MonitorsPublished on Apr 14, 2009
Energy News Monitor I Volume VI, Issue 44
Managing Volatility & Growth: A New Energy Paradigm

 (Selection of Observations from presentations made at the conclave)


Shri S C Tripathi, former Secretary, Petroleum


rowth and energy are two sides of the same coin and modern life is so critically dependent on harnessing various sources of energy. The GDP of a country is more or less directly proportional to its energy consumption. In India, the average consumption per capita is between one third and one fourth of the world per capita average consumption. China has reached the average. The United States is about 20 times that of India and about 8 times of the average consumption. As we take steps to increase consumption, we have to consider the consequences of energy consumption. CO2 emission and climate change are important side effects and hence the path that India will take will have to be different from the path which was taken by the developed countries in their growth process.  India will have to be more energy efficient.  

The oil crises of 1973 and 1979 were initially thought to be one time events but now they have become regular features of the hydrocarbon industry. The volatility in oil and gas prices does not seem to obey basic economic laws. The prices of crude oil which was in the range of about $20/bbl in 2002 went up to $40/bbl in 2004 and $147/bbl in 2008 and since 2009 it has been oscillated between $40/bbl to $80/bbl. Gas follows a slightly different rhythm but it has followed the volatility in oil quite closely with prices oscillating between $2/btu dollars and about $12/btu.

For any developing country the stability in energy resource prices is very important and therefore the role of the government becomes important.  But the role of government in respect of pricing, taxation, subsidy, marketing freedom etc., has to be carefully considered. Much of the effort towards economic liberalization in the petroleum sector were taken at the time when Mr TNR Rao was the Secretary, Petroleum and later given a big push when Dr Kelkar was Secretary, Petroleum. Liberalization was pursued both in the upstream as well as downstream. The New Exploration and Licensing Policy (NELP) was implemented and the DGH was established but now once again we seem to be at a loss on finding the right balance between the role of the government and the role and the regulator.

In downstream distribution, marketing and pricing we are moving towards freedom of distribution, freedom of pricing and freedom of marketing.  But because of high volatility and the consequent anxiety of the Government to protect the interest of the consumers, particularly the urban and rural poor, it has stepped back into the policy realm. Now we do not know when a balance between the two roles would be found.  We are not sure as to where the role of government ends or where the role of regulator begins. We cannot afford to have a situation where every time there is a spike in oil prices either because pirates captured ships in the Indian Ocean, or terrorists captured a few engineers on Nigerian Oil Fields or the President of Venezuela or the President of Iran or Al-Qaeda makes a statement, we go back to the Cabinet or to an empowered Group of Ministers to address the challenge. As long as the Government is preoccupied with such day to day fire fighting activities it is unlikely that we will see any long term energy planning from the Government. 

Mr Manish Tiwari, MP:

One of the most critical strategic decisions which Winston Churchill made when he was the first Lord of the Admiralty was to get the Royal Navy to shift from coal to oil. At that point in time what impelled that decision was the confidence which Great Britain had in its ability to secure those energy supplies. As you traverse the path of time from the first decade of the 20th Century to the first decade of the 21st century, countries which have occupied a larger role in international affairs have made the securing of energy supplies central to their security strategies. As India or Indian companies, both national oil companies and the private oil companies go around the world in search for equity oil they are competing with interests which at times do not use the most legitimate and the most ethical of business techniques. The Indian State needs to evaluate its ability to support the initiatives of its companies with the kind of muscle that is required to take on stiff competition. Our immediate neighbour China’s strategy offers some insight. The key girdle lock in its entire energy development paradigm was the Malacca straits because the bulk of China’s hydrocarbon supplies were routed through the Malacca straits. The construction of the Gwadar port right next to the Straits of Hormuz and its busy oil shipping lanes was the result of a strategic decision of China to resolve the Malacca dilemma.  

Dr. Vijay Kelkar, Chairman, Finance Commission

India’s growth momentum requires an assured supply of energy at internationally competitive prices for producers whether industry or agriculture. India’s economy is still in transition and it seems that at least the next two decades the economy will be driven by fossil fuels. Unfortunately, this country is not well endowed with fossil fuels which are available at low price. India is increasingly becoming import dependent for its energy sources. Hence price volatility has become more critical, not just for individual producers and consumers but for macroeconomic stability. Indian macroeconomic stability now depends critically on hydrocarbons and their prices.

It is true that oil prices have become more volatile in the last 5-6 years. A recent study shows that amongst all commodities oil prices is more volatile than that of gas or coal in the same period. Fortunately, our country is now much better able to handle this volatility in terms of macroeconomic management. For instance, we have episodes of four price rises: in 1973-74 the oil embargo, 1979-80 Iran-Iraq war, 1990-91 first gulf war and then the volatility in the last five years. The impact of volatility in the last five years is the highest in terms of trade.  It is likely that 1.5 to 2 percent of GDP was exported out of India because of high oil prices. In spite of that the Indian economy did not falter in terms of growth. It is a source of great strength that the Indian economy has now become more competitive; we have learnt to manage shocks and did quite well.  We had a combination of policies - we had policies of protecting consumers by taking on the budget some of the ‘off balance sheet’ liabilities, and passing on some liabilities to upstream producers – which enabled us to withstand the shock quite well. What is important now is how India is going to face not just volatility but high prices. It is more important to recognize that energy prices are going to be high. The era of cheap energy is over and the sooner we spread the message across to the economy the better it would be for the economy and society.  India has proved that it can handle volatility. That is no longer a serious matter of concern any more.  We have got market instruments in place. The private sector is using market instruments such as forward markets, future contracts, long term contracts and a number of other instruments quite effectively.  It would be logical to allow our public sector to use these instruments. 

Even after taking into account the decline from $140/bbl to $70/bbl, the price of oil on average is still higher than what it was in the last 30 years in real terms. In other words even with the global recession, oil prices have not gone down as sharply as they should have. That is because there are genuine market factors in play. The market structure has three elements which suggest that prices will be high in the coming years. On the demand side, the demand from emerging economies is increasing. This is something that cannot be arrested.  Every growing economy of Asia, Africa, Latin America as well as the oil exporting countries want more energy and so demand is increasing. The second force on prices is the greater awareness of environment. Eco-taxes will come on consumption of carbon which means that prices will go up. This too is inescapable. You have to be a believer that the earth is flat to believe there is no environmental crisis. There is an environmental crisis and most of the scientific evidence suggests that. This means eco-taxes are going to be added to energy prices. That is the second reason on demand side why are we going to get high prices.

On the supply side, there is evidence that the spare capacity in OPEC is now much lower than what it used to be. The spare capacity used to be the balancing wheel in the oil market and it is disappearing. Furthermore on the supply side, the days of finding jumbo fields or giant fields seems to be receding which means that the supply side will also will get little tighter. The third market structure is such that there is ‘financialisation’ of commodity markets that has increased in the past decade. They play both a positive role and negative role.  The hedge funds, private equity funds and other financial operators find that this is a very important asset class which they can use to diversify their own risk but only at the cost of increasing the risk of the oil prices.  So, although their own risk goes down, the oil price risk goes up.

The remarks are compiled from the recorded transcript of the presentations by the respective speakers. The remarks are strictly not to be reproduced or quoted. 

to be continued…

Courtesy: 8th Petro India Conference on ‘Managing Volatility & Growth: A New Energy Paradigm’ organized by the Observer Research Foundation (ORF) and the India Energy Forum (IEF) on November 24-25, 2009, New Delhi.         

Power Sector Inefficiency – Economic & Legal Implications (part II)

Shankar Sharma, Power Policy Analyst, Thirthahally

Continued from Volume VI, Issue No. 43…


eople’s displacement is the most serious social implications of large conventional power projects. Since independence about 5 million people are estimated to have been displaced many of them few times in few decades, because of various large size projects, of which power projects are known to have contributed considerably. Dams, power project buildings, transmission lines, coal & ash handling facilities, nuclear buffer zones, staff quarters etc. have all consumed a lot of lands including a considerable amount of fertile agricultural and forest lands. As per the Integrated Energy Policy (IEP) the total installed power generating capacity in the country has to increase from the present level of about 160,000 MW to about 800,000 MW by 2031-32. About 70% of this total generating capacity is projected to be from coal power and about 20 % from dam based hydel power. This massive addition to the capacity through conventional power sources will require about 1 million acres of land, most of which will be fertile agricultural and forest lands, and which will displace a large number of people who are already economically and socially at a disadvantage. Agricultural production loss due to loss of fertile lands and the pollution due to such power plants has already provided clear cases of serious impact on the economy as a whole and on the welfare of the masses.

As per a recent report of the Planning Commission the average cost of supplying electricity is expected to be Rs 4.16 per Unit in 2009-10, while the actual average tariff for this is Rs. 3.37 per unit. Thus the average gap between the cost of supply and the tariff is about 89 paise per unit. The average recovery of cost is even less because of the inefficiency prevailing in the system. Such a huge gap year after year is having a big impact on the economy of the country.

There are major economic dimensions to this sorry state of affairs in the power sector. As per the report of the 13th finance commission, which was tabled in the parliament on 25.2.2010, unless the public utilities engaged in transmission and distribution of electricity take urgent measures to improve the efficiency of the same the combined losses at the national level may increase from Rs. 68,643 crores in 2010-11 to Rs. 1,16,089 cores by 2014-15. Such huge losses year after year have led to deprivation of adequate funding to other crucial sectors of our developmental process such as drinking water, poverty alleviation, health, education, rural infrastructure etc. These huge losses cannot be sustained; and have huge deleterious impact on the developmental front.  Except for few privately owned companies, there is probably not a single electricity supply company in the country which is financially healthy.  In most states the industries, which were established on the assurance of reliable electricity supply, are suffering greatly, and a large number of small scale units are reported to be closed every year due to unreliable electricity supply.  The inefficiency in the sector has meant that the actual cost of bringing electricity to the end users has become very high.

None of the conventional power plants can provide electrical power on a sustainable basis. Coal reserves in the country, though thought to be huge only few years ago, is now estimated to last not more than 3 or 4 decades because of the increasing amounts of coal extraction. About 75% of the petroleum products are already being imported, and the natural gas reserve also is not considered huge. With the thermal power capacity already at about 65% of the total, it is pertinent to question the wisdom of continuing to rely on this source of electricity on a sustainable basis. Energy security for all sections of our society cannot be assured on the basis of imported energy sources.

to be continued…

Views are those of the author

Author can be contacted at [email protected]

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

Continued from Volume VI, Issue No. 43…


he bid will be based on different weightage: network tariff (40%), the transportation rate for carting the gas, CNG compression charge (10%), connection to maximum number of households (30%) and size of the network in terms of inch-kilometre pipelines (10%) — to incentivise quick development of CGD network. EoIs in the pre-bidding process would be subject to a preliminary scrutiny, public consultation before being authorised by the Board. In normal case, the entire bidding and authorisation process would take about 150 days. So the evaluation of the bids will take about five months.

The bid winner will get a 25-year exclusivity on the use of infrastructure and five years’ marketing exclusivity for the particular geography the entity operates in. After the five-year period is over, other companies will be allowed to market gas in the city but will have to use the existing pipeline network for which it will have to pay a fee to the original operator. Companies such as Indraprastha Gas in Delhi and Mahanagar Gas in Mumbai, which already operate city gas distribution projects, would have to re-apply for authorisation. Also, the marketing exclusivity for these existing companies would be three years compared with five years given to companies operating in new cities.

Once awarded, project implementation in each city or town will take between 18 and 36 months and will involve a capital expenditure of around Rs 400 crore in the first five years. The bidders would have to quote their tariff for five years in their applications. However, the tariff can be given on a year-to-year basis and inflation can be factored into the equation.

One major challenge for the Board is the historical baggage that it has to carry as a burden. This has to continue in order to be able provide a level-playing field. There are other problems like market service obligations, where the Board has to ensure quality of service, and these are part of the authorisation process. The Board is trying to ensure that it protects the consumer and ensure that he gets the best value for money. The ultimate challenge before the board is fostering fair trade and competition. The ultimate test for the Board would be that of being able to bring about a reasonable degree of fair trade and competition among the players even as it ensures the best value for the consumer.

Outstanding Regulatory Issues

Most of the regulations of the PNGRB are attuned to the ISO 9000 standards. PNGRB has specified a post-tax 14 per cent rate of return on the capital employed for these entities and they have given detailed calculations for this.  Rate of return may be linked to the PLR enabling revisions to take place with changing circumstances. An ROR of 14 per cent may not be very attractive for an investor because borrowing costs may be higher.  PNGRB seeks a long term gas supply agreement in 90 days which is rather short. LPG is being subsidised in the country which limits the price at which you can sell piped natural gas.  CGD in some parts of the government is restricted to domestics and compressed natural gas (CNG). While that is understandable, to invest in CGD networks is serious business as one project entails investment of around Rs 300 crore to develop, industrial load assumes equal importance.

CGD network is a serious business with huge market service obligation and once you connect a household, you are unlikely to be able to disconnect it. Unfortunately, even today CGDs or gas supply to households is not considered as a utility service. Even the Supreme Court ruled this in a case between the ONGC and Gujarat Gas in the 1990s and said that CGD had a long way to go. With the regulatory board in place gas GCD networks may be considered as a utility with all the other provisions that a utility attracts.  As a CGD, a supplier has to ensure that a retail consumer is able to access all the gas he wants round the clock, 365 days a year. As a result of this and changing government norms, the supplier has to cut down on supply to a large number of our industrial consumers just so as to maintain supply to our retail consumers. The regulator has focussed upon is building redundancy, which is more in the sense of business continuity. Multiple sources must be developed for CGD networks so as to tackle natural emergency situations sucg as floods or cyclones. 

The first CNG corridor in the country, which is running quite successfully, goes from Mumbai to Ahmedabad and then to Rajkot. There are six operators on that corridor. And that is the problem because all six have different standards. Creation of CGD safety standards is a primary requirement. This is essential so that these become a Bible for all entities seeking to enter this business. The next area is of developing and multiplying areas of core competencies to handles operations in different cities. This is important as the manpower has to work in a high safety oriented field. In this context a CGD training institute may be set up enabling all players to draw from a homogenous pool of capabilities. There has to be common understanding of regulatory acts and mechanism to avoid contradictions for synergy with the objectives. The regulator needs to be empowered to have say in gas availability / allocation to all CGD entities, which are not gas producer or major gas marketer as also in gas purchase pricing for CGD at affordable price for public good.

It is important that there should be single window clearance from various statutory bodies. In addition, sharing of resources like inventories at reasonable price should be encouraged along with pipeline connectivity from pipeline infrastructure provider. One key issue is that of customer acquisition. The way the city gas networks are now going to be developed is going to be fundamentally different from what was done in the past. Earlier, it was done in a more organic manner. The people who are going to get the authorisation now get a five –year exclusivity holding and therefore have to proceed with the network development fast to take full advantage of this. This would also mean a whole new paradigm for network development.  The other key challenge is that of getting the right suppliers in place.  Imagine a situation, where 10, 15 or 20 cities will be trying the build their networks within a year. Are there enough suppliers supplying steel pipes? Metering equipment? Are there enough construction crews to install those pipes? Entities which are planning a serious entry into this sector need to think about these aspects upfront and need to start securing some of these capabilities and in some cases, even building some of these capabilities. Last, but not the least, is the whole issue of efficient operations. Challenges pertaining to safety are going to be paramount, especially for people who are entering this sector, because one of two incidents can spoil a big brand name.

One major challenge for the Board is the historical baggage that it has to carry as a burden. This has to continue in order to be able provide a level-playing field. There are other problems like market service obligations, where the Board has to ensure quality of service, and these are part of the authorisation process.  The Board is trying to ensure that it protects the consumer and ensure that he gets the best value for money. The ultimate challenge before the board is fostering fair trade and competition. The ultimate test for the Board would be that of being able to bring about a reasonable degree of fair trade and competition among the players even as it ensures the best value for the consumer.

Opportunities in the Sector

Various entities and companies are likely to invest a total of Rs 120,000 crore for the implementation of eight sections of national gas grid City Gas Development in the country. Investment of Rs 40,000 crore is to be made in implementing eight sections of national gas grid (approx 8,000 km) and Rs 80,000 crore in 200 plus geographical areas (gas) for the CGD. Once a pipeline system is built by any entity, it is there for life. The government has allowed 100 percent FDI so this is a global opportunity not limited to Indian investors. There is also an opportunity for investors, not as infrastructure developers but as pure investors. Similarly, there is opportunity for consultants and manufacturers as well. For instance, testing and evaluation is a key area. Hitherto there were less stringent safety conditions but now this is a big concern. And then, there are opportunities for contractors, even in simple pipeline plumbing.


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


Note: Part V of the article on Oil & Gas Discovery & Production in India: Historical Milestones will be published in Volume VI, Issue 45

An Open Letter to Union Minister for Environment and Forests

Dated, 12th April, 2010

Dear Sir,

             Subject: Support for ministry’s principled stand on Acts of Parliament

Greetings from the Western Ghats.

The recent news media seem to be replete with reports that the Union Ministry of Environment and Forests (MoEF) is facing criticism that environment clearance to many projects, which will need either diversion of forest lands OR are proposed to be set up in environmentally sensitive areas, is being denied or delayed while seeking clarifications. The reports also indicate that few of your cabinet colleagues are bringing political pressure seeking dilution of the relevant regulations to get exemption from the provisions of many relevant Acts. A large number of law abiding and environmentally conscious citizens of this country are in support of the principled stand taken by MoEF on these matters.

The proponents of such ill-conceived projects need to be reminded that MoEF has been entrusted with the onerous responsibility of protecting our natural resources and environment through the Environmental Protection Act, the Forest Conservation Act and the Wild Life Protection Act.  In view of this critical responsibility the MoEF should not be seen as a rubber stamp of approval for every project, including the ill conceived projects.

Its is highly deplorable that high impact projects in such environmentally sensitive areas, such as a road through a protected forest in Karnataka OR in Madhya Pradesh OR Hubli-Ankola railway through thick forests of Western Ghats OR Gundia Hydel Project in Western Ghats, which may reduce the travel time by an hour or two OR reduce the distance by few kM OR provide few MW of power for wasteful uses, are considered highly essential to seek exemptions as compared to the integrity of thick forests or the conservation of rich bio-diversity. These people seem to be completely ignorant of the criticality of rich bio-diversity we have in our forests, and the fact that the forest & tree cover in the country is already below 23% against the national target of 33%.

People, who are aware of the destruction of our nature through unscientific mining activities, are also satisfied that you have taken a firm and principled stand against the enormous damage being caused by the mining.  We are happy to acknowledge your stand that almost one-third of the country’s top grade coal reserve areas would not be available for mining as these areas are now considered to be ecologically very fragile. We think that in fact almost all coal mines were, or are, or will be found to be, below thick forests.  The Integrated Energy Policy which envisages increasing the coal power capacity from the present level of about 80,000 MW to about 600,000 MW by 2031-32 must be reconsidered seriously in this context.  Large number of additional coal mines required to support such massive coal power capacity expansion will not only reduce our forest cover (which are the best sinks of CO2) considerably but also will seek huge quantities of fresh water, which is already getting scarce. These additional mines will irreversibly destroy water security, biodiversity security, food security and national culture, as well as contributing to global and regional climate change. Our country must utilize the plentiful free energy from the Sun instead of continuing to damage water bodies, soils, plants, animals and people irreversibly through outmoded nineteenth century ideas of limitless economic growth. If pressure lobbies are allowed to twist the laws of the land then various commitments by the government to its own people,  such as National Action Plan on Climate Change, will have no meaning, and we can forget our various commitments to the international community on Global Warming. There are any number of scientific reports in the international arena, which are consistently advocating the urgent implementation of environmentally sustainable policies through application of the law in a rigorous and timely manner before it is too late to safeguard the flora, fauna and the vulnerable sections of our society.

Popular support to the MoEF in your endeavors in this regard can be guaranteed.

Yours sincerely

Shankar Sharma, Power Policy Analyst, Thirthahally, Karnataka

Views are those of the author

Author can be contacted at [email protected]






Gas production from KG basin uneconomic at $4.20/mmBtu: ONGC

April 15, 2010. State-owned Oil and Natural Gas Corp (ONGC) said it will not be economically viable to produce gas from its Krishna-Godavari basin block at current sale price of $4.20 per mmBtu. ONGC, which has made 10 gas finds in a block that sits next to Reliance Industries' prolofic KG-D6 block off the Andhra coast, wants over $7 per million British thermal unit as gas price. The government has fixed $4.20 per mmBtu as the sale price of gas from RIL's KG-DWN-98/3 or KG-D/ block for five years. These rates, which are now being considered as a benchmark, are lower than $5.7 per mmBtu that gas from BG-led Panna/Mukta and Tapti fields command. ONGC plans to begin gas production from KG-DWN-98/2 block in 2015-16, later than previously anticipated 2013.  Before ONGC, Gujarat State Petroleum Corp (GSPC)-- a Gujarat government firm-- will begin gas production from its KG basin block. It remains to be seen if the government will approve a higher price for GSPC gas. 

Petrobras keen to exit Indian block: ONGC

April 15, 2010. Brazil's Petrobras is keen to exit from an exploration block operated by India's state-run Oil and Natural Gas Corp. Petrobras holds 10 per cent in the deep-sea exploration block in the India's gas-rich Krishna-Godavari basin. 


Private oil co keen on refinery at Cairn’s Rajasthan field

April 19, 2010. A leading private oil refiner is willing to build a well-head refinery at Cairn India’s Barmer oil-field after the Rajasthan government has agreed to give tax concessions.  The state government may pick up a 26% stake in the proposed refinery project, but the name of the prospective promoter was not disclosed.   

Reliance to shut VGO unit for a month

April 19, 2010. India's top refiner Reliance Industries plans to shutdown a 100,000 barrels per day (bpd) vacuum gas oil (VGO) hydrotreater at its old refinery for about a month, an industry source said on Monday. "VGO hydrotreater will be shut for 20-30 days to change the catalyst. Reliance's old 660,000 bpd refinery at Jamnagar has two VGO units each with 100,000 bpd capacity. There would be no impact on throughput due to the shutdown.  A VGO hydrotreater removes sulphur from heavy feedstock to produce naphtha, jet fuel and liquefied petroleum gas. 

Petron Eng bags Rs 1.8 bn contract from IOC

April 19, 2010. Petron Engineering Construction said it has bagged a contract worth Rs 1.8 bn from state-run Indian Oil Corporation for its Paradip Refinery Project.

The company has bagged the order for engineering related works at Paradip Refinery Project, Petron Engineering said in a filing to the Bombay Stock Exchange (BSE). The scope of work includes design, engineering, procurement, construction at the project site, it said.  

India Chennai Petro puts new refinery plan on hold

April 16, 2010. India's Chennai Petroleum Corp has put on hold its plans to build a new 300,000-barrels-per-day refinery at Ennore in southern India as it had not received environmental clearance from the government.

Chennai Petroleum will go ahead with the planned expansion of its existing 210,000-barrels-per-day (bpd) refinery at Manali in southern India. By the end of this year, it will raise the capacity of a 76,000 bpd crude unit at Manali by 12,000 bpd for an investment of 4 billion rupees ($90.18 million.

HPCL shelves refinery at Vizag

April 15, 2010. State-run Hindustan Petroleum has "shelved for now" its planned 300,000 barrels-per-day refinery and associated petrochemical project at Vizag.

Transportation / Trade

BP rebuilding India trade operations, hires head

April 19, 2010. Oil major BP Plc has shifted back its India trade-related operations from Dubai and has hired a former Essar executive to head its marketing activities in the country. Last October, BP temporarily shifted its Indian supply and trading business to Dubai following the resignation of four of its five-member trade team.

BP's local desk mainly handles marketing and supply of fuel in India from its bases in Mumbai and New Delhi, while the firm's Singapore and London offices manage trading operations. 

IOC, HPCL, BPCL losing Rs 2.65 bn a day on fuel subsidies

April 16, 2010. State-owned Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum are collectively losing Rs 2.65 bn per day on selling fuel below cost and may end the fiscal with a Rs 874.40 bn revenue loss. IOC, BPCL and HPCL currently sell petrol at a loss of Rs 6.68 per litre, while the loss is Rs 5.81 a litre on diesel, Rs 18.42 per litre on PDS kerosene and Rs 265.27 per 14.2-kg LPG cylinder.  Three fuel retailers lost Rs 479.60 bn on selling fuel below cost in the 2009-10 fiscal. The government has not yet said how it will make up for the projected losses for this fiscal.  For FY'10, losses on petrol and diesel are to be met by upstream firms like ONGC and the government was supposed to shoulder the under-recovery on cooking fuel. However, the government has not kept its part of the deal.

Oil firms raise ATF price by 3.2 pc

April 15, 2010. For the fourth time in two months state-owned oil retailers raised jet fuel or ATF prices, this time by 3.2 per cent, in step with rise in global oil rates. Aviation turbine fuel (ATF) rates in Delhi have been raised by Rs 1,338 per kilolitre, or 3.2 per cent, to Rs 42,179 per kl with effect from midnight tonight, an official of the Indian Oil Corp, the nation's largest oil firm, said.  

Jet fuel constitutes roughly 40 per cent of the operating cost of an airline and today's increase in fuel rates would put extra burden on Indian carriers. The hike comes on back of a 1.4 per cent increase on April 1 when prices in Delhi were raised to Rs 40,841.40 per kl. In March, rates were raised by Rs 2,286.03 per kl in two instalments.  

Pipavav Shipyard in talks to buy European oil rig, shipping co

April 15, 2010. Pipavav Shipyard is in talks to buy an oil rig and a shipping company in West Europe. The deal size would be around USD 100-million out of which Pipavav will put USD 40-million through equity and another USD 60-million by raising debt. The deal is expected to be concluded in the next four-to-eight-weeks. With this acquisition, Pipavav Shipyard will develop its offshore service assets and increase its global footprint in the offshore services arena.  

Oil spill cleaned at Rushikulya beach, no threat to Turtles

April 15, 2010. The authorities have been able to clean almost 100% of the furnace oil that leaked from a ship two km off the Gopalpur port in south Orissa and got scattered on the coast after being pushed by high tide. The ship, laden with non-coking coal and sailing from Indonesia, had anchored nearly two km away from the port at Gopalpur in Ganjam district, about 170 km from here, when a barge hit it causing oil leak on Monday evening. More than 100,000 Olive Ridley turtles had nested last month on the Rushikulya beach and millions of eggs were laid by them.

Policy / Performance

Govt plans to 'subsidise' imported LNG

April 19, 2010. The government may subsidise costly imported gas (LNG) by making users of cheaper domestic gas pay more under its unique plan to rationalise gas prices.  Currently, gas imported in liquefied form (LNG) costs $5.7 per million British thermal unit as against $1.82 rate for fuel produced from state-owned ONGC's fields and $4.2 per mmBtu for gas from Reliance Industries' KG-D6 field.  The ex-terminal price of liquefied natural gas (LNG) imported by Petronet LNG at Dahej from Qatar on long-term contract is slated to increase to $9.01 per mmBtu by 2012 and unless 'subsidised' it would have resulted in rise in electricity generation cost and spike in fertiliser subsidy. The new contract that Petronet has entered into are at least 25 per cent higher than the 2012 price and the Oil Ministry has asked the state-run gas utility GAIL to study making LNG affordable.

Provisional gas transmission tariff for Reliance, GAIL networks approved

April 19, 2010. The Petroleum & Natural Gas Regulatory Board (P&NGRB) has approved the provisional tariff for gas pipeline networks operated by Reliance Gas Transportation Infrastructure Ltd (RGTIL) and GAIL (India) Ltd, which is lower than the tariffs proposed by the entities. In an order passed for RGTIL operated East-West Pipeline the Board has determined a levelised tariff of Rs 52.23/mBtu. This was lower than what RGTIL had proposed, based on the actual volumes of first year of operations – a levelised tariff of Rs 55.91/mbtu. The initial proposal of RGTIL was of Rs 53.64/mBtu. RGTIL charged Rs 15/mBtu for the first zone (initial 300 km from the delivery point) and in the second zone it is Rs 61.77/mBtu.  For RGTIL, the tariff will be applicable from the date of the commissioning of the network – April 1, 2009.

Petroleum Ministry assures more gas allocation to plants

April 18, 2010. The Ministry for Petroleum and Natural Gas has assured additional fuel allocation for expansion of gas-based power projects, some greenfield plants of the State-owned AP Genco and fertiliser plants in the next round of gas allocation. During a meeting between the Union Petroleum Minister, Mr Murali Deora, and Andhra Pradesh Chief Minister, Dr K. Rosaiah, held at New Delhi, the former assured additional fuel allocation from KG basin gas, urging the State to identify entrepreneurs and industrial consumers for gas linkage.

Oppn plans cut motion against fuel price hike on April 27

April 17, 2010. More trouble is brewing for the Manmohan Singh government with the opposition planning to move a cut motion against the fuel price hike on April 27 in the Lok Sabha. Although petroleum and natural gas ministry is not being discussed in the House, the opposition wants to bring a cut motion on it. If the Speaker Meira Kumar admits it in the House, this will be the first time that a cut motion is taken up on a ministry which is guillotined.

At a Business Advisory Committee (BAC) it was decided to discuss demands for grants of only five ministries — external affairs, water resources, rural development, tribal welfare and national highways — due to “paucity of time”.

ONGC may challenge tax-sop rollback on gas prod

April 15, 2010. ONGC wants to challenge the government's decision to withdraw the seven-year tax holiday on production of natural gas in a high court as the economics of its deep-sea projects will be severely hit because of the decision. The then finance minister P Chidambaram, had in 2008, modified the definition of mineral oil to mean that it does not include production of gas for the purpose of grant of the seven-year break from payment of I-T.    

India to have strategic oil reserve by Oct 2011

April 15, 2010. India will complete building its first strategic crude oil storage by October 2011 in an effort to insulate itself from supply disruptions.

India, which is 75 per cent import dependent to meet its crude oil needs, is building under-ground storages at Visakhapatnam in Andhra Pradesh and Mangalore and Padur in Karnataka to store about 5.33 million tons of crude oil. This is enough to meet nation's oil requirement of 13-14 days. Visakhapatnam will have capacity to store 1.33 million tons of crude oil in underground rock caverns.  

A similar facility in Mangalore will have a capacity of 1.55 million tons and would be mechanically completed by November 2012. A 2.5 million tons storage at Padur, near Mangalore, would be completed by December 2012.

IOC plans 1st Azeri, Algerian oil deals

April 14, 2010. State-run Indian Oil Corp is planning its first-ever term crude oil import deals with SOCAR and Sonatrach, as it aims to lift 15.4 per cent more low sulphur oil in the current fiscal.  Terms of the deals to import 10,000 barrels per day (bpd) each of Tunisia's Zarzaitine grade from Algeria's Sonatrach and Azeri light from Azerbaijan's SOCAR had been finalised, but the agreements were yet to be signed.  IOC, which normally buys the two grades through spot tenders, plans to import 150,000 bpd of low sulphur crude through annual term deals in the current fiscal year that began on April 1. India's top refiner annually imports crude for its 10 refineries, which have a combined capacity of 1.2 million bpd.



BHEL bags Rs 63 bn order from RPCL

April 19, 2010. State-owned BHEL said it has bagged a Rs 63 bn order for setting up an energy-efficient power plant in Karnataka. The contract envisages design, engineering, manufacture, supply, erection and commissioning of two coal-fired thermal units of 800 MW each with supercritical parameters (energy efficient and environment friendly) at Raichur in Karnataka.  

RPCL is a joint venture company of Karnataka Power Corporation Limited (KPCL) and BHEL, which has been set up to build, own and operate supercritical thermal power plants in Karnataka.  BHEL is also executing a contract for supply of supercritical steam generators to APGenco’s 2x800 MW Krishnapatnam Thermal Power Project, which is at an advanced stage of completion, the statement added.

ABB bags orders worth Rs 1.45 bn from BRBCL

April 19, 2010. Power and automation technologies major ABB India said it has bagged orders worth Rs 1.45 bn from Bhartiya Rail Bijlee Company Ltd (BRBCL) for power-related works. The company has bagged the contracts for construction of substation and transformers to connect newly established Nabinagar thermal power plant to the railway network, ABB said in a filing to the Bombay Stock Exchange (BSE).

Bhartiya Rail Bijlee Company is a subsidiary of state-run power major NTPC in collaboration with the Indian Railways. BRBCL is commissioning 4x250 MW thermal power project at Nabinagar (Bihar) to meet the increased power requirements of rail networks in eastern and central India.

Water shortages hit power plants in MP

April 16, 2010. The Plant Utilisation Factor (PUF) or output of the state-owned thermal stations dipped to 62.87 per cent in the last financial year, the lowest since ten years, causing a huge loss to the MP State Electricity Board (MPSEB) mainly due to delayed rainfall. Besides, some thermal power units were also not taken up for annual overhaul and maintenance last year resulting in low PUF.  The installed thermal power generation capacity of Madhya Pradesh at present stands at 2857.5 Mega Watt (MW).

Videocon keen to set up power project in Punjab

April 15, 2010. Diversified business conglomerate Videocon Group said it is keen to set up a 1,000 MW thermal power project in Punjab with an investment of Rs 50 bn.  

NTPC, CIL may set up 2 power plants in Jharkhand

April 15, 2010. Public sector NTPC and Coal India have signed an agreement for setting up two 2,000 mw coal-based power projects in Jharkhand under a 50:50 joint venture.

Over 12.5 GW projects of Tenth Plan still stuck

April 14, 2010. Even in the penultimate year of the Eleventh Plan, power projects cumulatively adding up to 12,549 MW that were scheduled for commissioning in the Tenth Plan are still to come on stream. According to Government data updated till March 10, of the Tenth Plan projects that are still to be commissioned, nearly half are thermal projects in the Central sector, being implemented by utilities such as NTPC Ltd, Neyveli Lignite Corporation (NLC) and NEEPCO. Contractual problems with suppliers, delays in placement of orders, and hold-ups in the balance of plant packages are among the key reasons for the delays in case of the thermal projects, which total at 9,200 MW. Of these a majority, or 5,190 MW, are Central sector projects, while 1,036 MW are in the State sector and 2,974 MW in the private sector. Hydro projects which have slipped from the Tenth Plan and are yet to be commissioned include 2,321 MW in the Central sector and 558 MW in the State and 470 MW in the private sectors.

Transmission / Distribution / Trade

Tata Power may hike power tariff

April 19, 2010. Almost 60,000 consumers of Tata Power Company (TPC) across Mumbai will have to face increased power billing following State government's order to TPC to continue supplying power to R-Infra.  In addition, TPC is also facing a challenge to provide 100 MW to BEST, due to the State's order to continue power supply to R-Infra, despite the signing of a power-purchase agreement (PPA). 

Electricity, a scarce commodity in several parts of rural Kerala

April 18, 2010. Electricity has become a scarce commodity in several parts of rural Kerala, especially in Pathanamthitta district, where one of the major hydel project Sabarigiri is located. One stint of summer showers accompanied by winds had kept thousands of consumers, mostly households without power supply for four days (April 4-8).

Load-shedding in northern districts of Kerala

April 16, 2010. The Kasaragod, Kannur and Kozhikode districts in north Kerala may have to face intermittent load-shedding during the next few days on account of a problem with an incoming transmission line from Karnataka. Sources in the Kerala State Electricity Board (KSEB) said that a power transmission tower had collapsed along the route. This is expected to cause a likely shortfall of 170 MW in availability of power in the local grid, which cannot possibly be made good by diverting power from the lines feeding the rest of the State.

AP Transco mulls cost share approach for industrial consumers

April 14, 2010. Transmission Corporation of Andhra Pradesh is working on a new revenue share model which will help high tension (HT) industrial consumers access additional power provided they bear the extra cost burden. While representatives from the Confederation of Indian Industry and the Federation of Andhra Pradesh Chamber of Commerce and Industries and HT consumers have agreed to share the cost burden if additional power is supplied, this move is subject to regulatory approvals.  The Open Access system has also benefited some of the HT consumers in the State. About 50 MW is now being traded through the open access system, where individual consumers with over one MW demand have the right to procure power from either their own captive plants in other locations or purchase from merchant plants.

Policy / Performance

A Rs 1.35 bn power generation plant to come up in Pondy

April 20, 2010. Puducherry Administration has drawn up a plan to set up a co-generation power plant on the premises of the Cooperative Sugar Mill at Lingareddipalayam near here at a cost of Rs 1.35 bn using the bagasse available from the mill.  The government had also decided to start a distillery to produce arrack in Bahoor using the molasses produced by the sugar mill.  

Videocon plans 5 GW power projects

April 18, 2010. Leading business conglomerate Videocon said it has plans for generating 5,000 MW of power through projects in states like Gujarat, Chhatisgarh, Maharashtra and West Bengal. On fuel linkage the company has acquired a coal mine in Indonesia with capacity of 200 million tonne of coal and has plans to acquire a few more.  The company has also acquired land to expand the Pipavav project and generate additional 1200 MW of power.  Besides this, the company has planned to set up 1200 MW power plants in Maharashtra and West Bengal each and has acquired land for the same.

Maharashtra clears Tata Power's Shahapur plant rehab package

April 17, 2010. A high-powered group of secretaries formed by the Maharashtra government has cleared Tata Power Company’s compensation and rehabilitation package for the Shahapur plant in Raigad district.

The approval by this panel, which has secretaries from departments like revenue and rehabilitation, industry and power, should come as a big relief for the 2,400-mw plant that has been opposed by the locals and environmentalists.

L&T evinces interest to put up power shop in Jharkhand

April 17, 2010. Larsen & Toubro has evinced interest to put up a thermal power plant in Jharkhand. The state was more interested to work with a couple of big industries which could help the state meet its power requirement in the coming years. The Shibu Soren government has said that it would make Jharkhand an 'Engery Hub' by 2014. 

JSW Energy to buy majority stake in S. Africa coal mine

April 16, 2010. JSW Energy will acquire a majority stake in South African Coal Mining Holding (SACMH) for about Rs 382 bn ($85 million) besides making an open offer to the minority shareholders.

According to the deal, JSW Energy, through an yet-to-be launched wholly-owned overseas arm, will purchase the SACMH stake from Strider Holdings and RBH Resources at 30 cents a share. The company will buy 49.80 per cent in Royal Bafokeng Capital from Strider Holdings with an option to acquire the remaining stake. JSW Energy will also acquire Mainsail Trading 55 (Proprietary), an investor in SACMH, from RBH Resources Holdings.

Star rating helps save 1.65 GW: Bureau of Energy Efficiency

April 15, 2010. Initial estimates by the New Delhi-based Bureau of Energy Efficiency (BEE) suggest that around 1,650 MW of electricity was saved countrywide during FY10 through the use of star-rated air-conditioners, refrigerators, tube-lights and colour TVs. This includes nearly 350 MW saved by CTVs alone.While the one- to five-star labelling for fridges, ACs and tube-lights became mandatory from January 2010, the star-labelling for CTVs and LCDs is still voluntary. BEE expects to bring these too under the mandatory regulation by March 2011.




CNOOC hits Black Gold in Eastern Bohai Bay

April 19, 2010. CNOOC made a discovery in the Penglai 9-1 block in waters measuring 95 feet (29 meters) in the eastern Bohai Bay. Drilled to a total depth of 4,938 feet (1,505 meters), the discovery well PL9-1-2 struck oil pay zones with a total thickness of 253 feet (77 meters) and fractured a zone of buried hill with total thickness of 518 feet (158 meters). A drill stem test was performed, and the well flowed at an average rate of 540 bopd. CNOOC operates the block.

Gas OPEC boosting output sends prices lower for worst commodity

April 19, 2010. Algeria, Africa’s biggest exporter of natural gas, is getting no help from Russia and Qatar in curbing production to increase prices in this year’s worst- performing energy commodity.

Chakib Khelil, Algeria’s energy minister, plans to seek commitments from 11 gas exporting nations to reduce output and end a glut that’s caused U.S. prices to fall 28 percent since December. Russia, holder of the world’s largest reserves, said it doesn’t intend to cut supply, and Qatar, with the third- largest reserves, is opening new export facilities.

The fuel’s value is falling as Qatar raises liquefied natural gas output 44 percent this year and new supplies from North American shale rock cut U.S. imports to their lowest in more than a decade last year. Purchasers have reduced their take from long-term contracts priced to oil and bought more from spot markets such as the U.K., where the price for same day delivery is 21 percent below its five-year average.

Norway cuts Lofoten oil view, boosting greens

April 16, 2010. Norway slashed about a third off its oil and gas resource estimate for the waters off the Lofoten and Vesteraalen islands, bolstering those who oppose opening up the pristine Arctic region for drilling.

The Norwegian Petroleum Directorate, a government agency tasked with developing the country's offshore oil and gas riches, said the Arctic island waters could hold around 1.3 billion barrels of oil equivalent. This estimate comes after seismic studies of the waters and compares to a previous one of about 2 billion barrels.

Mexico's Pemex bullish after deepwater natgas find

April 15, 2010. Mexico's state oil monopoly Pemex has made a significant deep-water natural gas discovery. Pemex now believes the potential of the area could be as high as 5 trillion to 15 trillion cubic feet of natural gas.

The company is planning to drill a second well at Lakach to learn more about the size of the gas field once the rig that drilled the Labay probe can be moved into position. The Labay exploration well was the fourteenth drilled by Pemex in the deep waters of the Gulf of Mexico, where it has launched a major exploration campaign.

Shell suspends oil production at Nigeria’s EA field

April 14, 2010. Royal Dutch Shell Plc’s Nigerian unit suspended oil output at its offshore EA field to enable repair works after a storm. Production of some 100,000 barrels of oil equivalent per day has been deferred. EA has an installed capacity to produce 115,000 barrels of crude a day. The equipment connecting the floating, production, storage and offloading vessel for the oil field, which was scheduled for overhaul in May, had to be fixed urgently following a storm.  Shell operates the EA field as part of a joint venture in which state-owned Nigerian National Petroleum Corp. has a 55 percent stake.


Sinopec mulls plan to build refining complex in Singapore

April 20, 2010. China Petroleum & Chemical Corp. (SNP), the nation's largest refiner by capacity, is "studying the investment opportunity" to build a large refining and petrochemical complex in Singapore. The National Development and Reform Commission, China's top economic planner, in January approved the company's plan to invest and build a lubricant plant in Singapore.

The company is considering expanding the plant into a complex. The complex would be located on Singapore's Jurong Island, with a crude oil reserve depot and a large refinery in addition to the lubricant plant. 

China's April crude runs likely at record high

April 19, 2010. China's refinery crude runs look to be heading for another all-time high in April, bolstered by strong economic growth and a recent fuel price rise, and given a boost by stockbuilding ahead of the World Expo due to kick off in Shanghai.

Though runs may dip next month due to planned maintenance at some large refineries, crude throughput is expected to grow steadily later this year with new refining capacity scheduled to come online and the economy expanding at high speed. 

Refiners doing 'yeoman's work' meeting demand - API

April 16, 2010. U.S. refineries produced more gasoline this March -- at 9.3 million barrels per day -- than any previous month on record. March gasoline deliveries (a measure of demand) were higher -- at 9.2 million barrels per day -- than any previous March.

The highest amount of gasoline ever delivered was 9.6 million barrels per day in July 2007. Total March deliveries of all products, including gasoline, distillate, kerosene-jet fuel, and residual fuel, rose 3.5 percent from a year ago.  

Indonesia's Chandra Asri may join Aramco to build refinery

April 15, 2010. Indonesia's PT Chandra Asri will likely team up with Arabian American Oil Company (Aramco) to build a US$1 billion oil refinery to produce naphtha in the country.

The Saudi company is the only one serious in guaranteeing crude oil supply to feed the naphtha factory planned by the country's largest petrochemical company, a company official said.

There are a number of other companies indicating interest but all talks are still in the initial phase.  Chandra Asri will need naphtha to guarantee supply of the feedstock for its ethylene and propylene production units.

Libya seeks JV partner for refinery revamp

April 15, 2010. Libya is expected to finalize the sale of a 50%-stake in state-owned Azzawiya refinery this year as part of plans to modernize the country's refining sector and help it meet rising domestic product demand.

Libya plans to sell the share in its second-largest refinery to an international oil company as it seeks to upgrade and expand its domestic facilities.

Azzawiya, which has capacity to process 120,000 barrels a day of crude and largely supplies the local market, is in need of investment and a revamp.

China raises diesel, gasoline prices 4.6 pc on crude

April 14, 2010. China, the world’s second-largest energy user, will increase gasoline and diesel prices by as much as 4.6 percent after global crude costs climbed. The average retail gasoline and diesel price will rise by 320 yuan ($47) a metric ton, the National Development and Reform Commission said.

The NDRC said the fuel price gain will add 7 basis points to the April consumer price index month-on-month. The increase will boost costs for manufacturers and farmers and may add to inflationary risk as the Chinese economy, the world’s third biggest, expanded at the fastest pace since 2007 in the fourth quarter.

Transportation / Trade

Kinder Morgan to expand Cochin Pipeline

April 20, 2010. Kinder Morgan announced plans to modify and expand the existing Cochin Pipeline system to provide a solution for transporting natural gas liquids (NGL) from the Marcellus Shale Basin to fractionation plants and chemical markets near Sarnia, Ontario, and Chicago, Ill.  Kinder Morgan plans to build approximately 250 miles of NGL pipeline from the Marcellus Shale Basin in southern Pennsylvania to the Cochin interconnect at Riga, Mich.

Putin Heads to Vienna to conclude gas deal

April 20, 2010. Russian Prime Minister Vladimir Putin is scheduled to visit Austria to conclude a gas energy deal.   A deal between Russia and Austria to build a section of the planned South Stream gas pipeline on Austrian territory is to be signed. 

South Stream would send gas from the Black Sea to south-eastern and Central Europe. Austria is also involved in the rival Nabucco pipeline project that would give Europe access to Central Asian gas.

Clean Energy to expand CNG outlet network in NYC

April 19, 2010. Moving to expand its New York City network of CNG fueling facilities, Clean Energy Fuels has contracted to build and operate two new CNG stations in the area.

The first station will be located in Queens, and the second CNG station will open adjacent to Newark's Liberty International Airport. Designed to support growing fleets of CNG taxis, limousines and paratransit vehicles, the Queens and Newark Airport stations will also be available 24/7 for public access. 

US State utility regulators might oversee new pipelines

April 15, 2010. State utility regulators are concerned about the safety of pipelines used by Pennsylvania's booming natural-gas industry and are exploring whether they should have new powers to oversee that area and others.  Not all industry participants, however, are in favour of more oversight from the Public Utility Commission.

Major interstate and pipelines within Pennsylvania are under the jurisdiction of federal or state regulatory agencies. But the pipelines that connect wells to larger transport pipelines -- so-called gathering pipelines -- lie in a gray area. The number of gathering lines running from individual wells is unknown -- but is thought to be huge.  

Policy / Performance

Indonesian govt to offer 34 O&G blocks

April 20, 2010. The Indonesian government plans tenders for 34 oil and gas blocks in May this year, including 16 regular tenders and 18 direct offers.

The tenders will be made to coincide with the conference of Indonesian Petroleum Association (IPA) in Jakarta May 5-7. Most of the blocks are located in the eastern part of the country.

Mitsubishi keen on implementing LNG project

April 20, 2010. Mitsubishi Corp. said it is still keen on implementing a multi-billion U.S. dollar liquefied natural gas project in Donggi-Senoro, Central Sulawesi.  Mitsubishi is a 51 percent owner of PT Donggi-Senoro LNG (DSL), which will handle the gas project estimated to cost US $3.7 billion, including US $1.7 billion for the development of the gas reserves and US $2 billion for the LNG plant.

Mitsubishi will team up in the DSL with state-oil and gas company PT Pertamina and PT Medco Energi Internasional with shares of 29 percent and 20 percent, respectively.  Natural gas for the LNG is to be supplied from the Matindok gas field of Pertamina and Senoro gas field, which is jointly owned by Pertamina and Medco.

Suncor fires up gas production in Syria

April 19, 2010. Suncor announced that first commercial gas has been achieved from the Cdn $1.2 billion Ebla gas development in central Syria. First commercial gas follows the successful completion of commissioning, including the required performance testing, which has been approved by the Syrian Government. Suncor started selling production into the domestic market on April 19. Located in the Central Syrian Gas Basin, Ebla includes the Ash Shaer and Cherrife development areas, which cover more than 300,000 acres (approximately 1,251 square kilometers) combined.

Algeria Oil Min: New U.S. gas output leading to LNG glut

April 19, 2010. New natural gas production from the U.S., along with liquefied-natural-gas projects globally, is leading to an excess of capacity in liquefied natural gas, Algeria's energy minister said.

Chakib Khelil, speaking before a meeting here of the Gas Exporting Countries Forum, of which he is president, said the glut had led to a drop in prices to which the group was trying to find solutions. Amid a recent drop in demand, "the spectacular development of non-conventional gas production...[in North America] seems to be sustainable" due to technology, Khelil said. This will "generate idle capacity in re-gasification."

China lends Venezuela $20 bn, secures oil supply

April 19, 2010. China, the world’s second-biggest oil user, will lend Venezuela $20 billion and form a venture to pump crude from an Orinoco Belt block, President Hugo Chavez said as he promised to meet the Asian country’s energy needs.

The financing from China is separate from a $12 billion bilateral investment fund, Chavez said, and will pay for Venezuelan development projects. Venezuela currently sends China 460,000 barrels a day of crude oil.

The oil is used to repay the Asian country for $8 billion Venezuela used from the fund for infrastructure projects.  Spending by Chinese companies on mining and energy acquisitions reached a record $32 billion last year as fuel demand rises in the world’s fastest-growing major economy.

Pertamina assured of stake in Mahakam Block

April 16, 2010. The Indonesian government has ensured that state owned oil and gas company PT Pertamina will have a stake in the Mahakam Block now controlled by PT Total E&P Indonesie.  

The share of Pertamina, however, is yet to be decided.  Earlier, Pertamina said it was awaiting an answer from the government to its proposal to acquire 15 percent or 25 percent stake in the Mahakam block in East Kalimantan.  

Bahrain to join Iranian gas project

April 16, 2010. Iran and Bahrain are moving forward to strengthen economic ties, starting with a major gas exporting project to be signed soon.

Technicians and experts from both countries have made good progress on preparing for the project, said Iranian First Deputy President's Assistant Dr. Ali Agha Mohammadi. Dr. Mohammadi said, "Both sides have agreed on various technical aspects.

The next step will be the final signing of the project by the ministries." He said that a third party is also involved in the gas agreement, however he would not reveal who it was.

Industry opposes ‘monumental’ expansion of CFTC Power

April 15, 2010. Industry groups backed by Koch Industries Inc. and Cargill Inc. are fighting a Senate bill that would reshape almost 30 years of policy that allowed the $605 trillion over-the-counter derivatives market to surge and helped trigger the financial crisis in 2008.  

The Legislation would give the Commodity Futures Trading Commission authority over most of the U.S. market, the broadest expansion of its authority since becoming an independent agency in 1974.

The bill would give the commission the power to monitor over-the-counter trading, impose heightened capital requirements on companies with large swaps positions and limit the number of contracts a single trader can hold. The bill, which is expected to be taken up by the Senate this month, would push standardized swaps onto regulated exchanges or similar electronic systems.

At stake is control of one of Wall Street’s most lucrative businesses. Trading revenue in unregulated markets last year generated an estimated $28 billion for five U.S. dealers including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Morgan Stanley.

Schlumberger starts staffing in Iraq

April 15, 2010. Schlumberger Ltd has begun staffing an operation in Iraq, one of the first such moves by a Western energy company in decades.

The world's largest oilfield service company is finishing work on a 40-acre compound near Basra. Schlumberger expected to have 300 employees there by July and almost 600 by the end of the year.

Greens launch NAFTA action on Canada oil sands

April 14, 2010. Environmental groups launched a complaint against Canada under the North American Free Trade Agreement saying the country has failed to enforce anti-pollution rules governing its vast oil sands.

In the latest move in a long-running campaign to highlight the impact of oil sands development, the submission by Environmental Defense Canada, Natural Resources Defense Council and three citizens charges that toxic tailings ponds are being allowed to leak and contaminate ground water.

The ponds store residual oil, heavy metals and other byproducts of oil sands processing in the western province of Alberta. They are subject to environmental provisions under the federal Fisheries Act, the groups said.

Sinopec pays more for oil stake for energy security

April 14, 2010. China Petrochemical Corp.’s purchase of a stake in a Canada oil venture brings the nation’s spending on resources to $64 billion since 2005 and underlines its willingness to pay a premium for energy security.

The company known as Sinopec Group agreed to pay at least $650 million more for ConocoPhillips’s 9 percent stake in Syncrude Canada Ltd. compared with an estimate by Macquarie Securities.

The cost of the purchase could have been narrowed by a stronger yuan, currently constrained by a peg to the dollar. Gains in the Chinese currency would cushion the rising costs of oil and natural gas supplies needed to sustain the expansion of the world’s fastest-growing major economy.



Pacifica to bid for administration of Malaya plant

April 20, 2010. Pacifica, Inc. is bidding for a government contract to manage the 650-megawatt (MW) Malaya Thermal Power Plant in Pililia, Rizal, as part of a plan to expand into the power industry. Pacifica said it had submitted a letter of interest to the Power Sector Assets and Liabilities Management Corp. (PSALM) — the agency tasked to manage the privatization of state power plants — which put the independent power producer administrator contract for Malaya on the auction block. 

British Columbia to pursue controversial dam plan

April 20, 2010. British Columbia plans to pursue construction of a new hydro dam on the Peace River with the capacity to generate electricity for more 400,000 homes, though it is expected to meet with stiff opposition from environmental and native groups.

The Site C dam near Fort St. John, British Columbia -- which could cost as much as C$6 billion ($5.9 billion) -- according to some estimates -- was originally proposed in the 1970s, but the project was put on hold after the province concluded the electricity was not needed yet. 

British Columbia expects its electricity demand to increase between 20 percent and 40 percent over the next 20 years as the population on Canada's Pacific Coast continues to grow.

Brazil completes controversial Amazon dam auction

April 20, 2010. Brazil awarded a domestic consortium rights to build the world's third-largest hydroelectric dam in the Amazon rain forest in a chaotic auction amid criticism the dam is an environmentally hazardous money loser.

President Luiz Inacio Lula da Silva likely faces a prolonged battle over the 11,000 megawatt Belo Monte dam that he has heavily promoted despite opposition from a range of critics including Hollywood director James Cameron.

Government leaders say the project, due to start producing electricity in 2015, will provide crucial power for Brazil's fast-growing economy, but environmentalists and activists say it will damage a sensitive ecosystem and displace around 20,000 local residents.

Uganda power generation up 47 pc in 2 years to reach 361 MW-ERA

April 19, 2010. Uganda's electricity generation has increased 47% in the past two years due to more investment in the sector, the state-run Electricity Regulatory Authority said.

Power generation has reached 361 megawatts from 245 MW two years ago due to investments in hydro power stations as well as thermal generation plants, ERA said in a statement. Among the companies that have invested in the sector is Eskom Uganda Ltd., a unit of South Africa's state-owned power utility, Eskom, which operates the country's two hydro power plants on the River Nile. In the past seven years, Eskom has invested $7 million in upgrades and maintenance at the power stations.

AES bids for $481 mn BG power plant

April 19, 2010. U.S. power group, AES, has placed its bid for the $481 million Ballylumford power station in Northern Ireland. The seller, BG Group, is one of the companies created when British Gas was broken up and privatized.

BG, which also owns a 50% stake in the Seabank power station in Bristol, has appointed Goldman Sachs to sell its U.K. electricity plants. The oil and gas business, which recently sold its U.S. power plants, will now focus on big new oil and gas developments in Brazil and Australia.

Costa Rica to double power generation within 6 years

April 19, 2010. According to ICE’s Expansion of Electricity Generation Plan for 2010-2021, next year and through 2016 ICE will operate at least 14 more power plants. These generators would increase from 2400 to 4018 megawatts (MW) of installed capacity in the country.

According to the Instituto Costarricense de Electricidad (ICE), the contribution of these plants will cope with the rising electricity demand and reduce the risk of blackouts. Today, the electricity consumption of households, industries, businesses and institutions demand 1624 MW (peak).

Siemens gets order for Dutch power plant

April 19, 2010. Siemens Energy has received an order for the turnkey construction of a combined cycle power plant.  The purchaser of the 435MW Hemweg 9 plant is the Dutch utility Nuon, a subsidiary of Vattenfall. The gas-fired plant will supply power to more than 750,000 Dutch households The start of commercial operations is scheduled for late 2012 and Siemens will also be responsible for plant maintenance.

India, Bangladesh power venture to come up in Chalna

April 18, 2010. Chalna, a port town in southwestern Bangladesh, will be the location for a proposed 1,310 megawatt coal-fired power plant to be set up as a joint venture between Bangladesh and India.

A joint technical committee comprising officials of the Bangladesh Power Development Board (BPDB) and the National Thermal Power Corporation (NTPC) of India visited the site. The NTPC team has suggested that BPDB engage local consultants for the feasibility study on socio-environmental and ecological impact of the power plant.  Bangladesh and India signed a memorandum of understanding on exchange of power during off-peak hours (17 hours a day) when Prime Minister Sheikh Hasina visited India in January this year. 

Czech electricity demand, generation rise more than 2%yy in Feb

April 16, 2010. Czech net electricity demand in February was up 2.3% annually while the country's gross power production in the month was up 2.1% annually, the Energy Regulatory Office, or ERU.

Czech net power demand--which is total power production minus exports, electricity used in power generation and losses in grid--was 5.25 terawatt hours in February compared with 5.13 terawatt hours a year earlier. Czech total electricity generation was 7.58 terawatt hours in February compared with 7.42 terawatt hours a year earlier.

Australia's Wesfarmers says agrees coal prices

April 14, 2010. Australian conglomerate Wesfarmers Ltd said it has agreed to new quarterly coal price contracts, including a 70 percent increase for most of its Curragh coking coal. It said around 25 percent of Curragh's contracted tonnage remains under the annual pricing and based on the weighted average contract prices, annual pricing will increase by approximately 78 percent from April, compared to current levels.

Transmission / Distribution / Trade

European Commission orders increase of electricity trading capacity through Swedish borders

April 15, 2010. The European Commission has adopted a decision rendering legally binding commitments offered by Svenska Kraftnät (SvK) that will increase trade in electricity within Sweden and between Sweden and neighbouring countries contributing to a better allocation of resources and, ultimately, to lower prices for customers and end consumers.

The commitments address concerns that SvK may be abusing its dominant market position in the Swedish electricity transmission market by reducing the amount of export capacity on the interconnectors between Sweden and neighbouring EU and EEA Member States.

Tres Amigas proposed US grid hub attracts more than renewables

April 14, 2010. Tres Amigas, proposed as energy "hub" to allow new sources of wind and solar power to move from remote areas of the U.S. Southwest to power-hungry cities, is attracting interest from nuclear and fossil-fueled generators as well. To be built near Clovis, New Mexico, the Tres Amigas superstation will serve as a power hub, not only to only allow electricity to flow between the nation's three separate grids, but to improve the overall efficiency of the grid. 

Likened to a highway rotary, Tres Amigas will allow multiple power transmission lines from the three U.S. grids to feed power into and out of the superstation through multiple alternating- and direct-current converters connected by DC superconducting cables.

Policy / Performance

First SAARC level micro hydropower center set up in Nepal

April 20, 2010. The first South Asian Association for Regional Cooperation (SAARC) level micro hydropower center has been set up in Nepal. Set up with the help of the United States Agency for International Development (USAID), the center will be made autonomous, though kept under alternative energy promotion center at present. The center will provide national and international level trainings on micro hydropower, and exchange ideas and experiences in this sector.

Pekkarinen won’t propose 3 atomic reactors in Finland

April 18, 2010. Finland’s Economy Minister Mauri Pekkarinen said he won’t propose adding three new nuclear reactors.  Increases in the generation of renewable energy mean Finland doesn’t need three atomic reactors, Pekkarinen said.

Constellation Energy buys two plants for $365 mn

April 16, 2010. Constellation Energy Group said it agreed to buy two natural-gas-fired power facilities in Texas for $365 million, or about $332 per kilowatt, from privately held Navasota Holdings.

The transaction was for the 550 megawatt (MW) Colorado Bend Energy Center near Wharton and the 550 MW Quail Run Energy Center near Odessa, the company said. The company said the acquisitions would add 1,100 MW to its generation portfolio.

US needs nuclear storage, fuel options-regulator

April 14, 2010. As the United States works to expand its nuclear fleet for the first time in three decades and extend the life of current reactors, thorny questions remain to be answered about the life cycle of nuclear fuel, a former nuclear regulator said. Following the Obama administration's rejection of Yucca Mountain as a permanent site for used nuclear fuel, the government should move toward creation of an centralized interim storage location and push for the recycling of spent fuel.

Merchant projects, such as those proposed by an NRG Energy-led joint venture and Constellation Energy Group will face a more daunting challenge to secure the billions needed to finance new reactors compared to projects sponsored by utilities, such as Southern Co, FPL Group, Progress Energy and others that operate in regulated markets where they can more easily recover the huge investment needed through captive customers, during or before actual construction.

GE Hitachi’s Fuller to seek nuclear recycling

April 14, 2010. GE Hitachi Nuclear Energy is pushing the Obama administration to support new recycling technology that the company says would reduce the risk of proliferation and the storage needed for radioactive waste.

The approach differs from the reprocessing technology already in use outside the U.S. The nuclear industry has created enough waste in the U.S. to fill “a football field 30 feet high, end zone to end zone,” Jack Fuller, chief executive officer of the venture of General Electric Co. and Hitachi Ltd. of Japan, said. 

Washington sues to revive Yucca Mountain nuclear waste plan

April 14, 2010. Washington state, home to a former U.S. nuclear-weapons plant undergoing cleanup, sued the Obama administration to stop it from abandoning plans for the Yucca Mountain radioactive waste repository in Nevada.

The government’s decision to withdraw its license application for Yucca Mountain will frustrate Washington’s plans to clean up the Hanford Nuclear Weapons Reservation, a site located in southeastern Washington that was created in 1943 as part of the Manhattan Project, state Attorney General Rob McKenna said in a statement. 

About 53 million gallons of nuclear waste is stored in underground tanks at Hanford, and a third of those are known or suspected to have leaked, according to the statement.

Renewable Energy / Climate Change Trends


Suzlon to supply 44 turbines for wind project in Turkey

April 20, 2010. Wind turbine manufacturer Suzlon Energy said its subsidiary, REpower Systems AG, has bagged a contract for supply of 44 wind turbines for a project in Turkey.  Wind turbine manufacturer Suzlon Energy said its subsidiary, REpower Systems AG, has bagged a contract for supply of 44 wind turbines for a project in Turkey.  

The company has "concluded a contract with Al Yel Elektrik, a subsidiary of Akuo Energy SAS, for the delivery of 44 wind turbines for a project in Turkey," Suzlon Energy said.  

The turbines will be installed at Geycek wind farm in Kirsehir province, East of Ankara, in Turkey. REpower Systems would be responsible for service and maintenance of the turbines over the first 12 years of operation, it said.  The wind turbines are set to be delivered in 2011 and will be commissioned shortly after, it added.

Orient Green Power plans public issue to raise Rs 9 bn

April 19, 2010. The Shriram EPC-promoted Orient Green Power Ltd has filed for a Rs 9 bn public issue, it is learnt. OGPL is engaged in electricity generation from renewable sources and has a portfolio of about 175 MW, comprising 134.5 MW of wind and 40.5 MW related to biomass projects. OGPL has more than 500 MW under construction / implementation pipeline.

The company aims to expand this portfolio to 1,000 MW in two years, for which it seeks funds. It is learnt that the issue would hit the market later this summer, once it has gone through the formalities with SEBI. The issue is being managed by JM Financial, Goldman Sachs and UBS securities. Amarchand & Mangldas is the filing legal counsel.

Nalco to set up Rs 3 bn wind energy project

April 18, 2010. Aluminium PSU Nalco said it will set up a Rs 3 bn wind mill in the country as part of its green initiative. The state-owned navratna company is in the process of inviting bids for setting up a 50 MW wind energy project, possibly in Gujarat, Rajasthan or Tamil Nadu, a top company official said. Nalco would enter into separate contracts with the successful bidder for sale of land, engineering, procurement and Construction, and operation and maintenance of the project.  Also, the company said it is in the process of setting up smaller wind mills at high-altitude regions in Orissa where its mining operations are located to ascertain if such projects are feasible in that area. The PSU already produces power for meeting the requirement for its its alumina refinery and aluminium smelter in Orissa. 

A technology developed in Bangalore to power ‘waste to energy' plant in Malaysia

April 18, 2010. As ensuring clean growth is a big challenge in the light of growing ecological concerns, the setting up of waste to energy plant using mounds of municipal solid waste across the country holds the key, says an Indian patent-holder for such a project in Malaysia.

The technology was demonstrated at the UN Conference on Environment Ministers in Bangkok in 1995 as a follow-up to Rio Earth Summit and recognised as the best technology fostered in the Asia-Pacific region.

Solar Mission to award projects based on tariff discounts

April 18, 2010. Solar project developers offering the best discount on a tariff to be notified by the electricity regulator will figure higher in the pecking order during the allocation of identified projects under the Solar Mission programme. The tariff rates under consideration by the CERC for 2010-11 are Rs 17.90 a unit for photovoltaic (PV) and Rs 15.40/unit for solar-thermal.

The tariffs are notified annually by the CERC. NVVN (NTPC Vidyut Vyapar Nigam), the trading arm of NTPC, will procure power from the solar producers offering the most competitive tariffs on the ceiling rates to be notified by the Central Electricity Regulatory Commission (CERC), according to official sources. For 2009-10, electricity generation cost for PV was Rs 18.44/unit, and in the case of solar thermal, it was Rs 13.45. The reason for a higher tariff for 2010-11 being proposed for solar thermal is based on industry representations seeking a higher rate and availability of more data on capital cost of the projects.


Major economies focus on finance at climate meeting

April 20, 2010. Representatives from the world's biggest polluters sought to make progress on short-term financing to help developing countries adapt to global warming at a meeting hosted by the United States, U.S. President Barack Obama's top climate negotiator said. The Major Economies Forum on Energy and Climate included presentations by the United States and other developed countries on what they would do to make good on financing outlined in the Copenhagen Accord resulting from last year's U.N. climate meeting in Denmark.

The Copenhagen Accord outlined funds approaching $30 billion for 2010 to 2012 to help developing countries adapt to global warming and mitigate its potential effects, like floods, droughts and stronger storms. It also outlined longer-term financing by developed countries of $100 billion a year by 2020. Talks on that are being held by a separate U.N. panel headed by Britain and Ethiopia.

Milk production accounts for 3 pc of greenhouse gas emissions

April 20, 2010. Just under three per cent of the global greenhouse gas emissions are a result of milk production, according to a new report by the United Nations Food and Agriculture Organization (FAO). This figure includes emissions related to the production, processing and transportation of milk products. The percentage climbs to four when emissions from meat production from animals originating from the dairy system are factored in, the study says. FAO points out that methane contributes most to milk's impact on global warming, accounting for more than half of the sector's emissions in both developing and developed countries. Nitrous oxide and carbon dioxide also account for large proportions of the dairy sector's contributions to greenhouse gas emissions.

Scientists call for research on climate link to geological hazards

April 19, 2010. Scientists called for wide-ranging research into whether more volcanoes, earthquakes, landslides and tsunamis could be triggered by rising global temperatures under global warming. Significant warming of the atmosphere in the distant past can be linked to changes in geological activity, they say. Suggestions that climate change predicted for coming decades could bring similar changes remain speculative, but the scientists say there is enough evidence to take the threat seriously. Some experts have already linked current levels of global warming to rockfalls and landslides in mountain regions. 

Hyundai Heavy, LG invited to join $1 bn solar project

April 19, 2010. Matinee Energy Inc., a U.S. based renewable energy company, said it invited Hyundai Heavy Industries Co. and LG Electronics Inc. to become partners in a $1 billion solar project. Matinee signed a preliminary agreement with the South Korean companies, the solar power projects developer said in a statement yesterday, without saying where the plant would be built.  Hyundai and LG earlier said they were named preferred bidders for a solar-power order worth $1 billion from Matinee Energy.

Iberdrola Sings 50 MW PPA with We Energies

April 16, 2010. Iberdrola Renewables announced a power purchase agreement (PPA) with a new customer, We Energies of Milwaukee, Wisconsin. We Energies will purchase 50 megawatts (MW) of energy from Iberdrola Renewables' Barton Wind Power Project in operation near Kensett, Iowa.  

Iberdrola Renewables has become the second-largest wind operator in the U.S., with operations in 17 states and installed capacity of nearly 3,600 MW – over 30% of the company's global capacity – spread over 39 wind farms. 

China to fight ‘world war’ scale climate destruction

April 16, 2010. China, the biggest producer of greenhouse gases, vowed to “vigorously” develop a cleaner economy by using energy more efficiently and investing in research and development projects to cut carbon emissions.  Climate change represents a threat to Chinese economic development, and laws would be strengthened to meet climate targets. China and the U.S. account for 40 percent of global anthropogenic CO2 pollution. China is drafting rules that set a quota for how much of the electricity purchased by power grids must come from renewable energy sources. The nation is also preparing rules on subsidies for renewable energy.

Takaoka to introduce cheaper chargers for electric cars

April 16, 2010. Takaoka Electric Manufacturing Co., an affiliate of Tokyo Electric Power Co. and maker of chargers for electric cars, will introduce a new, cheaper recharging system in June to raise its Japan market share. The quick chargers, used like gas pumps to refuel electric cars such as Nissan Motor Co.’s Leaf and Mitsubishi Motors Corp.’s i-MiEV now cost 3.5 million yen ($37,600) each. Its new charging system will cost 2.2 million yen, he said. 

Demand for recharging equipment for electric cars is expected to rise in Japan as automakers sell more battery- powered vehicles. Sales of electric cars, which typically run less than 160 kilometers (100 miles) on a single charge, may depend on the cost of cars and the ease with which consumers can recharge them. 

U.S. solar capacity surges in '09 on incentives

 April 15, 2010. Installed solar capacity in the United States jumped 37 percent in 2009 as state and federal incentive programs helped prop up demand during a downturn, solar advocates said in a report. It was the fourth straight year of record growth for the U.S. solar industry, which most analysts say will emerge as a global leader in the next few years as traditional European powerhouses scale back on their solar incentive programs. U.S. growth was also encouraged by the falling price of solar modules, which dropped some 40 percent last year, the Solar Energy Industries Association said in a report. 

World Bank's IFC issues $200 mn "green" bond

April 15, 2010. The International Finance Corp issued its first "green" bond which aims to reduce greenhouse gas emissions through investments in clean projects like solar and wind farms and fixing inefficient power plants. IFC, a member of the World Bank Group, said proceeds from the $200 million, fixed-rate bond would be set aside in a separate account for investing exclusively in renewable energy, energy efficiency and climate friendly projects in developing countries. The launch of the bond "highlights increased interest from sustainable and socially responsible institutional investors," IFC said in a statement. SEB, a European financial group, will manage the four-year bond.

Climate bill seen raising gasoline prices

April 15, 2010. Point Carbon, a market analysis firm, estimated U.S. gasoline prices would rise an average of 27 cents per gallon from 2013 to 2020 if expected U.S. climate legislation led by Senator John Kerry becomes law. U.S. carbon prices should average about $31 a tonne from 2013 to 2020, said Point Carbon, which projected it would take a couple of years to set up a system should a law be passed. The 27-cent per gallon rise would have been an 11 percent rise on the average 2009 gasoline price of $2.35 per gallon. A compromise climate bill being drafted by Kerry, a Democrat, and Senators Lindsey Graham, a Republican, and Joe Lieberman, an independent, will be unveiled on April 26, according to a source. Point Carbon said the expected bill has a slim chance of passing Congress amid opposition from lawmakers in coal and oil states.

BP brushes off investor revolts on tar sands, pay

April 15, 2010. Oil major BP Plc easily beat off challenges to a Canadian oil sands project and to its executive pay policy. Europe's largest oil company by market value said 94 percent of shareholders who voted in advance of the annual meeting rejected a call to review its Sunrise project to squeeze crude from Alberta's bitumen-drenched soil. A group of shareholders including California Public Employees' Retirement System (CalPERS), ethical investor Co-operative Investments and a raft of environmental groups tabled the resolution. The group includes bodies that oppose oil sands production in principle, because it emits more carbon dioxide than traditional oil production, uses more water and involves greater destruction to the landscape.

Carbon market to thrive despite political failings: EU

April 15, 2010. The global carbon market will still have enough momentum to survive even if the international community fails to come up with a new deal to combat greenhouse gas emissions, a European policy coordinator said. Carbon traders and project expressed concern that the failure to secure a binding agreement at U.N.-led climate talks in Copenhagen last December was sucking the energy out of the market. Kyoto's first commitment period for rich nation emission targets expires in 2012. The protocol's Clean Development Mechanism (CDM) helps industrialized countries meet their mandatory U.N. emission targets by investing in clean energy projects in developing countries such as China and earn internationally tradeable carbon offsets in return.

Lack of ships may hinder UK wind power targets: EON

April 16, 2010. Lack of investment in the vessels used to build offshore wind farms could hinder Britain's ambitions to shift to renewable energy. Britain aims to install 32 gigawatts (GW) of offshore wind by 2020, enough to meet a quarter of the country's electricity needs, and although there has been investment in turbines factories and ports, a lack of vessels could curtail targets. 

U.S. seeks climate ideas after Copenhagen fell short

April 16, 2010. The United States is asking for ideas about how to tackle global warming without raising expectations of breakthroughs in 2010 ahead of climate talks among the world's top emitters.

A document listing U.S. questions to delegates from 16 other major economies shows the two-day talks will focus on the fate of U.N. climate talks, the non-binding Copenhagen Accord and the Kyoto Protocol. It does not answer key questions such as what the United States, the biggest emitter behind China, plans to do under any future U.N. plan. U.S. legislation to cap greenhouse gas emissions is stalled in the U.S. Senate. Instead it shows that major nations may have to go back to the drawing board after the Copenhagen summit failed to come up with a binding deal at the climax of two years of U.N. negotiations.

Obama will focus on energy bill after bank reform

April 16, 2010. President Barack Obama said his administration would shift its focus to climate and energy legislation after finishing financial regulatory reform. The Senate has not passed a similar measure but a bipartisan group of senators including Democrat John Kerry, Republican Lindsey Graham and independent Joe Lieberman are expected to produce a bill. Some environmentalists have questioned how big a priority Obama will make climate legislation on his long list of domestic policy priorities.

CNPC finishes early-stage huge gas storage plan

April 16, 2010. State-owned CNPC has completed some early-stage construction of China's largest underground natural gas storage project in northern Shaanxi province. China suffered a serious gas shortage during the past winter as demand surged while supply was curbed, partly by insufficient storage capacity.

CNPC, parent of PetroChina, decided to build the Changqing Oilfield Natural Gas Storage Project that would have storage capacity of 12 billion cubic metres, or fourfold China's largest storage facility in use. Xi'an Changqing Technology Engineering Co Ltd, a unit of CNPC, has compiled the concept design of the project, and early-stage assessment as well as gas injection and extraction plans for two gas storage sites.

California climate campaign spending may top record

April 16, 2010.  A dispute between environmental groups and refiners Tesoro Corp. and Valero Energy Corp. over global warming laws in California may flare into a political campaign with a price tag exceeding $150 million. The Texas-based companies want California voters to decide in November whether the state’s program for cutting greenhouse gases should be delayed until the economy dramatically improves. Environmental groups say the pollution controls will create jobs and should start in 2012 as planned. 

Sarkozy, Berlusconi push EU for border climate levy

April 15, 2010. The European Union's executive must work out ways to impose a climate levy on imports from countries which do not make efforts to combat global warming, the leaders of France and Italy said in a joint letter. The EU has already put in place laws aimed at forcing industry to reduce its greenhouse-gas emissions, but member states fear that that could force European companies to relocate to other territories with less strict rules, the so-called "carbon leakage."  EU leaders agreed in 2008 that the bloc could consider making importers buy permits to emit carbon dioxide (CO2, the main greenhouse gas) if world climate negotiations failed. The idea would be to force companies which import goods from states which do not have effective emissions controls to pay a price equivalent to the cost of emissions cuts imposed on EU states, so that European industry remains competitive.

‘Renewed appetite’ for IPOs set to boost solar and wind power

April 15, 2010. The biggest revival in stock prices since the Great Depression is reigniting interest in initial public offerings by environmental companies, spurring businesses from China to California to issue new shares. Electric automaker Tesla Motors Inc., U.S. green energy producer Ameresco Inc. and Spain’s T-Solar Global SA have filed to go public, and more companies are set to follow.  The initial offering would be Europe’s largest since 2007. Green companies plan to raise $9.6 billion worldwide, more than triple the total value of IPOs for the industry in 2009.  Renewable energy projects such as wind farms and solar parks are drawing the most interest while energy conservation and water management are also gaining financial backers.

Western climate group sees carbon at $33 per ton in 2020

April 14, 2010. A cap-and-trade market to slow climate change in Western U.S. states and Canadian provinces expects carbon dioxide to trade for about $33 per ton in 2020, an economist for the group said, outlining highlights of a new, unreleased analysis. California, Ontario and British Columbia are key members of the 11-state-and-province WCI, which aims to cut emissions 15 percent below 2005 levels by 2020 through the market system and complementary policies, such as energy efficiency regulation. Cap-and-trade systems, already in place in Europe and the U.S. Northeast, place a cap on pollution and let power plants and other big producers of greenhouse gases buy and trade emissions credits.

Climategate Probe finds no evidence of scientific malpractice

April 14, 2010. An investigation by a panel of scientists into the so-called climategate leaked e-mail flap found no evidence of scientific malpractice at the University of East Anglia, the U.K. school at the center of the probe. The inquiry, the second of three into research at the school in eastern England, said methods used by the university to compile historical records of global temperatures were “fair and satisfactory.” It also said allegations of deliberate misrepresentation of data derived from tree rings weren’t valid. 

Merrill Lynch has ‘bearish’ outlook for U.S. wind power demand

April 14, 2010. Merrill Lynch said it’s “bearish” on prospects for wind power demand in the U.S. because many states have exceeded their renewable-energy goals and lower natural gas prices make wind less competitive.

The Bank of America Corp. unit cut to “underperform” Danish turbine maker Vestas Wind Systems A/S and Spain’s Iberdrola Renovables SA, the largest operator of wind parks, in a note to investors.  The U.S. and China will lead world growth in wind energy, the Global Wind Energy Council in Brussels said, forecasting annual average growth of 21 percent through 2014.

BP to invest $1 bn plus in alt energy this year

April 14, 2010. Oil major BP Plc plans to invest more than $1 billion this year on alternative energy development, the head of BP's alternative energy unit said.

The company launched its alternative energy division in 2005 and has said it would spend $8 billion in the sector over 10 years to 2015. Investments are moving forward faster than the company had anticipated and BP expects to pour "a billion plus" into the alternative space this year. spent $1.3 billion in the alternative energy sector last year, which represented some 6 percent of the company's overall investment.

Hungary seeks to ‘clear its name,’ asks for CO2 trader’s data

April 14, 2010. Hungary, a month after selling carbon credits that triggered a halt on Europe’s largest spot market for emissions, said it asked a London-based metals broker for information about its trading.

Total Global Steel Ltd., started in 1999 as a trader on the London Metal Exchange, has yet to turn over the requested data. The country, which didn’t accuse Total Global of impropriety, said an unidentified company broke an agreement not to resell the CO2 credits in Europe, resulting in a three-day closure last month of the Paris-based BlueNext SA exchange.

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