Oil Prices and the United States: Hiding Behind China and India?

 

 

NEWS BRIEF

OIL & GAS

March 20, 2012. The Oil and Natural Gas Corporation (ONGC) will invest ` 200 crore in two projects of oil and gas exploration in Bihar's Kishanganj district over the next three years. The company was finalizing an agreement to take six acres of land on lease in Gargaoin panchayat under Kochadhaman block and Korat Bangama panchayat under Bahadurganj block for the projects. The drilling for up to five km will be carried out from April to explore oil and natural gas resources in the identified areas. The construction of roads upto drilling sites has commenced.

March 20, 2012. Gas output from Reliance Industries-operated D6 block has dropped further by about 1 million standard cubic meters per day to 34.62 mmscmd since February, creating a bigger scarcity of the low-cost domestic fuel and putting more pressure on customers such as power plants and citygas projects which are already facing a shortage The D6 block's output comes from two gas fields, D1 and D3, where production has fallen to 28.16 mmscmd this month, and the MA oilfield that produced 6.46 mmscmd of natural is the first week of March, government said. A month ago, the three fields were producing a total of 35.77 mmscmd. The fall in output from D1 & D3 fields could be attributed to "drilling of less number of development wells" as compared to that approved development plan. According to a status report filed by the company with the Oil Ministry of the 18 wells drilled, completed and put on production in the D1 and D3 fields, six wells had to be shut or closed due to high water cut/sanding issues. The output from KG-D6 is short of the 70.39 mmscmd-level (61.88 mmscmd from D1 and D3 and 8.5 mmscmd from the MA field) envisaged by now as per the field development plan approved in 2006. While Reliance holds 60 per cent interest in KG-D6, UK's BP Plc holds 30 per cent and Niko Resources of Canada the remaining 10 per cent. The MA oilfield currently produces about 11,335 barrels of crude oil per day. In addition, 1,680 barrels of condensate are produced from the field every day. The report said 14.80 mmscmd of the gas output is being sold to fertiliser plants and 16.62 mmscmd to power plants. The remaining 3.20 mmscmd is consumed by other sectors, including those fed by the East-West pipeline that transports gas from the East Coast to consumption centres in the West. RIL projected output of 34.5 mmscmd of gas during March.

March 19, 2012. Oil and Natural Gas Corp (ONGC) will invest about ` 2,600 crore in the third phase of development of C-series natural gas fields off the west coast. The company board, in its meeting on March 15, approved advancement of development of C-26 Cluster (consisting of C-23, C-26 and B-12-1) fields of Phase-III development of C-series fields, to pre-monsoon 2014 instead of 2018 envisaged earlier, ONGC said. The development will cost ` 2,592.17 crore. ONGC said the advancement will help realising production starting pre-monsoon 2014 instead of 2018 envisaged earlier. The company said it has discovered natural gas reserves in a block in Damoh district of Madhya Pradesh. Well Nohta-2 in block DamohJaberaKatni discovered one interval of gas during texting.

March 19, 2012. Oil India aims to produce 3.95 million tonnes (MT) of crude oil in 2012/13. The company would produce around 3.9 million tonnes in the current financial year that ends on March 31, compared with a target of 3.7 million tonnes.

March 14, 2012. The management committee of Reliance-operated D6 block, which is headed by the director general of hydrocarbons, has so far granted approval for the company to recover only $3.99 billion of its cost from sale of oil and gas out of its claim of $9.47 billion, oil minister Jaipal Reddy said. According to annual audited account of the D6 block up to March 2011, the expenditure incurred by the contractor in development activities of D1 and D3 gas fields and MA oil field is about $5.7 billion and $1.73 billion, respectively. The committee did not approve annual accounts of the D6 block, submitted by RIL for 2008-09, 2009-10 and 2010-11. The contract allows RIL to first recover its entire expenditure in developing oil and gas fields from block's sale proceeds before determining profit shares of stakeholders.

March 15, 2012. India's oil refining capacity is likely to rise by 15 per cent to 214 million tonnes a year by the end of current fiscal. The Economic Survey 2011-12, stated that the total refining capacity in the country as on January 1, 2012, was 193.39 million tonnes per annum (MTPA), of which 116.89 MT was in the public sector, 6 MT in joint ventures, and the balance 70.50 MT in the private sector. Out of the 21 refineries operating in the country, 17 are in public sector, three in private sector, and one is a joint venture of BPCL and Oman Oil Company (6 MT a year refinery at Bina in Madhya Pradesh).

March 15, 2012. Diesel price needs to be revised upward, or subjected to higher taxes, as misuse of subsidised diesel was adding to pollution and public health costs, the government's pre-budget economic report card said. The Economic Survey of 2010-11, presented in the Parliament by Finance Minister Pranab Mukherjee, have made the suggestions with regard to diesel prices in a chapter on 'Sustainable Development and Climate Change', which has been included in this annual document for the first time. In recent years, diesel price adjustments have lagged international prices and the budgetary subsidies for the fuel have also ballooned, the Survey noted. On the other hand, political economy arguments are that diesel is a widely used fuel for public transport, budgetary subsidies are offset by central and state value-added tax, excise and sales taxes, among others. As per the report, countries that export oil or those that are relatively diversified and energy- abundant can afford to keep domestic prices lower.

March 14, 2012. Brahmaputra Cracker and Polymer Limited (BCPL) was set to implement the Gas Cracker project at Lepetkata in Assam's Dibrugarh district on schedule. Major parts of the civil and infrastructural work in different units have been completed, mechanical contracts are progressing satisfactorily and electrical contractors have also been mobilized at the site. The project has incurred capital expenditure of ` 3900 crore till the middle of February 2012.

March 15, 2012. Keeping cards close to their chests, prospective bidders, for 65.12% stake in Gujarat Gas Company Limited (GGCL), are busy crunching numbers to make final offer to BG Group. Eight bidders will submit their final bids to acquire control over country's largest city gas distribution (CGD) company in the private sector. Gujarat based diversified Adani Group, electricity distribution major Torrent Group and state venture Gujarat State Petroleum Corporation (GSPC) are eyeing to enter industrial belt of South Gujarat for gas distribution.

March 15, 2012. Bharat Petroleum Corporation Ltd (BPCL) has bought Libyan and Nigerian crude oil via tender for the second half of April. BPCL has bought 600,000 barrels of Libyan Es Sider crude or Sarir from Japanese trader Itochu and 950,000 barrels of Nigerian Antan from a Geneva-based trading house at undisclosed price levels. The companies could could not be reached. The Antan cargo was swapped with Angolan Cabinda before the tender.

March 14, 2012. OAO Gazprom, the world’s largest natural-gas exporter, is struggling to get a foothold in the Asian markets leading global economic growth. The Russian company’s plan to supply liquefied natural gas to India from 2016, the year the U.S. is set to start gas exports, is faltering after buyers said they’re looking for cheaper fuel from North America. Last year, decade-long talks to supply pipeline gas to China foundered over price disagreements. Keen to protect Russia’s position in world gas markets, President-elect Vladimir Putin ordered export monopoly Gazprom to diversify into Asia and develop an LNG business. The Moscow- based company cut this year’s target for exports to Europe, which accounts for more than half of Gazprom’s gas revenue, as the debt crisis holds back economic growth and imports from the Middle East increase. Asia accounts for more than 60 percent of global demand for LNG, gas chilled to a liquid for transport by ship. The region imported 177.7 billion cubic meters of the fuel in 2010, valued at more than $86 billion, based on data from the U.S. Federal Energy Regulatory Commission. Buyers are turning to North America, where record production from shale deposits has driven down U.S. prices. GAIL India Ltd., the country’s largest gas supplier, became the first Asian buyer of U.S. natural gas in December when it signed a 20-year deal with Cheniere Energy Partners LP, which is planning the first U.S. export terminal. The contract, targeting 3.5 million tons a year starting in 2017, is linked to the day- to-day U.S. benchmark gas prices, which fell to a 10-year low of $2.21 a million British thermal units in January. It will also include a fixed component. Prices of LNG in India are at $13.65 a million Btus this year, according to FERC. Gazprom had agreed on preliminary long-term LNG supply deals with GAIL, Petronet LNG Ltd., Gujarat State Petroleum Corp., and Indian Oil Corp. for a total of as much as 10 million metric tons annually, with contracts to be signed within six months. In contrast to Cheniere, the Russian supplier ties long-term prices to oil, a policy some of its European customers are fighting. China has refused to pay Russia a price on a par with the European level. Ventures in Australia and Qatar, the world’s biggest LNG exporter, sell the liquid fuel to Asian buyers at prices linked to the so-called Japan Crude Cocktail, a 40-year-old index. Transporting gas from the U.S. would be less expensive than Asian LNG, ONGC Videsh Ltd., said, as it nears an agreement to buy its first U.S. shale gas asset.

March 20, 2012. Gujarat plans to set up its fourth liquefied natural gas (LNG) terminal at the Pipavav port soon besides commissioning the 5-MT capacity greenfield LNG terminal at Mundra by 2015-16. Many companies were interested in picking up 25% equity stake in ` 3,500 crore Mundra LNG terminal project. GSPC, owned by Gujarat government, wants to develop the project before inducting a new partner. GSPC has 50% equity stake in the terminal and Adani group holds 25%. Essar group, which initially held 25% stake in the project, exited the venture. The company plans to source gas from Australia and Egypt for the Mundra terminal. Pandian said Gujarat had emerged as LNG hub of the country and has appetite for new capacities. Hazira and Dahej terminals have combine capacity of over 13 MT and there is a scope for two more terminals. The Saumitra Chaudhuri committee report estimates that the domestic gas output would reach to 199 million metric standard cubic meters per day (mmscmd) by 2016-17, but demand would outstrip supply.

March 20, 2012. State-run Oil and Natural Gas Corporation (ONGC) will be among the biggest losers from the budget proposals as the company, already hit by forced discounts it has to offer refiners, will take a hit of up to ` 5,000 crore from the finance minister's proposal to raise the cess on crude oil by 80%. The cess was revised six years ago and fixed at ` 2,500 per tonne. Industry experts say that back-of-the-envelop calculations indicate that ` 2,500 cess per tonne resulted in a net payment of $7-7.5 per barrel of crude oil extracted now that outgo will shoot up to $15 per barrel. For ONGC, the unexpected increase in cess, along with its rising subsidy share burden, would severely hurt its profitability. The Iran crisis has pushed Brent crude above $125 a barrel, and India's average import price crude basket to $118, raising the losses of state refiners and the consequent subsidy burden on ONGC. Industry experts expect upstream firms' share of subsidy to increase in the quarter ending March 2012. Earlier their share for the nine months ended December 2011 was raised to 38% from 33% for the half year ended September. This pushed up the subsidy share in the December quarter to 47%, or ` 15,261 crore. ONGC's subsidy burden in the December quarter stood at ` 12,536 crore.

March 19, 2012. With the government acknowledging Reliance Industries' argument for reopening KG-D6 gas pricing, an association of private power producers has opposed any hike in rates saying the cost of electricity will rise by 50 paise per unit for every dollar increase in gas price. Association of Power Producers (APP), whose members include Reliance Power and Tata Power, wrote to Oil Minister S Jaipal Reddy saying domestic natural gas prices should not be increased above current rate of USD 4.2 per million British thermal unit. It asked the Oil Ministry to seek views of Attorney General of India on reopening of KG-D6 price which was in 2007 fixed at USD 4.2 per mmBtu for five years of production ending March 31, 2014. In January, RIL wrote to the oil ministry and the Prime Minister's Office seeking a price revision, saying that the current price was "sub-market" compared with three times higher price being paid for imported gas (LNG). The company had originally applied to the government for approval of a USD 4.3 per mmBtu price of KG-D6 for first three years of productions but the EGoM marginally lowered the rate and fixed it for first five years of production. In the letter -- copies of which were also marked to Finance Minister Pranab Mukherjee, Power Minister Sushil Kumar Shinde, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Pulok Chatterji, Principal Secretary to Prime Minister Manmohan Singh -- APP said any gas price increase would make the fuel unaffordable to the power sector. Claiming that the price increase would go against the basic principle of the Gas Utilisation Policy, it said hike in rates was also against the Supreme Court judgment in the RIL-RNRL case, which had stated that the utilisation of gas should be in a manner to "...sub-serve the best interests of the country...". APP said the fertiliser sector would also face the same situation if natural gas prices are increase. "...this would increase the subsidy burden to the country."

March 18, 2012. Finance Minister Pranab Mukherjee said the government will take "corrective decision" in consultation with all stakeholders to deal with the impact of rising crude oil prices on public finances and subsidy bill. Crude oil prices have been rising due to geo-political reasons, including the Iran situation. The prices had touched a high of USD 125 a barrel. The government has refrained from increasing prices of diesel, kerosene and cooking gas despite global crude oil prices witnessing a sharp rise. Petrol prices were de-regulated in 2010 but the government is yet to take a decision on freeing diesel prices. High subsidies are putting pressure on the country's fiscal deficit, which is likely to touch 5.9 per cent of the GDP this fiscal and 5.1 per cent in 2012-13. The government targets to bring down the subsidy bill to below 2 per cent of GDP in the next fiscal and 1.75 per cent in the subsequent years. Government has made a provision of ` 40,000 crore towards fuel subsidy.

March 16, 2012. State-owned oil companies hiked jet fuel price by 2 per cent, the second increase in rates this month. The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was hiked by ` 1,298.88 per kilolitre (kl), or 2 per cent, to ` 65,949.34 per kl with effect from midnight tonight, Indian Oil Corp, the nation's largest retailer, said. The increase in price comes on back of a 3.2 per cent jump in rates effected from March 1 on back of firming international oil prices. In Mumbai, ATF will cost ` 66,989.74 per kl from, against the current rate of ` 65,636.74 per kl. Jet fuel constitutes over 40 per cent of an airline's operating cost and the hike in prices will add to the burden of the cash-strapped airlines.

March 16, 2012. Despite a rollback of customs duty on imported gas or LNG and an extension of viability gap funding for various oil and gas installations, pipelines and LNG storage terminals, industry insiders see the Union Budget 2012 as lacklustre. Senior officials say they had expected complete deregulation of diesel, more freedom to revise petrol prices, abolition of excise duties and special duties prevailing on branded fuels. So, oil PSUs continue to be a worried lot, as they believe that the Budget did not do anything special for the sector that is reeling under one of its worst financial crisis, hit by a triple whammy of high crude prices, the government's steadfast refusal to deregulate fuel prices and the obvious under-recoveries that are threatening to bankrupt oil PSUs.

March 16, 2012. Clearing the way for oil refiners to pay Iran in Indian rupee, the Union Budget has exempted the payments made for crude oil purchased from the Persian Gulf nation, from any local tax. Iran had in January agreed to accept 45 per cent of the value of its oil exports to India in Indian rupees but the scheme could not be implemented due to taxation issues. It was feared that the money paid to National Iranian Oil Co (NIOC) may be considered as income generated by Iranian firm in the country and liable to be taxed. The withholding tax was up to 40 per cent, which neither NIOC or the Indian refiners wanted to pay. As a way out, Finance Minister Pranab Mukherjee in his Budget for 2012-13 exempted payments to Iran from taxes in "national interest". The exemptions would be effective from April 1, 2012. Iran is India's second largest crude oil supplier accounting for for some 12 per cent of its total crude oil imports. Despite Western sanctions, New Delhi is keen to retain Tehran as its key supplier but has faced problems paying for oil imports. India currently pays about USD 1 billion a month through a Turkish bank but there are fears that US and European sanctions against Iran may block even this route.

March 15, 2012. India’s biggest and best-performing fund manager wants the government to increase taxes and reduce oil subsidies to trim the fiscal deficit, enabling the central bank to pare borrowing costs and stimulate growth. The Reserve Bank of India will leave its benchmark interest rate unchanged. A reduction in levies in 2008 to protect the $1.7 trillion economy from the effect of the global financial crisis has led to tax receipts as a percentage of gross domestic product falling to an estimated 10.4 percent in the year ending in March from a four-decade high of 12 percent in 2008. India’s economy has slowed for four consecutive quarters, reducing tax receipts even as subsidies and a job-guarantee program spur spending. The deficit exceeded the government’s full-year target in the 10 months through January and may widen to 6.1 percent of GDP in the year ending in March. Lenders, including State Bank of India and ICICI Bank Ltd., India’s biggest, made up about 26 percent of the HDFC Top 200. Companies in oil, gas and petroleum products’ industries formed about 12 percent and those in construction and capital goods’ sectors totaled about 7 percent of the fund’s assets.

March 15, 2012. India's recoverable crude oil reserve has been estimated at 757.4 million tonne (MT) on Apr 1, which is not adequate to meet country's growing energy needs, minister of state for petroleum & natural gas RPN Singh said. The government has adopted multi-prong strategy such as increasing domestic hydrocarbon exploration and production activities, developing unconventional sources of hydrocarbon and acquiring overseas oil and gas assets towards country's energy security, he said. The government is also setting up underground strategic storage facilities of 5.33 million tonne capacity in three locations; Vishakhapatnam, Mangalore and Padur (Karnataka). The Vishakhapatnam facility has a capacity to store 1.33 MT crude oil while Mangalore facility has 1.50 MT capacity. The Padur storage unit has 2.50 MT capacity.

March 15, 2012. Reliance Industries' KG-D6 fields have seen nearly 22 per cent fall in production this fiscal due to drop in pressure and water ingress in wells, finance ministry-prepared Economic Survey said. The pre-Budget policy document said gas production from KG-D6 fields during April-December 2011-12 was about 12.36 billion cubic meters against the production of 15.82 BCM during the same period in 2010-11. Drop in KG-D6 production pulled down nation's gas output during first nine months of the current fiscal to 36.19 BCM as compared to 39.68 BCM during the same period last year. During the current fiscal, production of crude oil is estimated at 38.19 million tonnes, which is about 1.33 per cent higher than the 37.70 million tonnes produced during 2010-11. Domestic crude oil production during April-December was 28.70 million tonnes showing a growth of 1.9 per cent over the same period of the previous year. Oil production from Cairn India's prolific Rajasthan block was 4.80 million tonnes in nine months of current fiscal against total production of 5.148 million tons during full 2010-11 fiscal. The Survey said a total of USD 15.88 billion investment has been made in 235 blocks awarded in eight auction rounds under New Exploration Licensing Policy (NELP) since 1999. India has the fourth largest proven coal reserves in the world and holds significant prospects for exploration and exploitation of CBM. Under the CBM policy, 33 exploration blocks, the Survey said, adding 8.92 Trillion cubic feet output of prognosticated resources of about 92 Tcf, have so far been established. Shale gas can emerge as an important new source of energy in the country. Shale gas resources are spread over several sedimentary basins such as Cambay, Gondwana, Krishna-Godawari, and Cauvery.

March 14, 2012. The Petronet LNG Terminal at nearby Puthu Vypeen is likely to be commissioned by November-December this year. Petronet had earlier said the terminal would be ready by July, 2012 and would become operational by October this year. Petronet proposes to source LNG under a long-term contract from Gorgan in Australia by 2015 for its plant. About 1.5 million tonnes would be purchased from Gorgan and sold to GAIL, BPCL and IOC. There will also be a short-term arrangement besides this. On pipeline connectivity, GAIL, which was laying the pipelines, has to expedite the second phase. By December the pipelines are expected to be ready.

POWER

March 19, 2012. Leading private utility Tata Power said it has synchronised the second 525-MW unit at its Maithon mega power project in Dhanbad, Jharkhand under the requisite standard requirements. The first unit of 525 MW was commissioned, the company said. Maithon Power is a 74:26 joint venture between Tata Power and Damodar Valley Corporation. The JV is implementing a 2x525 MW coal-fired power project in Jharkhand.

March 18, 2012. Country's largest manganese miner MOIL plans to enter power generation business and has invited expression of interest from private sector players for a tie-up for development of coal blocks. The Maharashtra-headquartered company, under the administrative control of Steel Ministry, however, did not specify the area or size of the power plant it proposes to set up.

March 16, 2012. Nuclear Power Corporation of India Limited (NPCIL) has formed a new company in joint venture (JV) with National Aluminium Company Limited (NALCO). The new JV company, namely N PCIL-NALCO Power Company Limited was incorporated on March 2, 2012. NPCIL and NALCO signed a joint venture agreement in November last to form a Joint Venture company for the establishment of Nuclear Power Plants in India. As per the JV agreement, NALCO has 26% stake in the newly formed company, which is proposed to be enhanced to 49% subsequently.

March 15, 2012. The power sector has achieved 76 per cent of the generation target for 2011-12 in the first nine months of the fiscal, the Economic Survey 2011-12 said. Electricity generation during 2011-12 was targetted to increase by 5.4 per cent to 855 billion units, and in the first nine months 76 per cent of the target has been achieved, the Survey said. During the April-December (2011-12) period, 653.446 billion units (BUs) of electricity were generated against 598.244 BUs in the same period last financial year. Growth in power generation during April-December 2011 was 9.2 per cent compared to 4.6 per cent expansion during the corresponding period last fiscal. The growth in nuclear, hydro and thermal power generation was at 33.2 per cent, 19.2 per cent and 6.7 per cent respectively. The overall plant load factor (PLF) or the efficiency of thermal power stations stood at 72.1 per cent, slightly lower than the PLF of 72.9 per cent in the April-December 2010.

March 18, 2012. A power distribution firm of the city has been ordered by a consumer forum to pay ` 20,000 as damages to one of its customers for wrongly asking him to pay an arrear of ` 1.30 lakh. City's Central District Consumer Disputes Redressal Forum asked BSES Yamuna Power Ltd to pay damages to customer while scrapping the private discom's demand of the power arrear on the alleged ground that he had bought the property.

March 14, 2012. State utilities have asked Tata Power to legally contest the Indonesian government's decree that has raised the cost of coal for its ` 17,000-crore Mundra project, instead of trying to raise the tariff the company had bid to win the project. The utilities' resistance to any increase in charges by Tata Power is supported by the Central Electricity Authority (CEA), which has argued in a recent meeting with utilities and the power producer that increase in input costs is a risk the company should bear. It would be difficult to change the tariff as other companies had lost the race for the ultra mega power project (UMPP) only because they had quoted a higher tariff.

March 20, 2012. After keeping the Centre waiting for months, Tamil Nadu Chief Minister J. Jayalalithaa has at last given her thumbs up for the commissioning of the Koodankulam nuclear power project (KKNPP), which was in limbo owing to several protests by the locals and anti-nuke activists. Significantly, the AIADMK government's decision comes barely a day after polling getting over for the Sankarankoil by-election in Tirunelveli district, where the KKNPP is located. It appears that the AIADMK czarina, who had in the past made common cause with the protest, was only waiting for the bypolls to get over. The go-ahead comes with the announcement of a ` 500 crore development package for establishing cold storage and mechanised boat repair facilities for the fisherfolk, intended to wean them away from the ongoing stir.

March 20, 2012. Meghalaya will be generating 2,000 MW of power in near future and for this the state has roped in private power developers and state-owned North Eastern Electric Power Corporation (Neepco) to implement several power projects, said Meghalaya chief minister Mukul Sangma. Sangma, while presenting the state budget for 2012-13, said the state government “accords high priority to the power sector and efforts are on to make the state self sufficient in power.” Steps had been initiated to increase the generation capacity, and also augment the transmission and transformation system. The first unit of the Myntdu-Leshka Hydro Electric Project has been commissioned, and the second and third units are expected to be operational by the first and second quarter of 2012-13. Total capacity addition of this project will be 126 MW. The new Umtru and Ganol projects will add another 62.5 MW in the next two to three years. Further, the state government proposed to take up renovation and modernisation of Umiam Stage III project in 2012-13, for which proposal has been sent to the Centre for funding under Japan International Cooperation Agency (JICA) loan. Sangma said Meghalaya would be implementing hydro as well as thermal power projects to generating 2,000 MW of power in coming years and Memorandum of Agreement (MoA) had been signed to this effect with Neepco as well as with private power developers. Also, steps have been taken to connect the state to the North East Grid, and the Misa-Byrnihat transmission line has been commissioned.

March 19, 2012. As many as 18 power plants in the country are faced with critical level of coal shortage, Minister of State for Power K C Venugopal said. Of the 89 thermal power projects being monitored, 34 had fuel (coal) stock less than seven days and 25 of these had less than four days stock, he said. Stating the situation has improved subsequently, he said there are "only 18 super critical" power plants now. Power utilities, he said, have reported a generation loss of 8.7 billion units in 2011-12 (up to February, 2012) due to shortage of coal.

March 19, 2012. The private power producers are happy with the announcement of a slew of goodies for the sector in the Budget, but unanimously say that it makes only a marginal difference and a lot more needs to be done. They now want the government to take policy initiatives, regulators to allow steep tariff hikes, state utilities to set their house in order and companies, like Coal India, ONGC and Reliance Industries, to produce more fuel as the country is running out of coal and natural gas needed for new power plants. The budget proposals have paved the way for policy action.

March 19, 2012. The Kudankulam Nuclear Power Project's (KNPP) first 1,000 MW unit will be ready for the atomic energy regulator's clearance for fuel loading in two months' time and the Nuclear Power Corporation of India Ltd (NPCIL) is gearing up for it. NPCIL chairman and managing director S.K. Jain also heartily welcomed the Tamil Nadu cabinet's decision to take all steps in support of the two 1,000 MW reactors being set up at Kudankulam in Tirunelveli. According to Jain, all the reports needed by AERB relating to the first unit and the fuel loading are ready. Jain said NPCIL would also move people from its other stations to restart the work at the KNPP's first unit.

March 18, 2012. Nagaland has an electricity deficit between 30 to 50 MW, state power minister Doshehe Y Sema said. The minister said that the present power requirement in Nagaland is 80-110 MW during peak hours (5pm to 10pm) and 60-70 MW in off-peak hours. The availability of power during monsoons is 60-90 MW, while the number falls to 30-60 MW in dry seasons. The minister said that steps taken by the government to augment power resources included the construction of Lang Mini Hydro Electric Project (MHEP) to be commissioned by 2012 and the Tehok MHEP which will be in 2012-13, while an additional 27 MW will be generated by the Pallatana Gas Power Station during 2012-13.

March 17, 2012. At first glance, the finance minister seems to have worked wonders for power companies, granting almost everything he could give in a budget - from tax-free fuel imports to easier access to foreign funds, but bigger problems remain. There is nothing in the budget that will remove obstacles such as inefficiency in state-run distribution companies, shortage of domestic coal and natural gas, and inability of power producers to renegotiate contracts if fuel costs rise.

March 16, 2012. The government will auction 16 coal blocks to power producers, giving them the chance to bid for 8,165 million tonnes of reserves, enough to light up a whopping 68,000-MW of power plants for 30 years. The blocks are part of the 54 block with 18,000 million tonnes of reserve, which will soon be offered by the coal ministry to various sectors, including power. The ministry has allocated 25%, each, to steel companies and state mining corporations. A little less than 5% has been earmarked for cement and sponge iron units. Two small blocks would be offered to developers for pilot surface gasification projects.

March 16, 2012. The budget proposal to scrap customs duty on imported coal would bring down electricity generation costs by about 12 paise per unit, experts said. Faced with acute domestic coal shortage, many power producers are banking on imported fuel to meet their needs. The scarcity is estimated to hurt about 15,000 MW capacity in the current fiscal. In the 2012-13 Union Budget tabled, Finance Minister Pranab Mukherjee proposed to scrap basic customs levy on overseas coal. The power sector, vital for economic growth, is expected to see a capacity addition of over 80,000 MW in the 12th Five Year Plan (2012-17). State-run Coal India has also been advised to sign fuel supply agreements with power plants -- that have entered into long term power purchase agreements with distribution companies -- and would get commissioned on or before March 31, 2015.

March 15, 2012. The power sector would require a whopping investment of about ` 11 lakh crore in the next five years to achieve the targetted capacity addition of over 1,00,000 MW, the Economic Survey 2011-12 said. Meanwhile, the sector is likely to be constrained by shortage of fuel and environmental issues, it said.Shortage in supply of coal and gas to the power sector has been impacting the output at present. A delay in forest and environmental clearances, in particular for hydro-based power projects, has slowed down capacity addition. A power generation capacity of 50,000 MW to 52,000 MW is expected to be added during the current Plan period ending March 31, 2012. A capacity addition of 46,669.7 MW has so far been achieved untill January 2012. At the start of the 11th Five-Year Plan (2007-12), a capacity addition of 78,700 MW was envisaged but was scaled down to 62,374 MW in the mid-term appraisal, with the thermal, hydro and nuclear segments contributing 50,757 MW, 8,237 MW and 3,380 MW respectively. The country's total power generation capacity stands at over 1,80,000 MW.

March 15, 2012. Government has asked power producers to refrain from setting up new gas-based plants as dwindling fuel supply is threatening viability of 37,000-MW of existing and upcoming projects. The power ministry has issued an advisory to developers for not planning projects based on domestic gas till 2015-16. The directive signals that no further gas-based power generation capacity would be considered for allocation until existing gas demand is fulfilled.

March 14, 2012. To meet fuel supply commitments to the power sector, the government said CIL might divert a portion of the coal meant for e-auction to power plants. The decision, Minister of State for coal Pratik Prakashbapu Patil said, was taken following a meeting held in Prime Minister's Office to discuss the issues relating to coal shortage and finding out ways to meet the requirement of the fossil fuel of the power sector. Coal Minister Sriprakash Jaiswal had also said that it may divert a portion of the fuel under e-auction quota to power producers, besides resorting to imports to meet the crisis of the dry fuel. Under e-auction, coal is sold at spot market price. Around 10 per cent of the total coal produced by the state-owned firm is sold through e-auction. In order to provide relief to the fuel-starved power sector, it was decided that CIL will sign by March end agreements for supply of fuel to power projects commissioned up to December 2011. The decision, which addresses long-standing tussle between the state-controlled coal sector and private power producers, is an outcome of the meeting of Committee of Secretaries (CoS) constituted by the Prime Minister to look into issues impacting the power sector. During that meeting, it was agreed that CIL would sign Fuel Supply Agreements (FSAs) with power plants that have entered into long-term Power Purchase Agreements (PPAs) and have been commissioned or would get commissioned on or before March 31, 2015. Further, the FSAs would be signed for full quantity of coal mentioned in the Letters of Assurance (LoAs) for a period of 20 years. If the supply is below 80 per cent, then Coal India would be penalised whereas in case the supply is above 90 per cent, the company would be provided incentive. In case, Coal India is unable to meet the obligations, the company would have to arrange for fuel through imports or other arrangements.

March 14, 2012. China's thermal coal imports could soar to one billion tonnes in 2030 from just 175 million in 2011, while India's imports will be at least 400 million tonnes in that same year, five times last year's levels, research consultants Wood Mackenzie said. Imports will rise as surging growth boosts demand for electricity in two of Asia's largest economies, which rely heavily on coal for power generation. India's imports could "substantially" increase, "probably by next year," if the biggest supplier, Coal India, raises domestic prices closer to global levels soon. Wood Mackenzie expects India's thermal coal imports to rise to 95 million tonnes this year from 80 million tonnes in 2011 and they are likely to climb to 165 million tonnes in 2015.

OIL & GAS

March 18, 2012. Maersk Drilling, the oil-rig operating unit of Denmark’s largest company, plans to spend $4 billion to $6 billion on new platforms, with the first of those orders being placed as early as this year. The unit of A.P. Moeller-Maersk A/S plans to buy six to eight rigs to “expand into a more significant player”. Maersk Drilling, which has about 3 percent of the offshore market, has expanded its fleet as part of a long-term target to increase its capacity by 50 percent. The company, based in Copenhagen, is already spending $3.8 billion to build six platforms, with deliveries expected as early as next year. The company may start placing additional orders at the end of 2012 or in 2013.

March 16, 2012. Colombia, South America’s third- largest producer of oil, expects this year’s auction of so- called unconventional energy reserves to attract at least $500 million in investment. Royal Dutch Shell Plc, Exxon Mobil Corp., and Chevron Corp. have shown interest in Colombia’s reserves of gas trapped in shale rock and other unconventional sources. President Juan Manuel Santos is taking advantage of energy and metals reserves to draw record international spending to Colombia, including by billionaires Eike Batista and Carlos Slim. Improved security has enabled Ecopetrol SA, Colombia’s largest oil producer, and other companies to explore for fuel in areas that were off-limits a decade ago. About 30 onshore blocks of 109 blocks the nation will auction for exploration and production hold natural gas trapped in shale-rock formations or oil shales. Colombia aims to surpass Argentina in production of such fuels.

March 19, 2012. Valero Energy Corporation announced that due to unfavorable refinery economics and the outlook for continued unfavorable refinery economics, refining operations will be suspended at its subsidiary's 235,000 barrel-per-day refinery in Aruba. The refinery has been operating at reduced rates because of inadequate margins resulting in financial losses. Over the past two years, Valero has thoroughly evaluated all of its alternatives for the refinery and is now considering the possibility of operating a terminal and storage operation at the site. For the immediate future, Valero will maintain the refinery in a state that would allow a restart.

March 14, 2012. Iran’s oil exports will probably decline by 50 percent when European sanctions take full effect in July, the International Energy Agency said. Shipments will fall by at least 800,000 barrels a day. Iran exported just below 2 million barrels a day, compared with 2.6 million in November. Iran’s oil minister said exports haven’t decreased. U.S. and European Union leaders are increasing pressure on Iran over its nuclear program, which the government in Tehran says is for civilian purposes. Oil sales earned the Persian Gulf country, the Organization for Petroleum Exporting Countries’ second-biggest producer, $73 billion in 2010, accounting for about 50 percent of government revenue, according to the U.S. Department of Energy. Saudi Arabia is OPEC’s biggest exporter.

March 14, 2012. Oil refiners’ investment in more- efficient facilities is leaving shipping lines competing with Japanese power producers for a fuel that no one wants to make. Refiners are upgrading plants to cut output of fuel oil, a byproduct from making gasoline and diesel, as it sells for less than the price of crude. Shipping lines are seeking more of the product -- known in the industry as bunker -- to fuel expanding fleets, while Japanese electric companies are speeding purchases as they close nuclear plants for checks after 2011’s tsunami. The crunch means bunker has averaged 25 percent higher so far this year in Singapore trading than a year earlier, more than the 17 percent rise for Dubai crude. Container lines are unable to pass the increase to customers because of overcapacity, leaving AP Moeller-Maersk A/S’s cargo-box unit, the world’s largest, forecasting a 2012 loss and Orient Overseas (International) Ltd. predicting a “difficult” year.

March 20, 2012. China, the world’s largest oil consumer after the U.S., increased gasoline and diesel prices for the second time in less than six weeks after crude gained last month the most in a year. Prices will rise by 600 yuan ($95) a metric ton starting after the three crude grades tracked by the National Development and Reform Commission climbed more than 10 percent. Refiners will charge 7 percent more for gasoline and 7.8 percent more for diesel, the biggest price increases in more than two years.

March 20, 2012. OPEC nations are plowing cash into U.S. Treasuries at a more than 50 percent faster rate than all other foreign investors, an unintended benefit of oil prices above $100 a barrel. Organization of Petroleum Exporting Country members boosted their net purchases of government debt by $43.3 billion, or 20 percent, in the 12 months ended Jan. 31, compared with a 13 percent increase for non-OPEC foreign holdings. With prices up $26 a barrel since Sept. 30, producers have an additional $780 million in profits every day.

March 19, 2012. Iraq has approved a plan to expand its oil export routes by adding capacity from its northern fields and building a pipeline to ship oil from southern fields to Ceyhan in Turkey. The contingency plan was set by the government's energy and economic committee to deal with any potential crisis should Iran close the Strait of Hormuz, which would halt about 80 percent of Iraq's oil exports. Iran has threatened to close the Strait of Hormuz, used for a third of the world's seaborne oil trade, if Western moves to ban Iranian crude exports crippled its energy sector. Iraq exported 2.014 million barrels per day in February, including 1.711 million bpd from its southern oil hub of Basra and via exports terminal in the Gulf, and 375,000 bpd from its northern fields around Kirkuk to Ceyhan.

March 17, 2012. Rising gasoline prices threaten to temper a hard-won sense of economic momentum for middle-income families in the U.S. as the election campaign heats up. Middle-income families have seen their purchasing power drop during most of the economic recovery even as stocks soared. Inflation-adjusted median income only began to climb after bottoming out last August. The surge in gasoline prices now squeezes middle-income families again as President Barack Obama approaches the election. Gasoline prices are up almost 17 percent, or 54 cents, this year through March 14. While gasoline accounted for just 3.8 percent of consumer spending in January, fuel prices have a disproportionate impact on both the psychology and actual finances of middle- and lower- income families.

March 16, 2012. China pledged to prioritize land approvals for shale-gas exploration, allow tax-free equipment imports and offer subsidies to companies including PetroChina Co. tapping the largest reserves of the unconventional fuel. The country aims to produce 6.5 billion cubic meters of shale gas annually by 2015 and ramp up output to between 60 billion and 100 billion by the end of the decade, the National Development and Reform Commission (NDRC), matching estimates issued by the Ministry of Land and Resources. China has yet to produce shale gas commercially as its explorers struggle to overcome the lack of domestic drilling expertise and geology that is tougher than in the U.S., where output has surged 15-fold in the past decade. A “breakthrough” would be needed by 2015 for the country to achieve its goals, the National Energy Administration said. Natural gas accounted for less than 4 percent of China’s energy supplies as of last year, compared with a goal by the NDRC set in 2000 to boost the share of the fuel to 10 percent by 2010. The government plans to offer fiscal support for the development of shale gas, including a subsidy structure based on a system in place for coal-bed methane production. China will offer subsidies to encourage domestic companies to tap the resource, Zhang Dawei, deputy head of the Strategic Research Center at the land ministry, said. The subsidy will be higher than the 0.2 yuan (3 cents) per cubic meter provided for coal-bed methane because gas is harder to extract from shale rock, Zhang said. China will allow tax-free import of some drilling equipment that can’t be manufactured domestically, the NDRC said. The Chinese government will hold one or two auctions of shale-gas blocks, the land ministry said. China Petroleum & Chemical Corp., the nation’s second-largest oil company, and Henan Provincial Coal Seam Gas Development and Utilization Co. won the rights to explore two areas in the country’s first shale-gas auction in June.

March 16, 2012. U.K. Prime Minister David Cameron said that, while releasing oil from strategic stockpiles should be considered, there is no agreement with U.S. President Barack Obama on using reserves to reduce oil prices. The price of oil in New York fell as much as 1.6 percent after that Obama and Cameron agreed to cooperate on a release from stockpiles, including the U.S. Strategic Petroleum Reserve. With rising energy prices threatening to crimp the economic recovery, it “should not be surprising” that Obama and Cameron would discuss the matter. Crude oil for April delivery fell 8 cents, or 0.1 percent, to $105.35 a barrel on the New York Mercantile Exchange.

March 15, 2012. Oil at the highest price since 2008 is increasing BP Plc’s available cash as it negotiates a final bill with the Obama administration to pay for damages caused by the worst U.S. spill. The soaring price for crude that helped Chief Executive Officer Bob Dudley rescue BP from the brink of collapse may figure into talks with the U.S. government, potentially the biggest claimant in the Deepwater Horizon accident. The U.K. oil producer estimates its earnings rise $350 million a year for every $1 gain in Brent crude, which has jumped $41 a barrel to $126 since the April 20, 2010, tragedy. BP has been in talks with the Department of Justice to settle pollution claims that can reach as much as $17.6 billion. The company set up a $20 billion trust and has already agreed to a $7.8 billion settlement with residents and businesses. BP has set aside $3.5 billion for the federal government claim. President Barack Obama faces re-election this year with Republicans blaming him for rising fuel prices charged by petroleum companies.

March 15, 2012. President Barack Obama accused Republican presidential candidates of playing election politics over high gasoline prices, and mocked them for resisting development of alternative energy sources. Obama, whose re-election bid could be harmed by voter resentment and opponents' criticisms over increasing pain at the pump, insisted there was no "quick fix" or "silver bullet" for high gas prices.

March 14, 2012. The European Union may allow insurance against risks such as collisions and spills for tankers carrying Iranian oil, a proposal that would ease curbs on the nation’s crude exports. The EU would prohibit the insurance and re-insurance of Iranian oil “except for third-party liability insurance and environmental liability insurance”. The bloc aims to complete the regulation, which is being considered by national governments, within a month.

POWER

March 19, 2012. Karachi Electric Supply Company (KESC) has failed to restart Bin Qasim Power Plant II, completed few months back. The KESC has committed to make plant operational in July 2011 which has the capacity to produce electricity of 560 megawatt. The delay in the resumption of power generation project is causing hours long load shedding, while the power outage situation has been worsen in the upcoming summer season. Sui Southren Gas Company (SSGC) has provided KESC with 130 MMCFD gas for all power plants while committed to provide further 130 MMCFD gas for Bin Qasim power plant. If SSGC not provided additional gas supply for Bin Qasim plant than KESC is authorized to utilized the available gas to the Bin Qasim power plant II. On the other hand, KESC not uses the furnace oil for power generation and totally depend upon the gas to overcome financial burden of the company which is badly effected the consumers.

March 20, 2012. Two power companies have applied to the National Energy Board for permission to export Canadian electricity to the United States. The government is not honest about its intentions to export electricity to the U.S. using transmission lines paid for by Albertans. Capital Power already holds a licence to export 17,000 gigawatt hours (GWh) of electricity annually. That licence was first granted in 2002 and is up for renewal, which is why the company submitted an application Jan. 12. In practice, the company actually exports 1,000 GWh, a fraction of its allotment. The vast majority of that electricity - 970 GWh - comes from Ontario hydroelectric generation. Roughly 11 GWH comes from Alberta. Energy Department said electricity generation plants have to serve Albertans first before they are allowed to export excess power.

March 19 2012. Kenya will sign an agreement with Ethiopia for a Sh54 billion ($666 million) transmission line that is expected to enhance trade in electricity between the two countries and the East African region. Kenya seeks to import up to 400 megawatts of power from Ethiopia stabilising energy supply, which investors have blamed for the high cost of doing business and therefore eroding the competitiveness of goods in regional markets.

March 15, 2012. Clean Line Energy Partners held a meeting with Kossuth County Farm Bureau members, to announce its proposal to build a more than $1.7 billion power transmission line to connect wind farms in the Midwest to energy-starved urban areas in eastern Illinois. The project would start in O’Brien County in Iowa and deliver 3,500 MW of power over 500 miles to existing transmission lines serving the upper northwest located in Grundy County, Ill.

March 19, 2012. Russian Energy Minister Sergei Shmatko proposed extending cross subsidies in the power sector to 2016 or 2017 to avoid sharp increases in tariffs for households. The so-called last mile cross subsidies, by which industrial customers connected to Federal Grid Co also pay distributor OAO MRSK Holding which rents some of its grids, were to be eliminated in 2014. They had previously been prolonged from 2011.

March 19 2012. A leading UK government scientist has called for two new hydro-electric power stations to be built in North Wales, to help provide renewable energy for the rest of the UK. Professor David Mac Kay, chief scientist at the Department of Energy and Climate Change used a speech to the Institute of Mechanical Engineers to argue in favour of combining wind farms and pumped storage stations to help meet the UK and in particular England’s renewable energy needs. He highlighted sites at Bowydd and Croesor in Snowdonia as ideal locations for new stations.

Under the current devolved powers settlement, the Westminster Government would be likely to be responsible for determining any application to build a new hydro-electric power plant in Snowdonia. The Welsh Government only has authority for determining applications for power plants under 50MW of capacity, below the likely level of any new hydro-electric plant in Snowdonia. The biggest hydro-electric pumped storage power station in Wales has capacity of 1,800MW, almost double the combined capacity of Wylfa power station’s two nuclear reactors of 980MW.

March 19, 2012. The Romanian government said it has approved and submitted to parliament the draft of a new electricity bill that transposes the relevant EU directives. Under the draft bill, the economy ministry will transfer the supervision of state-controlled electricity transmission operator Transelectrica to other ministries in order to assure separate ownership within the power system in line with the EC directive 72/2009. The system operator will remain under the supervision of the economy ministry. The move also contributes to the unbundling process since the economy ministry controls power producers and suppliers as well. Separately, natural gas transmission company Transgaz will be also spun off from the economy ministry on similar grounds. The regulated electricity prices for non-residential and residential users would be gradually phased out until the end of 2013 and the end of 2017, respectively, under another key provision of the new electricity bill. A similar move has not been yet agreed for the natural gas market. The government urged the parliament to discuss and endorse the bill under emergency procedures.

March 16, 2012. Canada's nuclear regulator has given Bruce Power the green light to restart the Unit 2 reactor, which has been offline for more than 15 years, the Ontario power utility said. The approval, from Canada's Nuclear Safety Commission, allows the utility to power up the refurbished reactor to complete final safety and operations tests. The next step will be to link the reactor, located on the eastern shore of Lake Huron, to Ontario's power grid. Unit 2 is one of four reactors at Bruce Power's Bruce A plant. The 750-megawatt Candu reactor is expected to produce enough electricity to power 500,000 homes. Bruce Power expects to have approval to bring Bruce A's Unit 1, also being refurbished, online in the coming months. Unit 1 and Unit 2 have been shut down since 1997 and 1995 respectively. Once the two reactors are online, the Bruce A and Bruce B plants will be generating a combined 6,300 megawatts of power from eight reactors. Bruce Power currently generates about 4,700 megawatts from four units at Bruce B and two units at Bruce A.

March 14, 2012. Spain’s Supreme Court ordered the government to raise the price of power for consumers to cover more of the costs of delivery. The ruling follows appeals by Iberdrola SA and Endesa SA against the government’s decison to freeze power prices in January. The increase will be backdated to the start of January and may raise revenue by at least 900 million euros ($1.2 billion).

March 19, 2012. DIV Wind OOD, co-owned by India’s Suzlon Wind Energy Ltd. and Volkswind GmbH, is planning to build about 74 wind turbines in Bulgaria. The wind project near Balchik in northeastern Bulgaria will be at least 150 megawatts in capacity depending on the size of turbine used. DIV, based in Sofia, has obtained the required approvals and completed necessary studies for the project. The company is a venture between Suzlon and Volkswind, a German wind farm developer based in Ganderkesee that has built 60 wind farms. Bulgaria has good quality wind sites while wind markets in nations such as Germany, Spain and Denmark mature. Bulgaria also offers a feed-in tariff for wind plants. Bulgaria had 612 megawatts of installed wind energy at the end of last year. The provisional data showed the nation added 112 megawatts in 2011.

March 16, 2012. India proposed to scrap duties on imports of solar-thermal equipment as it seeks to reduce project costs for Reliance Power Ltd. and other developers adding plants. The exemption would lower costs for the seven companies building a third of India’s planned solar capacity using solar- thermal technology, which concentrates sunlight to boil water, used to power steam turbines. Reliance Power is importing turbines from Areva SA, while the others have ordered units from suppliers including General Electric Co. and Siemens AG.

March 16, 2012. Save for a few sops, the sunrise renewable energy sector had little to cheer from Finance Minister Pranab Mukherjee's Budget. One of those sops was an exemption from special countervailing duty that was made available for plant and equipment used in solar themal projects The budget also proposed to fully exempt a coating chemical used for compact fluorescent lamps from basic customs duty. Excise duty on LED lamps was also being reduced to 6 per cent. India's blueprint for renewable energy is grand and includes plans for 20GW of solar power by 2022.

March 16, 2012. Finance minister announced during the presentation of union budget 2012 that concessions and exemptions will be provided for energy saving devices, plant and equipments needed for solar-thermal project during their setting up. This hasn't gone too well with the domestic manufacturers who were expecting the same for solar photovoltaic (PV) industry, which holds almost 100% of the solar energy market in India. Domestic manufactures of solar PV cells and modules have been lobbying since long for exemption of all duties on raw materials and imposition of import duty on foreign finished PV cells and modules, but the minister has seem to disappointed them. Domestic manufacturers of solar PV and modules are running on capacity as low as 10%-15% so an exemption would have brought a relief to them. Another major player in the domestic solar energy market also voiced its disappointed mentioning that none of the demands of the indigenous manufacturers have been met and this is going to only hurt the industry.

March 20, 2012. Germany’s solar manufacturing industry will disappear within five years because of competition from Chinese companies. A surge in production of solar cells from Chinese companies is driving down the price of panels and making German companies uncompetitive.

March 20, 2012. The U.S. Energy Department mismanaged stimulus programs, putting taxpayer dollars at risk, according to two Republican reports released at a hearing where lawmakers debated who is responsible for rising gasoline prices. The reports, by Republican staff on the House Oversight and Investigations Committee, focused on a program that gave Solyndra LLC its $535 million loan guarantee two years before the company went bankrupt, and on a $5 billion home-energy efficiency initiative.

March 20, 2012. Strabag SE, the biggest builder in Central Europe, plans to invest more than 300 million euros ($396 million) on a factory in Germany to make foundations for offshore wind turbines and the vessels needed to install them. Strabag, based in Vienna, is seeking to make 80 foundations a year at the site in Cuxhaven. The plant, servicing the German market, will cost more than 100 million euros and produce enough foundations for one wind farm a year, with the rest of the investment going toward ships.

March 20, 2012. Millers in Brazil, the world’s largest sugar producer, may switch to making ethanol at the expense of the sweetener if prices for both commodities continue to approach similar levels, Societe General SA said. Domestic sugar sales in Brazil were last week 32 percent more profitable than anhydrous ethanol, the type blended into gasoline, according to Cepea, a university of Sao Paulo research group. Local sugar sales were 35 percent more advantageous than the hydrous kind, used in flex-fuel cars. That compares with a 40 percent advantage in the week ended March 2 for both types.

March 20, 2012. U.S. solar developers are luring cash at record rates from investors ranging from Warren Buffett to Google Inc. and KKR & Co. by offering returns on projects four times those available for Treasury securities. Buffett’s Berkshire Hathaway Inc. together with the biggest Internet search company, the private equity company and insurers MetLife Inc. and John Hancock Life Insurance Co. poured more than $500 million into renewable energy in the last year. That’s the most ever for companies outside the club of banks and specialist lenders that traditionally back solar energy.

March 19, 2012. Bloomberg New Energy Finance (BNEF) recognized 10 companies for developing innovative solar, biofuel, power-storage and electricity-management systems. The research company announced its New Energy Pioneers at its fifth annual conference in New York. The recipients were selected for both the potential value of their products and services and the companies’ ability to bring them to market. Some are focused on financing rather than energy, such as Clean Power Finance Inc., which operates an online marketplace for investors to fund consumers’ rooftop solar projects. Other Pioneers, such as Xtreme Power Inc., Smarter Grid Solutions Ltd, Maxwell Technologies Inc., Silver Spring Networks Inc. and Tendril Networks Inc., are developing storage systems, smart meters and software that may make the power grid more efficient.

March 19, 2012. Australia’s surtax on miners won’t deter investment in the resource industry and will help small businesses and workers with their retirement plans. The Mineral Resources Rent Tax, or MRRT, is scheduled to be voted by the Australian Senate and with the Greens Party pledging to support the ruling Labor Party, the law has enough votes in the upper chamber to pass.

March 16, 2012. The U.K. must learn from a failed 1 billion-pound ($1.6 billion) carbon-capture funding program that “wasted” four years, as it prepares to open a second financing competition. The U.K. in 2007 invited companies to compete for funds to build a demonstration carbon-capture and storage, or CCS, plant and selected four candidates. By last year, Iberdrola SAwas the only utility left in the contest after developers including BP Plc and EON AG shelved projects. The final bid was scrapped in October as Iberdrola was unable to build its proposed Scottish plant within the budget or agree to the contract terms.

March 15, 2012. JinkoSolar Holding Co. can remain competitive with global manufacturers if the U.S. government sets an import tariff of 10 cents a watt on solar panels produced in China. A group of U.S. manufacturers led by SolarWorld AG’s U.S. unit have asked the Commerce Department to put tariffs on imports after it made an initial ruling that Chinese subsidies were harming U.S. manufacturers. The department is expected to rule on the amount of the tariff March 19. Solar panel prices fell 51 percent amid a global supply glut. Solyndra LLC and Evergreen Solar Inc. declared bankruptcy last year, blaming competition from Chinese-subsidized solar companies. The company is also considering locating additional manufacturing in South Africa, Taiwan and Malaysia.

March 15, 2012. The U.K. is heading for power blackouts within five years unless Prime Minister David Cameron devises a better strategy to build new nuclear plants. The government is dragging its feet on replacing a quarter of its electricity generators that finish service by the end of the decade. The energy regulator estimates 200 billion pounds ($320 billion) must be spent by 2020 building new power stations and upgrading the electricity grid to cope with additional demand and the plants that retire from service. Electricite de France SA and Centrica Plc are leading the companies seeking to bid for work building new nuclear stations.

March 14, 2012. When all else fails, the British secret services are the perfect excuse - and London has rolled them out as an argument against one of the most complex pieces of legislation on the EU agenda. In theory, energy saving should be obvious and simple, especially in times of economic crisis. In practice, it has generated multiple amendments and mathematical formulae, Byzantine even by EU standards, as governments find ways to dodge targets on increased energy savings through more efficient buildings. One of many heated debates has focused on how many public buildings should be overhauled to make them use less energy. The current proposal is for a proportion of the total space to be renovated each year, but EU member states have been whittling away at how many buildings should be included. To a growing list of exceptions, Britain has added barracks and offices for the armed forces and other staff employed by national defence authorities capable of being shared with other central government authorities. Green campaigners said that was code for property used by military intelligence and that there was no reason why it should not be well-insulated. On the contrary, reducing reliance on imported oil from volatile regions, cited as a reason for Western military intervention, could help to reduce the need for counter-terrorism work and safe houses in the first place. A British diplomat in Brussels said Britain was opposed to target-setting.

March 14, 2012. Temperatures in many parts of the U.S. Northeast and Midwest may be 20 degrees Fahrenheit (11 Celsius) above normal in March. New York, Chicago, Washington and Boston are expected to reach 80 or above. Traders watch temperature predictions to gauge energy use and demand. Warm weather will drive up electricity use as people turn on air conditioners. About 51 percent of U.S. households use natural gas for heating. How long the hotter weather continues isn’t clear. While temperatures in the East may be 8 degrees higher than normal, computer models show some cooling is possible in the March 24 to March 28 time frame. The normal average temperature in New York on March 21 is about 44 degrees. It’s 40 in Boston and Chicago, 48 in St. Louis, 56 in Atlanta, 59 in Dallas, 64 in Houston, 48 in Seattle, and 59 in Burbank, California.

March 14, 2012. Brazil, which has a single utility- scale solar plant, will issue within two weeks a pair of regulations designed to promote the use of power generated from sunshine, the country’s electricity regulator Agencia Nacional de Energia Eletrica said. The two-pronged policy push offers tax breaks to utilities and will let consumers and businesses sell electricity generated from renewable sources to the grid, according to Ivan Marques de Toledo Camargo, Aneel’s director of regulation for distribution services.

March 14, 2012. The U.S. solar industry installed a record number of panels in 2011, more than double 2010, and is likely to see strong growth again this year. Solar installers built 1,855 megawatts of photovoltaic projects in 2011 for a total of $8.4 billion, up from 887 MW in 2010. The growth in U.S. demand comes as the makers of the panels that turn light into electricity have struggled to earn profits amid a glut of supplies on the global market that eroded margins.

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