wells in Turkmenistan confirm huge gas reserves

September 7, 2009. Three new exploration wells in the Southern Yoloten (Iolotan)-Osman-Minara field tested by the experts of Turkmengeologiya State Corporation have provided confirmation of huge natural gas reserves in Turkmenistan.

As the Turkmenistan.ru was informed by the State Corporation, the wells in the Southern Yoloten-Osman deposit zone produced millions of tons in gas discharge, and the first exploratory well on the Minara field gave the industrial gas flow debit of over 4 million cub m per day.

Chevron says Tombua-Landana start-up Imminent

September 4, 2009. Chevron Corp. is on the verge of starting up its Tombua-Landana oil project in Angola, one of the largest the oil giant is scheduled to bring into production this year. The company had previously said that the project would come on stream in the third quarter. The project, which is expected to reach a peak production capacity of 100,000 barrels of crude oil per day, underscores Angola's growing importance for international oil companies.

BP’s Tiber find may signal oil revival in U.S. Gulf of Mexico

September 2, 2009. BP Plc’s discovery of the biggest U.S. oil find in three years may spur an exploration revival in the Gulf of Mexico, a region thought by some industry executives to be played out after output slumped. BP said it identified a “giant” prospect called Tiber more than 9.7 kilometers beneath the surface of the Gulf. The find confirms there are more large reservoirs of crude off the coasts of Louisiana and Texas, said an analyst. The announcement brings new attention to a region where offshore oil exploration was pioneered more than six decades ago.

Downstream

Qatargas 2 Train 5 starts up

September 8, 2009. Qatar Petroleum and Exxon Mobil Corp. announced the completion and start-up of Qatargas 2 Train 5, one of the largest operating liquefied natural gas (LNG) production facilities in the world. This follows the start-up of the Qatargas 2 Train 4 in the second quarter of 2009. Each is designed with the capacity to produce 7.8 million tons per year, approximately 50 percent larger than any other global liquefaction facility currently operating outside of Qatar.

KNPC to start scheduled maintenance at refineries

September 7, 2009. Kuwait will carry out scheduled maintenance at all three of its domestic refineries in coming months, a Kuwait National Petroleum Corp., or KNPC, official said. Kuwait's largest refinery at Mina Al Ahmadi will be partially shut down between Oct. 27 and Nov. 16 for scheduled maintenance at one of its three crude processing units, or CPUs, and associated units including hydrocracker. The refinery's processing capacity of 460,000 barrels a day will be reduced by 120,000 barrels a day during the 21-day maintenance work at the CPU.

Costa Rica Refinery JV clears hurdle

September 4, 2009. Costa Rica's legal watchdog cleared a billion-dollar contract the government signed with China to jointly build an oil refinery after it was held up in legal wrangling for months. The Comptroller's Office reversed its own earlier ruling in March, when it said an agreement signed in 2008 for the Costa Rican Oil Refinery, or Recope, to form a joint venture with the China National Petroleum Corporation, or CNPC, was invalid.

Transportation / Trade

Shell, Seaoil roll back Philippine fuel product prices

September 8, 2009. Petroleum giant Pilipinas Shell is rolling back prices of its fuel products as a result of the softening of prices in the international market. The company is reducing by P1 (US$0.02) per liter the prices of its diesel, kerosene, super unleaded E10, unleaded premium and VPower while their regular gasoline will be slashed by 50 centavos per liter.

Beijing gas stations launch promotional sales

September 4, 2009. Despite the raised ceiling of the oil products price, most of privately-run and foreign-funded gas stations in Beijing have launched promotional sales, reflecting the continuing bleak downstream market demand. China's price regulator, the National Development and Reform Commission, raised the ceiling fuel retail price by 300 yuan/ton, to about 0.22 yuan/liter for gasoline and 0.26 yuan/liter for diesel. Under pressure from the weak demand, one gas station run by Shell in the Beijing suburbs lowered its retail price by 0.2 yuan/liter, and a Total gas station cut the retail price by 0.1 yuan/liter. Most of the private-run stations followed suit.

China’s West-East Gas Pipeline's capacity already exceeds 12 BCM

September 4, 2009. The first phase of the West-East Natural Gas Pipeline's annual capacity has exceeded 12 billion cubic meters, said an official with the National Energy Administration (NEA). The natural gas could replace the consumption of about 16 million tons of coal annually.

The second phase of the pipeline, expected to link the Chinese gas terminals to Kazakhstan's gas field, has been under construction since early 2008. The second phase project will be completed by 2010, increasing the total transporting capacity to about 30 billion cubic meters a year.

CNOOC eyes greenfield refinery in Shandong

September 2, 2009. The CNOOC Group is considering building a greenfield 12-million-ton/year refinery in Dongying, eastern Shandong province, according to a report. CNOOC Group is to lay out 46.3 billion yuan to build a refinery with a throughput capacity of 12 million tons/year and ethylene production capacity of 1 million tons/year. If so, it would be the CNOOC Group's second self-built large refinery after its 12-million-tons/year Huizhou refinery in Guangdong province that came on stream this May.

Policy / Performance

World oil demand projected to return to pre-recession levels by 2012

September 8, 2009. World oil demand is set to grow next year for the first time since 2007 and return to pre-recession levels by 2012, according to IHS Cambridge Energy Research Associates (IHS CERA) in its quarterly World Oil Watch report.

The rebound would mark a turnaround from the largest drop in global oil demand since the oil crisis of the early 1980s. IHS CERA expects oil demand growth to resume by 900,000 barrels per day (bd) in 2010 and return to its 2007 high of 86.5 million barrels per day (mbd) by 2012 -- a five year turnaround.

Platts: OPEC bumps up output to 28.79MM BOPD

September 8, 2009. The Organization of the Petroleum Exporting Countries (OPEC) crude oil production averaged 28.79 million barrels per day (b/d) in August, up 220,000 b/d from July, as Iraq and several other producers raised volumes from the previous month, a Platts survey of OPEC and oil industry officials and analysts showed.

Excluding Iraq, which does not participate in OPEC output agreements, production from the 11 members bound by quotas rose by 120,000 b/d to 26.24 million b/d, the survey showed. Iraqi volumes increased to 2.55 million b/d in August from 2.45 million b/d in July. Smaller increases of 50,000 b/d, 40,000 b/d, 20,000 b/d and 10,000 b/d came from Saudi Arabia, Angola, Venezuela and Iran, respectively. The latest estimates leave the OPEC-11 overproducing their 24.845 million b/d target by some 1.4 million b/d.

Iraq may delay Shell gas deal until ’10

September 8, 2009. A multibillion dollar deal between Royal Dutch Shell PLC (RDSA) and the Iraqi government to jointly develop domestic gas infrastructure in Iraq's south could be delayed until after the country's elections in January, a senior Iraqi oil official said. The official said the outcome of the talks must be submitted to the Iraqi government for approval before the $3 billion-$4 billion contract can be signed, and that would also take a few weeks.

Bangladesh govt urged not to lease out offshore gas, oil fields

September 7, 2009. Leaders of left-leaning political parties urged the Bangladesh government not to lease out offshore gas and oil fields to multinational companies in the greater interest of the nation. They also demanded immediate punishment of the policemen who attacked a peaceful procession of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports, leaving over 100 people injured.

Nigerian govt moves to protect oil quota

September 7, 2009. The Nigerian federal government is making efforts to fend off attacks which could dampen the new 1.7 million barrels per day (bpd) oil output. Nigeria plans to take the new quota to the meeting of the Organization of Petroleum Exporting Countries (OPEC).

The eighth biggest oil exporter in the world has been struggling to raise its production. The country's crude output, which dipped below one million bpd, has improved to meet the 1.7 million bpd quota allotted by OPEC. The government has urged the Movement for the Emancipation of the Niger Delta (MEND) to come on board with 27 days to the end of amnesty program.

Alaska Gov. seeks unified gasline

September 7, 2009. Alaska Gov. said he's not going to negotiate with the oil companies over how much the state taxes natural gas until they unite behind a gas pipeline project and can prove they need the help in order for construction to start. There are two competing proposals for a multibillion-dollar natural gas pipeline to the Lower 48. The state is tied under the Alaska Gasline Inducement Act to the effort led by the pipeline firm TransCanada Corp. and backed by Exxon Mobil, while Conoco Phillips and BP are engaged in a rival project called Denali.

UK oil links to Libyan bomber’s release

September 5, 2009. A U.K. official said that oil and trade links with Libya were a part of the government’s decision to release the Lockerbie bomber in a prisoner transfer deal. U.K. Justice Secretary Jack Straw said in an interview with the paper that he was unapologetic about including Abdelbaset al Megrahi in the agreement, citing a multi-million-pound oil deal between BP and Libya. Straw’s admission contradicts U.K. Prime Minister Gordon Brown who said days earlier that oil deals were not a factor in the prisoner’s release.

E.ON: Planning approval process begins for NEL pipeline

September 4, 2009. The planning approval process for the section of Norddeutsche Erdgasleitung (NEL) that is to run through the German state of Lower Saxony has now been initiated. The NEL pipeline is part of an overall energy industry concept. It is to connect the Nord Stream pipeline running through the Baltic Sea as well as the OPAL natural gas pipeline running to the Czech Republic with the European transmission network. Starting in Lubmin near Greifswald on the Baltic Sea, the NEL pipeline is to continue to Rehden in Lower Saxony.

US Natural gas price may drop below $2

September 4, 2009. Natural gas futures are poised to fall further after trading at the lowest in seven years in New York as stockpiles grew to a record for this time of year, according to options data and analysts. The cleaner-burning fuel, down 56 percent this year, may plunge another 20 percent to below $2 per million British thermal units as new liquefied natural gas supplies come on stream. Trading of bearish options on the U.S. Natural Gas Fund rose to a record as investors bet that the exchange-traded fund tracking gas futures will keep tumbling.

Ex-CIA boss urges curbs on oil firms supplying Iran

September 4, 2009. A former CIA director says companies that sell Iran refined petroleum products must be punished as the country gets closer to making a nuclear bomb. The U.S., China, Russia, France and the U.K, the five permanent members of the United Nations Security Council, and Germany, met to discuss the offer for direct talks with Iran. U.S. Defense Secretary Robert Gates said July 27 that the U.S. will seek support for “a much tougher position” should Iran reject the deadline. President Mahmoud Ahmadinejad says no one can impose sanctions on Iran anymore. The U.S. Senate voted July 30 to punish companies that sell gasoline to Iran by prohibiting them from supplying the Strategic Petroleum Reserve. The bill must be passed by the House of Representatives and signed by President Barack Obama before it becomes law.

Indonesian govt okays Inpex LNG project

September 3, 2009. The Indonesian government has approved a plan by Inpex Corp., a Japanese energy company, to build an offshore plant to produce liquefied natural gas in the country. The company, in which the Japanese government holds 29.35 percent, plans to extract natural gas from an undersea field in the gas-rich Masela block it is developing in the Timor Sea and export liquefied products to Japan. The facility, with an estimated construction cost of $19.6 billion, is expected to come on stream in 2016, with an annual output of around 4.5 million tons being eyed.

POWER

Generation

Immingham CHP plant to start in Q4-Conoco

September 7, 2009. ConocoPhillips' 450-megawatt (MW) Phase 2 Immingham combined heat and power plant (ICHP) is to start commercial operation in the fourth quarter of this year, ConocoPhillips said. ConocoPhillips said in a statement the ICHP in northeast England, next to its Humber oil refinery, was progressing the commissioning and start-up work of its Phase 2 expansion.

Eskom to assist Angola generate up to 10 000 MW

September 4, 2009. The South African government and Eskom have agreed to assist Angola develop its large hydroelectric power potential of up to 10 000 megawatts. An agreement signed this week between South Africa and Angola's energy departments provides potential for Angola to become a supplier of electricity.

Transmission / Distribution / Trade

US electricity demand down; bills may fall

September 6, 2009. Consumers and businesses may finally be seeing some relief from rising utility bills, thanks to the biggest decline in U.S. electricity demand in decades. Prices on wholesale markets are expected to decline for the rest of 2009, according to the Energy Information Agency. While rates probably will begin edging up again in 2010, it likely will be less than half the 6.2 percent jump recorded last year. For decades as Americans bought more electronics, more appliances, air conditioners and other gizmos, energy demand has only moved in one direction, and prices have followed suit. The decline in power usage over the past year is a rarity and also an indication of how badly the recession has jolted the economy and changed the way Americans spend.

Eritrea: Redoubling endeavours towards expanding equitable power supply

September 5, 2009. The Eritrean Electricity Corporation is redoubling endeavors towards expanding equitable power supply across the nation. Also as part of endeavors to promote rural electrification, a number of villages in remote areas have become beneficiaries of power supply, including 10 villages around Adi-Keih, 34 villages in Dekemhare, 10 villages around Keren and Afabet, as well as 5 villages around Barentu.

Policy / Performance

Nigeria: Electricity Commission threatens Sanctions against distribution firms

September 8, 2009. Nigerian Electricity Regulatory Commission (NERC) has threatened to impose a fine of N5,000 per day on power distribution companies who failed to operate within the rules and regulations guiding their operations.

NRC: No threat from leak at NJ nuclear power plant

September 8, 2009. Federal regulators say the first of two leaks of radioactive tritium this year at the nation's oldest nuclear power plant did not spread contamination beyond the plant's grounds.

The U.S. Nuclear Regulatory Commission says its investigation of an April tritium leak at the Oyster Creek Nuclear Generating Station found that groundwater contamination has not left the site of the Lacey Township plant. The plant got a new 20-year license in April and will be 60 years old at the end of it.

Tokyo Electric to use carbon market

September 8, 2009. Tokyo Electric Power Co expects to keep buying carbon credits overseas beyond 2012, when the first phase of the Kyoto climate pact ends, the company's climate section chief said, underscoring the firm's continued reliance on the global emissions trading market.

TEPCO, Asia's biggest utility, is already one of the top buyers of globally traded carbon credits under the protocol's market schemes to help Japan, the world's No.5 greenhouse gas emitter, to meet its Kyoto commitments.

TEPCO redeemed 24.8 million tons of such credits to offset 20 percent of its CO2 emissions in the past year. It is now considering how to meet a tough CO2 intensity goal that a 10-company industry lobby, the Federation of Electric Power Companies of Japan, has voluntarily committed itself to achieving in the year starting in April 2020.

Merkel favors extending nuclear phase-out by up to 15 years

September 8, 2009. Chancellor Angela Merkel said she favors extending Germany’s planned nuclear phase-out by up to 15 years as the government tries to keep power costs down in pushing to expand generation from renewable sources. In a town-hall-style meeting in Cologne three weeks before elections, Merkel told voters that prolonging the phase-out that’s planned for 2020 is “justifiable” to avert having to import power from nuclear sources in other European Union states. Utilities including RWE AG and E.ON AG have pressured the government to let them keep nuclear plants running longer.

Nepal seeks $1b loan from Chinese Exim bank

September 7, 2009. The government has initiated the process for seeking a soft loan worth US$ 1 billion from the Chinese Export and Import Bank, known as China Exim Bank, to finance three major development projects.

The proposed three projects include one regional airport at Pokhara, a hydropower project in Jajarkot district and a road connectivity package that mainly includes construction of bridges.

US lobbying heats for gas and coal

September 6, 2009. The gas industry’s leaders say they will descend on Capitol Hill to press their case about the advantage of gas, including that it emits about half the greenhouse gases as coal. The industry has formed a new lobbying group, and it is planning a national campaign that includes television advertising. Executives want fewer allowances for coal. They also want legislation that gives incentives for companies to convert truck fleets from diesel to natural gas. But the coal industry will also be active and said that coal was still a better fuel because its price is more stable than gas. But it is not only coal-industry lobbyists and their Congressional supporters who favor the concept of carbon sequestration.

Vietnam HCM City authority intervenes in electricity hike dispute

September 5, 2009. Authorities in HCM City have asked the Hiep Phuoc Power Company to reduce electricity prices for 60 factories in the Hiep Phuoc Industrial Park, following complaints about overcharging. Of the 60 factories, 32 have paid a total of VND23.1 million in extra costs since September last year, 20 per cent more than the normal rate, said Doan Hong Tam, deputy director of Hiep Phuoc Industrial Park Company.

Clean coal in China said to face ‘staggering’ costs

September 4, 2009. Western governments pushing China to use clean-coal technology may need to lower their expectations for the world’s largest producer of greenhouse gases. Costs will total as much as $400 billion over 30 years to install systems to capture carbon dioxide from power plant smokestacks in China and bury it underground. China has little incentive to invest because it will raise power prices and it’s unclear if wealthier nations will pick up the bill. U.S. Energy Secretary Steven Chu and European nations have championed carbon capture for nations including China as vital to slowing global warming while keeping coal in the energy mix. China, the biggest producer of coal, gets about 80 percent of its electricity from burning the fuel, which spews more heat- trapping gases than natural gas or oil.

Nigeria: No 24-hour electricity even with 6000 Mw minister

September 4, 2009. Minister of State for Power Mr. Nuhu Wya said Nigerians should not expect 24-hour electricity supply even after the attainment of the 6,000 megawatts target.Responding to questions in Kano after inspecting some facilities of the PHCN, the minister said Nigerians would not enjoy uninterrupted power supply even after government meets the promised target.

Atomic power’s cheap-energy tag belied by aid: Greenpeace

September 3, 2009. German taxpayer subsidies that keep nuclear plants running belie the image that atomic power is too cheap to be phased out, a study commissioned by Greenpeace said. Direct and indirect aid from 1950 to 2008 was 165 billion euros ($235 billion) and 92.5 billion euros more will be given through 2021, when the reactors are set to close, the Amsterdam- based environmental advocate said today, citing research showing aid fails to appear in federal subsidy reports.

South Africa: Electricity restructure is set to start with new law

September 3, 2009. The restructuring of the electricity-distribution industry through the creation of six regional electricity distributors (REDS) countrywide was ready to proceed as soon as the contentious 17th Constitutional Amendment Bill was promulgated. More and more municipalities had signed agreements to participate in the system and prepare their reticulation assets for transfer to REDS, even those initially opposed to the idea. So far, 147 of the 187 municipalities had signed the memorandums of understanding.

Tunisia: AfDB loan to rehabilitate Tunisia’s electricity network

September 2, 2009. The African Development Bank (AfDB) Group approved a loan of 42,34 million Units of Account (UA), equivalent to 87.83 million Tunisian dinars (TND) (US$ 66.306 million), to finance the rehabilitation and restructuring of the electricity network in the country. The Electricity Distribution Network Rehabilitation and Restructuring Project is an investment project dealing with the construction and rehabilitation of power lines and stations with a view to upgrading medium tension and low tension networks to meet Tunisia’s economic exigencies and satisfy the Electricity and Gas company (STEG’s) customers.

Renewable Energy / Climate Change Trends

National

Clinton Foundation plans 5 solar parks in Gujarat

September 8, 2009. Clinton Climate Initiative, a programme of US based William J Clinton Foundation, on Monday signed an memorandum of understanding with the Gujarat government for setting up solar parks in Gujarat. Each park will serve as a concentrated zone of solar development and will include 3,000 plus megawatts of solar generation as well as manufacturing facilities. Under the MoU signed with CCI, the government would facilitate in identification of land and create required infrastructure for setting up of solar plants in co-ordination with CCI and invite national and international developers to set up these plants on chargeable basis for the infrastructure created. The power produced by these plants shall in turn be purchased by state power utilities.

United Nations climate fund hits roadblock

September 8, 2009. The issue of hiking contribution in the United Nations’ “Adaptation Fund” to tackle climate change hit a stumbling block at a recent meeting of the finance ministers of G-20 countries, after India raised objections to plan of the developed countries. Developed countries like France and Germany were ready to increase their contribution but insisted the amount be diverted from their aids and grants to developing nations. Finance Minister Pranab Mukherjee, leading the brigade of the developing countries, didn’t accept this proposal and maintained that developed countries should not reduce their monetary support to developing nations and it should pump in fresh fund for climate change.

Siva ventures enters wind energy space in India

September 7, 2009. The ministry for new and renewable energy, in its solar mission to be launched on November 14, will introduce a 55 % subsidy on solar power installations for home and office use and will allocate Rs900bn till 2030 for solar power development, according to Union minister for new and renewable energy Farooq Abdullah. NRI industrialist C Sivasankaran promoted Siva Ventures acquired a controlling stake in Finnish wind power company WinWind in 2006. The JV which operates three manufacturing plants in Europe, catering to European demand, has established its first facility in the district about 50 km away from Chennai.

Renewable energy certificate gets nod

September 5, 2009. Power regulators under the ageis of Forum of Regulators (FoR), unanimously gave their consent for the introduction of renewable energy certificate (REC) to be exchanged only through power exchanges approved by the Central Electricity Regulatory Commission. The REC would be exchanged within forbearance price (ceiling price) decided by CERC time to time, not exceeding the forbearance price. Moreover, FoR was of the view that RE generators are not allowed to bank more than 25% of REC for the next year.

Slowdown dims solar panel prices 40-50 pc

September 4, 2009. Solar panel prices have fallen 40-50 per cent in the international markets in the last 6-9 months, triggered by the global liquidity crunch. This has led to tighter funding for solar farm power projects and a consequent build-up in inventory of panels. Despite an improvement in global liquidity and revival of orders, there is no imminent prospect of prices returning to mid-2008 levels, say industry experts. Solar panel manufacturers say prices are unlikely to return to the early 2008 levels even though some large projects are getting off the ground, particularly in western and southern Europe, the largest market for solar power projects.

Blended green fuel in Capital by next year

September 4, 2009. Indian Oil Corp (IOC) plans to introduce in 2010 hydrogen-mixed CNG that will improve energy efficiency of vehicles by 15% and reduce emissions by 30%. The country’s largest auto fuel retailer is in talks with the Delhi government for a fuel-dispensing network for the new fuel mix, called Hythane, in the national Capital. The blended fuel will have a hydrogen content of 17-18% and cost 30% more than CNG in Delhi. IOC is in talks with automakers such as Tata Motors, Ashok Leyland, Mahindra & Mahindra and Eicher Motors for Hythane-compatible vehicles to facilitate launch of the fuel in Delhi during the Commonwealth Games next year. The company’s research department has tested the fuel on three-wheelers, which could be used to ferry passengers during the Games.

Neste Oil reinducted in Dow Jones Sustainability World Index

September 3, 2009. Neste Oil has been accepted again, for the third year in a row, into the Dow Jones Sustainability World Index, which features 317 companies from 27 countries that excel in their commitment to a more sustainable future. This year, Neste Oil was also included in the Dow Jones STOXX Sustainability Index. Only five other Finnish companies are included in this edition of the DJSI World listing, which was published today by Dow Jones Indexes, STOXX Limited, and the SAM Group.

Moser Baer to develop solar project in Maharashtra

September 3, 2009. Moser Baer India said it has bagged a project to develop one mega watt solar project from Maharashtra government in Chandrapur. The company has been awarded the contract by Mahagenco, a government of Maharashtra power generation company, Moser Baer India said in a filing to the Bombay Stock Exchange. The company would be commissioning the project in consortium with Germany-based SunEnergy GMBH. The work for the project would be completed before January 2010, the filing added.

Solkar, Exnora to provide million solar lamps for the poor

September 2, 2009. Solkar Solar Industry Ltd and Exnora International will jointly launch a programme to enable donation of one million solar powered lamps countrywide to the poor. Solkar Solar, a manufacturer of solar-powered products and photovoltaic modules, which is in its 25th year of operation, had initially tied up with the NGO Exnora International to launch the project for Exnora volunteers to sponsor donation of one lakh solar-powered lamps to the poor in Tamil Nadu. The beneficiaries, to be identified by Exnora, would be those who use oil-powered lanterns.

Global

Climate change threatens food security in S Asia

September 8, 2009. Melting Himalayan glaciers and other climate change impacts pose a direct threat to the water and food security of more than 1.6 billion people in South Asia, according to preliminary findings of a new study financed by the Asian Development Bank (ADB). Analysing the current trends and scenarios based on projected temperature increases, the study warns that four countries in South Asia — Afghanistan, Bangladesh, India and Nepal— are particularly vulnerable to falling crop yields caused by glacier retreat, floods, droughts, erratic rainfall and other climate change impacts.

Climate bill needed for U.S. security, ex-officials insist

September 8, 2009. America's national security is at risk unless Congress and the Obama administration end partisan wrangling and agree on legislation to reduce U.S. contributions to climate change, a bipartisan group of former presidential advisers, cabinet members, senators and military leaders said. The energy and climate debate is divisive, but it's possible for the government to devise a "clear, comprehensive, realistic and broadly bipartisan plan to address our role in the climate change crisis," declared the Partnership for a Secure America, a group that seeks a centrist, bipartisan approach to security and foreign policy.

Agreement at Copenhagen a must: Maldives President

September 8, 2009. President of Maldives Mohamed Nasheed is to visit India in October at the invitation of Prime Minister Manmohan Singh to discuss issues related to climate change, ahead of the U.N. climate conference in Copenhagen in December. Mr. Nasheed, known for his outspoken views on climate change, is of the opinion that everyone stands to loose if the Copenhagen conference does not result in an agreement.

A section of the scientific community has predicted the possibility of Maldives ceasing to exist due to rise in sea levels triggered by climate change.

Maldives to introduce green tax on tourists

September 7, 2009. The Maldives archipelago, threatened by rising sea levels blamed on climate change, said it would introduce a new environment tax on all tourists who use its resorts and provide its economic lifeline. Famed mostly for high-end luxury resorts and white-sand atolls, the Maldives has made a name for itself as an advocate for mitigating climate change because rising sea levels are forecast to submerge most of its islands by 2100. The Maldives' $850 million economy gets more than a quarter of its gross domestic product from tourists, but has not yet taxed them to help it fight climate change.

Japan greenhouse-gas pledge strengthened by Hatoyama

September 7, 2009. Prime minister-designate Yukio Hatoyama pledged to reduce Japan’s greenhouse-gas emissions 25 percent by 2020 from 1990 levels, a more ambitious target than made by outgoing premier Taro Aso’s administration. The Democratic Party of Japan, which won a landslide election, will change government policy in line with an electoral pledge to cut heat-trapping gases by a quarter in 30 years, Hatoyama said in a speech in Tokyo.

The goal depends on other countries adopting similar targets, he said. Keidanren, Japan’s biggest business lobby, has said it opposes any cut bigger than 6 percent. In May the group said a 4 percent increase from the 1990 level was the “most rational goal” in terms of viability and the financial burden on consumers.

Energy-patent holders, UN square off over protecting climate

September 7, 2009. A United Nations agency proposed that developing nations get free licenses to clean-energy technology such as wind turbines, setting up a battle with manufacturers to be resolved in a climate treaty in December. Companies such as windmill-maker General Electric Co. or hybrid-car manufacturer Toyota Motor Corp. may be forced to give free access to patents or seek compensation elsewhere when their inventions are used by the nations to avoid greenhouse-gas emissions, under recommendations today by the agency in Geneva.

The “bold proposal” is aimed at creating a framework for industrialized and developing countries trying to strike a new climate-protection agreement in Copenhagen this December, UN economist Detlef Kotte said before releasing a 217-page report on the issue.

Fighting climate change good for industry: UN body

September 7, 2009. Released worldwide, the annual Trade and Development Report says keeping global warming at a manageable level “is not possible without resolute policy efforts that trigger a process of structural change towards more climate-friendly modes of consumption and production around the world”. An Unctad spokesperson said the report calls upon developed economies to take the lead in mitigating climate change as “they account for the largest share of accumulated greenhouse gases in the atmosphere and have greater economic, technological and administrative capacities for shifting rapidly to a low-carbon economy”.

Trade war looms in solar space

September 6, 2009. German solar firms Conergy and Solarworld have voiced strong concern about the pricing practices of Chinese panel makers -- who undercut their German peers' products by around 20 percent. Chinese modules sell in Europe at about 1.70 euros per watt, according to a UBS report. Industry experts say U.S. firms share those German concerns. Germany's BSW solar industry association is looking into allegations of dumping by Chinese rivals as Conergy rallies support to call on the European Union to examine Chinese pricing tactics.

Widen global warming fight beyond CO₂: U.N.

September 6, 2009. The world should widen a fight against global warming by curbing a string of pollutants other than carbon dioxide, the main greenhouse gas, the U.N. Environment Programme (UNEP) said. Heat-trapping methane, nitrogen compounds, low-level ozone and soot are responsible for almost half of the man-made emissions stoking climate change in the 21st century, it said. A wider assault on pollutants, twinned with cuts in carbon dioxide, would help toward a new U.N. climate pact due to be agreed in December and have other benefits such as improving human health, raising crop yields and protecting forests. Soot or 'black carbon', for instance, is among air pollutants blamed for killing between 1.6 and 1.8 million people a year, many from respiratory diseases caused by smoke from wood-burning stoves in developing nations.

Climate change funding talks stall at G20

September 5, 2009. Differences between rich and developing countries prevented G20 finance ministers from agreeing measures to curb global warming, casting more doubt on U.N. efforts to agree a new climate treaty. Industrialized nations sought progress on climate change financing at a meeting of G20 finance ministers but met resistance from emerging nations including China and India, who fear the proposals could stifle their economic growth. Ministers said in their concluding statement that they would work toward a successful outcome at a United Nations meeting in Copenhagen in December which aims to draft a new climate change treaty to succeed the Kyoto agreement.

Siemens wants to win Smart Grid orders worth over €6bn by 2014

September 4, 2009. Siemens AG wants to receive orders worth more than €6bn for intelligent power networks (Smart Grids) over the next five fiscal years. Siemens is already one of the leading international suppliers of Smart Grids and is continuing to strengthen this position. Siemens anticipates that orders for Smart Grid technologies will reach nearly €1 billion in the current fiscal year. According to studies, more than a billion tons of CO2 emissions could be abated with intelligent power networks by 2020. Smart Grids are essential for integrating renewable power sources into power networks and for ensuring stable power supplies from solar and wind energy.

Ethiopia’s Meles says Africa may ‘walk out’ over climate talks

September 3, 2009. Africa won’t “rubber stamp” any climate-change agreement by industrialized powers at global talks in Copenhagen this December that don’t meet the continent’s needs, Ethiopian Prime Minister Meles Zenawi said. “We will use our numbers to delegitimize any agreement that is not consistent with our minimal position,” Meles said.

Google-backed geothermal company suspends test project

September 2, 2009. Geothermal startup AltaRock Energy Inc said it has suspended its demonstration project in California due to geologic anomalies. The company, whose investors include Google Inc's philanthropic arm, Google.org, and top Silicon Valley venture capital firms Khosla Ventures and Kleiner Perkins Caufield & Byers, said that despite the setback, it will keep developing its engineered geothermal systems (EGS) technology and is evaluating alternative well locations. EGS improves upon the century-old technology of tapping geothermal energy from geysers, hot springs or volcanoes to generate electricity.

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