Energy News Monitor I Volume VIII, Issue 18

Kudankulam: Myth and Reality

 

NEWS BRIEF

OIL & GAS

Reliance Industries halts future oil and gas drilling

October 17, 2011. Reliance Industries is to suspend drilling for future oil and gas exploration pending a reassessment with its new venture partner BP. India's largest private oil explorer is "re-evaluating" its exploration and production strategy in partnership with the British company. Reliance recently concluded a $7.2 billion deal with BP, selling it a 30 percent stake in 21 of its oil and gas fields off the Indian coast. Reliance said that its second-quarter net profit jumped nearly 16 percent to 57.03 billion rupees ($1.2 billion) from ` 49.23 billion in the same period a year ago. The increase was helped by strong fuel refining margins which offset lower gas output from its fields. Reliance shares have fallen nearly 27 percent this year due to concerns over falling output from the main D6 gas fields it operates in the Krishna-Godavari basin off eastern India. India's upstream oil and gas regulator said Reliance was producing 44 million standard cubic metres per day (mscmd) from its main exploration field, well below the 60 mscmd it produced a year earlier.

BP focusing on 'Next Wave' strategy to boost KG-D6 output

October 17, 2011. With gas output from Reliance Industries' showpiece KG-D6 fields dropping by 23 per cent, the firm's new partner BP Plc has expressed confidence that the slump in production can be reversed by focusing on a 'Next Wave' strategy of developing satellite fields. Reliance reported a 23 per cent drop in production from the Krishna-Godavari basin D6 fields to 147.2 billion cubic feet, or 45 million standard cubic metres, per day during the July-September quarter. Production from KG-D6 had touched 61.5 mmsmcd in March last year and was projected to rise to 69.2 mmscmd by this time, but has instead slumped. BP asked the Oil Ministry for approval to begin pre- development activities at both the R-Series and satellite fields that surround the currently producing Dhirubhai-1 and 3 fields. Tests by RIL have shown that gas-bearing layers of sand in the Dhirubhai-1 and 3 fields of KG-D6 block are thinner than initially estimated and extraction may require costlier drilling techniques. Satellite fields in the KG-D6 block and discoveries, also known as the 'R-Series', together are estimated to have the potential to produce 35 mmscmd. RIL has submitted plans to invest $1.5 billion on developing four satellite fields to produce up to 10 mmscmd of gas by 2016. BP wants the government to quickly approve plans for additional satellite and R series reservoirs so as to begin the process of engineering and hike production of gas from KG-D6 by 2014.

Oilex's Cambay Basin block in Gujarat holds 1.3 trillion cubic feet gas, 1.6 bn barrels oil

October 16, 2011. Australia-based oil and gas explorer Oilex Ltd says its Cambay Basin block in Gujarat has been independently assessed to hold in-place natural gas reserves of 1.3 trillion cubic feet and 1.6 billion barrels of oil. The discovered gross in-place reserves of the Cambay Basin block near the town of Khambat, 160 km South of Ahmedabad, have been independently evaluated by Netherland, Sewell and Associates Inc to hold 1.314 trillion cubic feet (tcf) of gas and 1.633 billion barrels of oil. Of this, 484.7 billion cubic feet of gas and 83.3 million barrels of oil were deemed unrisked and recoverable. Oilex has drilled many wells in the Cambay field and had announced that an evaluation of these has concluded there are undiscovered gross in-place volumes of 12.644 tcf of gas and 11.592 billion barrels of oil.

ONGC Videsh signs an agreement with PetroVietnam

October 12, 2011. ONGC and PetroVietnam have signed an agreement to jointly explore upstream and down-stream opportunities in India, Vietnam and other countries to further strengthen their existing partnership in oil and gas sector. Partnership between ONGC's overseas arm ONGC Videsh and PetroVietnam is three decades old with Indian firm's involvement in the development of gas fields in 06.1 block in Vietnam, which contributes about 50% its domestic gas requirements. Besides, the producing block, OVL also holds stakes in two exploratory blocks; 127 and 128 in Phu Kanh basin in Vietnam, which it bagged in 2006 through bidding process.

India BPCL Bina plant may run full throttle

October 17, 2011. State-run Bharat Petroleum Corp's 120,000 barrels per day (bpd) Bina refinery in central India may begin operating at full capacity by end-October, slightly ahead of schedule and helping India cut fuel imports. Indian refiners are expanding capacity as economic growth in Asia's third-largest economy tries to boost industrial activity and air travel rises with expanding income. Bina refinery was expected to reach full capacity at 100 percent. Bina refinery is operated by Bharat Oman Refineries Ltd in which BPCL is a majority stake owner. The new land-locked plant has eased BPCL's current need to source products through imports or purchase from other Indian refiners to top up its retail sales requirement to meet the growing fuel demand in Asia's third-largest oil consumer. Bina refinery started crude processing in mid-2010, but subsequently shut down as some secondary units were not ready. The crude unit was commissioned again in January but the plant could not reach full capacity due to problems with the associated power plant. India imports fuel to meet local demand, despite having surplus refining capacity, as private firms prefer to export refined products, saying they do not get compensation from the government to sell fuel at subsidised rates. The country will likely cease to import gas oil once all refineries, including the new Bina and Bathinda refineries, are running smoothly. India's 180,000 bpd Bathinda refinery began crude processing on trial. However, the market impact on prices could likely be minimal as India has already reduced its gas oil imports from last year when refineries upgraded to meet cleaner diesel specifications. Until July last year, India used to import about 450,000 tonnes of gas oil. This later reduced drastically to about 80,000 tonnes a month. The fourth quarter is traditionally when demand for middle distillates picks up, used as heating fuel in Japan and Europe. The Bina refinery has a one-million-tonne-a-year naphtha hydrotreater, half-a-million-tonne continuous catalyst reformer, 1.95-million-tonne hydrocracker, a 1.63-million-tonne diesel hydrotreater and a 1.36-million-tonne delayed coker. BPCL operates a 240,000-bpd refinery in Mumbai as well as a 190,000-bpd refinery in the southern state of Kerala, run by subsidiary Kochi Refineries Ltd. It also owns a majority stake in a 60,000 bpd refinery in northeast India.

Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp losses on fuel sales pegged at ` 213.7 bn in Q2

October 17, 2011. State-owned fuel retailers lost ` 21,374 crore in the second quarter on selling diesel, domestic LPG and kerosene at government-controlled rates that are way below the cost of production. Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp lost ` 64,900 crore on selling the three fuels below cost during the April-September period. Of this, ` 43,526 crore pertains to the first quarter ending June 30 and the remaining ` 21,374 crore is for the July-September quarter. The three firms are losing ` 7.06 per litre on diesel, ` 25.90 per litre on kerosene sold through the public distribution system (PDS) and ` 270.50 per 14.2-kg LPG cylinder supplied to domestic households for cooking purposes.

Reliance Q2 net up 16 pc, refining margins disappoint

October 15, 2011. Indian energy major Reliance Industries posted its highest ever quarterly net profit on higher refining margins and other income, but analysts focused on slowing gas output and said refining margins were still below expectations. Reliance said net profit rose 15.8 percent from a year ago, largely driven by improved performance in refining and petrochemicals businesses. It also posted a 64 percent jump in other income to 11 billion rupees, mainly due to one-time treasury gains. The company operates the world's biggest refining complex in western India, which can handle less costly high-sulfur crude oil, giving it the best refining margins in the industry.

 

ONGC ready to supply gas to two thermal power projects

October 17, 2011. Oil and Natural Gas Corporation (ONGC) is now ready to supply gas to two major thermal power projects, Palatana in South Tripura district and Manarchak in West Tripura district. As per the schedule, the first phase of 726 MW power project will be operational by February next year though it was supposed to come up by the end of this year while the NEEPCO fixed up a target of generation from it's 104 MW power project at Manarchak by March 2013 next. As per the plan, the ONGC will supply gas to Palatana power project from 14 wells in phases so that it could run for 20/22 years. In view of the growing demands for natural gas, the ONGC has kicked off 'Mission six Million' to increase gas production and set a target of exploring 41 wells in Tripura by next year. However, the Asset Manager made it clear that the ONGC would not be in a position to supply gas for any new project after meeting demand of Palatana and Manarchak power plants. The ONGC discovered a well at Khoubal in North Tripura district last year and trying hard to explore more wells in the state.

Finance Ministry hopeful of ONGC stake sale by December end

October 18, 2011. The government is hopeful that 5 per cent disinvestment in blue-chip oil company ONGC will be completed by December, although it has advised SAIL to put on hold its share sale for the time being. The government plans to sell 5 per cent, or 427.77 million shares, through the follow-on public offer (FPO). After the FPO, its stake in ONGC will come down to 69.14 per cent from 74.14 per cent. Although the government had planned to raise ` 40,000 crore from disinvestment in the current fiscal, it has not been able to make much headway because of uncertain market conditions. So far, it has raised only ` 1,144 crore from stake sale in Power Finance Corporation (PFC).

PM Manmohan Singh requests states to cut tax on natural gas, imported LNG

October 15, 2011. Natural gas and imported liquefied natural gas could soon become cheaper if Prime Minister Manmohan Singh's plea to states to lower taxes on them is accepted. PM has made a strong pitch for a 'declared goods' status for both items that will reduce the VAT on them to 5% from 12% in most states. The declared goods status for natural gas and LNG would benefit firms like RIL, Gail and gasbased fertilizer and power plants. However, states may not readily agree to this reduction as the growth in VAT collections in the first half of the current financial year has slowed to 20%.

Oil Ministry allocates 7.23 mmscmd of ONGC gas to power, fertiliser units

October 13, 2011. The Oil Ministry has allocated 7.23 million standard cubic metres per day of natural gas from ONGC fields to power and fertiliser firms, including Reliance Infra, NTPC and National Fertilisers Ltd. Reliance Infra's Samalkot plant in Andhra Pradesh, which gets 0.25 mmscmd (million metric standard cubic metres per day) of gas from Reliance Industries' eastern offshore KG-D6 fields, has been allocated 0.03 mmscmd of gas from ONGC's Krishna-Godavari Basin fields. Lanco's Kondapali plant has been allocated 0.11 mmscmd, while Spectrum Power will get 0.29 mmscmd from ONGC's fields. GVK Industries has been allocated 0.2 mmscmd. ONGC will produce a total of 0.63 mmscmd of gas from the KG Basin and the remaining 6.605 mmscmd is envisaged to come from western offshore fields like the C-Series, Bandra Formation, North Tapti and Vasai East fields. The gas from fields off the West Coast will be priced at $5.25 per million British thermal units and the same from the Krishna-Godavari basin, off the Andhra Pradesh coast, at $4.75 per mmBtu. This is more than the $4.205 per mmBtu that Reliance Industries charges for its KG-D6 gas. Of the gas ONGC will produce from western offshore fields, NFL's Vijaypur plant in Uttar Pradesh has been allocated 0.73 mmscmd, while IFFCO's Kalol and Aonla units will get 0.097 mmscmd and 0.36 mmscmd, respectively. Tata Chemical's Babrala plant has been given 0.08 mmscmd. NTPC has been allocated 0.82 mmscmd for its plants in North India, while the Bawana unit in the national capital has been given 1.564 mmscmd. Indraprastha Power has been allocated 0.23 mmscmd and Ratnagiri Gas and Power Pvt Ltd has been allocated 0.9 mmscmd for its plant at Dabhol, in Maharasthra. GFSC's urea-making plant at Baroda (0.2 mmscmd), KSFL's Sahajahanpur unit (0.204 mmscmd), Rashtriya Chemicals and Fertiliser's Thal plant (0.45 mmscmd), Kribhco's Hazira unit (0.8 mmscmd) and GNFC's Bharuch plant (0.1 mmscmd) have also been allocated ONGC gas.

CAG advises Oil Ministry of caution on RIL's KG-D6

October 12, 2011. The CAG has advised Oil Ministry to allow Reliance Industries to recover expenditure on its eastern offshore KG-D6 field only after it has been audited. Stating that the Comptroller and Auditor General's (CAG) letter to the ministry was to "flag the critical issues so as to facilitate adequate precautionary action". The letter asked the ministry to review the decision to allow RIL to retain entire 7,645 sq km KG-D6 block in the Bay of Bengal after the giant Dhirubhai-1 and 3 gas finds were made in 2001 besides seeking review of 10 contracts, including the eight awarded to Aker Group for the MA oilfield in the same block, on a single-bid basis. But it did not mention of CAG report calling for an audit of increase in expenditure proposed by Cairn on its Mangala Rajasthan oilfields from $1.24 billion to $3.34 billion. It also did not mention the $201.54 million expenditure that was disallowed for cost recovery by CAG. CAG had audited expenses RIL incurred during 2006-07 and 2007-08, and spending incurred from 2008-09 onwards is to be covered in future audits. As practice, operators are allowed to recover from sale of hydrocarbons, only that part of investment which has been audited. Even in case of RIL's KG-D6 block, $5.26 billion out of $5.69 billion invested till March 31 was allowed to be cost recovered only after audit. The CAG audit of KG-D6 was the second audit and expenses had previously been audited by a government appointed auditor.

 

POWER

JSW Energy's Ratnagiri project begins full operations

October 17, 2011. JSW Energy said its 1,200 MW thermal power project at Ratnagiri, Maharashtra was fully operational and supplying electricity to the state grid. The company said the project's fourth unit of 300 MW began operations. JSW Energy has also resumed operations of 270 MW lignite-based power project in Barmer, Rajasthan. Two more units at the location would be commissioned shortly. Aggregate generation capacity of JSW Energy stands at 2,330 MW.

Bawana power plant to be commissioned

October 16, 2011. Bawana power plant, built at a cost of ` 4,500 crore, will finally be commissioned next month as the Oil Ministry has allocated natural gas for the plant which will initially generate 750 mega watt of power. The ONGC will supply 1.564 mmscmd (million metric standard cubic metres per day) gas to the 1500 MW capacity plant from western offshore fields and the fuel will be priced at $5.25 per million British thermal units. The fate of the plant had become uncertain after Reliance Industries Ltd refused to supply gas for the plant from its KG-D6 gas fields in Andhra offshore following delay in its commissioning. Following the refusal, Delhi Government had approached the Prime Minister's Office seeking its intervention in getting gas for the plant. The commissioning of the plant will improve the power situation in the city up to a great extent. The city Government has requested Prime Minister Manmohan Singh to inaugurate the plant whose foundation stone was laid by him in March 2008. Although the Centre now has allocated gas at domestic price for generation of 750 MW of power at the plant, Delhi Government was still clueless about procuring gas for production of the remaining 750 MW of power.

NTPC resumes generation after coal supply improves

October 15, 2011. India's largest power producer, NTPC, has resumed generation at plants with a total capacity of 4,000 MW after coal supply improved in the past two days. The coal ministry is working overtime to transport fuel to projects but the electricity supply will improve only after four to five days. The government has assured people it would make sure that there are no power cuts during Diwali. NTPC said most of the company's projects were running at full capacity although the fuel situation was still tight.

 

Essar Energy inks power supply pact with Bihar

October 18, 2011. Essar Energy Plc said it has entered into a long-term pact with the Bihar State Electricity Board for suppling 300 MW power from the group's upcoming 1,200 MW Tori-I plant in Jharkhand. Essar Energy said it has signed a power purchase agreement (PPA) with Bihar State Electricity Board (BSEB) for 300 MW of contracted capacity from Tori-I plant. The 1,200 MW coal-fired power station is under construction in Jharkhand. According to Essar Energy, the PPA was secured following a competitive bidding process, with supply of power under the terms of the PPA being due to commence from May, 2015. This is the company's second 25-year PPA with Bihar State Electricity Board for the Tori I project. In July 2010, Essar Energy had inked an agreement for 450 MW of capacity at a levelised tariff of ` 2.64 per kWh. Essar Energy said the company is pleased to have concluded this PPA with Bihar. Currently, Essar Energy has 1,600 MW of operational capacity and three power projects -- having a total of 2,910 MW capacity -- are expected to be fully commissioned by March 2012. Another seven power projects are under construction, which will take Essar Energy's total to 9,670 MW by March, 2014.

J&K to witness shortage of 200 MW of power supply

October 13, 2011. The Jammu and Kashmir government said there will be shortage of 200 megawatts of power supply to the state over the next few days due to a fall in thermal and hydel power generation in northern India. Power supply in Jammu province is likely to be disturbed as result.

 

Coal India Ltd asks govt to lower FY'12 production target to 448 MT

October 18, 2011. Coal India Ltd (CIL) has asked the government to scale down its production target for the 2011-12 financial year to 448 million tonnes (MT) from 452 MT at present, fearing it will not be able to make up for slippage in output in the first half of the fiscal. The state-run company missed its April-September target by about 20 MT, recording an output of 176 MT against the target of 196 MT, which it has blamed on inclement weather, including heavy rains in August-September that affected production in almost all its collieries. During the course of an assessment of production this month, it emerged that it was very difficult to make up for losses of 20 MT that occurred in the first half of the fiscal during the remaining months of the year. Meanwhile, the five Coal India Ltd trade unions that met with Coal Minister Sriprakash Jaiswal had assured him of their best efforts to meet the company's annual production target after their employee bonuses were revised upward to ` 20,000 per worker instead of the earlier announced ` 17,000. The Planning Commission had asked the Coal Ministry to chalk out an action plan to ensure that CIL meets its production target for the current financial year. CIL, which accounts for 80 per cent of domestic coal production in the country, had missed its production target, recording an output of 431 MT against the revised target of 440 MT.

Coal shortage to ease in 3-4 days: Sriprakash Jaiswal

October 18, 2011. India's coal shortage, which has crippled several power plants, will ease in three to four days but power producers need to step up imports to be able to maintain adequate stocks of the fuel, Coal Minister Sriprakash Jaiswal said. He said Coal India had stepped up dispatches in the past two days to help power plants. The company's unions had also reached an agreement with the government, ruling out the threatened three-day strike that would have forced more coal-fired plants to shut down. Jaiswal said Coal India alone could not solve the problem. Companies, however, find imported coal too costly. Indonesia has raised the export price of coal significantly while Australia has introduced a new carbon tax which has made supplies very costly. The minister said more than 1 million tones of NTPC's imported coal was lying at ports and the company had not made arrangements with the railways to move it to its plants. Total coal stocks at thermal power stations had dropped 4% in two days and the number of plants with super critical stocks had risen to 32 from 29. The number of plants with critical stocks had risen to 47 from 44.

Dalmia Group signs MoU for power plant

October 18, 2011. The Dalima Group has signed a memorandum of understanding (MoU) with the Jharkhand government to set up a power plant in the state. The group company, DCB Power Ventures Ltd, has decided to set up the power plant in Deoghar district. This will be the first mega power plant of the district and generate around 1320 MW. The company had expressed interest in setting up a power plant in the state a couple of years back.

India's power sector to see tougher times

October 17, 2011. India's power sector could see "tougher times ahead" due to depleting inventory of key raw material coal, forcing several power stations to operate at extremely low stock levels. As many as 29 power stations, of the 86 coal-based power projects in India, are currently operating with less than 4 days coal stock and 44 with less than 7 days stock. India's power supply situation will improve in the next four-five days as coal supply to power plants is slowly picking up. Coal production in India has been impacted by heavy rains in Orissa and strikes in Singareni Collieries Company Ltd, which contributes to nearly 10 percent of India's coal production. Coal India, the world's biggest coal miner, produced 8 percent less in the September quarter while despatches fell 5 percent on year.

REC awaits finance ministry views on $1 bn FCCB proposal

October 16, 2011. Rural Electrification Corp (REC) is awaiting the response of the finance ministry on its proposal to raise $1 billion through the issue of Foreign Currency Convertible Bonds (FCCBs). The company plans to mop up around ` 30,000 crore in the current fiscal. Of that, around $1.5 billion would be raised from international markets. REC provides financing for various power projects, mainly for rural areas.

Private power companies like Reliance, Tatas ask Coal Ministry to allocate fuel based on merit

October 16, 2011. Against the backdrop of the government mulling over the allocation of more coal to NTPC, Reliance and the Tatas have asked the Coal Ministry to allocate the dry fuel on the basis of project merits, rather than ownership. The Association of Power Producers (APP) has also stressed on the need for a level-playing field in the allocation of coal. Coal should be allocated based on the merits of projects and not on the basis of ownership. APP is a grouping of many power generators, including Reliance, the Tatas, Essar, Adani Group and GMR Energy. Coal is a scarce natural resource and it must be distributed on the basis of its efficient use and in a manner to maximise the benefit to end-consumers of power. In the wake of power supply disruptions in different parts of the country, the Coal Ministry recently said that it would make efforts to provide more coal to the country's largest power producer, NTPC. Coal shortages due to factors like the Telangana agitation and Orissa floods have hurt power generation at many NTPC plants, which are operating at sub-optimal levels. Coal Minister Sriprakash Jaiswal said his ministry will make efforts to provide more coal to NTPC. Importing coal is not a solution to the country's fuel supply problems. This technical constraint makes it difficult for the existing thermal plants to provide an undertaking for accepting unspecified quantities of imported coal. Fuel Supply Agreements (FSAs) are granted for a period of five years, whereas the commitment for supply of energy under Power Purchase Agreements (PPAs) is between 25-30 years. For a developer to meet its obligations to procurers, there cannot be any disconnect between the PPA and FSA. The lenders would also be extremely reluctant to finance a project which has no sustained and assured supply of fuel.

Coal supply to power plants being shored up: Coal Ministry

October 15, 2011. The government said it has scaled up the delivery of coal to thermal power plants to avert electricity shortages in the festive season. Around 40 rakes of coal per day has been supplied to various power plants in north India alone till Oct 14 and that the average supply would be increase to 53 rakes per day. Meanwhile, 140 rakes of coal was delivered to north India-based power plants during the last three days including 16 rakes to Badarpur power plant and 20 rakes to Dadri power station. Coal supply was being shored at other power plants across India and that the situation is being monitored. The lack of coal supply to power plants due to varied reasons, including rains and civil strife has threatened to cascade into a pan-India crisis with states such as Delhi, Andhra Pradesh, Maharashtra and Karnataka facing power shortages. The main reasons behind the shortage of feedstock are heavy rains in some coal producing areas, a two-day strike by workers of state-run Coal India and the disruption of mining in Andhra Pradesh due to an over-month long strike to press for a separate state of Telengana. As a result, many of the units of the country's largest power producing utility, the state-run NTPC, have been left with coal supplies for no more than two days. Some units were also operating at sub-optimal levels.

Government forms panel to look into NTPC's North Karanpura project

October 13. 2011. The government has constituted a three-member panel headed by Planning Commission member B K Chaturvedi to look into proposed relocation of NTPC's 1,980-MW North Karanpura plant in Jharkhand. The development comes after a Group of Ministers (GoM) on Coal headed by Finance Minister Pranab Mukherjee, decided to refer the North Karanpura power project issue to the B K Chaturvedi Committee. The three-member panel, which includes Coal Secretary Alok Perti and Power Secretary P Uma Shankar, will submit its report within a month from the day of its formation. The issue of relocating the proposed power plant of NTPC has been a major bone of contention between the ministries of coal and power, as the plant is planned in an area that holds six billion tonnes of coal reserves. While the Coal Ministry has been arguing in favour of relocating the proposed plant, the Power Ministry has been opposing the move, following which the matter was referred to the ministerial panel. The ` 8,000 crore NTPC project has been hanging fire for almost a decade due to a controversy over its location. The North Karanpura project, situated in Chatra district of Jharkhand, was supposed to be implemented during the current Five-Year Plan.

Power Ministry asks Oil Ministry to allocate gas to 10 power projects

October 13, 2011. The Power Ministry has asked the Oil Ministry to allocate gas to 10 power projects that are running at half of their generation capacity due to non-availability of the fuel. The ten gas-based projects include both state-run and private projects, which are suffering due to a lack of fuel. The Power Ministry has also communicated that around 3,500 MW of gas-based capacity that was likely to be added during the 12th Five-Year Plan (2012-17) is stranded, as there has been no assurance from the Oil Ministry on fuel supply. State-owned NTPC has slashed its gas-based capacity addition target by 5,000 MW due to the shortage of gas. NTPC currently has a gas-based capacity of about 4,000 MW. The Oil Ministry may not provide gas to merchant power plants as it is of the view that domestic natural gas, which is cheaper than imported gas, should be supplied to companies that sell all power produced from the gas at regulated tariffs. Around 2 mmscmd of gas is required to fire a 500-MW power plant.

Set aside coal for power projects before e-auction: Power Ministry

October 12, 2011. The Power Ministry said it has asked the Coal Ministry to set aside coal for power projects before allowing e-auctions of the raw material. Coal India will be able to spare coal, provided the developer picks it up from the pit head. Around 10 per cent of the total production of Coal India is sold through e-auctions. The Coal and Power Ministries would meet soon, though he refused to give details on the issues that will be discussed at the meeting.

NTPC told to supply full quota of power, discoms to buy at higher rates

October 12, 2011. The city government has requested NTPC to ensure that it supplies its full quota of power to Delhi, while also directing all discoms to try and procure power from the open market even if it is at higher rates. The power situation in the Capital continues to be grim, with estimating a shortfall of about 1,100 Megawatts. Delhi’s current demand fluctuates between 3,200 MW to 3,700 MW. Several areas across the city continued to face outages for up to three hours with East and North Delhi being the worst hit. Power generation has been severely hampered in plants like NTPC’s Dadri I and II, Singrauli, Farakka, Singrauli and Kahalgoan. Also, the Badarpur Thermal Power Station continue to function at less than its installed capacity due to water shortage since the temporary closure of the Agra canal.

 

OIL & GAS

Venezuela’s PDVSA said to need $13 billion for light-oil output increase

October 13, 2011. Petroleos de Venezuela SA expects to increase production at existing oil fields by 250,000 barrels a day in its joint ventures through 2015 for a total investment of $13 billion. State oil producer PDVSA and China National Petroleum Corp. have secured a $4 billion loan from China Development Bank Corp. that will finance 40 percent of the increased production target. An increase in production at existing fields is “imperative” for the company.

ONGC Videsh Limited buys 25 pc in Kazakh oil block

October 13, 2011. ONGC Videsh has acquired 25% stake in the highly prospective Satpayev exploration block in Kazakhstan, which can produce close to 300,000 barrels per day. The deal was signed, completing a 16-year pursuit for the block in the Caspian Sea which is estimated to have 1.85 billion barrels of crude oil reserves, valued at $92 billion at an average price of $50 a barrel.

Sinopec turning Daylight Chinese puts Talisman-Newfield in play

October 12, 2011. China Petrochemical Corp.’s takeover of Daylight Energy Ltd. shows how the oil industry’s biggest selloff since 2008 is transforming companies from Talisman Energy Inc. to Newfield Exploration Co. into potential targets. The two were among 19 oil and gas explorers valued at a discount to Daylight, which traded at 5.6 times earnings before interest, taxes, depreciation and amortization before agreeing to sell itself. Including net debt, the state-owned refiner known as Sinopec will buy Daylight in the industry’s cheapest purchase, even as it pays the largest takeover premium since 2005.

 

No plans to build refinery in Indonesia - NNPC

October 14, 2011. The Nigerian National Petroleum Corporation (NNPC) denied any plan by the federal government to build three refineries in Jakarta, Indonesia. Nigeria and the federal government has concluded plans to construct three additional refineries in Bayelsa, Lagos and Kogi states. Nigeria plans to invest Rp 24 trillion (US$2.68 billion) in Indonesia to fund the construction of three oil refineries. However, in a swift reaction, the NNPC said it was ridiculous for three refineries worth 2.68 billion dollars to be producing only 300 barrels per day, and dismissed the report as "419".

Gasoline cargoes to U.S. poised to advance by 45 pc on refinery maintenance

October 13, 2011. Gasoline shipments from Europe across the Atlantic Ocean will increase over the next two weeks as U.S. refineries remain in a maintenance period, curbing gasoline production. Twenty-nine tankers were booked or are due to be chartered for loading in the period. That’s nine more cargoes than last week. U.S. refineries step up maintenance during the first weeks of October to get ready for more production of winter fuel. Refinery utilization rates decreased to 87.7 percent by the end of September, after jumping to a year-high in the third week of August. Of the 29 vessels, known in the industry as medium-range tankers, 14 have already been booked and 15 will probably be hired, according to the survey. They will be able to carry about 9.1 million barrels of gasoline, or 651,000 barrels a day over the next two weeks. The rate is about 78 percent of the daily 838,000 barrels the Department of Energy said the U.S. imported over the past 12 months.

Technip to build base oil plant at Baytown complex

October 12, 2011. Technip announced that it has been awarded a contract for a specialty lubricant base stock facility that will be built at ExxonMobil's integrated refinery and chemical plant complex in Baytown, Texas. The project will provide a new synthetic lubricant base stock plant, consisting of the process unit, associated pipe rack and product tanks, as well as pumping and firewater system. The contract covers project management, detailed engineering, procurement, and construction. Technip's operating center in Houston, Texas will execute this contract, which is scheduled to be completed in 2013.

Rosneft, CNPC set to form board for refinery JV

October 12, 2011. Russian oil major Rosneft and China National Petroleum Corporation (CNPC) will soon form the board of directors of the Vostok Petrochemicals joint venture that is implementing a project to build an oil refinery in the Chinese city of Tianjin. Rosneft will present its nominations to the board to the Chinese company. The project to build the refinery will be based on the agreements reached earlier. Production at the refinery will be geared toward petrochemicals, base oils and exports of oil products.

 

Gas beating oil in shipping market as consumers expand stockpiles

October 18, 2011. Record liquefied-petroleum-gas shipments are eroding a glut of the tankers hauling the fuel used in stoves, cars and lighters, driving charter rates to the highest ever at a time when most other ships are losing money. Seaborne trade in LPGs will advance 7.9 percent to 60.2 million metric tons this year, led by supplies from Qatar. Monthly rental costs will exceed the previous record of $1.27 million by next year’s third quarter, from $900,000 now. The surge in supply is a consequence of expanding natural gas output and oil refining, which produce LPGs as a byproduct. While returns on the biggest ore carriers fell 87 percent in the past three years and owners of some of the largest crude tankers are paying clients to hire their vessels, LPG ship rates almost doubled.

Kinder Morgan to buy El Paso for $21 bn

October 17, 2011. Kinder Morgan Inc.’s agreement to buy El Paso Corp. (EP) for $21.1 billion, the energy industry’s biggest transaction in more than a year, would create the largest natural-gas pipeline network in the U.S. The cash and stock offer is valued at $26.87 per El Paso share, or 37 percent more than the Oct. 14 closing price. The combined company would have 67,000 miles (107,000 kilometers) of gas lines and eclipse Enterprise Products Partners LP as the biggest U.S. pipeline operator. The transaction strengthens Kinder Morgan’s position as a major player in the U.S. gas industry, providing the infrastructure to transport growing production from new fields to new markets. Chief Executive Officer Richard Kinder is making a bet that the need for pipelines will continue to grow. Kinder, 66, will be chairman and CEO of the combined company. The acquisition, once closed, would create immediate shareholder value because of its cash flow.

Spain to re-export LNG for thirsty Asia

October 13, 2011. A rise in liquefied natural gas demand in Asia is prompting Europe's biggest buyers to reload cargoes for delivery to higher-paying Pacific Basin markets. Spain, Europe's No 2 LNG importer, is set to re-export four cargoes this month as gas demand there falls while demand in Asia keeps rising after a March earthquake in Japan increased LNG import needs.

 

BP gets $4 bn from Anadarko for oil spill costs

October 18, 2011. Anadarko Petroleum Corp will pay BP Plc $4 billion toward clean-up and victim compensation for the Gulf of Mexico oil spill. The amount is less than BP might have won in court, but it softens the blow of overall spill-related costs to the British group. Anadarko also said it will no longer pursue allegations of gross negligence against BP. It is unclear what impact this development will have on the remainder of the morass of litigation pending in federal court in New Orleans.

Iran may start exporting jet fuel, hopes for gas link to China

October 16, 2011. Iran will soon start exporting aviation fuel processed at its Bandar Abbas refinery in the country’s south. Several East Asian countries have shown interest in supplies of Iranian jet fuel. Iran faces challenges in developing its energy resources due to international sanctions over its nuclear program.

The U.S. and European governments accuse the country of seeking to produce atomic weapons, while Iranian leaders say they want nuclear power for domestic energy needs.

The Persian Gulf nation is the second-largest oil producer in the Organization of Petroleum Exporting Countries, and its proven reserves of natural gas rank second in size after Russia’s.

Pakistan prepares to award LNG import contract

October 14, 2011. The Oil and Gas Regulatory Authority (OGRA) will award the contract of setting up a terminal at Port Qasim next month, which will be used for the import of Liquefied Natural Gas (LNG) in the country. Eighteen companies had shown interest to setup the terminal, out of which one will be selected early next month under third party access rules.

The Sui Southern Gas Company (SSGC) will allow the distribution of LNG through its system. SSGC, said that OGRA would give the third party access to utilise SSGC infrastructure to only one party, while three other companies already given licences, including Gasport, Engro Vopak and Global Energy Holdings (GEH), have consented to setup their own infrastructure and terminal diluting the exclusivity of SSGC.

These three companies are still in the race for SSGC capacity allocation. The selected party would develop their own LNG FSRU, arranging their own supply of LNG and having their own buyers of re-gasified LNG (RLNG).

U.S. to impose sanctions on BP, Gulf spill contractors

October 13, 2011. The U.S. offshore drilling regulator formally issued sanctions against BP and the major contractors involved in the 2010 explosion on the Deepwater Horizon rig that killed 11 workers and spewed more than 4 million barrels of oil into the Gulf of Mexico. By law, the companies face fines of up to $35,000 a day, per incident for the violations. In its final report on the accident issued the Interior Department outlined infractions committed by the companies. BP, owner of the ruptured Macondo well, received the lion's share of the sanctions, with seven notices for violations ranging from failure to protect health and property to failing to keep the well under control at all times.

 

POWER

Syria and Siemens ink power station deal

October 17, 2011. Syria and German engineering giant Siemens inked a $419 million contract for the expansion of a power plant north of Damascus. The minister of electricity signed with German group Siemens a contract worth EUR 305 million to expand the Nassariya power station in north Damascus. Siemens will work to design, manufacture, supply, install and operate all equipment necessary for the creation of an additional branch of the plant.

New hydro plant opens in Snohomish County

October 17, 2011. Washington has its first new hydro-electric power plant in 20 years. The Young's Creek plant is now open just outside of Sultan in Snohomish County. Snohomish PUD has plans to build more of these mini-plants if this one meets its expectations.

Abu Dhabi to construct 1,500 MW power plant

October 17, 2011. The Abu Dhabi Water and Electricity Authority (Adwea) will announce plans later this year to build a 1,500-megawatt power plant. The facility will also produce 100 million gallons of water.

Electricity demand in Abu Dhabi is growing at 12 per cent a year, while water use is likely rise at an annual rate of 5 per cent, he said earlier at an industry conference. Adwea's installed generating capacity is 14,000 megawatts. Abu Dhabi is seeking to assess its power needs before the first of the UAE's four planned nuclear plants comes on stream in 2017.

Sumitomo Corp. and Korea Electric Power Corp. are already building the Shuweihat 3 power plant, a $1.5 billion (Dh5.5 billion) unit designed to produce 1,600 megawatts when it starts operating in 2014.

Korea Electric also has contracted to build the nation's nuclear reactors, each of which will generate 1,600 megawatts. Plants now under construction in the UAE will add more than 2,500 megawatts of power and 100 million gallons of water-treatment capacity.

Saudi Electric signs $1.4 bn power plant deal

October 16, 2011. Saudi Electricity Company has signed a 5.4 billion riyal ($1.44 billion) contract with an unnamed Saudi company to build 1,200 megawatts (MW) of power generation capacity at a plant in the Saudi capital. The PP10 combined cycle plant power plant in Riyadh currently has a generation capacity of 2,240 MW. The contractor will add 10 steam turbines which should be in operation in 46 months. Saudi Arabian Bemco Contracting Co submitted the lowest bid of $1.43 billion for the expansion project. Saudi Electricity has an $80-billion investment plan to increase its power generation capacity by 30,000 MW by 2018 to meet power demand which is growing at around 8 percent each year.

Sikorsky fires up $30.6 mn power plant

October 15, 2011. Sikorsky Aircraft's factory has a new heart: a $30.6 million, 7,200 square foot box containing a series of metal encased engines, generators and switches, connected by wires, vents and pipes filled with water, natural gas, steam and electricity to power the helicopter maker.

The company received a $4.6 million state grant as part of a program aimed at reducing electricity congestion that was driving up prices in 2006. Ten megawatts is enough to power about 1,100 homes.

Mitsubishi to build two gas turbine plants in California

October 14, 2011. Japan's Mitsubishi Corp will construct two large gas turbine power plants in California to augment electric supply from solar, wind and other renewable energy sources. The company expects total construction cost to be about 90 billion yen ($1.17 billion). The combined output capacity of the two plants will be 1 million kilowatts, which is roughly equivalent to a single nuclear reactor. One of the plants, a 200,000 KW facility, will be built solely by Mistubishi at a cost of about 20 billion yen and is expected to be operational in July 2012. The other, a 800,000 KW facility, will be constructed jointly by Mitsubishi, General Electric Co and an American developer. Mitsubishi will hold a 50 percent stake in this plant, which is expected to go onstream in August 2013. Both plants are to supply power to a major California utility for 10 years.

 

NERC queries PHCN, 5 power plants over load shedding

October 18, 2011. Nigerian Electricity Regulatory Commission (NERC) has warned its licensees that massive load shedding of their customers without approval from it violates the Electric Power Sector Reform (EPSR) Act 2005 and that appropriate sanctions will henceforth be meted on erring organization. This warning is coming on the heels of load shedding of 1,400 mega watts that started involving five power plants. The load shedding that will last seven days is without the Commission’s approval.

PPL Electric Utilities chooses route for new power line

October 17, 2011. After consideration of public input and careful study of the region, PPL Electric Utilities has chosen a route for a new power line as part of a project to improve electric service for homes and businesses in northeast Pennsylvania and the Poconos.

The selected route connects the new Paupack substation site near Lakeville, along a zig-zag course southwest in Paupack and Salem townships, between Route 590 and Lake Wallenpaupack. It rounds west of Ledgedale and west of Newfoundland, and heads west through Sterling Township into Lackawanna County meeting the new North Pocono substation. It then goes southwest to the new West Pocono substation near the Luzerne/Monroe county line west of Pocono Pines. Finally, it veers northwest through Luzerne County to the existing Jenkins substation near Wilkes-Barre. The existing transmission lines from Jessup to Honesdale will be rebuilt, and a small section from Cherry Ridge to Lakeville will receive additional wires. The new power line and three new substations will provide safe and reliable electricity to homes and businesses in the region. In choosing the location for the new 230-kilovolt power line and the new 69-kilovolt power lines that are needed for this project, the company conducted an extensive public input process and a months-long study of the region.

 

Japan still considering total nuclear power pullout

October 18, 2011. Japan has not ruled out the possibility of complete closure of its nuclear power stations as one option for the country's future energy policy after the world's worst nuclear accident in 25 years, economy minister Yukio Edano said.

Earlier Edano said that Japan was working on improving its energy efficiency and would promote the development of renewable energy sources and of gas powered generation plants to make up for lost nuclear output.

Japan's former prime minister Naoto Kan concluded that nuclear power was no longer worth the risk after an earthquake and tsunami crippled the Fukushima power plant. But his successor Yoshihiko Noda has signaled that nuclear power could play a role for decades and pro-nuclear interests are quietly campaigning for their sector.

The government has let a panel of experts begin a debate on Japan's energy policy. Public concern about safety leapt after the Fukushima accident, which forced 80,000 people from their homes and sparked fears about food and water supply. Some 70 percent of voters polled in July backed Kan's call to phase out nuclear plants. A series of scandals in which regulators and power companies tried to sway hearings on reactors has also dented public trust. Noda has acknowledged that public safety concerns will make it tough to build new reactors, but has stopped short of saying atomic power would play no role at all by 2050. He said decisions on reactors already under construction would have to be made "case-by-case."

Vietnam to give preferences to power projects

October 17, 2011. Vietnam approved preferences for investments of thermal power projects under build-operate transfer agreements. Such projects will be exempt from income tax for the first four years and will pay 5 percent in the following nine years and 10 percent for the remaining years of the project.

ADB to provide $97 million loan to Pakistan hydropower project

October 13, 2011. The Asian Development Bank will provide a $97 million loan for the 147-megawatt Patrind hydropower project in Pakistan. The run-of-the-river Patrind hydropower plant, between the Kunhar and Jhelum rivers near Muzaffarabad, is being developed by Star Hydro Power Ltd., a joint venture between Korea Water Resources Corp., Daewoo Engineering and Construction Co. and Sambu Construction Co.

Italy approves Edison breakup plan, sale to EDF

October 12, 2011. The Italian government has approved a plan to break up Edison SpA and sell part of it to EDF SA (EDF) of France. Italian Industry Minister Paolo Romani asked EDF to give Edison’s Italian investors an “honorable” exit, either in cash or assets. The transaction should be completed by an Oct. 31 deadline.

 

AEG Power Solutions and Electrotherm end solar businesses joint venture on poor demand

October 17, 2011. Amsterdam-based AEG Power Solutions and power systems maker Electrotherm have decided to terminate their agreement to combine their solar businesses in India. The two companies had said that they planned to set up 100 MW capacity in three years. Their first installation of 15 MW was due to come up by December 20101 and another 30 MW at beginning of this year in Gujarat and Rajasthan. Gandhinagar-based Electrotherm, makes electric vehicles, and power and renewable energy systems. AEG, which enjoys a 13% market share of the industrial solar power market in India, has been operating here since 2006, with the country contributing 3-5% to its global revenues. In 2010, turnover from India was about 1.5 million euros and is expected to grow up to 15 million euros in FY2011. AEG's clients include Tata BP Solar and Emvee Solar.

The biggest challenge in India is financial closure of solar projects as the industry is still at a nascent stage. Of the 800-900 MW planned projects, only 20-30% have reached completion, leading to cost escalation. India is targeting an installed capacity of 1GW of solar power by next year under the National Solar Mission. In 2010, the country's solar installed capacity stood at 37 MW, which is expected to grow to about 300mw. AEG says it plans to focus on India as its growth market.

Suryachakra, two US companies to develop renewable energy projects

October 17, 2011. Suryachakra Power Corp said its Hong Kong subsidiary has entered into a JV pact with two American entities for developing renewable energy projects in India that will have a capacity of 500 MW.

Suryachakra Global Ventures Ltd, Hong Kong (SGVL) has signed MoU with American Bio Sources (ABS) and Environmental Energy Finance Corp (EEFC). The Exim Bank of US has approved $200 million funding to American Bio Sources to set up renewable energy projects in India. SGVL is a wholly-owned subsidiary of Suryachakra Power.

Companies scramble to set up solar power projects

October 15, 2011. India's solar power sector is gathering steam, with 150 companies rushing in to offer 2,500 megawatts of projects for the second round of bidding, seven times the allocated capacity of 350 MW for which bids were invited, raising hopes that electricity tariffs from the renewable source would fall below `  10 a unit. About 150 companies are in the fray for 218 projects worth ` 3,500 crore in the second round of projects under the Jawaharlal Nehru solar mission that aims to add 20,000 MW of solar capacity in the decade. In the previous round, the government had received bid applications for about 1,700 MW against an available allocation of 150 MW solar power. The government will shortlist companies by the second week of November. These firms will submit financial bids by the end of next month.

Suzlon Energy to buy five Brazilian wind projects from Martifer

October 13, 2011. Suzlon Energy Ltd., Asia’s third- biggest maker of wind turbines, will purchase five wind farms in Brazil from Martifer Renovaveis Geracao de Energia e Participacoes SA. Suzlon received permission to buy the wind farms from electricity regulator Agencia Nacional de Energia Eletrica.

MBCEL commissions largest solar power capacity

October 12, 2011. Moser Baer Clean Energy Limited (MBCEL) commissioned Asia's largest solar farm in Banaskantha district of Gujarat. The 30 MW solar farm has been set up using 2,36,000 Thin Film modules with an approximate investment of ` 465 crore. The power will be evacuated through 2 separate 66 KV lines to Sub-Stations at Anganwada and Dunawada. This project awarded under phase 1 of Gujarat Solar Power policy 2009 will be the first major project commissioned under the Gujarat Solar Mission. With 11 MW of existing solar power generation capacity, Gujarat is country's largest solar power producer. With MBCEL adding 30 MW of renewable generation capacity, Gujarat is strengthening its position in the country. Gujarat will unveil this project. MBCEL is commissioning yet another 15 MW solar power project in the state.

 

GE investing in 20 MW solar greenhouse project in Sardinia

October 18, 2011. General Electric Co. (GE), the world’s biggest maker of power-generating equipment, invested $58 million to build a greenhouse on the Italian island of Sardinia that will use the sun’s energy to provide power to the national grid as well as to grow crops. The Su Scioffu project in Villasor, Italy, a venture with Moser Baer India Ltd. (MBI), began generating electricity Aug. 30 after the first five megawatts of a planned 20 megawatts of capacity became operational.

EU 2050 energy road map sees big shift to renewables

October 18, 2011. The European Union must make a drastic shift from fossil fuels and derive more and more of its power from renewable sources, driving up electricity costs over the next two decades. The 2050 energy road map to be published by the end of the year complements a 2050 low carbon road map released by the European Commission earlier this year, which seeks to chart a way to reducing carbon emissions by more than 80 percent by the middle of the century. The cost in energy-related expenditure could result in a rise to as much as 15 percent of a household's income in 2030 and 16 percent in 2050, although this would include capital costs and transport fuel costs.

Suntech sees stronger U.S. solar growth

October 18, 2011. Suntech Power Holdings Co Ltd expects U.S. solar installations to reach a record 2 gigawatts, even as demand from the German market stumbles. Solar companies have been betting that the United States could become the world's largest market in the next few years, replacing Germany in the top spot as Berlin trims subsidies there. That increase in U.S. installations would more than double the 878 megawatts of solar built in 2010.

Suntech said with Canada, North America's market could reach 2.2 or 2.3 GW. The United States was the fourth largest market for solar behind Germany, Italy and Japan, and most analysts had forecast 2011 U.S. demand of 1.5 GW to 1.6 GW. One gigawatt is about the power output capacity of a large nuclear reactor.

Still, the German market has been slower to pick up in the second half of the year than the company had expected. The reduction of subsidies in Germany and Italy, the world's two biggest solar power markets, and rising production of the panels that turn sunlight into electricity have left the industry with a glut of equipment and driven panel prices down by some 35 percent. That has weighed heavily on profit margins for Suntech and its competitors, such as First Solar, Trina Solar and JA Solar Holdings, and driven their shares to multi-year lows.

Suntech's shares have dropped more than 70 percent. With 2.2 gigawatts of module production capacity at its plants around the world, Suntech is the largest producer in the sector. Suntech is not currently planning to grow that figure, Beebe said, adding that its competitors are likely to re-think any new spending plans. The steep drop in module prices should help drive new sales and make the renewable energy source less dependent on subsidies. Prices for utility-scale projects at the best-suited sites in Arizona are currently being set at 10 cents per kilowatt hour, not including government subsidies. The cost is higher across the state line in California, the largest U.S. solar market.

The price in Arizona makes solar competitive with other power generation sources, such as natural gas. A year ago developers were quoting new projects at between 14 cents to 16 cents per kilowatt hour. Some U.S. incentives for the solar industry have expired or are due to expire, and industry analysts have said that financing for new projects in 2012 could be more difficult to obtain.

The company does not plan to follow the strategy of First Solar or SunPower Corp and build its own solar power plants, but it will back its customers with financing. In the United States, Suntech is supplying modules for Sempra Energy's 150 megawatt Mesquite Solar 1 project in Arizona. It has already delivered 140,000 panels to the site, or 15 percent of the total. Suntech will recognize revenue from the Mesquite project over six quarters.

Debt crisis ‘dramatic barrier’ to clean-energy finance, KfW says

October 18, 2011. The European debt crisis represents a “dramatic barrier” to financing for clean-energy projects, according to German state-owned lender KfW Group. Access to long-term financing has become more difficult as banks struggle to raise capital on the market. KfW, named the world’s safest bank by Global Finance magazine in August, last year provided 25.3 billion euros for renewable energy and energy-efficiency projects worldwide, Schroeder said. KfW intends to boost clean energy financing “each year by 10 percent. German turbine makers including Siemens AG and Nordex SE, as well as producers of solar photovoltaic equipment such as Q- Cells SE and Solarworld AG, have previously benefited from KfW lending.

Biofuels growth stifled by EU policy delays: BP

October 18, 2011. Biofuels for use in transport are becoming more competitive compared with oil but the pace of growth has slowed due to a lack of regulation and sustainability standards in Europe, BP's biofuels division said. New expects the European Union to meet its 2020 target of getting 10 percent of energy for transport from renewables, namely biofuels, if new measures are put in place to support the more sustainable alternative fuels. EU policymakers are currently debating the green credentials of some biofuels and should present proposals for approval by EU governments and lawmakers before the end of the year. However, legislation might not emerge for several years. Around 20 percent of EU and U.S. transport should be fueled by biofuels by 2030 and 9 percent globally, compared with the current 3 percent.

U.S. study suggests pricing carbon from ground to consumer

October 18, 2011. To measure a country's greenhouse emissions from fossil fuels, it makes sense to consider the whole carbon supply chain, from oil well or coal mine to a consumer's shelf. Currently, putting a price on climate-warming carbon dioxide generated by oil, coal, natural gas and other fossil fuels typically takes place where the fuel is burned. However, this may not be the most effective way to calculate carbon emissions' cost.

Carbon dioxide generated by human activities such as coal-fired power plants and factories and petroleum-powered vehicles contributes to the heat-trapping greenhouse effect that spurs climate change.

To counter this effect, some policy makers advocate putting a price on carbon emissions to curb consumption. Without advocating any method of pricing carbon, the scientists suggest that as a practical matter, it could be most efficient to administer any so-called "carbon tax" at the point of extraction.

The scientists analyzed fossil fuel extraction, combustion and consumption in 112 countries and 58 industry sectors. They learned that 51 percent of all carbon dioxide emissions from human activities stemmed from fossil fuels or goods that were sent across borders to get to consumers.

Fat replaces oil for F-16s as biofuels head to war

October 18, 2011. Biofuels face their biggest test yet -- whether they can power fighter jets and tanks in battle at prices the world’s best-funded military can afford.

The U.S. Air Force is set to certify all of its 40-plus aircraft models to burn fuels derived from waste oils and plants by 2013, three years ahead of target. The Army wants 25 percent of its energy from renewable sources by 2025. The Navy and Marines aim to shift half their energy use from oil, gas and coal by 2020.

 ‘Ambitious’ climate targets needed to rescue UN market, EU says

October 17, 2011. The United Nations’ carbon program, the world’s second biggest, needs “ambitious” emission- reduction targets to rescue a market that has shrunk by nearly 80 percent since 2007, according to the European Commission. Greenhouse gas credits dropped to a record. More than 190 nations will discuss climate-protection rules for the period after 2012, when the current targets for developed nations under the Kyoto Protocol expire. Talks will take place in Durban, South Africa.

The European Union is open to the so-called second commitment period under certain conditions and hopes to have a new agreement binding all countries to cut emissions within five years. The UN Clean Development Mechanism, which generates credits for investment in emission-reduction projects in developing countries, shrank to $1.5 billion last year from $7.4 billion in 2007. Offset credits issued under the mechanism, known as the CDM, can be used for compliance by companies in the EU emissions trading system, valued at $119.8 billion in 2010 and ranked as the world’s largest. From 2013 the EU will accept only new offset projects based in least-developed countries. Additionally, the import of credits generated by reducing industrial gas hydrofluorocarbon- 23 and of those tied to some nitrous-oxide projects will be banned as of May 2013. Supply from existing CDM projects, excluding activities related to HFC-23 and N2O, may be enough to satisfy demand from EU emitters by 2020.

The Roskilde, Denmark-based Risoe is a unit of the UN Environment Program. Australia will add demand for 450 million metric tons of credits in the five years through 2020, Trevor Sikorski, an analyst for the investment banking unit of Barclays Plc (BARC). That’s equivalent to about a quarter of yearly emissions in the EU market. Investors and traders including Geoff Sinclair, head of carbon trading at Standard Bank Group Ltd., have expressed concern that demand for the Certified Emission Reduction credits known as CERs will dry up without a global treaty with binding emission-reduction goals. The UN talks to fix post-2012 climate architecture, which involve extending emission-reduction goals under the Kyoto accord and creating a new globally binding treaty, have stalled amid differences between rich and developing nations. Countries including Japan and Russia have said they don’t want to extend the Kyoto treaty. Their absence, along with that of the U.S., China and India, would leave the Kyoto pact without targets for the five biggest national emitters of pollution from burning fossil fuels.

SeaPower talking to investors for tidal power sea test trials

October 17, 2011. SeaPower Gen Ltd., a U.K. maker of tidal current turbines, is talking to industrial partners and wealthy investors about raising 25 million pounds ($39 million) within two years to complete sea trials. The Southampton-based company aims to raise 1 million pounds by year-end. It’s looking for 5 million pounds and the rest in 2013. Energy from the waves and tides has the potential to meet as much as 20 percent of the current U.K. electricity demand, according to the government. SeaPower’s technology harnesses energy from tidal currents to produce electricity.

Britons told to shop around for energy

October 17, 2011. British households struggling to pay rising fuel bills should change supplier, check their tariffs, or insulate their homes to try to save money, energy secretary Chris Huhne said after ministers met the "Big Six" energy companies for talks. Huhne has dismissed opposition Labour calls for the government to pressure companies to use growing profit to cut bills, saying it would be wrong for ministers to try to set prices. More competition, greater transparency in the wholesale energy market and consumers shopping around would combine to drive down energy costs. With household finances squeezed, the cost of electricity and gas has shot up the political agenda and the government is under pressure to be seen to be taking action.

Cellulosic ethanol ‘Floodgates’ may open in 2013, Poet LLC says

October 17, 2011. Cellulosic ethanol output may surge starting in 2013, when the first commercial-scale plants “open the floodgates” for the fuel, according to the largest U.S. corn-based biofuel producer. Poet LLC plans to start production in 2013 at a 25 million- gallon-a-year plant in Iowa and secured a $105 million conditional loan guarantee from the U.S. Energy Department. Competitors BP Plc and Abengoa SA also plan facilities by that year for the fuel, made from inedible grasses and crop waste. The company is the country’s biggest corn-based biofuel maker by installed capacity. The U.S. hasn’t been able to meet federal mandates established under a 2007 energy law to blend cellulosic ethanol with gasoline because insufficient quantities have been available. The Environmental Protection Agency has had to reduce the target figure for blenders by more than 90 percent during the past two years. The annual mandates run through 2022. The government needs to provide investors with confidence the ethanol mandates won’t be scrapped. Cellulosic ethanol differs from conventional ethanol because it is made from substances such as corn stover, rather than the edible part of crops. Poet’s first cellulosic ethanol plant, dubbed Project Liberty, is being built in Emmetsburg, Iowa, next to an existing ethanol plant. All Poet’s 27 refineries use corn to make ethanol, meaning there’s potential to build a cellulosic plant next to each to make use of the stover.

Durban target is to get Kyoto deal within five years

October 14, 2011. A successful outcome for the next global climate change conference in Durban would be to get everything in place for a legally binding successor to the Kyoto Protocol in less than five years. Previous climate change conferences in Copenhagen in 2009 and Cancun in 2010 ended without a plan for a new global deal, and time has run out to get a binding treaty in place when the first phase of the Kyoto Protocol expires at the end of 2012. Pending a new global deal, there would be a transition period in which the Kyotol mechanisms would still apply and the EU would carry on leading efforts to cut emissions. So far the world is failing to reduce carbon emissions sufficiently to contain global warming within the limit of 2 degrees Celsius that scientists say is necessary to avoid the worst effects of climate change.

US lawmaker urges action against solar panel imports

October 14, 2011. The United States must take action against unfairly subsidized solar panel imports from China and other suppliers that threaten the future of U.S. producers. The U.S. solar industry has been hit hard by competition from China and other countries, which offer cheap financing and forms of subsidy to support the sector. U.S. solar panel maker Solyndra filed for bankruptcy, burdened with $783 million of secured debt and squeezed by falling prices for solar panels caused by an industry glut. Its downfall has become a political embarrassment for the Obama administration, which had promoted it as an example of how it planned to spur development in clean energy technology and provided a government guarantee on a $535 million that Solyndra has said it may not repay in full.

I can create 1.2 million energy jobs: Perry

October 14, 2011. Republican presidential candidate Rick Perry outlined plans to dramatically increase energy production and create 1.2 million jobs, taking aim at federal regulations he said are strangling the economy. Perry's announcement at a U.S. Steel plant in a suburb near Pittsburgh came as the Texas governor seeks to shore up his campaign for the 2012 Republican presidential nomination after a series of shaky debate performances and distractions knocked him out of the front-runner position. Perry said if elected in November 2012 he would sign a series of executive orders in the first 100 days of his administration to roll back federal regulations and open up more areas for oil and gas exploration. Perry would repeal the Environmental Protection Agency's authority over greenhouse gases blamed for global warming and eliminate all current and planned EPA programs to restrict carbon dioxide emissions. Many Republicans in Congress would support that but it would be hard to overturn the Supreme Court's ruling in 2007 the EPA has the authority to regulate those gases.

China targets GE’s wind turbines with $15.5 billion war chest

October 14, 2011. China has taken on General Electric Co. (GE) and Western peers that control the $70 billion wind-turbine market, striving to repeat its 2010 coup when the Asian nation sold more than half the world’s solar panels for the first time. Armed with at least $15.5 billion in state-backed credit, China’s biggest windmill makers Sinovel Wind Group Co. and Xinjiang Goldwind Science & Technology Co. won their first major foreign orders in the past year. Both plan to set up plants abroad, including China’s first in the U.S., easing entry into markets for delivering machines that can weigh 750 tons each.

Khosla Ventures raises $1.05 billion to support energy, internet

October 14, 2011. Khosla Ventures, a venture capital investor, raised $1.05 billion and formed a new fund to support renewable energy and communications technology. The Khosla Ventures IV fund will back early-stage companies developing clean energy initiatives, wireless technology and online systems.

German renewable energy consumer subsidy to increase ‘slightly’

October 14, 2011. German consumers will see a component of their power bills that subsidizes renewable energy output rise “slightly” as solar panel installations lag and higher wholesale electricity prices temper the effect for households. The rate will rise to 3.592 cents a kilowatt-hour in 2012 from 3.53 cents this year. The regulator, known as the Bundesnetzagentur in German, said it expects 4.5 gigawatts of solar panels to be installed next year compared with about 7 gigawatts in the “boom year” of 2010.

GE solar panels with 14 pc efficiency rate may surpass First Solar

October 14, 2011. General Electric Co. (GE), the world’s biggest maker of power-generating equipment, said it will produce thin-film solar panels that convert at least 14 percent of the energy in sunlight into electricity and may surpass products offered by First Solar Inc. When a new plant in Colorado reaches full capacity of 400 megawatts a year, efficiency will be above 14 percent. Production will begin next year and initial shipments are expected in 2013.

A conversion rate above 14 percent will make GE’s panels some of the most-efficient thin-film products in volume production. First Solar, the largest manufacturer of thin-film panels, had an average efficiency of 11.7 percent in the second-quarter. It’s working on technology that may yield panels with 15.3 percent efficiency in volume production, and hasn’t set a date when they will be available.

The company said that it expects to offer panels with 13.5 percent to 14.5 percent efficiency in 2014. GE said that it will open a factory in Aurora, Colorado. It will make enough panels to power approximately 80,000 U.S. homes. It’s expected to cost $300 million and will employ 350 people.

GE picks Colorado for $300 million solar panels production plant

October 14, 2011. General Electric Co. (GE) plans to build its first thin-film solar factory in Colorado after months of negotiations with at least two states that wanted the $300 million plant and the 350 full-time jobs it will require. The plant will make enough panels annually for customers to generate power for 80,000 U.S. homes, or about 400 megawatts. GE is entering a struggling solar industry with the Bloomberg Global Leaders Solar Index of 37 manufacturers down 49 percent this year and module prices sinking in an oversupplied market. Silicon panels, which convert more sunlight to power than thin-film, will slip to $1.35 per watt this year and as low as $1.05 per watt in 2013. Global production capacity next year will be more than double the demand for panels of about 20,000 megawatts. GE will need to improve efficiency to lower costs for developers and compete with China, which produces more than half the world’s solar panels. GE decided to expand manufacturing after reaching a 12.8 percent conversion rate, a record for their technology. The factory will be located in an existing building in Aurora, Colorado, east of Denver, and is part of a $600 million investment in GE’s solar business, the company said. About half of that is for the new plant. Panel production will begin in 2012, and initial shipments to customers will take place in 2013.

Marine contractors seek jobs in U.S. offshore wind supply chain

October 14, 2011. Marine contractors and equipment suppliers are seeking a share of the nascent U.S. offshore wind energy industry. Kokosing Construction Co., a closely held construction management company, is bidding to lay undersea cables to transmit power from several planned wind farms off the Atlantic coast. There are no wind farms in U.S. waters, and this lack of infrastructure is creating a market for contractors, shipbuilders, oil-rig installers and other companies with experience building large structures at sea. A supply chain to service offshore wind development will emerge once the first sea-based energy projects begin construction. Offshore wind developers say oil and gas companies have needed expertise in designing and installing heavy equipment in harsh, marine environments.

U.S. defends deal to boost auto fuel efficiency

October 13, 2011. The Obama administration pledged transparency in setting standards to boost auto fuel efficiency and cut tailpipe emissions, countering claims that a landmark agreement securing automaker support for its environmental initiative was secretive. The agreement reached in July is the foundation of a planned rule requiring that new cars sold in the United States nearly double average fuel efficiency by 2025 to 54.5 miles per gallon. The administration said the formal regulation was a work in progress and would provide opportunity for outside input.

Most Republican voters back clean air rules

October 13, 2011. Most Republican U.S. voters oppose congressional efforts to dismantle the Environmental Protection Agency's air pollution rules. Republicans in the House of Representatives have fought against EPA rules on emissions of everything from mercury to greenhouse gases, saying the regulations will kill jobs and saddle heavy industry and power plants with billions of dollars in costs at the worst possible time.

Deepwater to build first U.S. offshore wind farm

October 13, 2011. Deepwater Wind is racing to build the first U.S. offshore wind farm off Rhode Island and hopes to parlay that into a string of East Coast farms that could partially replace embattled nuclear power plants. The privately held U.S. wind power developer plans to begin construction of the $205 million, 30-megawatt Block Island project in 2013 or 2014, ahead of a farm proposed by Cape Wind which had been expected to be the nation's first offshore facility. The energy generated by the 30-megawatt Block Island project will be enough to power about 10,000 homes in Rhode Island. The company is planning other projects off the Atlantic Coast as well, with three 1,000-meagawatt projects currently in the works. The company says a 1,000-megawatt offshore wind project will produce enough electricity for 350,000 homes.

Air France says come fry with me to Paris in jet fueled by old cooking oil

October 13, 2011. Air France SA flew an Airbus A321 passenger aircraft from Toulouse to Paris’s Orly airport with a fuel mix comprising 50 percent used cooking oil. The 80-minute, 354-mile (570-kilometer) journey was the world’s greenest commercial flight. Besides using biofuel, the plane, which can carry more than 200 passengers, flew the shortest available route using a more- efficient continuous descent approach. That helped cut in half the overall emissions of carbon dioxide. Airlines won approval from ASTM International, the U.S. technical standards body, to fly passenger planes using fuel made from inedible plants and organic waste mixed with petroleum-derived fuel. Approval allows for blends of up to 50 percent biofuel. Since then, airlines including Deutsche Lufthansa AG and Finnair Oyj have flown using such blends. More efficient air traffic management could result in a decrease of 10 percent in aircraft fuel consumption, according to the statement, as well as “significant” reductions in CO₂ and noise emissions.

Offshore wind ‘moon landing’ may kick-start development in U.S.

October 13, 2011. The U.S. needs its own version of Alpha Ventus, Germany’s first offshore wind farm, to drive the industry on this side of the Atlantic. There are almost a dozen wind farms planned off U.S. shores and none are under construction. One, Cape Wind in Massachusetts, has been in the works for a decade and it’s still not clear when the first turbines will be installed. Completing a project in U.S. waters would show that developers can complete the permitting and financing processes and may provide a needed spark to the industry.

Greens sue Obama administration over axed smog rule

October 12, 2011. Public health and environmental groups sued the Obama administration to overturn a decision that scrapped tougher standards on smog pollution which causes lung and heart problems. Earthjustice, the American Lung Association, the Environmental Defense Fund and others sued the administration after the White House directed the Environmental Protection Agency to kill the draft Ozone National Ambient Air Quality Standard. The decision leaves thousands of people at risk of illness and premature death stemming from emissions of smog-forming chemicals.

EU seeks powers to speed up energy pipes, grids

October 12, 2011. The European Union is seeking new powers to speed through major energy projects aimed at curbing dependence on imported oil and gas and ensuring sustainable, green supplies. As part of preparations for the first EU budget to include energy spending, the draft indicates priorities for allocating 9.1 billion euros ($12.4 billion) set aside for 2014-2020 to improve power and gas pipelines and networks.

Australia's carbon tax plan passes biggest hurdle

October 12, 2011. Australia's plan for a national carbon price passed its biggest political hurdle when the lower house of parliament voted in favor of the scheme. Australia, the world's biggest coal exporting nation, accounts for only around 1.5 percent of global emissions, but is the developed world's highest per capita polluter due to a reliance on coal for 80 percent of its electricity generation. The carbon legislation, and a bill for A$300 million ($298.7 million) in assistance for the steel industry, must still pass the upper house Senate in a vote due in mid-November, but the government and Green senators have the numbers to ensure the bills will become law. The carbon plan, if passed by the Senate, would see Australia join the European Union and New Zealand with national emissions trading schemes, while the United States and Japan have smaller regional schemes. The government and the Greens hope the carbon tax will reignite momentum for a global emissions reduction agreement at climate talks in Durban, South Africa, in December.

U.S. solar industry may add 37,394 jobs on grant extension

October 12, 2011. A one-year extension of a U.S. Treasury grant program that pays for as much as 30 percent of a solar project’s costs would add 37,394 jobs to the economy next year, according to the Solar Energy Industries Association. The grant program, part of the 2009 economic stimulus package, expires at the end of this year after a one-year extension was passed by congress in December. An additional extension would boost solar jobs by 12 percent as developers increase installations by 2,000 megawatts, or enough for about 400,000 homes. More than 100,000 Americans work in the solar industry, double the number in 2009. The solar industry has stepped up efforts to lobby for an extension of the incentive program in the wake of Solyndra LLC’s bankruptcy. The solar company borrowed $527 million against a $535 million U.S. Energy Department loan guarantee, and its failure prompted criticism from Republican lawmakers.

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