The 3 Week Diet System

Friday, April 30, 2010

Germany launches push into offshore wind

Published: April 30, 2010 at 4:10 PM

BORKUM, Germany, April 30 (UPI) -- The blades began turning on Germany's first offshore wind farm this week -- the starting signal for the construction of hundreds of additional sea-based turbines.
Erected 28 miles off the North Sea coast, the Alpha Ventus farm consists of 12 wind turbines -- each nearly as high as the Washington Monument -- that are to generate enough power for nearly 50,000 households. German utilities Eon and EWE as well as Sweden's Vattenfall invested $333 million in the project, which is to pave the way for similar farms to be built near Germany's coastlines in the coming years.
"The use of offshore wind power will play a central role in the energy of the future," Germany's Environment Minister Norbert Roettgen said before cutting the ribbon on the wind farm. "Alpha Ventus is the beginning, it is the pioneer for us, and it will lead the way to the age of renewables."
Germany has ambitious clean energy targets; the share of renewables in the power mix is to grow to more than 30 percent by 2020 and 40 percent by 2030, up from 16 percent today.
While the country has pioneered commercial onshore wind power production, growth on land is limited. Some 21,000 turbines are already turning in Germany, and recent plans to replace aging ones with more powerful -- and thus bigger ones -- have drawn public opposition.
That's why companies are moving at sea. Offshore construction and maintenance is difficult and costly but the wind blows stronger and steadier, resulting in a greater power yield than on land.
Somewhat of a "green rush" has ensued, with General Electric and all major European utilities staking claims off the Irish, Scottish, British, Dutch and German coastlines.
Britain is leading the push into offshore energy in Europe, with several massive projects planned off its coastlines. Yet other nations are now catching up.
While the German farm is small, it is special because it was constructed in 100-foot-deep water -- a much more demanding environment than the shallow seas of the British coast.
"We can now tackle additional offshore deep-water projects in the German North and Baltic seas," Eon Chief Executive Officer Wulf Bernotat said in a statement.


Cellulosic Biorefineries: An Ethanol Revolution

By Paul Pansegrau

The Energy Independence & Security Act of 2007 contained a number of mandates with respect to renewable fuels. One of these mandates called for the production of 16 billion gallons of cellulosic or biomass-based fuel by the year 2022. This simply means producing ethanol from nonstarch sources such as corn stover and cobs, wheat straw, switchgrass, wood, sugarcane bagasse, agricultural residues, municipal solid waste, garden and lawn clippings, and rice hulls. In 2009, a total of 10.75 billion gallons of corn (starch) ethanol were produced from 170 production facilities operating in 21 states. According to EISA, corn-based ethanol is to be capped at 15 billion gallons. In order to produce the additional 16 billion gallons of cellulosic ethanol, new facilities will have to be built that are scaled to produce sufficiently large quantities in order to sustain profitable enterprises. Going hand-in-hand with the production of ethanol will be the need for more flexible-fuel vehicles (FFVs) that can burn ethanol up to a level of 85 percent.

The Energy & Environmental Research Center has worked with all facets of the ethanol industry: from siting corn ethanol plants, to developing new fermentation schemes, to inventing new thermochemical processes that require absolutely no fermentation. So here’s an answer to a question we get asked at least weekly—what is the status of this ethanol revolution? Indeed, it will take a revolution.
With respect to FFVs the automakers seem willing to produce more E85 FFVs, but in most states gas stations that carry E85 lag way behind and there is still a severe lack of public acceptance and incentive to get consumers interested in FFVs. Of the 7 million or so E85 vehicles on the road, GM has made half of them and has plans for 50 percent of its production to be FFVs by 2012.

With respect to the fuel production side, the U.S. DOE is trying to stimulate technology development for cellulosic ethanol plants. Within the past two years, DOE has provided awards to 20 organizations working to develop such technologies. Currently, 19 of the original 20 organizations are actively working toward their goals; one organization has dropped out; and three are producing cellulosic ethanol—albeit at small scales. The array of technologies being developed is diverse, in part due to the wide variety of cellulosic biomass feedstocks being utilized.

Most ethanol plants today are located in the Corn Belt of the U.S., but most of the 19 organizations with DOE awards for cellulosic ethanol are developing their technology outside of the Corn Belt. This represents the diversification of feedstocks being developed. States that currently do not possess starch-ethanol production facilities and are hosting a DOE-funded project include Maine, Vermont, Florida, Montana and Louisiana.

The technologies used to convert cellulose to fermentable sugars include biological methods that utilize concentrated acid hydrolysis and enzymatic hydrolysis, coupled with fermentation. Other technologies will utilize thermochemical means such as gasification to convert the biomass to gas and then reform that gas using chemical catalysis or biological fermentation to produce ethanol. When compared head-to-head, these various technologies offer an almost endless combination of possibilities for conversion of cellulose to ethanol.

In conclusion, the status of the cellulosic ethanol revolution is that automakers are poised to do their part, consumers are lagging a bit in motivation, and technology options have yet to be proven commercially. Whether this is sufficient to meet the EISA goals remains to be seen.

Paul Pansegrau is a research scientist at the EERC. Reach him at or (701) 777-5169. 


Rig explosion dirties BP's green image

, On Friday April 30, 2010, 5:58 am EDT
NEW YORK (AP) -- BP brands itself a friend of the environment, an energy company that goes "beyond petroleum."
That image, worth billions of dollars, is being sullied by the company's inability to contain a massive oil spill in the Gulf of Mexico.
As the expanding oil slick threatens marshlands and wildlife along the coasts of Louisiana and Mississippi, BP faces perhaps the biggest public relations challenge an oil company has experienced in the U.S. since the Exxon Valdez tanker disaster in Alaska in 1989.
BP's environmentally friendly image -- its logo is a green and yellow sunburst -- has outlasted past accidents, including a Texas refinery blast and Alaska pipeline spill. But last week's deadly explosion on a BP-operated oil rig and the looming environmental damage are shaping up to be a major problem, experts said.
Since the accident, BP's stock market value has declined by roughly $25 billion.
An estimated 5,000 barrels of oil per day are spewing into the Gulf, and the company is spearheading the cleanup. But on Thursday, the government sent in equipment to support BP's efforts as the spill was reaching the coast. The Obama administration said BP is responsible to pay for the cleanup, which the company says is costing millions of dollars per day.
Marketing experts and environmentalists say BP's response so far has been superior to Exxon's treatment of the Valdez crash. BP devoted most of its home page on its Web site to the disaster, and it's held regular news conferences.
But it's had some slips. Most notably, BP appeared to initially downplay the extent of the oil spill. It estimated that 1,000 barrels of oil were seeping from the sea bed each day. The government later corrected that figure to five times as much.
In addition, local officials in communities in the path of the spill have expressed frustration with the lack of communication from BP officials, as well as the government.
"They have to repair the problem. I'm not sure if anything else is going to matter until they do," said Kelly O'Keefe, managing director of the Virginia Commonwealth University Brandcenter. "And they should apologize."
BP says it's not focusing on its public relations effort.
"It's about tackling an oil spill as aggressively as we can," said Robert Wine, a spokesman at BP's headquarters in London.
BP has had its share of recent high-profile accidents:
-- An explosion at a BP refinery in Texas City in 2005 killed 15 people and injured 170. Regulators in October hit BP with a record $87 million fine for failing to correct safety hazards at the plant. BP has formally contested the fine.
-- More than 200,000 gallons of oil spilled from a BP pipeline in Alaska in March 2006, the largest-ever spill on Alaska's oil-rich North Slope. BP paid about $20 million in fines, including $4 million to the National Fish and Wildlife Foundation for Arctic environmental research.
-- Last year, BP paid nearly $2 million in fines for not operating with the proper equipment at oil fields along the North Slope.
The costs could be much higher this time. Besides cleanup expenses now running at $6 million a day, BP faces potential fines and costs to ensure better safety on the rigs it operates in the Gulf. And there will be legal costs. Two lawsuits have already been filed related to the blast and potential damage to the commercial shrimping industry.
The immediate concern was the oil slick threatening hundreds of species of fish, birds and other wildlife along the Gulf Coast.
Eileen Campbell, chief executive of market research company Millward Brown, said BP risks becoming associated with photos of oil-soaked wildlife.
That would stand in stark contrast to the green image that BP took years to build. The company has invested in solar and wind energy projects. It devoted $500 million on biofuels research, and CEO Tony Hayward supports capping carbon emissions. It spent nearly $76 million in the United States on radio and TV last year, according to Kantar Media.
Altogether, the company's efforts have contributed to a brand name worth about $17.3 billion, according to the marketing firm Millward Brown.
BP is considered the most environmentally friendly of major oil companies, the firm said. In contrast, Exxon's brand is based more on its reputation for innovation, corporate citizenship and communication with shareholders.
In the grand scheme, BP hasn't gone much beyond its core business of petroleum. Of its $73 billion in revenue in the first quarter, about $72.3 billion of that came from the exploration, production, refining and marketing of oil and natural gas. The rest came from "other businesses" such as solar and wind energy.
David Oesting, an Alaska lawyer who represented the plaintiffs in a class-action suit that followed the Valdez crash, doesn't believe BP will suffer as much as Exxon did.
Exxon eventually spent more than $4.3 billion on the cleanup and on lawsuits to compensate residents. Two decades later, it continues to pay for the damages. Oesting said he won $1 billion in the suit, and years later he's still cutting checks to the victims.
BP will benefit from the Oil Spill Liability Trust Fund, which was established after the Valdez crash by collecting 8 cents from the industry for every barrel of oil produced or imported to the U.S. The fund has about $1.6 billion available to cover damages suffered by coastal residents, fishermen and other affected businesses, according to the Coast Guard.
BP now is at the front lines of what is likely to be a renewed attack on Big Oil.
The Obama administration signed off a few weeks ago on a plan to allow more drilling along the East and Gulf coasts. Edward Markey, the chairman of a House energy committee, has asked the heads of BP and four other oil companies to testify at a hearing about the spill.
Richard Charter, senior policy adviser for Defenders of Wildlife said the rig explosion will reverberate for years in public debates about whether to expand offshore drilling. He said the unfolding environmental damage along Louisiana's coast will linger in memories of the American public.
"It will remind people that there is a risk with this kind of industrialization of the coast," he said.


Japex seeks Canada approval for oil sand expansion

Fri Apr 30, 2010 1:58am EDT

TOKYO (Reuters) - Japan Petroleum Exploration (1662.T: Quote) (Japex) said on Friday it has asked for Canadian government approval to expand bitumen output from the Hangingstone oil sand project by up to 35,000 barrels per day.
The Hangingstone oil sands are currently producing about 7,000 bpd of bitumen, and the expansion is expected to increase output by an average 25,000 to 30,000 bpd, Japex said.
Japex said that approval may take about a year and a half, and that it could begin output by late 2014 if it receives approval in the autumn of next year.
A Japex subsidiary owns a 75 percent stake in the project, while Nexen Inc (NXY.TO: Quote) has the rest.
(Reporting by Osamu Tsukimori)


Japan, power firms reportedly plan nuclear venture

April 29, 2010, 6:52 p.m. EDT

By Tokyo Bureau 

TOKYO (MarketWatch) -- The Japanese government and three major power companies will set up a firm to sell the country's nuclear power technology overseas, the Asahi Shimbun reported Thursday.
Tokyo Electric Power Co. (9501.TO), Chubu Electric Power Co. (9502.TO), Kansai Electric Power Co. (9503.TO) and the Japanese government will each invest Y100 million in the company, which could be established this fall, the report said.
Toshiba Corp.(6502.TO), Mitsubishi Heavy Industries Ltd. (7011.TO) and Hitachi Ltd. (6501.TO) are also considering investing in the venture, the report said.


Kuwait woos top oil firms, politics tricky

Apr 30, 2010 at 11:56

The world's fourth-largest oil exporter Kuwait is looking to entice big oil firms back with new deals.
A change in the political mood has given optimism to both Kuwait oil officials and foreign oil firms, which failed for years to make progress on new deals as a power struggle between government and parliament paralysed the state.
France's Total made a high-level pitch this week when Chief Executive Christophe de Margerie led a delegation to discuss potential ventures with top Kuwait oil officials.

That came after Kuwait signed a technical service contract with Royal Dutch Shell for gas field development in February, signalling Kuwait was open for business.

"The Shell deal has whetted the appetite of the other big oil companies," Kuwait's Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told Reuters. "We've been approached. If they accept our terms and conditions, they are most welcome."
Tensions between the legislature and the cabinet eased after the prime minister, Sheikh Nasser al-Mohammad al-Sabah, survived a non-cooperation motion in parliament in December, but disagreement remains over reforming the economy and weaning Kuwaitis from a decades-old welfare state.
"Stakeholders in the Kuwait system seem to be saying enough is enough, we'd like to see something done, we've wasted too much time," said David Kirsch of Washington-based PFC Energy.
"There are still some real challenges. But there is a strong notion that the rest of the region is passing Kuwait by."
Last year, oil majors BP and Chevron scaled back their presence in Kuwait after making little headway in negotiating new deals after 15-year technical service contracts lapsed. Energy sector pessimism was cemented when parliamentary criticism led Kuwait to cancel billion-dollar petrochemical and refining deals.
In contrast, the world's biggest oil firms competed in two of the largest oil auctions ever held in neighbouring Iraq, winning deals to develop its giant oilfields. Kuwait officials at the time voiced concern they had missed their opportunity to attract the world's top oil firms.
Oil more controversial
The gas deal with Shell has escaped parliament's public scrutiny. That may be because Kuwait needs the gas for power stations and has struggled to produce it from challenging fields in the north.
But getting oil deals past parliament would be tougher for the oil minister. Oilfields have long been off limits to foreign investment, and the involvement of international firms even as service providers is an emotive issue for parliament.
"Gas is always the least controversial element in the energy mix in the region," said Samuel Ciszuk, Middle East energy analyst at IHS Global Insight. "But the jury is still out on whether they will make progress elsewhere. What about heavy oil?"
The oil minister will have to convince parliamentarians that oil service deals would not lead to the OPEC-member allowing foreign firms access to its reserves, officials said.
Sheikh Ahmad may be the right man for the PR job. His other portfolio is the information ministry, and this week he hosted the largest energy industry conference in Kuwait for years.
"It is difficult because opposition to previous deals was not always based on scientific fact," said one Kuwaiti oil official. "The projects need to be better understood and perceived by MPs and the public."
Any progress could quickly be torpedoed if relationships again become strained between parliament and the executive, another official said.
"They are good plans, but it is the same faces in parliament," the official said. "They could still cause problems."

Kuwait has raised its oil capacity to 3.1 million barrels per day (bpd) without foreign help, but needed the project management and technology of foreign oil firms to move toward its 4 million bpd capacity target in 2020, analysts said.
"They are important," said former oil minister Ali al-Baghli. "Because these foreign companies have new technologies that Kuwait Oil Company and its contractors don't have."
Kuwait needed to boost output of heavy oil, and improve the percentage of oil it recovers from oilfields, analysts said.
"They don't have the capacity for it," said Fereidun Fesharaki, head of FACTS Global Energy. "These things are megaprojects, they are difficult. Raising capacity to 4 million bpd would be very hard to achieve."
Exxon Mobil, Chevron and BP have all previously discussed technical service agreements with Kuwait.
France's Total is looking at working with Kuwait on enhanced oil recovery. Exxon signed a preliminary deal in 2007 to work on heavy oil in the country's north. BP has looked a working in the country's west, while Chevron has looked at the south and east.


China Nuclear Sets Up Fourth-Generation Plant Venture (Update1)

April 30 (Bloomberg) -- China National Nuclear Corp. set up a venture with local partners in Fujian province to build fourth-generation reactors as the world’s biggest polluting- country turned to clean energy to drive its economy.
China National Nuclear holds a controlling stake in the venture formed on April 28 with Fujian Investment and Development Corp. and the government of Sanming city, where the atomic plant will be located, the Beijing-based company said on its website.
The world’s fastest-growing major economy is developing nuclear energy to help cut reliance on more polluting coal and oil and to meet surging electricity demand. China is emerging as a potential exporter of atomic technology, increasing competition for companies including Areva SA.
China National Nuclear and its partners aim to start building the plant “soon,” according to the statement.
The fourth-generation nuclear technology developed under the China Experimental Fast Reactor program has “noticeable advantages” in increasing the efficiency of uranium use and reducing nuclear waste, China National Nuclear Vice General Manager Yu Jianfeng said in the statement.
The government is urging domestic nuclear companies to partner with foreign firms to build reactors abroad, China National Nuclear President Sun Qin said in an interview in March.
Electricite de France SA, Europe’s biggest power producer, signed agreements with China National Nuclear and China Guangdong Nuclear Power Group yesterday to expand global cooperation.
--Wang Ying. Editors: Ryan Woo, Ang Bee Lin.


Euro Coal-Stable despite S.Africa strike threat

Thu Apr 29, 2010 10:08pm IST

LONDON, April 29 (Reuters) - South African and DES ARA coal prices ended the day little changed despite a strike threat from May 10 which could disrupt South African exports.
SATAWU the transport workers union said on Thursday it had been given the go ahead to strike from May 10 after wage talks with state operator Transnet broke down. [ID:nWEA9175]
Traders said the strike threat had already been factored into prices earlier this week and in any case, fundamentals have had little to do with the recent rise in prices to $94.00-$100.00 a tonne from $81.00 two weeks ago.
Indian traders have emerged as sellers of South African prompt cargoes which they are trying to replace with cheaper Indonesian material.
However, Indonesian prices are also on the rise due to heavy rains disrupting supply. Bayan has already declared force majeure but most other Indonesian exporters' shipments are also affected to some extent [ID:nJAK486152].
"If the Indians think it's that simple to sell South African and replace it with Indonesian low-grade or anything else, they will soon realise they're wrong," one trader said.

Three June loading South African cargoes traded on globalCOAL at $94.00, $94.00 and $94.25 a tonne FOB Richards Bay, up 50 cents from Wednesday.

A June loading South African coal cargo was bid at $93.25 and offered at $94.00, up 25-50 cents. A July loading South African cargo was bid at $94.00 and offered at $95.00, down 50 cents.
A June delivery DES ARA cargo was bid at $87.50 a tonne, little changed. A July cargo was bid at $89.00 and offered at $89.50 a tonne DES ARA.
For the latest oil market report please click on [O/R]. The latest UK power and gas report can be found at [NG/GB]. (Reporting by Jackie Cowhig)


Natural gas prices tumble with growing supplies

Natural gas prices fell sharply Thursday after the government said supplies expanded more than expected amid ongoing weak demand for oil and gas.
Meanwhile, fresh reports indicating the U.S. economy is getting stronger boosted oil prices above $85 a barrel.
Natural gas prices fell 8.5 percent after the Energy Department's Energy Information Administration said natural gas inventories held in underground storage in the lower 48 states grew by 83 billion cubic feet to about 1.912 trillion cubic feet for the week ended April 23.
Analysts expected an increase of 72 billion to 76 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. The inventory level was 18.8 percent above the five-year average and 5.6 percent above last year's storage level.
Natural gas for June delivery fell 36.8 cents to settle at $3.980 per 1,000 cubic feet on the New York Mercantile Exchange.
Supplies are growing even as more companies look for new natural gas sources, analyst Hamza Khan of the Schork Report said. The hope is that gas will be used instead of coal to run more power plants, because it burns cleaner with fewer emissions. For now, demand for electricity and natural gas is weak in the recovering economy.
"We're expecting huge builds in natural gas and that's exactly what we're seeing," Khan said.
Both oil and retail gasoline rose for a second day despite increasing crude inventories. Analysts think traders are looking past that to signs of an improving economy.
"The bottom line is that the symptoms keep changing, but the underlying source of strength is a boundless hope that economic recovery will give us higher demand," U.S. energy consultancy Cameron Hanover said in a report. "It seems to be good enough for oil prices, even if it makes little sense to us."
Benchmark crude for June delivery rose $1.95 to settle at $85.17 per barrel on the New York Mercantile Exchange.
Oil followed the stock market higher, which rose on encouraging earnings reports from a number of companies and signs of a stronger economy. Exxon Mobil Corp., ConocoPhillips and Occidental Petroleum Corp. said their first-quarter profits jumped significantly on higher oil prices, and the Labor Department said initial claims for unemployment benefits fell last week.
The dollar grew weaker against other global currencies, making commodities like oil, which are priced in dollars, more attractive to overseas buyers.
Retail gasoline prices rose 0.8 cent per gallon overnight to a national average of $2.877, according to AAA, Wright Express and Oil Price Information Service.
In other Nymex trading in May contracts, heating oil rose 2.22 cents to settle at $2.2512 a gallon, and gasoline gained 2.29 cents to settle at $2.3556 a gallon. Both contracts expire Friday.
In London, Brent crude rose 74 cents to settle at $86.90 on the ICE futures exchange.
Associated Press writers Pablo Gorondi and Alex Kennedy contributed to this report.


High crude prices driving profit for oil companies

Pulling oil from the ground is proving to be easier and more profitable than getting drivers to fill up their cars and trucks with gasoline and diesel fuel.
Exxon Mobil and ConocoPhillips, the No. 1 and No. 3 oil companies in the U.S., said Thursday that first-quarter profit jumped because oil prices were substantially higher than a year ago. That was more than enough to offset losses both had from their struggling refining businesses, which have been unable to pass along all of their costs for higher crude prices to consumers.
Exxon's U.S. downstream operations, which include refineries, lost $60 million in the first quarter, compared with a profit of $352 million a year ago. ConocoPhillips' refining and marketing business lost $4 million in the quarter. In the same quarter of 2009 it had a profit of $205 million.
The No. 4 oil company, Occidental Petroleum, has no refining operations. It reported profit nearly tripled to $1.06 billion for the quarter.
Oil companies are becoming more profitable as the price of oil has skyrocketed from $33 a barrel in the first quarter of last year during the depths of the Great Recession to above $85 a barrel Thursday. But integrated oil companies, which refine oil as well as explore for it, have seen their refining businesses decline because of soft demand for gasoline and diesel. U.S. petroleum consumption dropped in the first quarter for the third year in a row, according to the Energy Information Administration.
Exxon, based in Irving, Texas, said its first-quarter profit climbed 38 percent to $6.3 billion from $4.55 billion a year ago. Two years ago, Exxon earned $10.89 billion in the first quarter when oil prices were on their way to a record $147 a barrel. Exxon's revenue rose 41 percent to $90.25 billion.
ConocoPhillips, based in Houston, said its profit more than doubled to $2.1 billion. A year ago the company made $840 million. Revenue totaled $44.8 billion in the quarter.
ConocoPhillips CEO Jim Mulva told analysts on a conference call that opportunities for profitable investments for large, integrated oil companies like his have changed dramatically in the past few years.
"The question for our company is how do we create value for our shareholders in this type of environment given the assets, the resources, and the opportunities we already have in our existing portfolio," he said.
Exxon and Occidental said production rose about 5 percent from the year-ago quarter. ConocoPhillips said its production fell by the same amount.
Earlier this week Royal Dutch Shell and BP reported bigger profits because of higher oil prices. Shell posted earnings of $5.48 billion, a 57 percent increase. First-quarter profit for BP, which is dealing with an environmental catastrophe in the Gulf of Mexico after a rig it hired sank, more than doubled to $6.1 billion.
Exxon shares lost 53 cents to close at $68.66. ConocoPhillips rose 55 cents to close at $59.10. At one point in the session, they reached a new high for the past year of $60.15. Occidental shares added $1.35 to close at $86.25.


Brazil to Raise Ethanol Mixed With Gasoline to 25% (Update1)

By Katia Cortes
April 29 (Bloomberg) -- Brazil plans to boost the amount of ethanol mixed into gasoline at the pump ahead of a record sugar- cane crop this year.
The measure to boost the ethanol mix to 25 percent from 20 percent will take effect on May 2, said Manoel Bertone, the Agriculture Ministry’s production and bio-energy secretary. In February, the government reduced the mix after inventories fell near the end of the sugar-cane harvest.
The government may lend 2.5 billion reais ($1.5 billion) to help ethanol mills stockpile the cane-based biofuel in a bid to guarantee supplies and prevent price rises between harvests, Bertone told reporters today in Brasilia. Domestic ethanol prices rose to a record 1.17 reais a liter in January, before plunging 41 percent to 83 centavos in March, according to Sao Paulo University’s school of agriculture, known as Esalq.
“Brazil won’t have problems with ethanol supply this year,” Bertone said. “We’ll have a huge crop and government policies to help mills supply the market regularly.”
The financing for stockpiles is being considered by the Finance Ministry and may be available starting in June, he said.


India, Japan to establish a working group on civil nuclear cooperation

New Delhi, Apr.30 (ANI): In a landmark development today, India and Japan have agreed to put aside past differences on the nuclear issue, and will now work towards a civil-nuclear treaty with the establishment of a Joint Working Group (JWG) on civil-nuclear cooperation.

This key decision is said to have been finalized during a meeting between the Deputy Chairman of the Planning Commission of India, Montek Singh Alhuwalia, and Japan's Minister of Economy, Trade and Industry. Masayuki Naoshima during the fourth ministerial-level meeting of the India-Japan Energy Dialogue here.

The Japanese industry is basically pushing its government to consider engaging India in nuclear trade, as companies from the United States, France and Russia seem to have already acquired a head start in terms of cornering Indian nuclear business.

The chairmen of leading Japanese companies like Toshiba, Mitsubishi and Hitachi, who are accompanying Minister Naoshima on his current visit to India, form the core-lobbying group, which is encouraging the Japanese Government to work out a civil nuclear deal with India.

During the dialogue, both Alhuwalia and Naoshima welcomed the progress made so far in Working Group discussions by Japanese and Indian officials on energy efficiency, renewable energy, coal and electricity, and power generation.

While welcoming India's formal joining of the International Partnership for Energy Efficiency Cooperation (IPEEC) last year, both recognized that a viable and vibrant energy policy can contribute to addressing both energy requirements and reducing the negative impact of climate change.

It was agreed that the two countries would step up cooperation in the energy sector through concret and pragmatic projects. (ANI)


Nokia, Ford Power Demand Spurs Coal Purchase in India (Update1)

By Dinakar Sethuraman
April 30 (Bloomberg) -- Electricity demand from investors such as Ford Motor Co., Hyundai Motor Co. and Nokia OYJ may boost coal demand in India as Tamil Nadu, the biggest wind power generator in the country, adds new coal-fired units.
The Tamil Nadu Electricity Board may add three units of 600 megawatts each this year, which will boost the state utility’s coal consumption by about 9 million metric tons, said J.P.S. Amarnath, chief engineer for coal. The utility, which consumes 15 million tons annually, imports about 2 million tons.
“We are currently importing coal from Indonesia,” Amarnath said in an interview in Chennai. “We have tie-ups with Coal India to meet our additional needs.” The supply agreements may run as long as two decades and carry penalties for non- delivery, he said.
Tamil Nadu, India’s second-most industrialized state, plans to add 8,000 megawatts over the next four years to ease blackouts and power cuts of 6-9 hours a day, according to the state utility. Most of the additional capacity will be coal- fired, said C.P. Singh, the head of the utility, in Chennai. Hyundai, Ford and Nokia are among international companies to establish factories outside Chennai, the capital of Tamil Nadu.
Domestic coal will be harder to procure as new mines, which are yet to be developed to meet growing demand, are located in “troubled” areas in Chattisgarh and Jharkhand, said S. Narayan, president of Centre for Asia Studies and a former bureaucrat who oversaw coal policy. Both states are witnessing armed conflict between Maoist rebels and the government.
Domestic Supplies
The state utility may keep coal imports unchanged as it’s confident of securing domestic coal from Coal India Ltd., which is of lower heating value compared to the imported variety, Amarnath said.
The turbines used in their power plants are compatible with domestic coal, which has a 4,000 gross calorific value. Better grades of imported steaming coal from Australia, South Africa and Indonesia whose heating value is more than 5,000 can only be used when blended with the domestic variety, he said.
Unlike utilities in neighboring Karnataka and Maharashtra states, the Tamil Nadu utility secures its imports through state MMTC Ltd., he said.
Power-station coal prices at Newcastle, an Asian benchmark, increased 1.9 percent last week, the globalCOAL NEWC Index shows. Prices rose to $100.18 a ton from $98.28 in the week to April 23.
India, the world’s second-most populous nation, will import 76 million tons of thermal coal and coking coal for steel-making in the 2010 fiscal year, according to mjunction Services Ltd., a Web-based trader backed by the country’s biggest steel producers, in January. That’s up from 59 million tons in the previous period. Imports will rise to 110 million tons in 2012.


Italian gas company in Iran threatened with US sanctions

2010-04-30 11:30:00

/AKI) Italy's largest energy company has said it will end its role as lead developer of a natural gas field in Iran after the US threatened to impose sanctions on it.
Eni will transfer the Darkhovin gas field to local partners after the US threatened to place sanctions on companies doing business with energy-rich Iran which Washington and its allies say is developing nuclear weapons.
'We will hand over the field within the next few weeks,' Paolo Scaroni, Eni chief executive, said here Thursday.
'We are aware of initiatives by US to adopt laws, regulations or policies requiring divestment from companies that do business with countries designated as states of sponsoring terrorism,' Eni said in its 2009 report.
'These policies could adversely impact or limit investment by certain investors in our securities and so possibly impact adversely our share price,' it said.
Italian Prime Minister Silvio Berlusconi has called for tighter sanctions against Iran and said Italian companies have cut business ties with Tehran by a third since 2007.
The Italian government is the largest shareholder of Eni and the company said it would pull out of Iran after Berlusconi's pledge.
No new sanctions have been imposed on its Iranian activities, but any new US sanctions could pose a risk for the energy giant.
Darkhovin is the only gas field operated by Eni in Iran, the company said.

Oil output increases on Saudi Arabian gain

April 30, 2010 - 3:15PM

The Organization of Petroleum Exporting Countries’ crude-oil production increased in April, led by a Saudi Arabian gain, a Bloomberg News survey showed.

Output rose 25,000 barrels, or 0.1 per cent, to an average 29.19 million barrels a day from a revised 29.165 million in March, according to the survey of oil companies, producers and analysts. Production by members with quotas, all except Iraq, rose 80,000 barrels to 26.88 million barrels a day, the highest level since December 2008 and 2.035 million above their target.

OPEC cut its quotas by 4.2 million barrels to 24.845 million barrels a day beginning in January 2009 as fuel demand fell during the worst recession since World War II. Compliance among the 11 members with quotas fell to 52 per cent in April from 53 per cent in March. All members with quotas exceeded their production limits.

''We’re unlikely to see OPEC discipline improve at all until prices drop, at which point it may be too late,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Crude oil for June delivery rose $US1.95, or 2.3 per cent, to $US85.17 a barrel yesterday on the New York Mercantile Exchange, the highest settlement price since April 15. Futures have gained 67 per cent in the past year.

Saudi Arabia, the group’s biggest producer, bolstered output by 60,000 barrels to 8.26 million barrels a day, the highest level since December 2008. It was the largest increase of any member. The kingdom exceeded its quota by 209,000 barrels a day.

''The Saudis are probably concerned about the elevated price level,'' Lynch said. ''They tend to take a longer-term view than other members.''

Higher production

The United Arab Emirates, OPEC’s third-largest producer, bolstered output by 20,000 barrels to 2.32 million barrels a day, putting the country 97,000 barrels a day above its target. It was the second-biggest gain.

Iraqi output dropped 55,000 barrels a day to 2.31 million in April, the lowest level since October 2008. It was the biggest decrease in OPEC.

An explosion blew a hole in an Iraqi pipeline, stopping crude oil exports via Turkey on April 22. Oil exports were expected to resume within a week, once repairs are completed on the pipeline, an artery through which Iraq pumps one-fourth of its crude shipments, according to Imad Baqer, head of the production department at the North Oil Co.


Thursday, April 29, 2010

Bilbray among 'Biofuels' top 10

April 29, 2010 8:02 PM

Biofuels Digest, on its website, published its top 10 "walk-walkers" - Congress members and senators who are the biggest supporters of renewable energy and bioenergy.

Congressman Brian Bilbray, R-Solana Beach, was ranked number eight along with representatives Collin Peterson of Minnesota, Jerry Moran of Kansas, Harry Teague of New Mexico and Aaron Schock of Illinois.

Bilbray and Teague were noted for their work with biotech companies in developing algae as a biofuel and solar power in San Diego and New Mexico.

President Barack Obama topped the list, followed by Secretary of Agriculture Tom Vilsack, U.S. energy power czar Carol Browner, Energy Secretary Steve Chu, New Mexico Senator Jeff Bingaman, Washington Congressman Jay Inslee, South Dakota Senator John Thune and North Dakota Senator Kent Conrad, senators Max Baucus of Montana and Charles Grassley of Iowa, as well as senators John Kerry of Massachusetts, Lindsey Graham of South Carolina and Joe Lieberman of Connecticut.


Obama steps up fight to contain oil spill

April 30 2010 00:42
The Obama administration yesterday stepped up its response to the BP oil spill in the Gulf of Mexico, designating it an event “of national significance” as rescue workers struggled to stop the oil from washing ashore on the Louisiana coast today.
The move will free up money and resources from around the country to fight the slick caused by last week’s explosion on the Deepwater Horizon drilling rig, which appears to be leaking five times as much oil as was previously feared.

Louisiana declared a state of emergency as the slick neared the coast, threatening wildlife and fishing grounds. The US military might be deployed to help contain the leak.
“While BP is ultimately responsible for funding the cost of response and clean-up operations, my administration will continue to use every single available resource at our disposal, including potentially the Department of Defense, to address the incident,” President Barack Obama said yesterday.
The spill has complicated Mr Obama’s plan to lift some restrictions on US domestic offshore drilling for oil, a concession he made to try to win Republican support for a long-awaited climate change bill.
It also deals another blow to BP, which operated the rig that exploded last week, leaving 11 workers missing and presumed dead. A blast at the company’s Texas City, Texas, refinery in 2005 killed 15 people.
BP shares fell 7 per cent yesterday over concerns about clean-up costs.
The US Coast Guard on Wednesday night said that 5,000 barrels of oil per day could be leaking into the ocean from the site. It had previously put the leak at 1,000 barrels per day.
At the higher rate it would take less than two months for as much oil to be spilt as in the Exxon Valdez disaster in Alaska in 1989.
Janet Napolitano, homeland security secretary, said the spill was a “major incident”, but the extent of damage was not known. “The difference with the Valdez is that the Valdez was a knowable quantity of oil because it was a ship. This is leakage from a well,” she said.
BP has been working on the clean-up with oil companies and government agencies. Crews tested a controlled burn-off of oil on Wednesday but suspended the effort yesterday due to sea and wind conditions.
They have also been using skimmer ships and spraying dispersants from aircraft. About 70 vessels, six aircraft and 1,700 personnel are involved.
The Department of the Interior will send teams to the Gulf of Mexico to test other platforms and rigs, part of an investigation to ensure that all oil companies are adhering to standards for oil drilling.


‘60,000 jobs’ in wind energy

Friday, April 30, 2010
By Geoff Percival

THE potential tangible benefits of a successful wind energy sector were unveiled yesterday, with experts estimating 60,000 jobs could be created as part of its development.

State of emergency is declared as US oil slick nears the coast

April 30, 2010 
The massive oil spill pouring from a ruptured well in the Gulf of Mexico is expected to reach the Louisiana coast today, threatening hundreds of species and prompting an environmental catastrophe.
As BP faced growing accusations that it had tried to play down the scale of disaster after the Deepwater Horizon rig exploded and sank last week, the US authorities said that five times more oil was surging into the Gulf from the seabed than had been calculated previously.
President Obama was briefed on the disaster and ordered Janet Napolitano, the Homeland Security Secretary, and Ken Salazar, the Interior Secretary, down to the Gulf Coast today.
Mr Obama also ordered the US military to get involved in the increasingly urgent effort to contain the disaster, an operation now involving 1,100 people and more than 70 vessels. Last night the Governor of Louisiana declared a state of emergency.
At a White House press conference, Mrs Napolitano and Robert Gibbs, Mr Obama’s spokesman, made clear that, under US law, BP was responsible for the spill and the cost of the clean-up, on a day in which the British company’s shares tumbled.
Mrs Napolitano declared the spill one of “national significance”, which allows the federal Government to use resources and personnel across America to deal with the growing emergency.
With winds pushing an enormous slick about half the size of Wales towards shore today, the National Oceanic and Atmospheric Administration said that each day the rig’s broken drill pipe was spewing 210,000 gallons of oil — 40 road tankers — into the sea. The previous estimate was of 42,000 gallons a day.
US experts are now fearful that it could take weeks, or even months, to shut off the ruptured pipe — yesterday a third leak was discovered — meaning that within two months the spill would surpass the 11 million gallons that leaked from the Exxon Valdez tanker in the notorious spillage off the Alaska coast in 1989, America’s previous worst oil disaster.
News that five times more oil was pumping into the Gulf was delivered by Rear-Admiral Mary Landry at an awkward news conference where tensions and disagreements between the US Coast Guard and BP over the scale of the disaster were laid bare.
The Gulf Restoration Network, an environmental campaign group, warned that the leak could eclipse the Exxon Valdez disaster, and accused BP of trying to cover up the scale of this spill.
“This underscores our concerns that BP is influencing the spin on this oil drilling disaster, and obfuscating the truth to protect their brand,” said Aaron Wiles, the group’s campaign co-ordinator.
“We remain terrified about the scale of this disaster, as it’s clear that there are not enough containment resources to effectively protect the Gulf Coast,” he added.
It also emerged yesterday that the oil rig did not have a remote-controlled shut-off switch used in other oil-producing nations, such as Norway and Brazil, which could have closed down the well after the explosion.
The device, known as an acoustic switch, is not required under US law, but the lack of one added to questions about BP’s operation of the Deepwater Horizon. It exploded 50 miles off the Louisiana coast on April 20. The cause of the blast, which killed 11 of the 111 workers on board and set the rig ablaze before it eventually sank, has yet to be determined.
Mr Suttles said that Deepwater Horizon was equipped with other safety devices that should have prevented this type of spill, in which the oil is coming out of fractures on a severed pipe connected to the wellhead, 5,000ft below the surface.
As dawn broke yesterday in the oil industry hub of Venice, 75 miles from New Orleans and not far from the mouth of the Mississippi, crews loaded orange oil booms on board a supply boat at Bud’s Boat Launch.
There, local officials expressed frustration with the pace of the Government’s response and the communication they were getting from the Coast Guard and BP officials.
“We’re not doing everything we can do,” said Billy Nungesser, the president of Plaquemines Parish, which is sited on both sides of the Mississippi at the tip of Louisiana.
Dozens of vessels were trying to contain the spill, using a variety of methods. Crews triggered a series of controlled fires to burn off the thickest parts of the slick, while booms, skimmers and chemical dispersants were trying to stop the rest from reaching shore. Heavy seas, forecast to last into next week, are hampering the operation.
BP was due to start drilling a new “relief” well that would allow them to stop the flow from the seabed, although officials said that it would take at least two months to complete.
A separate effort was also under way to try to place a dome on the ruptured wellhead but that, too, could take weeks.
BP has also tried, unsuccessfully, to close the wellhead using submersible robots.
More than 400 species are threatened by the oil, including wading birds and sea otters. The Gulf’s abundant oyster and shrimping grounds are also in danger of severe damage.
The vast and ecologically delicate Louisiana wetlands, already damaged by hurricanes, could face catastrophe if they become clogged up by oil. The 100-mile by 45-mile slick also threatens the coasts of Alabama and Mississippi.
Marine and coastal life from the smallest plankton to the resident sperm whales will all be affected, experts say. Valuable fisheries for oyster and menhaden fish are at risk, as is the breeding of endangered turtles and bluefin tuna.
If the slick spreads, the rare manatees of the Florida panhandle could be under threat.
Much depends on where the slick ends up and the success of the efforts to contain it.
If it is taken by the Gulf’s defining current, which is known as the Loop, the oil may also reach the Florida Keys and endanger the region’s coral and resident marine populations.
The type of oil leaking from the sea floor is complicating matters. It is called sweet crude, which contains heavy compounds, known as asphaltenes, that do not burn easily or evaporate, even on the warm Louisiana coast.
With light crude, both burning and chemical dispersants work well, but neither tactic is very effective against sweet crude, raising fears that nothing can be done to stop the oil reaching shore.


Gulf Coast oil spill could eclipse Exxon Valdez

VENICE, La. – An oil spill that threatened to eclipse even the Exxon Valdez disaster spread out of control and drifted inexorably toward the Gulf Coast on Thursday as fishermen rushed to scoop up shrimp and crews spread floating barriers around marshes.
The spill was both bigger and closer than imagined — five times larger than first estimated, with the leading edge just three miles from the Louisiana shore. Authorities said it could reach the Mississippi River delta by Thursday night.
"It is of grave concern," David Kennedy of the National Oceanic and Atmospheric Administration, told The Associated Press. "I am frightened. This is a very, very big thing. And the efforts that are going to be required to do anything about it, especially if it continues on, are just mind-boggling."
The oil slick could become the nation's worst environmental disaster in decades, threatening hundreds of species of fish, birds and other wildlife along the Gulf Coast, one of the world's richest seafood grounds, teeming with shrimp, oysters and other marine life.
The leak from the ocean floor proved to be far bigger than initially reported, contributing to a growing sense among many in Louisiana that the government failed them again, just as it did during Hurricane Katrina. President Barack Obama dispatched Cabinet officials to deal with the crisis.
Cade Thomas, a fishing guide in Venice, worried that his livelihood will be destroyed. He said he did not know whether to blame the Coast Guard, the federal government or oil company BP PLC.
"They lied to us. They came out and said it was leaking 1,000 barrels when I think they knew it was more. And they weren't proactive," he said. "As soon as it blew up, they should have started wrapping it with booms."
The Coast Guard worked with BP, which operated the oil rig that exploded and sank last week, to deploy floating booms, skimmers and chemical dispersants, and set controlled fires to burn the oil off the water's surface.
The Coast Guard urged the company to formally request more resources from the Defense Department. A BP executive said the corporation would "take help from anyone."
Government officials said the blown-out well 40 miles offshore is spewing five times as much oil into the water as originally estimated — about 5,000 barrels, or 200,000 gallons, a day.
At that rate, the spill could easily eclipse the worst oil spill in U.S. history — the 11 million gallons that leaked from the grounded tanker Exxon Valdez in Alaska's Prince William Sound in 1989 — in the three months it could take to drill a relief well and plug the gushing well 5,000 feet underwater on the sea floor.
Ultimately, the spill could grow much larger than the Valdez because Gulf of Mexico wells typically hold many times more oil than a single tanker.
Doug Suttles, chief operating officer for BP Exploration and Production, had initially disputed the government's larger estimate. But he later acknowledged on NBC's "Today" show that the leak may be as bad as federal officials say. He said there was no way to measure the flow at the seabed, so estimates have to come from how much oil rises to the surface.
Mike Brewer, 40, who lost his oil spill response company in the devastation of Hurricane Katrina nearly five years ago, said the area was accustomed to the occasional minor spill. But he feared the scale of the escaping oil was beyond the capacity of existing resources.
"You're pumping out a massive amount of oil. There is no way to stop it," he said.
An emergency shrimping season was opened to allow shrimpers to scoop up their catch before it is fouled by oil. Cannons were to be used to scare off birds. And shrimpers were being lined up to use their boats as makeshift skimmers in the shallows.
This murky water and the oysters in it have provided a livelihood for three generations of Frank and Mitch Jurisich's family in Empire, La.
Now, on the open water just beyond the marshes, they can smell the oil that threatens everything they know and love.
"Just smelling it, it puts more of a sense of urgency, a sense of fear," Frank Jurisich said.
The brothers hope to get all the oysters they can sell before the oil washes ashore. They filled more than 100 burlap sacks Thursday and stopped to eat some oysters. "This might be our last day," Mitch Jurisich said.
Without the fishing industry, Frank Jurisich said the family "would be lost. This is who we are and what we do."
Louisiana Gov. Bobby Jindal declared a state of emergency Thursday so officials could begin preparing for the oil's impact. He said at least 10 wildlife management areas and refuges in his state and neighboring Mississippi are in the oil plume's path.
The declaration also noted that billions of dollars have been invested in coastal restoration projects that may be at risk.
As dawn broke Thursday in the oil industry hub of Venice, about 75 miles from New Orleans and not far from the mouth of the Mississippi River, crews loaded an orange oil boom aboard a supply boat at Bud's Boat Launch. There, local officials expressed frustration with the pace of the government's response and the communication they were getting from the Coast Guard and BP officials.
"We're not doing everything we can do," said Billy Nungesser, president of Plaquemines Parish, which straddles the Mississippi River at the tip of Louisiana.
Tension was growing in towns like Port Sulphur and Empire along Louisiana Highway 23, which runs south of New Orleans along the Mississippi River into prime oyster and shrimping waters.
Companies like Chevron and ConocoPhillips have facilities nearby, and some residents are hesitant to criticize BP or the federal government, knowing the oil industry is as much a staple here as fishing.
"I don't think there's a lot of blame going around here. People are just concerned about their livelihoods," said Sullivan Vullo, who owns La Casa Cafe in Port Sulphur.
A federal class-action lawsuit was filed late Wednesday on behalf of two commercial shrimpers from Louisiana, Acy J. Cooper Jr. and Ronnie Louis Anderson.
The suit seeks at least $5 million in compensatory damages plus an unspecified amount of punitive damages against Transocean, BP, Halliburton Energy Services Inc. and Cameron International Corp.
In Buras, La., where Hurricane Katrina made landfall in 2005, the owner of the Black Velvet Oyster Bar & Grill couldn't keep his eyes off the television. News and weather shows were making projections that oil would soon inundate the coastal wetlands where his family has worked since the 1860s.
It was as though a hurricane was approaching, maybe worse.
"A hurricane is like closing your bank account for a few days, but this here has the capacity to destroy our bank accounts," said Byron Marinovitch, 47.
"We're really disgusted," he added. "We don't believe anything coming out of BP's mouth."
Signs of the 2005 hurricane are still apparent here: There are schools, homes, churches and restaurants operating out of trailers, and across from Marinovitch's bar is a wood frame house abandoned since the storm.
A fleet of boats working under an oil industry consortium has been using booms to corral and then skim oil from the surface.
The Coast Guard abandoned a plan Wednesday to set fire to the leaking oil after sea conditions deteriorated. The attempt to burn some of the oil came after crews operating submersible robots failed to activate a shut-off device that would halt the flow of oil.
Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, was briefed Thursday on the issue, said his spokesman, Capt. John Kirby. But Kirby said the Defense Department has received no request for help, nor is it doing any detailed planning for any mission on the oil spill.
Obama dispatched Homeland Security Secretary Janet Napolitano, Interior Secretary Ken Salazar and Environmental Protection Agency administrator Lisa Jackson to help with the spill. The president said the White House would use "every single available resource" to respond.
Obama has directed officials to aggressively confront the spill, but the cost of the cleanup will fall on BP, White House spokesman Nick Shapiro said.
Mohr reported from Jackson, Miss. Associated Press writers Janet McConnaughey, Kevin McGill, Michael Kunzelman and Brett Martel in New Orleans, and Melinda Deslatte in Baton Rouge also contributed to this report.


Spain Pricks Solar Bubble, Loses Investors as Greek Fate Looms

By Ben Sills
April 30  -- Spain is lancing an 18 billion-euro ($24 billion) investment bubble in solar energy that has boosted public liabilities, choking off new projects as it works to cut power prices and insulate itself from Greece’s debt crisis.
Industry Minister Miguel Sebastian is negotiating reductions in subsidies for solar plants that would curb energy costs, a ministry spokesman said this week. Grupo T-Solar Global SA, the world’s biggest photovoltaic plant owner, shelved its Spanish stock offering three days ago. Solar Opportunities SL postponed a 130 million-euro deal due to be signed today.
“They’ve put the fear of god into all these investors,” said Paul Turney, chief executive officer of Madrid-based Solar Opportunities. “By the time they’ve finished dithering around, they’ll have hurt their credibility so badly that no one will want to invest.”
Spain is battling on several fronts to revive its economy and convince government bondholders it can avoid getting dragged into a Greek-style debt spiral after Standard & Poor’s cut its credit rating April 28. Solar-plant owners including General Electric Co. earn about 12 times what’s paid for power from fossil fuels. Most of that is a subsidy charged to customers.
Prime Minister Jose Luis Rodriguez Zapatero’s government last cut solar rates in 2008, hitting plants not built at the time. Now it’s weighing reductions for the thousands of installations already making power from the sun, wind and biomass.
‘Excessive Subsidy’
“This is necessary,” said Leon Benelbas, chairman of Atlas Capital Close Brothers investment bank in Madrid. “It’s an excessive subsidy at a time Spain has to gain competitiveness, and the cost of energy is a determining factor.”
Spain’s fixed-price system for renewable power, which attracted more investment in solar panels in 2008 than the rest of the world put together, boosts the state’s liabilities even though they don’t show up on its balance sheet.
That’s because the Spanish system delays payments by consumers for part of their electric bills for years. The government guarantees repayment to power suppliers such as Endesa SA and Gas Natural SDG SA. The cost of those unpaid bills rose last year by about 4 billion euros to 16 billion euros.
Spain intends to revise the clean-energy rates down “to avoid damaging the competitiveness of industry,” Sebastian told the Spanish parliament yesterday.
Ratings Cut
S&P cut its rating on Spanish debt to AA on April 28, saying the nation that was AAA-rated until January 2009 is underestimating its fiscal problems and overestimating its ability to grow.
Government officials, who spurred more than 18 billion euros in solar-power projects since 2008, are meeting with industry representatives to negotiate cuts to subsidized rates.
“We had a gold rush here,” said Turney who, based on current power rates, planned to invest 240 million euros of equity into Spanish solar plants by next year. “They were building plant like crazy.”
Instead, the Solar Opportunities executive postponed a deal with 30 million euros in equity and 100 million euros of debt that was set to be signed today. He said he may cancel other projects too.
Groups such as the Spanish Photovoltaic Industry Association say they’re willing to accept cuts for future plants. They argue that reducing the price for existing facilities will breach their agreements with the government and damage the country’s reputation with investors.
‘Sensible Government’
“No sensible government is going to do this,” Juan Domingo Ortega, co-owner of Renovalia Energy SA, said at an April 23 outlining the company’s plan to raise 153 million euros in a stock offering. Renovalia is set to begin trading May 12.
Shares of solar producer Abengoa SA lost 8.9 percent this week. Solaria Energia y Medio Ambiente SA dropped 8.8 percent.
Forcing solar investors to take a haircut increases the risk of doing business with the Spanish government and may damage its ability to sell bonds, said Juan Laso, chief executive officer of T-Solar.
“The consequences of this are enormous, not just for the companies and financial institutions that have invested their money, but for the credibility of the country,” Laso said.
Investors began questioning the strength of Spanish assets as the shockwaves from Greece’s financial meltdown spill across Europe. The extra yield investors demand to hold Spanish 10-year government bonds reached 113 basis points this week, the widest spread in more than a year as the scale of the bail-out needed by Greece ballooned.
Legal Argument
The legal dispute on Spanish solar rates turns on a reading of the 2007 law that governs renewable-power production. The government says it gives it the right to revise prices for existing plants this year. Executives say their prices are guaranteed for 25 years.
“In renewable energy, often government incentive programs are a key factor in our decision,” said Andrew Katell, a spokesman for GE Energy Financial Services. “We would take the same approach in Spain.”
GE Capital’s energy investment unit has 32 percent of Fotowatio Renewable Futures, which owns 90 megawatts of solar generating capacity in Spain.
“Those who thought it was a government guarantee hadn’t done their homework,” said Benelbas of Atlas Capital. He said investors will welcome the price cuts because it curbs the state’s financial exposure. “It’s all connected.”


Exxon profits up 38%, but miss estimates

By Ben Rooney, staff reporter

NEW YORK ( -- Exxon Mobil Corp. said Thursday that earnings in the first quarter rose 38% from a year earlier as oil prices rebounded. But profits fell short of Wall Street's expectations due partly to higher health care costs.
The world's largest publicly traded energy company said it earned $6.3 billion, or $1.33 per share, in the first three months of 2010. That's up from $3.5 billion, or 92 cents per share, in the same period last year.

It was the first time Exxon reported a quarterly increase in earnings since the second quarter of 2008, when it posted a record $11.7 billion profit. But Thursday's results were below Wall Street forecasts. Analysts had anticipated earnings of $1.41 per share, according to a consensus compiled by Thomson Reuters.
Shares of Exxon (XOM, Fortune 500) recovered from early declines, rising 0.5% to $69.55 in morning trading.
"The improvement from the two prior periods was mainly due to higher oil prices," said Fadel Gheit, an analyst who covers Exxon at Oppenheimer Equity Research. "A loss in U.S. refining, higher health care costs and income tax rate were the main reasons earnings were below expectations."
Exxon said it took a charge of $200 million, or 4 cents a share, related to the health care reform bill President Obama signed into law in March. Earnings were also impacted by the absence of favorable 2009 tax items, the company said.
Rex Tillerson, Exxon's chief executive, said in a statement that higher oil prices and strength in the company's chemicals business helped boost earnings. But he acknowledged that refining margins "remained weak" in the quarter.
Exxon and other companies that convert crude oil into refined products such as gasoline and diesel have been squeezed as demand for fuels remains soft and oil prices have trended higher.
The company said earnings in its global refining business fell to $37 million from $1.1 billion a year earlier, due mostly to lower margins. The company suffered a $60 million loss in its U.S. refining operations.
But weakness in refining was offset by stronger earnings from Exxon's oil production and exploration activities, which benefited from higher oil prices.
In the first quarter, oil prices averaged nearly $78 a barrel, compared with an average of about $43 a barrel in the same period of 2009.

The rebound in oil prices and gradually improving economy has helped boost profits across the energy sector. ConocoPhilips (COP, Fortune 500) posted a $2.1 billion quarterly profit that was more than double last year's take. Royal Dutch Shell (RDS.A) said Wednesday that profit rose 48% to $4.9 billion in the first quarter.
Exxon said production rose by 4.5% in the quarter. The company increased capital and exploration spending by 19% to $6.9 billion.
"Our solid financial position enabled ongoing investment at record levels through the business cycle," said Tillerson.
Earnings from Exxon's chemicals business, the smallest of its three divisions, jumped to $1.2 billion from $350 million a year ago.
Sales in the quarter were $90.2 billion, versus a forecasted $96.4 billion in revenue.
Cash flow from operations and asset sales jumped to $13.1 billion in the quarter from $9.1 billion.
Meanwhile, Exxon said it received clearance from the U.S. and Dutch authorities to proceed with its acquisition of natural gas giant XTO Energy (XTO, Fortune 500). The deal is expected to close by the end of the second quarter.
David Rosenthal, Exxon's vice president of investor relations, declined to comment on the status of the deal with XTO in a conference call with analysts.  To top of page


Oil rig safety-valve failure investigated

Published: April 29, 2010 at 4:35 PM

NEW ORLEANS, April 29 (UPI) -- The oil slick oozing from the explosion-toppled oil rig in the Gulf of Mexico prompted Louisiana's governor to declare an emergency Thursday.
Gov. Bobby Jindal said in a statement released by his office the declaration was needed to prepare for the predicted impact of oil leaking from the Deepwater Horizon on the Louisiana coast, which could threaten the state's natural resources.
Jindal's executive order noted scientific models indicate the oil spill could reach parts of the Louisiana coastline sometime Thursday, and Breton Sound and Chandeleur Sound by Saturday with the Pass a L'Outre Wildlife Management Area expected to see the first effects.
Jindal said "a minimum of 10 additional state and national wildlife management areas and wildlife refuges in Louisiana and Mississippi are in the direct path of the oil plume and can be expected to be impacted."
Jindal authorized the director of the Governor's Office of Homeland Security and Emergency Preparedness and all state agencies to undertake all "necessary and appropriate" legal action to deal with the spill.
President Barack Obama addressed the situation prior to another event in the White House's Rose Garden, saying he's been receiving frequent updates.
Obama said while oil producer British Petroleum is "ultimately responsible" for paying the cost of response and cleanup operations, his administration "will continue to use every single available resource at our disposal, including potentially the Department of Defense," to address the April 20 incident that left 11 workers missing and presumed dead.
The president noted Homeland Security Secretary Janet Napolitano has designated the spill of "national significance" and the Interior Department will be sending teams to the gulf to inspect all platforms and rigs.
"And I have ordered the secretaries of Interior and Homeland Security, as well as Administrator Lisa Jackson of the Environmental Protection Agency, to visit the site on Friday to ensure that BP and the entire U.S. government is doing everything possible, not just to respond to this incident, but also to determine its cause," Obama said.
The New York Times reported sea and wind conditions Thursday hampered the cleanup efforts, including a controlled burn of some of the floating oil.
"We are being very aggressive, and we are prepared for the worst case," Coast Guard Rear Adm. Sally Brice O'Hare told reporters.
Federal investigators said earlier they were trying to determine why the oil rig's "fail-safe" safety valve didn't work, allowing large amounts of crude oil to flow out, The (New Orleans) Times-Picayune reported Thursday.
Unmanned submarines that arrived soon after the explosion couldn't activate the blowout preventer, The Wall Street Journal reported.
Tony Hayward, BP chief executive officer, said learning why the blowout preventer didn't activate was a key question in the investigation.
"This is the fail-safe mechanism that clearly has failed," Hayward told the Journal.
Officials said a third leak was found in the oil well and the amount of crude spilling into the gulf has grown to 5,000 barrels a day.
Environmental officials say they are concerned the slick could affect oyster, shrimp and speckled trout nurseries, as well as nesting grounds for brown pelicans, laughing gulls and other birds.


UPDATE 1-Iraq aims to up oil output to 4.5 mln bpd in 2014

BAGHDAD, April 28 (Reuters) - OPEC member Iraq aims to raise crude output to 4.5 million barrels per day in 2014, boosted by a raft of signed oilfield development deals, the government's five-year plan showed on Wednesday.
The ambitious plan, which was approved by the cabinet and posted on the Ministry of Planning's website, also sees oil exports at 3.1 million bpd in 2014, up from 2.15 million bpd this year.
The five-year plan assumes an oil price of $63 a barrel in 2011, and $68 a barrel in 2012-2014.
Iraq struck a series of deals with global oil companies that could boost its output capacity to 12 million bpd from 2.5 million now in seven years, allowing it to generate cash to rebuild and create thousands of jobs after years of war and economic decline.
Only now emerging from the violence following the 2003 U.S.-led invasion, Iraq has had grand development goals in the past couple of years but few targets set out in previous plans have been achieved.
The new 2010-2014 plan, if implemented, aims at diversifying the oil producing country's economy through public-private partnerships in industry, and attracting more investments.
"The overall allocation for the five-year plan is $186 billion," Deputy Planning Minister Sami Matti told Reuters.
It covers 2,700 projects in different sectors with the government funding more than 50 percent and the rest paid by foreign and local private investors, Matti said.
Iraq's oil exports were 1.79 million bpd in March. In its 2010 budget, Iraq has forecast a deficit of 17.95 trillion dinars, and assumes a price of oil, the main revenue earner, of $62 a barrel. (Reporting by Khalid al-Ansary; Writing by Rania El Gamal; Editing by Keiron Henderson)


Exxon, Shell Make Offer to Avoid Argentine Oil Strike (Correct)

April 28, 2010, 2:07 PM EDT

By Rodrigo Orihuela
April 28 (Bloomberg) -- Exxon Mobil Corp., Petroleo Brasileiro SA and other oil producers offered Argentine workers a raise in a bid to avert a nationwide strike that could lead to fuel shortages, a group representing the companies said.
The Oil Industry Chamber, which also represents Royal Dutch Shell Plc in salary negotiations with unions, offered oil workers a salary increase of 18 percent, said Enrique Pourteau, the group’s executive director. The chamber and union officials will discuss the offer in government-brokered talks tomorrow, he said in a telephone interview.
The Argentine Federation of Oil, Gas and Biofuel Workers union called a strike for April 30 in seven cities. The union hasn’t named the refineries that will be affected by the strike.
YPF SA’s press office said in an e-mailed statement that its three refineries in the country won’t be affected by a strike because its workers belong to a different union.
--Editors: Jessica Brice, Carlos Caminada.


U.S. May Sell LNG to China on Surplus, Standard Chartered Says

By Dinakar Sethuraman
April 28 -- The U.S. may supply liquefied natural gas to China as cheaper output costs outweigh transportation charges, making the U.S.-produced fuel competitive, Standard Chartered Plc said.
China, the world’s second-biggest energy user, may have paid about $10 per million British thermal units in recent LNG contracts compared with about $6.35 for the three year-average at Henry Hub, the U.S. gas price benchmark, the bank said in a report today. China has agreements to buy LNG from Qatar and Australia.
“The likelihood of U.S.-produced gas being shipped to Asia on a profitable basis is increasing,” said Singapore-based analyst, Han Pin Hsi. “This is provided Henry Hub prices hover at the three-year average of $6.35 per million Btu with shipping and other re-gas or liquefaction costs staying below $3.65.”
China has signed contracts for about 34 million metric tons of LNG a year, compared with projected annual demand of 40 million tons by 2020, Sanford C. Bernstein & Co. said. U.S. gas output climbed the past four years, contributing to a glut, as drilling advances unlocked fuel-rich shale formations from Louisiana to Pennsylvania.
“Our estimates have taken into consideration days of voyage and an anticipated LNG carrier price of $55,000 a day,” Standard Chartered said. “The buffer is greater if we factor in current Henry Hub pricing.”
It takes about 64 days for a ship to sale to Asia from the U.S. Gulf.
China’s Prices
U.S. natural gas futures rose 0.6 percent to settle at $4.24 per million British thermal units on the New York Mercantile Exchange yesterday.
Gas prices in China may rise in the near term because of higher demand and government plans to increase prices by as much as 20 percent, Standard Chartered said.
By 2008, unconventional gas supplies accounted for more than half of domestic production in the U.S. compared with 15 percent in 1990, with the volume quadrupling to 300 billion cubic meters a year, the bank said.
For prices based on crude oil at $80 a barrel, the bank estimated typical LNG pricing at as much as $13.80 per million Btu, while for term contracts where crude is part of the pricing, the fuel may cost as much as $12.60, it said.