Mexico Gearing Up for Chicontepec Pay Dirt

Mexico announced plans for a 170-well tender at Chicontepec, a giant oil region that spans three states in northern Mexico. Pemex plans to pump 700,000 bpd from Chicontepec by 2017

From the article:

Pemex said it will pick the winning bid on April 7 with work starting in early May and lasting two years. Pemex often runs into bureaucratic delays in assigning large contracts.

Late last year Pemex announced two Chicontepec drilling tenders, each for 500 wells, that have attracted interest from oil-services giants Schlumberger Ltd. ( SLB), Halliburton Co. (HAL) and Weatherford International Ltd. (WFT).

Mexico's urgent need to bring new oil fields into production has made the country a bright spot for oil-services firms during a year when most oil companies are cutting their investment budgets due to low oil prices.

[...]

Chicontepec is a main pillar in Pemex's strategy to get oil production back above 3 million barrels a day by 2015. Pemex expects to be producing only 72,000 barrels a day at the basin this year despite two years of aggressive drilling. But by 2015 Pemex says Chicontepec will be producing 511,000 barrels a day, or a sixth of total output.

- Brewskie

Federal Government May Overtake Smart Grid System

Replacing America's antiquated electrical grid system is imperative for various reasons: much of it was constructed decades ago; we need an adaptable grid system to better serve America's rearranging demographics; and we need a 21st century grid system to transport wind power from the Midwest, or solar power from the Southwest.

People in the federal government recognize this and are considering legislation to preempt states' power on the Establishment of new power lines. The Huff reports on this:

After two hours, a consensus seemed to emerge: The outdated electricity grid must be modernized and expanded if President Barack Obama's vision of dramatically increasing the country's renewable energy resources is to be accomplished. And the federal government will have to play a bigger role in locating high-voltage power lines to overcome local and regional resistance.

Senate Majority Leader Harry Reid, D-Nev., a leading participant in the gathering, said he will soon introduce legislation to give federal regulators authority to override states when it comes to locating long-distance power lines.

"We cannot let 231 state regulators hold up progress," Reid said, referring to the members of state public utility commissions that decide on transmission locations.

[...]

Interior Secretary Ken Salazar said he's ready to open federal land to renewable energy projects, including wind farms in the waters off the U.S. coast, and map out energy corridors. But, he warned, the power grid of today won't get the new energy to the markets that need it.

[...]

Sen. Jeff Bingaman, D-N.M., who chairs the Senate Energy and Natural Resources Committee that will craft energy legislation, said that while he has not seen Reid's proposal, he agreed the Federal Energy Regulatory Commission should have more authority for planning and locating high-voltage power lines.

Bingaman said he hopes to have a bill in four to six weeks that will address the grid issue and establish a requirement for utilities nationwide to generate a certain percentage of electricity _ as much as 20 percent by 2020 _ from renewable sources such as wind, solar and biomass.

Ghawar Guzzler comment: While controversial, the need for a smart grid system in the 21st century is too imperative, too important to not allow the federal government carry authority. Some may consider it idealistic to let states, or even private industry to take charge with this monumental task; but history has taught us - from the great engineering of Rome to our own Interstate Highway System - central government authority is by far the best at tackling infrastructure; and let us not forget... it was the federal government, with massive subsidies and the grand ambition of the Tennessee Valley Authority of the 1930s, that led to the electrification of the (then) underdeveloped Deep South.

Do not consider government's role of infrastructure constructor as usurper to private industry; it's rather an accomplice - a catalyst to private industry. Do we need proof? Could anyone seriously imagine Wal-Mart without the Interstate Highway System - the largest public works project in the history of the world??

Government electrified the Deep South and rural America, drained swamps, built sewer systems; it can lead the charge with a smart grid system and help transform our 21st century lifestyle.

- Brewskie

The Oil Drum Kranked on Meth: 2012 Will See 65 mbpd

I realize I've been fixated on the Oil Drum lately, but these peak oil tycoons have really been OD'-ing on the peak oil Kool Aid lately.

Today, we have this gem from the boyz. It's a declaration that oil production will free fall after this year, seeing a rapid decline from 73-74 mbpd of crude production (stated on the graph), sliding down to about 65 mbpd by 2012 - after which... production will (somehow) glide down rather than fall. Below is a graph, and you can find this load of crap here.

Mind you, these lads - like Mathew Simmons and others in the peak oil community - have been screaming wolf for decades, screeching as loud as their tourette syndrome loaded lungs will allow, as often as their schizophrenic "peak demons" taps them on the shoulders.

Let's consider:

• They proclaimed the Ghawar Oil Field has been in decline at a rate of 8% since 2005 (Ghawar increased production last summer, sending it to heights not seen since its record setting year of '81).

• They've proclaimed Saudi Arabia itself is in decline (again, the oil kingdom increased production last summer, sending the slack jaws of the Drum boyz to the floor).

• Three years back, they forecasted a Norht America gas decline this decade. They completely shot down shale gas' potential, and got knocked back on their asses last year when they witnessed, at one point, America's near 9% increase in production - the largest since the late 1950s.

• They failed to forecast oil's Wiley E. Coyote free fall last summer.

• And so on...

The point is these bong boyz have been making failed proclamation after failed proclamation. They cherry pick their interpretations in the face of their detailed graphs and extensive research. Have they mentioned anything about last year's oil glut (I've got stuff coming about this later this week)? How much do they report on the oil glut we have now; the decline in demand occurring presentling, and has been occurring with OECD nations since 2005 (see page 5)? If they're going to make this ludicrous prediction, then let's hold them accountable. Let's ask them why production isn't nose diving in several years. Let's ask them what's wrong with their analysis, and why oil isn't up to $300 a barrel.

This is why mainstream society doesn't take these ostracized cranks seriously: because they're a load of Chicken Littles who've cried wolf far too many times over too many decades.

- Brewskie

See? There's Going to be a U.S. Gas Glut...

An earlier post indicated a likely natural gas glut in America later this year due to a surplus of imports. Platts is also foreseeing an upcoming gas glut, forecasting a possible drop to $2 per MMbtu.

Part of the article can be read from below:

Ron Denhardt, vice president of natural gas services for Strategic Energyand Economic Research, said in his latest monthly report that "prices arelikely to average below $3.50/MMBtu during April through October and it isquite possible that prices will decline below $2.00/MMBtu."

Denhardt pointed to weather-adjusted working gas storage pulls runningabout 8 Bcf/d behind last year, as well as total industrial production inJanuary coming in 10% lower than in January 2008. Among heavy gas-consumingindustries, primary metals output has fallen 36%, while agricultural chemicalshave fallen back 20% and total chemicals production has fallen by 12%.

A portion of the gas-demand drop "could be explained by the gas-intensivesectors declining more than average industrial production," the analyst said, adding that power-generation demand for gas likely has fallen in the wake of ashutdown of commercial facilities. Assuming normal weather, Denhardt projects storage levels at the end ofMarch to reach 1.666 Tcf--well above the 1.247 Bcf reached last year and thefive-year average of 1.486 Tcf. As a result, he said, unless producers takesteps to substantially shut in production, working gas in storage could reach4.4 Tcf by the end of the traditional injection season on October 31.

"This is 400 to 500 Bcf greater than capacity," Denhardt said. "Thus, themarket could absorb the loss of substantial production because of hurricanesor strong demand from hot weather with a minimal impact on prices."

[...]

Liquefied natural gas imports also are likely to put strong downwardpressure on US gas prices, as an expected decline in Asian LNG demand thisyear and next should coincide with a growth in global LNG production next yearof about 7 Bcf/d. Denhardt predicted that US LNG imports this year could reach1.7 Bcf/d or higher, compared with a relatively meager 1.1 Bcf/d last year.

Honda to Increase Hybrid Production

(Editor's note: Ghawar Guzzler will once again try blockquote for article excerpts.)

Honda has been hit by the global slowdown like most carmakers, and has seen its earning decline like oil companies; but this isn't stopping the pirate from unloading its war plunder and gear for battle. It's time to whip the lackadaisical crew into battle frenzied and churn out more Insights.

Demand for Insight hybrids has been overwhelming; Honda is beefing up factory RPM's, planning to spit out more Insights. Excerpt from the blog below:

Honda had originally planned to sell 200,000 Insight hybrids over the next year — half in America and 60,000 in Japan, reports Reuters. But the “response has been overwhelming,” said Hiroshi Kobayashi, deputy chief operating officer for Honda’s domestic operations. “We will have to increase production plans,” he said, though he stopped short of saying how many more Honda would build.

In Japan, the Insight will start at about $20,000, which is much cheaper than the new Toyota Prius, which will go on sale in May with a base price of about $24,300.

- Brewskie

PA May Force Companies to Reveal Gas Shale Drilling Secrets

Drilling for shale gas let America rip dimethyl sulfide last year, fouling gas' previously high price. Why not let more boys into the party? Pennsylvania is considering just that.

Fresh from Forbes:

Three decades ago, environmentalists and public officials rang the alarm when the price of fossil fuels shot up and drilling companies descended on western
Pennsylvania's oil and gas fields in search of paydirt.

The state Legislature responded with the 1984 Oil and Gas Act, which forced the companies to comply with strict new environmental standards - but also handed them a cushion that allowed them to keep secret most information about their below-ground discoveries for five years.

Now, with a fresh wave of exploration companies flocking to Pennsylvania in pursuit of natural gas in the sprawling Marcellus Shale rock formation, state legislators are considering peeling back that cloak of secrecy.

One proposal backed by several key senators would require disclosure of well-specific production data every six months in an effort to stimulate interest in drilling and bring Pennsylvania into line with major gas states.

- Brewskie

Using Nuclear Power (Errr... Thermal Batteries;)) to Bake Tar Sands

It's called "Mordor of the North:" a vast environmental holocaust larger than Florida, stripped of forests, scarred from mining, with polluted "seas" that place Down Chemical high on Patrick Moore's best environmental stewards list. But since we're too lazy to got back to 19th century farming, and with renewals still out of reach for a bit, we regrettably have no choice but to rely on the blood of the earth - even if... sometimes, and tragically, that mean literally beating that blood out of Mother Nature's face.

Vast amounts of natural gas are required during tar sands' separation process, where water is superheated into steam to separate the bitum; egg heads grind gears day and night researching improved/alternative methods to reduce costs.

Hyperion has floated this idea: use a hot-tub sized nuclear generator, placed underground, to power the process to sip oil out of tar sands, displacing the need to transport and burn natural gas.

Excerpt found below:

Yeah, it’s an unusual target market — and Hyperion is an unusual company. Hyperion claims that those mining an average oil field could save as much as $2 billion a year if they used the company’s technology instead of natural gas to power the process. Oil fields are also remote locations, where the costs of transporting fuel for power cut into the bottom line.

Tar sands developers, like the military, which Hyperion is also targeting, could also be, for lack of a better word, less squeamish about controversial forms of power — the industry is already routinely the target of attack by environmentalists.

But Hyperion also appears to be trying to distance its marketing from the “nuclear” elephant in the room. The term nuclear does not appear once on its latest news release — surprising, given it’s the crux of the technology. Instead it’s using terms like “thermal battery,” explaining the module as one that utilizes the “energy of low-enriched uranium fuel.” We figure anyone who’s going to plunk down $25 million for the device would figure it out.

Deliveries are expected to hit 2014, pushed back from 2013.

Some will undoubtedly find this controversial, but Canadian tar sand extraction and processing is already controversial enough. Wouldn't we rather use nuclear power - which commits no greenhouse emissions, and has plenty of uranium at disposal (this is Canada) - for tar sand processing over natural gas, which does contribute CO2 emissions and is in finite (though ludicrous) quantities? Smell the air of "Modor of the North," wither your lungs like Golem, decide for yourself.

- Brewskie

Has High Priced Oil Been Sent Through the Meat Grinder?

Great to be back! This should be a better week:)

The peak oil prophets saw the light once and are convinced that high-priced oil will return again - very soon, with vengeance. There will likely be some rise at some point, and when the world economy recovers, there's no doubt it will put some bite into demand. But $100+ barrel oil? This may take some time, and while the Chicken Littles wait, they will laughably be ostracized by mainstream society for (as they have for decades) crying wolf too many times over too many decades. Cut your bamboo rods, you!

Seeking Alpha had an interesting post indicating that, as opposed to what some market analysts and the so called peak oil "experts" have to say, this may take a while. Oil appears be a deflated athlete: it's artificial high price was pumped up like a Mark McGwire parade float on load-boats of steroid helium and HGH; and like the dot com bust, it may not be coming back, as this pinnacle float blew a leak wider than George W.'s empty skull, and flew off to space to never come back.

The article can be found here, and below are some bits:

Remember when Intel (INTC), Microsoft (MSFT), Dell (DELL), Lucent (ALU), Yahoo (YHOO) and Cisco (CSCO) ruled the markets? There was an era, roughly 1997 to 2000 when those stocks actually mattered...

[...]

And then, they just didn’t matter anymore. Once the dot com bubble burst, every bounce or rally in these names was basically a selling opportunity…for 8 years and counting! See the above chart for a notion of how frustrating it must have been to stay positive on NASDAQ tech names.

[...]

I believe that this story is repeating itself in the oil patch. Market participants seem to be in a state of disbelief that Chesapeake (CHK), Transocean (RIG), National Oilwell Varco (NOV) and ConocoPhillips (COP) aren’t important anymore. These stocks may have have seen the best levels they will ever see, at least for a long time.

[...]
When the credit crunch hit the hedge funds, we saw a raft of speculative money come out of commodities across the board. Then, industrial demand for oil literally disappeared from North America to China. These two events revealed to many newbies what the old school oil traders already knew, that commodities (and the related stocks) could be more volatile than what many were prepared for.

[...]

The oil names, in contrast, are trading at absurdly low multiples, in fact, the average PE ratio on the 18 oil stocks that make up the Oil Services ETF is only 5.08! This low multiple reflects the fact that last year’s earnings were peak earnings in this very cyclical business. Next year’s “E” is a giant unknown, but the market knows it ain’t going to stack up to when crude was over $100.

And so now, we will watch for years as these stocks grind it out in between the recent lows and the highs of yesteryear. In the meantime, investors on both Wall Street and Main Street will gradually come to the realization that the Chesapeake position they put on at 70 will not be break-even any time soon (if ever). In frustration, the hot money that came in but was too slow to sell closer to the top will come out, which makes all short-term rallies suspect in the entire sector.

And according to Joshua Brown, the old sow himself - T. Boone Pickens - may be placed out to the "pasture for slaughter" before oil hits $300 a barrel.

On a side-note, Ghawar Guzzler has been examining last year's oil production charts, and there's reason to be delighted: a giant oil glut appeared to be occurring right under our panicked $140 a barrel eyes; and the shocking part is - it could have been bigger. This news is in the works and plans are in place to post it this week. Happy days!

- Brewskie

Status Update: Too Hungover from the Oil Party

No updates this week. Very hectic week and healing up from it.

Till next time.

- Brewskie

New Syngas Method for Lower Tar Sand Production Costs

Canada holds vast hydrocarbon potential, but getting it isn't cheap. Oil companies are pouring fortunes into research in effort to lower production costs from roughly $10 a barrel. Some analysts believe it could potentially fall to $3 a barrel (Ghawar Guzzler cannot officiate this for now).

Nexen Inc. and OPTI has a promising new technique. Rather than piping in vast amounts of natural gas to heat water into steam - thus adding to the cost - a partial offset is created by using syngas, processed from the tar sands itself is used.

The Calgary Herald reports:

Nexen Inc. and OPTI Canada’s $6.1-billion technological gamble appears to be paying off as first production of sweet synthetic crude flowed from the partners’ Long Lake oilsands facility this week.

After more than a year in delays, the innovative thermal bitumen operation and upgrading unit ran as planned, on synthetic gas processed from the heaviest bits of the tar-like substance. Full production of 60,000 barrels per day isn’t expected for another year to 18 months, but analysts called the 24-hour run an important catalyst for the project.

[...]

Thermal oilsands projects use a massive amount of natural gas to generate steam, which is piped into the earth to soften up bitumen and enable it to flow through secondary wells back up to the surface.

The technology being pioneered at Long Lake would reduce the need to buy the fuel by running somewhat of a closed loop system.

Briefly, bitumen is steamed out of the earth, then processed to separate out the sand and water, as other steam assisted gravity drainage projects, then the water gets recycled back into steam.

Where Long Lake gets interesting is that the diluted bitumen then gets partially upgraded, and those products get further upgraded through a hydrocracker into light synthetic crude with low sulphur content, with the asphalt-like bits turned into synthetic gas. The gas is subsequently burned to produce the steam to produce the bitumen, and as a source of hydrogen for the hydrocracker that produces the synthetic crude.


- Brewskie

Cleaning Canadian Tar Sand Water

(Editor's note: What a busy week! There's hardly been time to post anything, much-the-less studying up on energy.)

Canadian tar sand production is a dirty, nasty business. It's relatively common knowledge that Canadian tar sands must be mined; vast amounts of water, super-heated by nat. gas, is necessary to separate the bitumen from the sand. This in effect leaves behind highly polluted, toxic man-made lakes where the polluted water is stored.

CNFO offers a solution to this. It's press release states: "it has been engaged by Premere Resources Corporation to develop a new application of its desalination technology to clean waste water from heavy oil and tar sands processing."

More from the press release states:

Large amounts of brine water are created in the processing of heavy oil. CNFO will adapt its desalination process to clean this waste water so that it may be reused instead of discarded as an environmental waste product.

Forty percent of Canada's oil production is from tar sands. The large amount of salt water produced in this process has become an increasing threat to the environment. CNFO's technology will address this threat by separating the clean water from the pollutants so that the fresh water can be reused. This will reduce the amount of water consumed in production and the amount of environmental waste produced by the process. There is more oil stored in tar sands than in all conventional reserves combined. Production of oil from tar sands is expected to increase significantly in the next several years.

This still doesn't dilute the fact that, because of the vast mining operation, the land suffers terrible scars as a result. One can even see the mining's effect from lower orbit in space. However, we are forced to rely on hydrocarbons for the moment to power our lifestyle - nobody, save for boondoggled hermits, wishes to embrace a 19nth century or Mad Max lifestyle. The unpardonable environmental sins, though, should give us extra incentive to move onto the sustainable 21st century lifestyle, and make hydrocarbons obsolete.

Let's move; chop-chop!

- Brewskie

- Brewskie

Warning: Peak Uranium in 10 Years (and Peak Squirrel, Too!)

Ah, the booger pickers at the Oil Drum have been really festive lately. It's as if they've found religion again: no more fluff puff posts trademark of the past several months - stories like "A World Without Money" that were the signature trend in a world of deflated oil prices, and deflated egos.

This morning they cooked another stolid stool: Peak Uranium(!), in ten years! This, like peak gas (is America still going to have a gas crisis this decade?), has been a staple among the peak crowd - has been for years. Among the more extremist of the peak movement, there's a belief - an agglomeration, of sorts - of a "peak everything," where everything from oil to coal to uranium will collide into a perfect storm within decades; creating the "perfect peak," a "peak of everything" as they call it. This apocalyptic vision has been a religious staple among certain peakers, particularly the hardcore or extremist peaker, who believe all support elements of modernized society will collapse due to depletion of fossil fuels and resources, reverting us to a 19th century lifestyle, or transforming us into Mad Max savages.

The Oil Drum, like many in the peak movement, have made an assortment of bad calls in recent history, despite the use researched material and noted graphs. As Mathew Simmons, "the King of Peak," says himself: "Data always beats theory. Compare data to theory three times and come to a conclusion." The Drum boyz blew the call on the impending American gas crisis (it was going to occur this decade), downplaying any potential shale or other unconventional sources of gas could contribute; blew their oil forecast last year, stating oil would "never drop below $100 a barrel", would embark on a death march to $200+, and ignored evidence of an oil glut (info. on this will be posted soon); they've been incessant in their belief of peak natural gas occuring in the near future (have these dudes seen how much gas Russia, Iran, Qatar and Turkmenistan have?); and they're reusing another failed ploy, the immenence of peak uranium occurring - soon.

This is ridiculous. First, have they checked how much uranium is in the world? Have these Stone Age neanderthals ever heard of reprocessing nuclear waste? For some information, check out the world's largest reserves of uranium (in tons):

Australia
1,462,0000

Kazakhstan
961,000

Russia
641,000

South Africa
512,000

Canada
497,000

United States
399,000

Brazil
310,000

And the largest producers as of 2007:

Canada
11,148

Australia
10,131

Kazakhstan
7,808

Russia
4,015

Niger
2,976

Overall, 48,544 tons of uranium were mined in 2007.

It's time to ease up to some John Lennon in the face of this apocalyptic drum beat. In the meantime, the Drum boyz better pay attention to another startling statistic, one that occured last year. The peak and decline of peak oil fandom, which has risen and fallen in tandem to oil prices.

- Brewskie

Weekly Dose: 2/15/09

Educational updates for your pleasure:

• ITC Holdings Corp. proposes new wind power transmission lines for the Midwest.
• New Jersey's 120 megawatt solar plan.
• America's cellulosic potential could displace one-third of gasoline by 2030.
• Shell's coal seam gas to LNG (hat tip: Peak Energy).
• The world's largest "pinwheel" - 7 megawatts (10 megawatts in the pipeline).
• Germany plans 960 megawatt offshore wind farm.
• 10 biodiesel refineries to be built in India.
• Japs to halt production of bad porn (an Onion article).
• Why gas has nudged up (it's still cheap!) despite lower oil prices; this will likely contribute to the oil glut.

Over and out for now.

- Brewskie

Xe, the Company Formerly Known As Blackwater

Blackwater - the infamous private contractor that's earned controversy for the conduct carried out by its contracted personnel - has revealed its latest PR attempt to cleanse a tarnished image: changing the company's name to "Xe," which is pronounced "z." Blackwater also announced it will change the current company logo (pictured above).

The private security firm has confronted a string of controversies since hiring out its armed contractors in Iraq; many of whom earn tens of thousands of dollars more than military personnel, and put in shorter commitments. One such incident occurred on December 24, 2006, when an armed Blackwater employee was accused shooting and killing a security guard of Iraqi vice president, Abdel Abul Mahdi. A prior incident - of the same year - occurred in the Baghdad Green Zone when an SUV, driven by Blackwater operatives, crashed into a U.S. Army Humvee. Blackwater guards disarmed the Army soldiers, and forced them to lie on the ground at gunpoint until they could disentangle their SUV from the wreck. In May 2007, Blackwater employees opened fire on the streets of Baghdad twice in two days. One of the incidents provoked a standoff between the security contractors, and Iraqi Interior Ministry commandos, according to U.S. and Iraqi officials.

Blackwater is believed to have 20,000-30,000 armed security personnel in Iraq. Its string of controversies sparked the book, "Blackwater: The Rise Of The World's Most Powerful Mercenary Army," by Jeremy Scahill.

- Brewskie

Update: Israel's Colossal Gas Find Likely to Get Super-Sized

Last month, Israel landed a super-size gas find - a 3 trillion cubic feet gas patch, big enough to potentially meet the small Middle East nation's needs for 15 years. Now, under studious scrutiny, it appears this whopper is likely far bigger than previous estimates - 5 trillion cubic feet, a 61% increase.

- Brewskie

Sweet Blazin' Lights - 1.3 Gigawatts of Solar (Yes, Gigawatts)!

(Hat tip: Peak Energy) The bright prophecy of solar in America's southwest is just starting to bear fruit. The largest solar deal ever inked: a deal between the utility Southern California Edison, and solar power plant maker, BrightSource, for 1.3 gigawatts of solar installations - more juice than even the largest nuke plant. The deal calls for solar thermal power as opposed to conventional photovoltaic; solar thermal concentrates the sun's rays to create steam in a boiler to turn a turbine.

More detail from the Wired magazine article:

The momentous deal will deliver more electricity than even the largest nuclear plant, spread out among seven facilities, the first of which will start up in 2013. When fully operational, the companies say the facility will provide enough electricity to power 845,000 homes — more than exist in San Francisco — though estimates like that are notoriously squirrely.

[...]

The new deal breaks the company's own record for the largest ever solar deal. The new installations, when completed, will produce 3.7 billion kilowatt hours of electricity per year. Previously, they'd cut a deal to deliver 900 megawatts of power to the Northern California utility, PG&E.

[...]

The 1980s-era solar thermal plants use the oldest solar thermal technology around, known as a parabolic trough. Mirrors shaped like a paper-towel roll cut in half concentrate the sun's rays on a liquid. That heat can be transformed into various types of energy. The Luz fields made electricity, but Frank Shuman built a plant based on this principle to pump water in Egypt in the first decade of the 20th century.

The new design sounds more exciting. Mirrors that track the sun — heliostats — sit in a massive field around a tower with a boiler. All those mirrors concentrate the sun's heat on the boiler, which makes steam and drives a turbine.

Blazin'

- Brewskie

Court Has Enough Power to Knock Down Mountains

A federal appeals court ruled in favor of mountaintop removal today, overturning a ruling that would require additional environmental review of mountaintop removal in Appalachia.

The article can be read here, and here are some excerpts:

A panel of the 4th U.S. Circuit Court of Appeals in Richmond, Va., ruled 2-1 that the U.S. Army Corps of Engineers has the authority to issue Clean Water Act permits for mountaintop removal coal mines without more extensive reviews. The court also overturned a related ruling that using ponds to remove sediment from streams at mountaintop mines violates the Clean Water Act.

The rulings are a blow to environmentalists and coalfield neighbors who oppose the highly efficient but destructive practice that exposes thin, shallow coal seams. Rocks, dirt and other debris typically are dumped into valleys containing intermittent streams, which is how clean water rules become involved.

The decision is a big win for mine operators. The coal industry says most of the nearly 130 million tons of coal produced at mountaintop mines in Appalachia goes to generate electricity for 24.7 million U.S. customers. Moreover, mountaintop mines employ some 14,000 people across West Virginia, Virginia, Kentucky and Tennessee.

Mountaintop permits have slowed to a trickle since March 2007, when the Corps was ordered by U.S. District Judge Chuck Chambers to rescind several permits. It was Chambers' ruling that the appeals court overturned.

For a better narrative of how mountaintop removal mining is executed, what its environmental impact is, please read this article from Wired magazine.

- Brewskie

China, Saudi Arabia Team Up for Desalination Projects

Ironic: two-thirds of the world is covered with water, and only 3% is fresh water. Even with 3%, there's still plenty of water; the problem - its availability in particular parts of the world, the scarcity of clean water, or diminishing sources of water because of climate change.

China and the Middle East are remedying this by building desalination plants. Desalination isn't cheap: it's expensive, energy-intensive; but with a growing population, the availability of drinkable water is a must.

Shanghai Electric Power Generation Group (SECPG), and Saudi Arabia’s ACWA Power International recently announced a partnership to work on power and desalination projects. The article can be read here.

The two countries also singed a deal that allows Chinese companies to explore and develop oil and gas projects.

- Brewskie

New Saudi Blood to Double Spare Capacity

The Tiger Woods of oil giants is proving ever more that she's still in her prime, that she still has magic buried in the depths of those enormous fields (the Ghawar Oil Field takes eight hours to drive around!).

The mighty oil titan reports it will more than double spare capacity to 4.5 mbpd by the middle of this year. This will be achieved by bringing the Khurais project online, which will add 1.2 mbpd to reserve capacity. The article can be read here.

Saudi's target spare capacity for this is 1.5-2.0 mbpd.

- Brewskie

Condom Industry Immune to Economic Distress

Where do you invest in this uncertain market? Big companies are laying off, car inventories are piling up, commodities are in the toilet; and everybody is being stingy(!) - saving instead of spending, waiting for bargains, waiting for prices to go down. If you own a restaurant or a small business, gregarious empathy is on your side, but forget charitable donations of spend-happy consumers.

Well, if there's one industry that's safe to be in - one seemingly impervious to financial kryptonite, and does a commendable service to society, to boot - it's the condom industry! Savvy investors will be delighted by their investments in Trojan or Durex(lol...:)) - U.S. sales were up 5% in the 4th quarter of 2008, up 6% last month compared to last year.

The article can be read here. And if you're without luck tonight, read this article and imagine what's possible down the road: watch a little You Porn, charge up your iPod (or your vibrator - lol!)

Okay, time to get some work done.

- Brewskie

Too Many Beers Explains Our Economic Foul-Up

In a recent post, investment advisor Tony Sagami recalled a conversation he had with one of the top mutual fund managers in the country. In the conversation, he asked:

"How much of your own money do you have invested in your fund?"

With a few too many beers, he replied, "Hardly any! You think I'm stupid?"

That second quote serves as one of the most exemplary reasons why we're in the screw-up, and serves as a microcosm as to what counter-measures need to be applied to prevent future abuse.

- Brewskie

Cheap Hybrids Minus Pricey Batteries - No Hot Air

The Swiss Federal Institute of Technology is developing a new type of hybrid vehicle that's affordable, and is close to achieving the same fuel saving. The catch? Throw out the sowing machine size electric motor and its pricey companion, the uper-duper expensive battery.

Sounds like a lot of hot air. Well, it takes air and a novel, yet seemingly low-tech (but difficult) paradigm buster that's going to make you slap your head, and say, "Why didn't I think of that?"

The Swiss Institute is developing a car that stores energy by using the engine's pistons to store compressed air. Later, when needed - you guessed it - the air is released and the car is propelled along. This nifty feature adds 20% to the engine's cost; for gas-electric hybrids, the electric motor and its pricey battery companion add 200%!

Some info. from the article is below (link):

The overall idea of air (or pneumatic) hybrids isn't new, but making them efficient has been challenging. "It's difficult to keep the [energy] losses involved in moving air around small enough that it looks attractive," says John Heywood, a professor of mechanical engineering at MIT who has also worked on developing air hybrids. What's more, tanks of compressed air store far less energy than batteries, severely limiting the fuel savings in typical air-hybrid designs, says Doug Nelson, a professor of mechanical engineering at Virginia Tech. This is one of the major drawbacks of cars designed to run solely on compressed air.

Guzzella's new air-hybrid design makes use of advanced control systems to more precisely control the flow of air, improving overall efficiency. To overcome limited storage capacity, the design relies less on capturing energy from braking than other hybrids, and more on another approach to saving energy: using pneumatic power to boost the performance of smaller, more efficient gasoline engines.

[...]

Guzzella's design replaces a two-liter gasoline engine with a very small 750-milliliter one that's adequate for cruising speeds. It uses compressed air to provide boosts of power for acceleration. The dense, compressed air provides the oxygen needed to burn larger amounts of fuel than usual, a technique called supercharging.

A similar approach is already used in some production vehicles, where exhaust gases drive a turbocharger. But turbochargers are known for a problem called "turbo lag"--a noticeable delay between when the accelerator is depressed and when the extra power kicks in. The lag is the result of the time it takes for the turbine in a turbocharger to start spinning fast enough. Guzzella says his system suffers no such delay, providing extra power instantly. That's could make the technology more appealing to consumers, says Zoran Filip, a professor of mechanical engineering at the University of Michigan, who was not involved with the research.

About 80 percent of the efficiency gain in Guzzella's system comes from using the small engine. Some of the rest comes from capturing energy from braking and then using it for acceleration--over short distances the car can be propelled by compressed air alone, using no fuel. Fuel is also saved by adjusting the load on the engine to keep it running at optimal efficiency, either by increasing the load by using some of the pistons to compress air, or by decreasing the load by using some compressed air to drive the pistons. Finally, compressed air can be used to restart the engine, making it practical for the system to turn the engine off whenever the car comes to a stop, rather than idling.

[...]

Computer simulations suggest that the design should reduce fuel consumption by 32 percent, which is about 80 percent of the fuel-savings of gas-electric hybrids, he says. Initial experiments have demonstrated that the design can be built.

- Brewskie

Rundown for Feb. 8, 2009

Well, there was the Jack Sequel and America's new wind title, but this was a dead week otherwise. Here's some of the scrounged-up sour crude:

• Sweden nukes nuclear ban.
• Chinese gas production jumps to 9th.
• Socialist GOP members oppose pay caps for bailed-out bankers.
• Strange brew - Brewer to turn beer waste into fuel for trucks.
• You think? Corn-based ethanol worst than petroleum-based gasoline.

Hopefully, there will be some bigger gushers next time.

- Brewskie

More Proof Why You Won't Need Platinum for Fuel Cells

(Editor's note: although blockquote works well for some bloggers, but its usage has proven finicky with Ghawar Guzzler. Excerpts from articles will be presented in italics until, otherwise noted.)

Researchers have grown arrays of carbon nanotubes which, under demonstration, may be capable of fulfilling the necessary role of catalyst with fuel cells - eliminating the need for exotic materials such as platinum; and they're cheaper and longer lasting, too boot.

Excerpts below include,

More than half the cost of fuel-cell stacks comes from platinum, according to the Department of Energy. "Fuel cells haven't been commercialized for larger-scale applications because platinum is too expensive," says Liming Dai, a materials-engineering professor at the University of Dayton, in Ohio, who led the work. "For electrodes, you need a cheaper material that still has a high performance."

Dai and his colleagues make electrodes by depositing the carbon-nanotube arrays on a composite film of polymer and carbon nanotubes. In a Science paper, the researchers show that using the material as a cathode gives four times higher current densities than do conventional platinum-coated electrodes. "There has been very limited success to finding a replacement for platinum, and [carbon nanotubes] could be one," says Prashant Kamat, a chemistry professor at the University of Notre Dame.

Carbon nanotubes, which are known to be electrically and mechanically robust, could overcome other issues that platinum faces. Carbon monoxide can stick to platinum's surface and make it less effective, Dai says. Also, platinum is not very durable, and its properties degrade over time. "Carbon nanotubes have long-term operational stability and do not suffer from carbon-monoxide poisoning," Dai says.

And...

To make the nanotube electrodes, Dai and his colleagues start with a compound containing carbon, nitrogen, and iron. They place this on a quartz substrate and heat it in the presence of ammonia, resulting in nitrogen-doped carbon nanotubes growing straight up from the surface. Then they oxidize the array to remove residual iron and transfer the array to a polymer film. Immersing the electrode in a potassium hydroxide electrolyte, the researchers found that it speeds up the cathode reaction of oxygen and electrons.

Meanwhile, others are working on different platinum substitutes. Kotaro Sasaki, who does fuel cell catalyst research at Brookhaven National Laboratory and his colleagues at Brookhaven are making atom-thick platinum films, which would use much less of the precious metal. Researchers at Monash University, in Australia, have made cathodes from a polymer called PEDOT. At Argonne National Laboratory, researchers have made nanotube arrays loaded with small quantities of platinum or iron.

- Brewskie

China Faces Worst Drought in 50 Years

(Hat tip: Peak Energy) Asia's tiger on steroids is facing a double calamity: the layoff of millions of migrant factory workers, who've lost their jobs in the economic downturn, and a deadly drought that's the worst in 50 years.

From the Times...

The worst drought in half a century has parched fields across eight
provinces in northern China and left nearly four million people without proper
drinking water. Not a drop of rain has fallen on Beijing for more than 100
days, the longest dry spell for 38 years in a city known for its arid climate.
The Office of State Flood Control and Drought Relief Headquarters described the
drought as a phenomenon “rarely seen in history” as the Government declared a
state of emergency.

Plus,

The drought could hardly have come at a worse time for the leadership, which is already gearing for possible social instability with some 20 million rural
migrants now out of work after losing their jobs in coastal factories and in
cities. Many have returned to work their farms while they wait for the economic
climate to improve but may now find they are unable to grow a harvest with no
water for irrigation.

And...

The absence of rain or snow since November has affected 9.5 million hectares of farmland - 43 per cent of the winter wheat sources.

One agriculture expert said that the drought could reduce annual production
in major wheat-growing areas by 2 to 5 percent. Ma Wenfeng said: “The
severest-hit regions of Henan and Anhui will see their wheat harvest down by
about 20 percent.”

- Brewskie

Petrobras' Oil Calvary on the Way

Brazil is tooling up an army for plunder. Petrobras will receive 33 brand new spakin' oil rigs by 2012, with 11 arriving this year. Forty rigs are operated or leased currently.

Excerpts...

The rigs are part of a $104.6 billion exploration and oil output plan through 2013. Under the program, Petrobras hopes to increase production by more than half to 3.66 million barrels a day in 2013 from 2.4 million barrels a day in 2008. Exploration and production will account for more than half the company’s $174.4 billion spending plan in the period.

- Brewskie

Chevron Announces Jack Sequel

Yup, ladies, peak oil is in full swing. Chevron recently announced another offshore discovery -Buckskin, which may rival the Jack Oil field (500 mb) discovered in 2006 - in the same lower tertiary formation its older sibling was discovered.

Excerpts are:

The Buckskin find is 190 miles (306 kilometers) southeast of Houston in waters 6,920 feet deep, the San Ramon, California- based company said today in a
statement. Chevron and its partners discovered a 300-foot column of oil-soaked
rocks in a 24 million- to 65 million-year-old formation known as the lower
Tertiary.

The find appears to be similar to the Jack discovery, which is 44 miles to the east and part of the same geological trend, Chevron said. Jack,which Chevron expects to cost at least $3 billion to develop, was the first indication that engineers and geologists had figured out how to tap a previously unreachable formation that may hold as much as 15 billion barrels of crude.

So far this year, Petrobras struck another field (possi. 10bb), Anadarko hit a gulf discovery, Israel hit a whopper gas find, Buckskin popped up; and on top of this, the world has an oil glut, and a possible tsunami gas glut heading for the U.S. Run for the hills.

- Brewskie

Kasakhstan May Become 2009's Biggest Uranium Producer

It's 1:00 a.m. on a Friday morning. Thursday was super busy, and this is the first opportunity there's been to sit down and post. Here's one for today about Kazakhstan's prospect for becoming the #1 uranium producer in the world for 2009. Boy, they're lit with the stuff.

- Brewskie

Garbage Truck Lives Off of Garbage

Not quite "Back to the future," but getting there. A U.K. company has designed a rather unique electric garbage truck that, well... lives off of what it eats. The way it works is this: it goes around collecting garbage, takes the refuse to an "energy and waste power station and recycling center;" there the trash is burned to generate electricity, the truck stays put and receives a fresh charge overnight - and a little excess juice is even contributed to the grid!

The truck features a 40kWh lithium-ion battery; it's capable of reaching speeds 0f 50 mph, and has a range of 100 miles after a six to eight hour charge.

- Brewskie

The Future King of Supercomputers

I.B.M. is the Michael Jordan, the Tiger Woods and the Babe Ruth of supercomputer makers. I.B.M.'s next bad boy, a BlueGene dubbed Sequoia, is expected to fire up in 2012. This monstrosity of number crunching will eat a quadrillion calculations per second (20 petaflops). That's ten times faster than today's reining champ, named Roadrunner - also built by the I.B.M gods.

Word from the article can be checked out here.

- Brewskie

Evidence Suggests China Surpassed America's January Auto Sales

Strong evidence suggests China surpassed America's auto sales last month - a trend, if contiuned, will eventually turn China into the world's largest car market.

From the article:

Official data for China's auto sales in January will not be out until next week. But they are expected to show sales at about 790,000 units for the month, Zhang Xin, an analyst at Guotai Junan Securities in Beijing, said Wednesday.

In the U.S., meanwhile, auto sales in January tumbled 37 percent to 656,976 vehicles, the lowest monthly level in 26 years.

Plus...

General Motors is one of China's biggest automakers, with billions of dollars invested in joint ventures and a record 1.09 million vehicles sold in 2008, up 6 percent from the year before.
Struggling GM has been counting on the growth in China, which passed up Japan in 2006 to become the world's second-largest vehicle market, thanks to strong sales to the country's fast-growing middle class.

But lately China's car market has been cooling as consumers hold off on big purchases. Domestic vehicle sales rose only 6.7 percent in 2008 to 9.38 million units - the first time growth has fallen below 10 percent since 1999.

And January's sales in China fell about 8 percent from the monthly record 860,000 vehicles in January 2008. That same month in the U.S., sales topped 1 million.

- Brewskie

U.S. Now the World's Biggest Wind Market

The U.S. is now the new king of wind energy; China is doing good, too. America, with 8.35 gigawatts of new capacity (almost as much as all of Europe added last year), usurped the previous title holder, Germany, with a total of 25.1 gigawatts of wind energy over 23.9 (Germany still obtains a higher percentage of its energy through wind).

From the article:

Global wind energy capacity surged by 28.8 percent in 2008, as the United States became the world's leading market, an industry survey showed Monday.

The Global Wind Energy Council said the US and China showed the strongest growth in wind energy as the global electric-generating capacity rose to 120.8 gigawatts at the end of 2008.

Also...

Wind power accounted for about 42 percent of the new power capacity last year in the United States and one-third in Asia.

China doubled its installed capacity by adding about 6.3 gigawatts, reaching a total of 12.2 gigawatts.

"The Chinese wind energy market is going from strength to strength, and has once again doubled in size compared to 2007, reaching over 12 GW of total installed capacity," said Shi Pengfei, vice president of the Chinese Wind Energy Association. "The outlook for the coming years is also very healthy."

At this rate, China would be well on its way to overtake Germany and Spain to reach second place in terms of total wind power capacity in 2010, the council said.

The total 2008 market for turbine installation is estimated to be worth $47.5 billion.

- Brewskie

BP and Shell Post Losses

Both BP and Shell reported losses.

Hopefully the oil industry doesn't need a bailout - ha-ha!

-Brewskie

December Home Sales Rose

Pending home sales rose 6.3 percent in December from a month earlier. Big gains were experienced in the South and Midwest.

From the New York Times article:

The number of pending home sales — those in which a buyer has signed a contract but not closed — were up 2.1 percent from December 2007.

And...

The Realtors’ Affordability Index rose to its highest level since 1971 in December, a result of lower home prices and lower mortgage rates. The rate on a 30-year fixed mortgage has fallen to an average 5.35 percent, compared with more than 6 percent in October.

Across the country, pending home sales rose 12.8 percent in the Midwest and 13 percent in the South. But they fell slightly in the Northeast and slid 3.7 percent in the West despite a small buying boom that had emerged as buyers snapped up foreclosed and distressed homes.

It's still shitty out there, but hang in there; we'll get through this.

- Brewskie

Anadarko's Deepwater Gulf Discovery

This isn't a Petrobras strike, but it's worth mentioning. Texas-based Anadarko recently announced a deepwater oil discovery in the Gulf of Mexico, named "Heidelberg," located under 5,000 feet of water and total drilled depth of 28,500 feet.

Excerpts from the press release read:

"The Heidelberg discovery further validates our geologic understanding of the subsalt Miocene trend. The well encountered the same-age sands and reservoir characteristics similar to the previously announced Caesar/Tonga discoveries," said Bob Daniels, Anadarko Sr. Vice President, Worldwide Exploration. "Since 2005, we have drilled seven successful exploration wells in this Middle-Miocene trend, each targeting resources of more than 100 million barrels."

Once drilling operations are complete at Heidelberg, Anadarko plans to drill the Vito prospect in Mississippi Canyon block 984, which Anadarko operates with a 20-percent working interest. Vito is a 30,500-foot test, targeting Miocene objectives in 4,000 feet of water and is on trend with other recently announced industry discoveries at Kodiak and Freedom.

According to the press release, "As of year-end 2007, Anadarko had 2.4 billion barrels of oil equivalent of proved reserves, making it one of the world's largest independent oil and natural gas exploration and production companies."

- Brewskie

Bolivia Poised for Lithium Boom (But the Socialism...)

South America is stuffed with Lithium; Bolivia is to be believed by some as possessing the world's largest reserves. As automakers around the world prepare to launch electric and plug-in hybrid cars (note: the current generation Toyota Prius, not a plug-in hybrid, uses a nickel-metal hydride battery), Bolivia is poised to take advantage of the boom - not only by producing and supplying lithium, but making lithium batteries for cars and consumer products.

Excerpts include:

On a remote Andean plain here, a short drive on unpaved roads from the world's largest salt flat, 120 government workers are constructing a facility to help power the fuel-efficient electric cars of the future.

The plant, in a sparsely populated region, is supposed to begin producing basic compounds of lithium, which is used to make batteries for cell phones, power tools, computers and other electronic devices, by year's end.

"Bolivia will become a big producer in six years of batteries," Luis Alberto Echazu, the minister of mining and metallurgy, said in an interview. He ticked off three companies that he said have expressed interest in investing in the government's lithium venture: Sumitomo, Mitsubishi and Bollore, a French company.

Oh, but that socialism...

The country's socialist president, Evo Morales, and its powerful union leaders are all deeply suspicious of foreigners, and their politics could stymie yet another opportunity for Bolivia to improve the lives of its citizens.

He (President Morales) said that the government should own and operate any lithium mining operations, and that foreign companies can invest their cash but must play only secondary roles.

In his biggest move as president, he also raised taxes on the foreign companies that hold the rights to Bolivia's natural gas reserves, the second largest in Latin America, and also gave the government the right to decide when and where the gas is sold.

Morales declared that the gas belonged to Bolivians, not "transnationals," as foreign companies are known here. Bolivians lionized Morales for sticking it to the foreigners.

The result? Foreign gas companies have stopped investing in Bolivia, and Bolivia has been unable to supply the gas it promised in contracts with Brazil and Argentina.

Like much of South America, Bolivia's economy and natural resources have been unfairly exploited by wealthier nations, and has suffered tyrannical wrath under extremist dictatorial leadership (some friendly to Western interests). Still, swinging from one mood extremity to another, in hastened attempt to solve deplorable state, never works and often excacerbates the situation. Just look at Venezuela. A poor country with a long history of being exploited, now in the grasp of a myopic dictator whose socialist drive has driven up inflation, hindered the oil sector, and hurt the economy. He kicked out Western oil companies and now he wants them back.

South America should heed the Greek maxim: "Moderation is the answer to everything; any extremity is bad."

- Brewskie

Get Ready for the U.S. Gas Glut

Seven giant overseas gas export terminals are expected to start up this year, expanding worldwide capacity by 20%. There's only one problem: the torrid world economy is dampening gas demand. With producers unlikely to scale back, with a slew of new LNG tankers and expensive gas export terminals coming stream, there's only one place that has the capacity and the appetite to absorb excess gas - the United States, where three trips to the energy buffet are never enough.

Below are excerpts from the article (link):

“It’s completely counterintuitive,” said Murray Douglas, a global LNG analyst with Wood Mackenzie in Houston, who is predicting U.S. LNG imports will grow 30 percent to 456 billion cubic feet this year and to more than 1.1 trillion cubic feet by 2013.

“We don’t believe Asia and Europe will be in a position to absorb this new production, and the U.S. is the only market that can take it, that has a large amount of storage.”

Other analysts, including Houston-based Waterborne Energy and Raleigh, N.C.-based Pan Eurasia Enterprises, agree that an American gas import surge may be coming.

Even the Department of Energy updated its LNG import predictions for 2009 recently to include the possibility of such a surge.

LNG imports could be a challenge to shale gas producers:

The wave of imports might even be strong enough to challenge growing domestic natural gas production from various shale formations, including the Barnett Shale near Fort Worth and Fayetteville Shale in Arkansas.

“This can put pressure on U.S. gas prices and could delay the full development of some of the new shale projects,” Douglas said.

- Brewskie

Updates For Febuary 1, 2009

Here's the rundown for the week:

• Telsa suffers setback with San Jose plant.
• The first Brazilian built semi-submersible platform went into production for Petrobras.
• Ireland pledges 250,000 electric cars by 2020.
• Toshiba's fuel cell charger coming in March.
• Bases in Antarctica are converting to wind and solar power.
• Russia feels Europe's pain: Medvedev in a hurry to complete two gas pipelines that leaves Ukraine in the dark.
• Texas to spend $5 billion on electric power lines for wind energy.
• The anti-Cheney: Biden to chair green energy task force.
• Canada exports tar poo; now they may serve to feed wealthy countries short of arable farm land.
• "Deres gold in 'dem dumps."
• California's PG&E's drive for tidal power (hat tip: Peak Energy).

- Brewskie