Tuesday, June 30, 2009

Surprise Fact: Africa Alone Can Feed the World?

(Hat tip: the always amusing Peak Energy)

Africa's lost history always leaves me vexing: what could have been had the Europeans not embarked on their infectious colonialism of Mother Earth's tragic continent? Well, it appears Africa's enigmic nature leaves us perplexed in the present, too (link):

DOOM-MONGERS have got it wrong - there is enough space in the world to produce the extra food needed to feed a growing population. And contrary to expectation, most of it can be grown in Africa, say two international reports published this week.

The first, projecting 10 years into the future from last year's food crisis, which saw the price of food soar, says that there is plenty of unused, fertile land available to grow more crops.

"Some 1.6 billion hectares could be added to the current 1.4 billion hectares of crop land [in the world], and over half of the additionally available land is found in Africa and Latin America," concludes the report, compiled by the Organization for Economic Cooperation and Development and the UN Food and Agriculture Organization

If further evidence were needed, it comes in a second report, launched jointly by the FAO and the World Bank. It concludes that 400 million hectares, straddling 25 African countries, are suitable for farming.

Models for producing new crop land already exist in Thailand, where land originally deemed agriculturally unpromising, due to irrigation problems and infertile soil, has been transformed into a cornucopia by smallholder farmers.

As in Thailand, future success will come by using agriculture to lift Africa's smallholder farmers out of poverty, aided by strong government measures
to guarantee their rights to land, say both reports.

Here's a recent article about Russia's vast, unrealized agricultural potential:

Russian President Dmitry Medvedev this weekend proudly hosted a world grain
forum in his home city of Saint Petersburg, promoting Russia as a major player
in agriculture and warning that hunger remains a global problem.

“In the next 10-15 years we are planning to bring the volume of Russian
grain exports to 40-50 million tons, increasing our share of the global market
to 20 percent,” said Agriculture Minister Yelena Skrynnik.

“Russia is not only about gas, oil and metals. We also have great grain
resources,” she said. Last year, Russia exported 20 million tons out of a total
of 108.4 million tonnes of grain harvested.


Russia has tens of millions of hectares (acres) of chernozem (black earth), a dream soil because of its richness in humus, which is formed by the decomposition of plant matter by micro-organisms. The high humus content gives the soil an ability to retain moisture that makes it perfect for farming. The famous Black Earth region in the southwest of Russia covers an area approximately half the size of Germany.

But the fall of the Soviet Union led to vast tracts of arable land going fallow. Ex-Soviet states have lost 24 million hectares (59.3 million acres) of arable land — three quarters of it in Russia — since 1993, said Dmitry Rylko, head of the Russian Institute for Agricultural Market Studies. He added that by contrast 31 million hectares of arable land had been gained elsewhere in the world. “The Soviet authorities exploited a large part of the arable land but in a completely unproductive way,” he said, adding that the fall of the USSR led to a dramatic decline in demand and support in the sector.

Medvedev said that Russia would now be preparing cultivation of 20 million hectares of farmland that have fallen fallow since the Soviet collapse.

Thanks, Karl Marx, you've certainly helped the world progress nicely. Dmitry Orlov must have a bust of you on his mantle.

- Brewskie

New Lighting Standards

'Bout time. The Obama administration announced new energy-efficiency standards for light bulbs:

"I know light bulbs may not seem sexy, but this simple action holds enormous promise because 7 percent of all the energy consumed in America is used to light our homes and businesses," the president said, standing alongside Energy Secretary Steven Chu at the White House.

Obama said the new efficiency standards he was announcing for lamps would result in substantial savings between 2012 and 2042, saving consumers up to $4 billion annually, conserving enough energy to power every U.S. home for 10 months, reducing emissions equal to the amount produced by 166 million cars a year, and eliminating the need for as many as 14 coal-fired power plants.

The president also said he was speeding the delivery of $346 million in economic stimulus money to help improve energy efficiency in new and existing commercial buildings.

- Brewskie

Waterproof Lithium-Air Battery

IBM recently announced imperial ambitions to conquer lithium-air battery technology; now, TR gives the nuts and bolts on this hopeful beauty...

A company based in Berkeley, CA, is developing lightweight, high-energy batteries that can use the surrounding air as a cathode. PolyPlus is partnering with a manufacturing firm to develop single-use lithium metal-air batteries for the government, and it expects these batteries to be on the market within a few
years. The company also has rechargeable lithium metal-air batteries in the
early stages of development that could eventually power electric vehicles that can go for longer in between charges.

Lithium-metal batteries approach the energy density of fuel cells without the plumbing needed for these devices; in theory, the maximum energy density is
more than 5,000 watt-hours per kilogram, or more than 10 times that of today's
lithium-ion batteries. Lithium metal-air batteries are also very lightweight
because it's not necessary to carry a second reactant. Lithium metal is "the
holy-grail battery material," says Steven Visco, chief technical officer and
founder of PolyPlus.


Using lithium metal as a battery electrode, however, has proved problematic, mainly because the material reacts rapidly and violently with water. "People have thought about lithium-air batteries for decades, but there's always water in the air," says Visco. Exposure to even traces of water rapidly degrades the material.

PolyPlus has solved this problem by developing what the company calls a "protected lithium electrode." The device consists of a flat, rectangular piece of lithium metal overlaid on either side with a ceramic electrolyte material called lisicon. The solid electrolyte is impermeable to water but lets lithium ions pass through. Another coating protects the electrolyte from reacting with the lithium metal. And finally, the edges of the device are sealed with an aluminum-polymer laminate similar to a potato-chip bag. The laminate provides a watertight seal, and it's flexible, so it doesn't create any strain when the electrode shrinks with use.

When the lithium-metal electrode is placed in water, lithium ions leak out and react with oxygen dissolved in the water or with the water itself. To make a lithium metal-air battery, the device is fitted with a gas-diffusion electrode similar to those used for zinc metal-air hearing-aid batteries. When the battery is switched on, the electrode draws in oxygen through the membrane to react with the lithium ions. But unlike hearing-aid batteries, these devices won't self-discharge over time. "You can leave the battery on the shelf for months and expect it to work because the membrane protects it," says Visco. And because they're based on high-energy lithium metal, these batteries last much longer and are more lighter than zinc-air batteries.


PolyPlus is currently testing lithium metal-seawater batteries in conjunction with the Monterey Bay Aquarium Research Institute to determine whether they can withstand real working conditions. One concern is that microorganisms in the ocean will grow on the batteries' surface and impair their operation, although preliminary tests have produced good results.

The single-use batteries made by the company employ a piece of lithium metal about two centimeters squared and three millimeters thick; they have a storage capacity close to that of the lithium-ion batteries in today's laptops at one-fifth the weight. The company has partnered with battery manufacturer Quallion to produce batteries based on PolyPlus's electrode designs and will make batteries under contract for an undisclosed government agency. Quallion says that lithium-metal electrodes can be processed using much of the infrastructure already in place for making lithium-ion batteries. "Certain precautions are needed to handle the material, but there are no tricks to it," says Beach.

- Brewskie

Consumer Reports Flunks Honda Insight=(

It achieves good fuel-economy, but that's about it according to Consumer Reports. This little space pod only edged out the Dodge Caliber...

Calling it "the most disappointing Honda Consumer Reports has tested in a long time," America's most influential product testing magazine has given extremely poor marks to the Japanese automaker's new Insight hybrid.

In a verdict that reminds us of a certain Jeremy Clarkson review (albeit more kindly worded), Consumer Reports blasted the gas-electric hatchback for its "ride quality, handling, interior noise, acceleration, rear-seat, access, and visibility," consigning the hapless Honda to a 21 out of 22 ranking among other small hatchbacks and wagons. Tallying a road test score of 54 points, it was trailed only by the widely-panned Dodge Caliber, which managed just 49 points.

Despite the fact that it won't receive a much-coveted CR "Recommended" nod, the Insight still managed to post a "Good" overall road test score (largely on the strength of its 38 miles-per-gallon as-tested fuel economy). Regardless, it was comprehensively beaten by both the Volkswagen Jetta Wagon and the Hyundai
Elantra Touring, which scored 80 and 79 points, respectively.

- Brewskie

Get a Smart Car for $99 a Month

Not that anyone would want to be inside one of these tin cans in a wreck (of course nobody would want to wipe out on a motorcycle at 70 mph, either), but thanks to generous incentives, it's now possible to purchase one of these little buzz bombs at $99 a month:

smart USA will allow qualified consumers using the federal rebate to purchase a new smart fortwo for as low $99 a month. The smart fortwo will qualify for the highest voucher level of $4,500 upon the trade in of an eligible vehicle. This special financing was designed to provide an additional monetary incentive for consumers to replace older vehicles that guzzle fuel and emit high levels of greenhouse gasses with new, highly efficient ones like the smart fortwo. It will launch later this summer when the rebate system officially takes effect.

- Brewskie

Fed Plows Solar into Southwest

Interior Secretary Ken Salazar said the federal government is aiming to fast-track solar projects in six southwestern states:

Interior Secretary Ken Salazar said he has signed an order setting aside more than 1,000 square miles of public land for two years of study and environmental reviews to determine where solar power stations should be built.

"We are putting a bull's-eye on the development of solar energy on our public lands," Salazar said during an announcement with U.S. Sen. Harry Reid of Nevada, in a courtyard shaded by a solar power array at the University of Nevada, Las Vegas.


Salazar vowed to have 13 "commercial-scale" solar projects under construction by the end of 2010. He set a goal of producing a total of 100,000 megawatts of solar electricity.

Salazar said the federal Bureau of Land Management plans to spend $22 million conducting studies of 24 tracts in the 670,000 acres of property he set aside in Nevada, Arizona, California, Colorado, Utah and New Mexico. Posters displayed Monday showed some of the sites in southern Nevada, Southern California east of San Diego, an area west of Phoenix, and tracts north of Cedar City in Utah, southwest of Pueblo, Colo., and around Las Cruces, N.M.

Bureau officials said the goal will be to identify lands of at least three square miles with solar exposure, suitable slopes and proximity to existing or designated roads and transmission lines. Wilderness, high-conservation-value lands and lands with conflicting uses were excluded. Setting aside the sites, called Solar Energy Study Areas, would prevent new mining claims and other third-party use during the studies.

An industry official hailed Salazar's promise to clear a logjam in utility-scale solar developments. The BLM said it has 158 active applications for solar power plants pending.


Salazar said bureau was already considering environmental reviews for two projects in Nevada. The NextLight Silver State South would have a solar array producing 267 megawatts, and NextLight Silver State North would produce about 140 megawatts.

Salazar said the two plants combined would produce more electricity than a "mid-sized" coal-fired plant that can produce 350 megawatts.

- Brewskie

Monday, June 29, 2009

Stephen Hawking Can Now Outrace a Corvette

Scientists at Toyota's Collaboration Center have developed a wheelchair that can be controlled by brain waves - no fingers necessary. Read here...

Japan's BSI-TOYOTA Collaboration Center has successfully developed a system that controls a wheelchair using brain waves in as little as 125 milliseconds.

BTCC was established in 2007 by RIKEN, an independent Japanese research institution, as a collaborative project with Toyota Motor Corporation, Toyota
Central R&D Labs, Inc., and Genesis Research Institute, Inc. Also collaborating in the research were Andrzej Cichocki, Unit Leader, and Kyuwan Choi, Research Scientist, of BTCC's Noninvasive BMI Unit.

Recently technological developments in the area of brain machine interface (BMI) have received much attention. Such systems allow elderly or handicapped people to interact with the world through signals from their brains, without having to give voice commands.

BTCC's new system fuses RIKEN's blind signal separation1 and space-time-frequency filtering2 technology to allow brain-wave analysis in as little as 125 ms, as compared to several seconds required by conventional methods. Brain-wave analysis results are displayed on a panel so quickly that drivers do not sense any delay. The system has the capacity to adjust itself to the characteristics of each individual driver, and thereby is able to improve the efficiency with which it senses the driver's commands. Thus the driver is able to get the system to learn his/her commands (forward/right/left) quickly and efficiently. The new system has succeeded in having drivers correctly give commands to their wheelchairs. An accuracy rate of 95% was achieved, one of the highest in the world.

- Brewskie

Chevron Ignites Steamflood Injection in Saudi

Back in March, Ghawar Guzzler posted a snippet about Chevron embarking on a steamflood injection pilot program in Saudi Arabia's Wafra Field, located in the Neutral Zone, to see if it can unlock potential tens of billions of oil trapped in the Middle East. Now, Chevron announced the program is underway...

The $340 million LSP, which is the final test phase for the steamflood project, is expected to lead to full-field steamflooding of the First Eocene reservoir, marking the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.

"Full-field deployment of steamflood technology in the PNZ would significantly increase recovery of crude oil reserves, confirm the technology's potential applicability in other carbonate oil fields and build on Chevron's steamflood capabilities that date back five decades," said George Kirkland, executive vice president, Chevron Global Upstream and Gas.

The LSP is the third in a series of staged tests to validate the feasibility of applying the enhanced oil recovery technology of steamflooding to unlock the producing potential of the heavy Eocene oil of the PNZ's carbonate reservoirs. Previous tests included the Small Scale Test (SST), which was successfully completed in 2008, and simple steam stimulation testing, conducted in the late 1990s.

Steamflooding involves injecting steam into heavy-oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells.

Chevron has successfully employed steamflooding to produce heavy oil from sandstone reservoirs at Kern River, Calif., for more than 40 years and at
Duri in Sumatra, Indonesia, for 25 years. The company is recognized as the world's leader in steamflood technology.

- Brewskie

Grubby Landfill to Algae Biofuel Plant

The town of Woodbine has spent decades of dealing with the after-effects of its closed landfill. Now a solution has arrived: converting it into a $200 million biofuel plant to convert Algae into usable fuels:

To Mayor Bill Pikolycky, Woodbine's old landfill has been a big headache. Closed for decades, the 45-acre property is covered with scruffy vegetation and needs an environmental cleanup that would cost the tiny Cape May County borough millions of dollars.

The site began to look like an opportunity, however, after the mayor heard Andrew Greene's unusual proposal.

Greene sees the landfill as a prime location for Garden State Ethanol, a $200 million biofuel plant that would use more than 100 bioreactor tanks to convert algae into ethanol and biodiesel oil. And Pikolycky sees the venture as a way to generate tax income and jobs and to have the site remediated at no expense to the borough.


Greene, president of Garden State Ethanol of New Brunswick, and former chief executive officer of the Robert Wood Johnson Health Network, is seeking funds for the project. He has been "in talks with an institutional investor," he said.

If approved, work on the plant, off Fidler Road, could begin by early next year, said Greene, of East Windsor, N.J.

He said the project was expected to yield scores of construction jobs and about 60 permanent positions at the 24-hour-a-day plant.

Garden State Ethanol plans to work with Rowan University to identify the most productive species of algae and the best environment in which to grow it, Greene said.

"These are the early days" of algae bioreactors, said Jim Lane, editor and publisher of the Miami-based Web publication Biofuels Digest. "About 20 to 30 companies are actively developing pilot programs.


The town of 3,000 has a 9 percent unemployment rate, one of the worst in South Jersey, and is the 86th most economically distressed of 566 state municipalities, the mayor said.

A water-treatment plant operated by the borough and another at the Woodbine Developmental Center would provide the 100 million gallons of treated but nonpotable water that would run through pipes to Garden State Ethanol.

There, the water would be fed into bioreactor tanks up to 20 feet high and 12 feet wide, with light and temperature controlled to grow algae, Greene said. Electricity at the plant would be supplemented by solar units.

Once the algae blooms, a third of the water is removed and sent through a centrifuge to produce an algae cake. That cake contains oil and carbohydrates that are separated. The oil is sent by rail to a nearby refinery and turned into biodiesel fuel. The carbohydrates are processed into ethanol, which is added to gasoline at the refinery, Greene said.

"You can do the whole thing again in 24 hours," Greene said. "Every year, we'll produce 13 million gallons of biodiesel oil and 25 million gallons of ethanol."

- Brewskie

Cheap Coal to Oil

This is only in fetus phase, so it's uncertain to predict where this will go, but University of Texas Researchers of Arlington say they have developed a method of converting lignite (brown coal - lousy stuff) into Texas intermediate-quality crude oil - at a price that's roughly half, $35 instead of $65 or $70.

Read here or click the link:

In a few years, the researchers predict, their discovery could lead to oil that costs $35 a barrel instead of the current $65 to $70.

This could translate into a Lone Star bonanza. Texas sits on a 200-year supply of lignite that's easily accessible because it lies near the earth's surface. Lignite, one of the lowest and cheapest grades of coal, is now used to fuel steam-electric power generation.

The research team had three goals according to the article:

  • "To produce a quality oil out of coal."

  • "Get the production cost of that oil down to at least $35 per barrel."

  • "Come up with a concept for refining the oil."

The team has accomplished all those things, Billo said, and coming up with a way to refine the oil was key.

The group developed a microrefinery that can manufacture oil from coal without the huge financial cost associated with traditional refineries.

"The team's microrefinery would fit anywhere you could put a structure that's 20 feet wide by 20 feet long by 20 feet high," Billo said. "Each microrefinery would cost about $5 million and could produce 500 to 1,000 barrels of crude per day."

Billo said that $5 million may sound like a lot – but not when compared with a traditional refinery, which costs "from $800 million to $6 billion, depending on the size and the real estate."


UTA's methodology was based on work at the University of West Virginia, which holds patents on converting bituminous soft coal, a much higher grade than lignite, into crude oil.

The two schools still work together, but UTA found that working with lignite presented demands different from those of bituminous coal.

"By producing an oil between light sweet and heavy crude, we surpassed our expectations," Billo said.

"We spent the first year proving we can make good oil. Next year, we expect to improve the quantity. We should be able to get two barrels of oil out of a ton of lignite. "In the next couple of years, lignite will be selling for $12 to $14 a ton, while bituminous will cost $60 to $70 a ton."

"In two years, we want to have built an industrial-size refinery. We want to ramp them up to 10 [microrefineries] side by side, producing 10,000 barrels a day, just a pittance. But it would blend with other crude regardless of its weight."

Guido Verbec of the University of North Texas Chemistry Department analyzed the UTA oil from lignite and said: "The distribution of the hydrocarbon chains are between C23 and C33, so that's a good distribution and looks more refined than standard crude oil."

- Brewskie

Gulf of Mexico Forecasts Record Oil Production

Gulf of Mexico Oil production is believed to be heading for greater heights, hitting 1.9 mbpd in a few years, up from 1.2 of last year:

Gulf of Mexico oil production is forecast to increase substantially over the next few years, possibly reaching 1.9 MMb/d in 2013 which would be a record high, according to Richie Baud, MMS deputy regional supervisor for the Office of Production and Development. This is MMS’ best-case scenario, which factors in industry-announced discoveries and undiscovered resources.

Recent startups at BP-operated Thunder Horse (capacity: 280 Mb/d oil; 200 MMcf/d gas), BHP-operated Shenzi (capacity: 100 Mb/d oil; 50 MMcf/d gas), Chevron-operated Tahiti (capacity: 125 Mb/d oil; 70 MMcf/d gas), and volumes of oil and gas production coming back online from hurricane shut-ins, are reversing the GoM oil production trend upward, albeit temporarily, beginning this year. MMS says 75% of the increase in oil production and 72% of the increase in gas production will
result from hurricane shut-ins coming back online.

Well, gas might down in a couple of years (but who cares - we've got a centuries worth of gas here onshore)...

Meanwhile, based on existing shallow water and deepwater operator commitments,
GoM natural gas production is forecast to increase slightly this year over last year, to about 7 bcf/d, according to MMS. However, in 2010, gas output is forecast to begin declining again, even with the addition of resources from industry announced discoveries.

Nevermind; onto the good news...

In 2008, operators announced 15 new deepwater discoveries, almost double
the number reported in 2007.
Seven new deepwater projects (Bass Lite, Neptune, Blind Faith, Mississippi Canyon block 161, Raton, Thunder Horse, and
Valley Forge) began production last year, bringing the total to 141. This is up from 130 at the end of 2007. Meanwhile, 73% of the tracts receiving bids in the three GoM lease sales held in 2008 are in deepwater.

Say, haven't peakers been loquaciously warning about declining oil discoveries? With Brazil, Angola, Iran, Saudi Arabia, the Arctic and the Gulf of Mexico, it looks like there's plenty of oil left to be found...

Much of the new development in the GoM is in ultra deepwater (water depths greater than 5,000 ft [1,524 m]), and often targeting high temperature and high pressure prospects beneath salt canopies with layers of tar, which complicates drilling and production. This requires rigs equipped with the latest technology, and production systems suited for harsh weather, in areas with minimal existing infrastructure.

“The deepwater frontier has entered a new phase,” says Mike Prendergast, MMS chief of staff, GoM region. He points to the increasing use of hub facilities as a trend
in deepwater development. “Hub facilities will serve a bigger role as drilling moves to deeper waters, and this will require further development of MODU technology as many of the hubs lack drilling capacity,” he says.

Chevron recently announced it has initiated front-end engineering and design of a new deepwater hub to develop the Jack and St. Malo discoveries. The floating
production platform will be a semisubmersible designed facility with an initial nameplate capacity between 120,000 and 150,000 b/d of oil, 37.5 MMcf/d of gas, and provision for a future 200,000 b/d of water injection. It will be moored in 7,000 ft (2,134 m) of water. Mustang won the contract for topsides FEED, with completion expected in 2Q 2010.


Many of the newbuild MODUs scheduled for delivery to the GoM will be equipped with DP systems, and capable of drilling in up to 12,000 ft (3,658 m) of water to 40,000 ft (12,192 m) TD. In 2007, MMS reported a record number of
rigs (15) drilling in ultra deepwater.
Although this record has not
been surpassed, MMS expects increased drilling in this water depth, with 15 newbuild MODUs scheduled for delivery to the GoM in 2009-2011. MMS expects two
new drillships and six new semisubmersibles in this year, five new drillships
and one semisubmersible in 2010, and one new semisubmersible in 2011. Also, four
semisubmersible rigs are being upgraded to drill in ultra deepwater, with delivery to the GoM expected in this year and in 2010.

- Brewskie

Friday, June 26, 2009

N Dakota Production Ramping Up

It's no Prudhoe Bay in her prime (nor even now), but N Dakota's production of Bakken is ramping up nicely, making it the fifth-most productive state:

Development of the promising Bakken Shale formation is reshuffling the deck for US states with bragging rights on oil production, boosting North Dakota now into the top tier of oilpatch jurisdictions.

Thanks to the Bakken, North Dakota has drilled past New Mexico, Wyoming and the venerable Oklahoma to claim fifth place among US oil producing states with average daily output of 202,000 b/d, according to EIA data at the end of last year, before activity slowed for the latest recession.

Excluding offshore output, Louisiana may well be in reach with its production of 209,000 b/d. But the Bakken will have to prove extremely prolific for North Dakota to challenge California's 587,000 b/d, Alaska's 702,000 b/d or Texas' 1.09 million b/d any time soon.

Given the optimism of some USGS reports about the potential for the Bakken, however, we may be watching the emergence of a new state oil-producing powerhouse. Last year the USGS estimated the Bakken formation may hold anywhere from 3 billion to 4.3 billion barrels of recoverable oil.

North Dakota's 202,000 b/d average for December of 2008 represented a 50% gain from December of 2007, when North Dakota's 135,000 b/d average still had it lagging Wyoming's 145,000, New Mexico's 161,000 and Oklahoma's 164,000.

Here's the Oil Drum laying an egg on Bakken last year:

If total production amounts to only 500 million barrels, as I have suggested, this would equate to about 23 days worth of United States oil usage, spread over many, many years.

Looking at future production another way, the recent peak in production has been 75,000 barrels of oil per day (discussed in more detail below). Even if operators are able to triple this amount, the resulting production of 225,000 barrels a day (which would be a considerable challenge), will amount to only about 1.1% of US oil consumption, assuming the US uses about 20.7 barrels of oil a day, based on EIA data.

If we can reach 225,000 barrels of oil per day, the history of Bakken suggest this level would be short-lived - the peak production will probably last for a year or less - because as we shall see below, total Bakken production can be expected to decline to 50% or less of its peak rate within a few years, because of the steep decline rate of individual wells.

Will the Drum stooges shit all over themselves again like they did with shale gas? Time will tell; but N Dakota is already near the "considerable challenge" of 225,000 bpd, and production is up 50% since Dec. 2007.

- Brewskie

The Department of Energy Issues Rules for Smart Grid Grants

The DOE has finally issued guidelines for utilities, and other companies clamoring to get a bit of the $3.9 billion of stimulus money for smart grid projects (a link to the DOE's guidelines is included):

The funding opportunity announcement issued Thursday sets rules for how to apply for about $3.9 billion in grants, which will provide part of the cost of qualifying projects.

It's an important boost for utilities seeking to build out expensive two-way communication and control technologies for their electricity grids, with projects ranging from smart meter networks to sensors and controls for distribution and transmission grids.

As expected, the DOE's funding will be broken into two categories. The larger portion, about $3.3 billion, is for the Smart Grid Investment Grant Program, aimed at technologies that can be deployed on a commercial scale.

And the pressure is on to apply for those investment grants, noted John Quealy, managing director of equity research for Canaccord Adams. Letters of intent are due by July 16, and full applications are due by August 6, with awards to be announced in October, he said.


The grants will also be split up according to the size of the proposed projects, with those under $20 million to get 40 percent of the total, and larger projects between $20 million and $200 million to get 60 percent of the total, he said.

The DOE will also be giving out about $615 million for smart grid demonstration projects, for "new and more cost-effective smart grid equipment, tools, techniques, and system configurations that can significantly improve upon today's technologies." The largest grants it will give under that pool of grant funds is $100 million.

For both types of grants, the DOE has kept to its May decision to increase the maximum grant amounts from what had previously been smaller caps of $20 million for investment grants and $40 million for demonstration grants.

- Brewskie

$500 Million Green Jobs Grants Opened for Bidding

$500 million of Recovery Act funds are now up for grabs in efforts to retool America's economy, to revamp its energy creation and energy infrastructure (link):

About $150 million in grants are earmarked for green job training programs that provide “pathways out of poverty,” and a portion of some $290 million in grants will go toward efforts to retrain workers from the hard-hit auto industry."

These grants are an essential first step towards not just building America's clean energy economy, but making sure that every community gets to enjoy the benefits of that economy," Green For All CEO Phaedra Ellis-Lamkins said in a statement provided to GreenBiz.com.

The $500 million has been designated for the following areas:

  • $150 million in Pathways Out of Poverty Grants. Eligible applicants include national nonprofit organizations that have networks of local affiliates and other partners and local entities.

  • $100 million in Energy Training Partnership Grants for programs that will serve workers affected by national energy and environmental policy, workers who need training to update or transition their skills and the unemployed. An unspecified portion of the funds are for projects that serve communities left stranded by the foundering auto industry.

  • $190 million in State Energy Sector Partnership and Training Grants for state workforce investment boards that are working with their state governors to devise a strategy that aligns a workforce vision with state energy policy and green job training on local and regional levels. A portion of this money also will be reserved for communities affected by the auto industry meltdown.

  • $50 million to state employment agencies to compile labor market data on the energy efficiency and renewable energy industries -- not only to build an information base, but also to support jobseekers who want to pursue work in green industries.

  • $5 million in Green Capacity Building Grants to enable organizations to provide training for entry-level or gateway positions.

Information about grants, eligibility and application deadlines can be found at the U.S. Department of Labor Employment & Training Administration's website, and at http://www.grants.gov/.

In other green job news, Oregon - a state blindsided by unemployment - saw its green jobs grow seven times faster than other jobs.

- Brewskie

Thursday, June 25, 2009

Mr. Simmons's Mental Capacity Goes Up in Smoke

This ultimately will be a somewhat quick debunker post on the man (a trademark, "heart attack brick burger-like meat stack" is in the pipeline for him=)). I was reading a vaguely noticeable article on "why gas won't go to $4 a gallon this summer (as if anybody couldn't see that)," when this bit was eyeballed (link):

Houston consultant Matthew Simmons sees higher prices ahead as well. OPEC's supply capacity is strained, he said, and the recession has halted refinery expansions, pipeline improvements and offshore-drilling projects. "There's no extra crude in OPEC's pocket," he said. "We have no cushion."

There you have it, folks: "we're screwed;" all coming from the mouth of the man who driveled last winter "we don't have any evidences of a glut," or who's messianic certainty of natural gas Armageddon prevented him from forecasting shale gas's significance, or the gas glut we have now.

Of course for normal people - those who don't flake out their brains from "phalanxing" insidious chemicals from layers of makeup plastered onto one's face (like Wacko Jacko) - who have been paying attention to the news, they have gained clarity of a situation a 1st grader could comprehend: you're wrong, old fart.

Here's the real money shot:

And we fist-pounders demandingly ask: "Where's the beef?"

I hate to run rehashed material into the ground - yah gotta run idiots' heads into roughshod soil like wheel barrels to perk any activity in their frontal lobes! - but Saudi Arabia is or will be adding spare capacity(here, here... poke here), plus has exhibited avarice avity for its vaunted offshore potential; Iran's not shabby with "Great Lakes" oil discoveries (same can't be said for political freedom), then or now; and Iraq, if it can hold its shit together, has a Kobe Bryant-like oil future, with plenty more oil to be found.

Mr. Simmons is a colossal businessman who started his company from scratch; yet he banked an ego the size of his fortune on oil and gas Armageddon. This man has gotten practically nothing right this decade with his dooms day scenario forecast; yet his "fleet" of peak oil Lassie clones slobber their rough collie smiles to every phonon he emits. "Oh no, OPEC has no cushion. We're soo fucked!!"

Mr. Simmons never-the-less persists into his wintry charge of peak oil doom like ravenous Napoleon charged pig-head first into Russia. With such callous disregard to facts, it's no wonder Mr. Simmons played an influencing part with another indefatigable turd:

- Brewskie

Petrobras Reconfirms Discoveries Viable at $40 per Barrel

Despite the technological obstacles of drilling Brazil's pre-salt discoveries, Petrobras has been insistent that its fields can be drilled at $40 per barrel; though skeptics remain in massive herds. Here they are reiterating their point:

State-controlled Petrobras said Tuesday that production from the massive oil fields deep below the ocean floor off Brazil’s Atlantic coast was viable at $40 a barrel for benchmark Brent crude.

The “pre-salt” reserves, so called because they are located under a thick layer of salt, can be extracted at a cost of less than $40 per barrel, Petrobras finance chief Almir Barbassa told reporters in Sao Paulo.

Among other things...

Brazil expects “to go from production of between 2 and 2.4 million barrels of petroleum daily to 5.7 million in 2020,” Barbassa said.

The “ambitious” strategic plan unveiled by Petrobras in January was well-received by investors, with the company’s shares on the Sao Paulo and New York stock exchanges outperforming the benchmark indexes for both markets, Barbassa said.

In January, the Brazilian oil giant released its 2009-2013 business plan, which includes the pre-salt assets for the first time and calls for a sharp increase in investment from $112.4 billion to $174.4 billion.

- Brewskie

'Ders Still Black Gold in 'Dem Hills?

California's oil glory is long past. It's production peaked back in '85 at 1.1 mbpd (or 1.2 - whatever) and is now spurting out 666,000. However, one maverick cornucopian, Occidental Petroleum Corp., is bucking conventional wisdom and is heading for the hills for what it believes lays buried treasure (link):

Occidental Petroleum Corp., the fourth-biggest U.S. oil producer by market value, is drilling exploratory wells in California in a bet that deposits there hold hundreds of millions of barrels of crude.

Occidental is counting on prospects near Long Beach and in other parts of the state to drive “meaningful” reserves and output growth in the next decade, Chief Executive Officer Ray Irani said. The company will drill 20 exploratory wells this year on sites ignored by rivals that quit searching California in the 1970s in favor of the North Sea and South America.


“While Texas is a big base for us that over the next 10 years will continue to grow modestly, California is going to grow in a meaningful way,” Irani, the longest-serving CEO of a major U.S. oil company, said yesterday in an interview at Occidental’s headquarters in Los Angeles.

Chief Financial Officer Stephen Chazen said the company is targeting fields with oil and natural-gas reserves equivalent to at least 150 million barrels of crude each. That would be about one-third the size of Chevron’s deepwater Tahiti field in the Gulf of Mexico, which began production in May.

‘Sizeable’ Fields

“We’re very excited about California because it’s a very under-explored area,” Chazen said in the same interview. “You are not going to find Prudhoe Bay, but I think you’ll find sizeable fields here left in California.”


Occidental has been quietly amassing leaseholds on California land for the past five years with a view to tapping reserves that were overlooked or dismissed by other companies, said Irani, 74. Those leases now encompass 1.1 million acres, an area three times the size of New York City.

- Brewskie

Wednesday, June 24, 2009

Holy Shit! US Men's Soccer Team Beats Spain!

Totally unrelated to energy, but hardly anything - except maybe a cockroach - will have heard of this in the US (link).
It is finished. Spain's 35-match unbeaten streak ends on a frigid night in Bloemfontein, where the United States men's national team has engineered an improbable 2-0 upset of the reigning European champions.

Goals from Jozy Altidore and Clint Dempsey have given the United States its most improbable upset since tipping England in the 1950 World Cup.
Oddsmaker William Hill listed the U.S. as a 12-to-1 longshot to snap Spain's record run!
- Brewskie

Synthetic Super Sucker Trees

Here's another piece this bizarre, yet interesting form of research: synthetic trees that sap out CO2 like a fish drinks water.
Trees are great absorbers of carbon dioxide from the atmosphere, and inhibitors of climate change -- that's why treehuggers hug them so much. But leave it to humanity to engineer a better tree. A synthetic tree, currently being tested as a prototype, ensnares carbon about 1,000 times faster than a real tree.

The "tree" uses plastic leaves that capture the carbon dioxide in a chamber. The carbon dioxide is then compressed into liquid form. The tree captures the carbon without the need for direct sunlight, which means that, unlike traditional trees, the synthetic trees can be stored in enclosed places such as barns, used anywhere, and transported from one site to another regardless of conditions.

Lackner says the captured CO2 could be used to create fuel for jet engines and cars, the two most common carbon emitters. In other cases, the CO2 could be used to enhance current production of vegetable produce.

Klaus Lackner, a professor at Columbia University who is developing the tree, met with U.S. Energy Secretary Steven Chu last month to talk about the concept. In an interview with CNN, Lackner said the synthetic tree is "several hundred times better at collecting CO2" than windmill generators. Lackner says that for every 1,000 kilograms of carbon dioxide collected, the tree emits just 200 kilograms. This ratio is more than enough to warrant the relatively high cost of building the trees (about the same as a new automobile) or retrofitting coal plants.

Each synthetic tree could collect about 90,000 tons of carbon per year.

- Brewskie

Oil Tanker Industry Waning (Wonder Why?)

Slacking oil demand is putting a crimp in the demand for oil tankers...

In a precursor of troubled waters ahead for the shipping industry, Frontline Ltd, the world’s largest operator of supertankers, recently cancelled orders for two supertankers and four supermaxes, a total value of $556 million. The chairman of Frontline, Jens Martin Jensen, predicted that moves by other shippers will “emerge in the next weeks” that could result in as much as one-third of all orders for new oil tankers being cancelled or delayed due to the slacking global thirst for crude. The stock price of Frontline Ltd (NYSE: FRO) has fallen from a high of $72.36 in the past year to $24.32.


While the price of oil has more than doubled since February 2009, it has largely been the work of speculators and investors fleeing the weak dollar for commodities. The global demand for crude has actually declined from the economic downturn, crippling the tanker industry. The International Energy Agency expects the first drop in overall oil demand in consecutive years since 1983. In the past year, the share price of USO, (NYSE: USO) the exchange traded fund for petroleum, has fallen from $119.17 to $37.41.

Orders at shipyards worldwide have collapsed: a 42.3% fall in the last year alone. Ye Zhigang, an analyst with Haitong Securities, predicts that the global demand for shipping will remain low until 2013. He expects large government owned shipyards to endure with many of the smaller private ones being forced into bankruptcy or gobbled up by a stronger competitor.

As a result of the slack in demand, the rental price for a supertanker, based on shipping rates from Saudi Arabia to Japan, is now so low that many are being used for storage. There are now about 60 supertankers only holding oil, a one-third increase since April of this year. The benchmark rental rate for supertankers in the first quarter of 2009 was at its lowest rate since the third quarter of 2002. The Claymore Delta Global Shipping Index, (NYSE: SEA) the exchange traded fund for the shipping industry, is at $11.46, down from a year high of $26.05.

- Brewskie

Chemotherapy is So Barbaric

Here's some future speculation of how nanotechnology will someday make cancer treatment so much easier...

Nanoparticles specially engineered by Univ. of Central Florida Assistant Professor J. Manuel Perez and his colleagues could someday target and destroy tumors, sparing patients from toxic, whole-body chemotherapies.

Perez and his team used a drug called Taxol for their cell culture studies, recently published in the journal Small, because it is one of the most widely used chemotherapeutic drugs. Taxol normally causes many negative side effects because it travels throughout the body and damages healthy tissue as well as cancer cells.

The Taxol-carrying nanoparticles engineered in Perez’s laboratory are modified so they carry the drug only to the cancer cells, allowing targeted cancer treatment without harming healthy cells. This is achieved by attaching a vitamin (folic acid) derivative that cancer cells like to consume in high amounts.

Because the nanoparticles also carry a fluorescent dye and an iron oxide magnetic core, their locations within the cells and the body can be seen by optical imaging and magnetic resonance imaging (MRI). That allows a physician to see how the tumor is responding to the treatment.

The nanoparticles also can be engineered without the drug and used as imaging (contrast) agents for cancer. If there is no cancer, the biodegradable nanoparticles will not bind to the tissue and will be eliminated by the liver. The iron oxide core will be utilized as regular iron in the body.


The process works like this. Cancer cells in the tumor connect with the engineered nanoparticles via cell receptors that can be regarded as “doors” or “docking stations.” The nanoparticles enter the cell and release their cargo of iron oxide, fluorescent dye and drugs, allowing dual imaging and treatment.“

Although the results from the cell cultures are preliminary, they are very

Perez said.A new chemistry called “click chemistry” was utilized to attach the targeting molecule (folic acid) to the nanoparticles. This chemistry allows for the easy and specific attachment of molecules to nanoparticles without unwanted side products. It also allows for the easy attachment of other molecules to nanoparticles to specifically seek out particular tumors and other malignancies.

- Brewskie

Saudi Gaining Jerry Falwell Appetite for Offshore Crude

The oil kingdom evidently is getting a little "Petrobras envy:" it's got big plans to ramp up offshore production by 20%, and its been signing up platforms (link)...

In fact, the NOC holds the world's largest offshore field, Safaniya, with an estimated 20 billion barrels of oil and daily production of 1 MMbopd. Other major producing offshore fields for Saudi Aramco include Zuluf, which has a daily production capacity of 500,000 bopd, and Marjan, which produces 270,000 bopd.

In a five-year plan starting in 2009, Saudi Aramco is increasing drilling exploration and investment in the oil sector, which includes increasing drilling by a third. A priority has been placed on offshore areas, and the company is presently investing in an effort to increase production capacity by 20%. That includes both development to achieve first production and re-development of producing fields. Major upstream projects include works on offshore fields Berri, Zuluf and Safaniyah. Also under development, Manifa is expected to hold between 10 and 20 billion barrels of oil and is scheduled to come on-stream by the third quarter of 2011.

Saudi Aramco has not always been very active offshore or focused on its offshore resources. At the start of the decade, the NOC only had one rig working in the waters offshore Saudi Arabia, and it was a rig that the company owned. That number increased over the next year to four rigs by the close of 2001. Following that pattern of increased offshore activity, the number of rigs Saudi Aramco contracted from 2002 through mid-2005, continued to increase with nine rigs contracted in June 2005.

By the close of 2005, Saudi Aramco had 16 rigs contracted, and that number continued to increase. By mid-2007, the company had 23 rigs contracted for work.
Through 2008 and into the start of 2009, the number of rigs increased further, with Saudi Aramco's contracted rig count peaking at 29 rigs in January of this year.


Looking forward, the total number of jackups contracted by Saudi Aramco slips to 19 by the close of 2009. In 2010, the average number of rigs the company has contracted is 17, and 2011 starts with 15 rigs contracted so far.

Although the company has not signed new contracts as of late, the length of Saudi Aramco contracts is significantly longer than the typical jackup rig contract. In fact, the worldwide average contract length for all currently ongoing jackup contracts is 857 days. In contrast, the contracts Saudi Aramco has signed since 2008 are an average of 1,115 days long, which is 258 days, or 30%, longer than the current worldwide average length.

Taking into account that jackup contracts are shorter in the Gulf of Mexico than other areas of the world, the worldwide average jackup contract length is 917 days if you disregard the GOM jackup contracts. Nonetheless, Saudi Aramco contracts remain 198 days, or 22%, longer.Furthermore, the number of contracts signed in the last year has dwindled, but that may be part of a strategic pattern, rather than a lessening in activity. The only contract signed by Saudi Aramco in the last twelve months was an extension of the already contracted Arch Rowan. This is in contrast to the number of contracts signed in 2008, which were six. Prior to 2008, Saudi Aramco had signed just one new offshore rig contract in 2007, but had signed six new contracts in 2006.

If this pattern of a busy year followed by a slow year continues, the company may be ready to sign a number of new contracts at the start of 2010. Given that the company has openly expressed its plans to increase production and focus on its offshore fields, as mentioned above, it seems likely that Saudi Aramco will be launching rig tenders and signing a significant number of new contracts or extending existing contracts in the relatively near future.

Since the King of Peak started screaming like the King of Pop, back in 2003, about Saudi's upcoming oil collapse, I wonder how such oil prospects reflects on his sanity? Hey, according to him, we're still in big trouble in respect to natural gas. Too bad the difficulty of labeling someone legally insane becomes apparently more difficult with each million made...

- Brewskie

"Solar Magic" Kills Solar Ineffiency

One thing solar critics point out is "shady interferences:" for example, if one solar array falls under a shade, the performance of all the panels drops. As if this isn't something you couldn't see being solved - good grief!

Now we have Solar Magic(!): a power management circuitry that remedies this simple problem...

If just one solar panel in a rooftop array falls under shade, the performance of all of the panels typically drops. That's because an array's electrical voltage and current are usually set at just one point: the inverter that changes direct current to alternating current. The settings the inverter can choose are determined by the worst-performing solar panel. National Semiconductor of Santa Clara, CA, has developed power management circuitry that adjusts the voltage on each panel to match its power output. Field tests show that the gadget can reduce losses from unshaded panels by 57 percent.

- Brewskie

Robert Rapier Offers Optimistic Appraisal of Shale Gas

(Note: I decided to edit out the somewhat snarky tone and give more better props to Robert. Although Robert possesses a doomer-slant and he is slow to admit good news, he's unlike the obdurate morons of the peak oil community; he's an intelligent, hardworking and talented individual who's record speaks for itself; he's been known to go against heavyweights like Ken Deffeyes, or the flow of the peak oil community. Though his stance on shale gas is overdue, the fact he's come around merits respect - unlike Matthew Simmons who is still convinced "we're heading off the cliff.")

(Hat tip: Peak Oil Debunked)

I like Robert Rapier, I think he's one of the Drum's better writers and makes some interesting points; however, I still find he has a rather strong doomer-slant, and he's a bit slow towards accepting good news. However, Robert, after what seemed to be eons, finally came around to see the light on shale gas: "that we have enough natural gas available that civilization isn't going to end any time soon due to lack of energy supplies."

Time is getting short and I only had time to skim through the blog. I just thought it was interesting to point out=)

- Brewskie

Exxon Mobil's Shiny New Gas Facilities

This is an article about some new gas production facilities Exxon Mobil has:

Tuesday, dozens of Western Slope business and government leaders toured Exxon Mobile's new facilities to learn more about how the company operates. The new facilities are located between Rifle and Meeker on County Road 5.

Exxon Mobil has started using a new Central Treating Facility that can process 200 million cubic feet of natural gas per day. That's four times what their old facility could handle.


At the processing facility, carbon dioxide and water are removed from the gas. This is the first step in the process of getting the gas pipeline ready.

Exxon Mobile has 6 to 7 rigs working right now. The new facility will allow the company to move that natural gas from the ground to the pipeline faster.


Exxon Mobile says some of the new technology it uses also helps the company reduce it's environmental impact.

For example, rigs can drill 9 to 10 wells on a single pad. This cuts down on the number of pads being built in the area, reduces traffic and means crews will be on the land for a shorter amount of time.

- Brewskie

No Need for Arctic Gas; Alberta in Trouble?

Several posted articles postulated that shale gas may wipe out the need for gas from Alaska's North Slope, or from Canada's frigid Mackenzie Valley; a post from canada.com confirms the same:

Abundant cheap supplies of natural gas from new shale deposits, plus growing imports of liquefied natural gas flowing into the United States, push back by 15 years the need for Arctic gas and make it difficult for higher-cost gas from Western Canada to compete, says pipeline executive Steve Letwin.

The North American natural gas industry is "overbuilt," pointing to weak prices for a long time, said Mr. Letwin, Houston-based executive vice-president, gas transportation and international, at Canadian pipeline giant Enbridge Inc.

Years of worry about supply shortages because of the maturing of conventional supplies have been replaced by worries there aren't enough customers for the 1,200 trillion cubic feet of natural gas in shale deposits -- enough to last a century -- found in the past three years, plus liquefied natural gas coming from offshore that is "needed like a hole in the head," Mr. Letwin said in an interview.

"The biggest issue that we now have is [insufficient] demand," said Mr. Letwin. "And in the absence of demand, you are going to see a price for gas that is going to be kept between US$5 and US$7 for a long time to come."


Shale producers in the United States can make money at low prices, he said. But the trend is not promising for natural gas stranded in the Arctic, which has
been waiting for decades for pipelines to be built so it can be commercialized.

Another canada.com post speculates that America's shale gas resources may hurt Alberta's
, of which has been a producer of gas exported to the US:

Major shale gas discoveries in the southern United States are threatening the financial lifeblood of Alberta: the royalties the province collects from natural gas, Premier Ed Stelmach says.


Energy companies aren't drilling in Alberta because of the new finds and a ``very, very depressed gas market right across North America,'' the premier explained.

He said the major new finds, including some estimated at a trillion cubic feet in Louisiana and Texas, are much closer to the market than Alberta ``and these are serious consequences for the revenue side in government.''

Stelmach couldn't say how much of an impact there will be on provincial revenues in terms of a dollar amount, but said ``royalties are at least a good third of our revenue stream.''

- Brewskie

Tuesday, June 23, 2009

Efforts to Smoke Out the Rats

A Huffington Post article about efforts in Congress and by the Obama administration to clamp down on speculative manipulation in the energy markets.

But now, as a comprehensive climate bill wends its way through the House of epresentatives, some of these aggressive commodities practices have come under crutiny. New legislati proposed by Rep. Waxman (D-Calif.) and Rep. Markey (D-ass.) would create a system of carbon allowance permits that the government would sell to companies that want to circumvent new emissions requirements. These permits could end up spurring as much as $2 trillion in new carbon-based "derivatives." In this ase, these new derivatives, so-called because they derive their value from omething else, would be traded on the commodities markets, and without proper regulation, critics worry their prices could be manipulated much in the way that traders influence the price of oil.

With the combination of the upcoming climate bill that that could create a
major new commodity derivatives market, in addition to a new focus from the Obama administration on derivatives, experts are hoping that regulation will be strengthened. Experts and legislators say these two forces have created a
perfect storm, and that the opportunity is ripe to take a broader look at the
overall commodities market rather than be limited to reforming only derivatives.

President Obama last week called for the overhaul Wall Street, and as part of his proposal, he zeroed in on regulating over-the-counter (OTC) derivatives, or those instruments that are bought and sold via verbal contracts. Because they are not traded on an exchange, OTC derivatives leave no paper trail and lack transparency. At this time, it seems probable that the pollution derivatives would be traded over the counter.


Sanders is one of a five legislators who has proposed legislation in recent weeks that would change the freewheeling Chicago market by strengthening regulations and, in some cases, bolstering the oversight powers of the Commodities Futures Trading Commission (CFTC). Sanders is hoping to compel the CFTC to invoke its emergency powers to stop traders from participating in excessive oil speculation.

Other legislation related to reforming the commodities markets includes an amendment in the climate bill sponsored by Rep. Bart Stupak (D-Mich.) to close several commodity market loopholes; a proposal by Sen. Tom Harkin (D-Iowa) to
put all commodities trades on transparent exchanges, and a bill by Rep. Collin Peters (D-Minn.) that originally called for expansive changes for commodities but that was substantially weakened after going through committee.

One of the most pressing issues addressed by much of this new legislation is the role of large bank holding companies like Goldman Sachs and Morgan Stanley. The firms earn billions of dollars in revenue by buying and selling commodities that they trade for proprietary accounts. At the same time, they own thousands of miles of oil and gas pipelines and vast warehouses, and use this infrastructure to gather non-public information to help them develop strategies to maximize profits. While they are not supposed to use this inside information to manipulate prices, they often do, say the experts.


Other legislation related to reforming the commodities markets includes an amndment in the climate bill sponsored by Rep. Bart Stupak (D-Mich.) to close several commodity market loopholes; a proposal by Sen. Tom Harkin (D-Iowa) to
put all commodities trades on transparent exchanges, and a bill by Rep. Collin Peters (D-Minn.) that originally called for expansive changes for commodities but that was substantially weakened after going through committee.

One of the most pressing issues addressed by much of this new legislation is the role of large bank holding companies like Goldman Sachs and Morgan Stanley. The firms earn billions of dollars in revenue by buying and selling commodities that they trade for proprietary accounts. At the same time, they own thousands of miles of oil and gas pipelines and vast warehouses, and use this infrastructure to gather non-public information to help them develop strategies to maximize profits. While they are not supposed to use this inside information to manipulate prices, they often do, say the experts.


While numbers are hard to come by, Morgan Stanley said in its November 2008 SEC filing, that it held $18.7 billion in commodity futures, options and swaps. In its annual report, the company said that commodity revenues had jumped 62 percent. The bank also reported to the SEC that it had committed $452 million solely to lease petroleum storage facilities in 2009.

As for Goldman, 17 percent of if its $22 billion in revenue in 2008 came from fixed income, currency and commodities, which includes all of its energy trading business. Meanwhile, Citigroup's trading division, Phibro, reported the total value of its commodity derivatives increased to $214.5 billion in 2008, a 384 percent increase from 2004. Bank of America held $58.6 billion in these derivatives as of September 2008.

- Brewskie

Geothermal to Bailout Iceland

The good 'ol days occurred in 2008: high gas prices, sky-rocketing food and commodities, peak oil fervor and finally, the global economic meltdown that cascaded last fall with Iceland tanking.

Now Iceland is tyring to get back on its feet. The solution? A mammoth geothermal project: a two-mile well drilled into a volcano. Read here.

Beneath the calm landscape, though, Fridleifsson and his crew of geologists, engineers and roughnecks are attempting the Manhattan Project of geothermal energy. The two-mile-deep hole they've drilled into Krafla, an active volcanic crater, is twice as deep as any geothermal well in the world. It's the keystone in an effort to extract "supercritical" water, stuff so hot and under so much pressure that it exists somewhere between liquid and steam. If they can tame this fluid — if it doesn't blow up their drill or dissolve the well's steel lining — and turn it into electricity, it could yield a tenfold increase in the amount of power Iceland can wrest from the land.

Iceland's geological evolution makes it especially well suited to harvesting geothermal energy. The island is basically one big volcano, formed over millions of years as molten rock bubbled up from the seafloor. The porous rock under its treeless plains sponges up hundreds of inches of rain every year and heats it belowground. Using his energy is simply a matter of digging a well, drawing the hot fluid to the surface, and sticking a power plant on top. Then, as power plants go, it's business as usual: Steam spins a turbine that drives a generator, and electricity comes out the other end. More than 50 countries use geothermal power; pretty much anywhere magma and water are within a few miles of the surface is fair game. Iceland ranks 14th in the world for
geothermal resources but is the highest per-capita producer of geothermal power.
It's committed to getting clean power out of the ground.

And commitment is what the rocky country needs right now. Last fall, Iceland ntered a deep economic recession following a financial meltdown. Now, Iceland's economy is down to fishing, metals and its clean, limitless supply of geothermal energy. It's betting heavily on that energy, hoping to someday offload excess electricity to Europe through undersea cables, and Fridleifsson's project is the all-in wager of the game. Many countries dabble in green energy — a solar plant here, a wind farm there — as they try to wean themselves off oil and coal. Iceland, on the other hand, has been making zero-emissions power a reality since the oil shock of the 1970s, when its progressive inhabitants realized that their dependence on imported energy was an economic vulnerability. Fridleifsson's project, once just a scientific experiment, is the most recent expression of that ethos. If the gamble pays off, it could not only catapult
Iceland out of debt but revolutionize renewable-energy efforts around the world.


The IDDP well will dip two and a half miles belowground into a pocket of water heated to 1,100° by a bubble of magma. Water normally exists as steam at this temperature, but the immense pressure of the rock above holds the water in a near-liquid state. Once the water squirts to the surface, it will retain nearly all the energy that heated and compressed it. It is virtually certain that engineers will have to redesign existing heat exchangers to handle the water's heat and potentially corrosive chemistry, but a plant running on naturally occurring supercritical water could churn out up to 500 megawatts, on par with a small nuclear reactor and half of what a large coal plant produces. Unlike these, though, the IDDP's zero-emissions power source will last as long as the Earth's core continues to heat rainwater.

Iceland's geothermal efforts are currently operating at 20 percent capacity. If it exploited the island's full reserves in only the conventional way, it could produce 20 terawatt-hours of electricity per year — about the same as three nuclear reactors. Tap into other supercritical reserves, or drill deeper into existing wells, and Iceland's electric output could be five times that of the U.S., the world's largest producer of geothermal electricity; Iceland is only the size of Kentucky.In 2000, Fridleifsson recruited Wilfred Elders, a professor emeritus of geology at the University of California at Riverside, from retirement to co-lead the IDDP. Geological studies revealed that supercritical water does indeed flow under Iceland, and the six-mile-wide Krafla caldera was the place to go after it. They realized that all they have to do is tap the stuff — and hope that it doesn't destroy the drilling equipment in the

- Brewskie

This EV Battery Will Outlast Your Dog

This article is from several weeks back, but it's worth noting. Read by clicking here and find out how long this bad boy lasted in a two-year test run:

When it comes to electric vehicles, critics have referred time and again to the fact that the death and replacement of batteries nullifies any savings made at the pump. With a battery’s limited lifespan, and battery prices still high, drivers may not be saving much. However, recent tests by battery provider Southern California Edison (SCE) show.

Over the past two and a half years, SCE has been testing a lithium-ion battery sub-pack. And the results are incredible. The lithium-ion battery has displayed remarkable longevity, surviving 180, 000 miles with no significant deterioration. With the average family vehicle traveling less than 15,000 miles per year, this test holds great significance. This dramatic increase in the life expectancy of an EV battery pulls the cost equation more convincingly on the EV’s side.


The battery, a Johnson Control-Saft lithium-ion battery subpack, was tested in a commercial delivery van in a laboratory setting at SCE’s Electric Vehicle Testing Center in Pomona, CA. The battery subpack is one sixth of the actual battery size used in a plug-in hybrid electric vehicle.With such remarkable test results, and testing still in progress on the subpack, the U.S. Department of Energy has asked SCE to test the battery’s viability for passenger car performance.

The Department of Energy supplied a full sized battery for further testing.

This will be one of the posts I will refer to when I (eventually - depends on the schedule) get around to doing a future post currently in mind: Why Electric Car Critics are Dead Wrong. Gotta roast Simmons again, though.

- Brewskie

Sniffing Out Cancer

Nanotechnology Now has this bit about the "cancer nose:"

An article describing Rotello and colleagues' new chemical nose method of cancer detection appears in the June 23 issue of the journal Proceedings of the National Academy of Sciences online.Currently, detecting cancer via cell surface biomarkers has taken what's known as the "lock and key" approach. Drawbacks of this method include that foreknowledge of the biomarker is required. Also, as Rotello explains, a cancer cell has the same biomarkers on its surface as a healthy cell, but in different concentrations, a maddeningly small difference that can be very difficult to detect.

"You often don't get a big signal for the presence of cancer," he notes. "It's a subtle thing."He adds, "Our new method uses an array of sensors to recognize not only known cancer types, but it signals that abnormal cells are present. That is, the chemical nose can simply tell us something isn't right, like a ‘check engine light,' though it may never have encountered that type before." Further, the chemical nose can be designed to alert doctors of the most invasive cancer types, those for which early treatment is crucial.

In blinded experiments in four human cancer cell lines (cervical, liver, testis and breast), as well as in three metastatic breast cell lines, and in normal cells, the new detection technique correctly indicated not only the presence of cancer cells in a sample but also identified primary cancer vs. metastatic disease.In further experiments to rule out the possibility that the chemical nose had simply detected individual differences in cells from different donors, the researchers repeated the experiments in skin cells from three groups of cloned BALB /c mice: healthy animals, those with primary cancer and those with metastatic disease. Once again, it worked. "This result is key," says Rotello. "It shows that we can differentiate between the the three cell types in a single individual using the chemical nose approach."


Rotello says the chemical nose approach is so named because it works like a human nose, which is arrayed with hundreds of very selective chemical receptors. These bind with thousands of different chemicals in the air, some more strongly than others, in the endless combination we encounter.

The receptors report instantly to the brain, which recognizes patterns such as, for example, "French fries," or it creates a new smell pattern.Chemical receptors in the nose plus the brain's pattern recognition skills together are incredibly sensitive at detecting subtly different combinations, Rotello notes. We routinely detect the presence of tiny numbers of bacteria in meat that's going bad, for instance. Like a human nose, the chemical version being developed for use in cancer also remembers patterns experienced, even if only once, and creates a new one when needed.

For the future, Rotello says further studies will be undertaken in an animal model to see if the chemical nose approach can identify cell status in real tissue. Also, more work is required to learn how to train the chemical nose's sensors to give more precise information to physicians who will be making judgment calls about patients' cancer treatment. But the future is promising, he adds. "We're getting complete identification now, and this can be improved by adding more and different nanoparticles. So far we've experimented with only three, and there are hundreds more we can make."

- Brewskie

IBM Takes On Lithium-Air Battery Challenge

IBM is trying to develop the lithium-air battery, a power-storage medium with potentially 10 times its lithium-ion cousin. Read here. (The article first describes a water-cooled supercomputer IBM is developing. Skim through)

Lithium-air batteries, like their cousins zinc-air batteries, generate power by exposing metal and an electrolyte to oxygen, oxidizing the metal and releasing energy (see Electricity From Air and Zinc? A Growing Chorus Says Yes).

Zinc-air batteries are already commercially available for some uses like powering hearing aids, and developers say they can offer four times the energy storage of lithium-ion batteries.

Theoretically at least, lithium-air batteries could provide about 10 times the energy density – the amount of energy stored per kilogram – than the roughly 200 kilowatts per kilogram that cutting-edge lithium-ion batteries now provide, said Spike Narayan, the functional manager for science and technology at IBM's Almaden research lab.

The main challenge metal-air batteries pose is that it's very hard to reverse the chemical reaction that provides their energy without putting more energy into it than you'd get out of it. Meaning: Short of replacing the chemical components of the batteries, they can't be recharged, Narayan said.

It's a problem researchers have been trying to figure out for decades.


Advances will require finding the right catalysts to reverse the chemical reaction at low enough energy levels, as well as advances in nanotechnology to distribute that catalyst close enough to the metals so that it is effective, he said.

While IBM hasn't publicly announced its partners on the project, Narayan said they would be both industry and government research leaders in the field. IBM plans to unveil more about its plans in August.

Eventually, IBM envisions partnerships with battery makers or automotive companies to bring advances to commercial production, he said.

The technology could also have implications for storing energy for the electricity grid, he noted – something that Drew Clark, of IBM's Venture Capital Group, in December said is likely to be one of the hottest markets for venture capital investment this year (see For 2009, It's All About Smart Grid and Storage).

- Brewskie

China's Maglev Systems

Next Big Future has this absolutely amazing bit on magnetically levitated systems in development; several of their systems will be tested with freight, with the belief it could be three times cheaper than rail. A number of sources are sighted; read on...

The post first jumps into two systems being developed in Inner Mongolia:

Cost studies show $0.13 to 0.017 per ton-mile depending upon the length of magnetic pipe. Rail and truck costs are in the $0.35 to 0.05 per ton-mile cost range.

The first system is being co-developed by the Chinese motor manufacturer Harbin Electric and a domestic Maglev (magnetic levitation) technology specialist. The first phase of the project – to build a 850m-long linear motor-driven freight test track at a coal mine – is already underway.Once the test track has been validated, the project is expected to expand to a 32km-long coal transportation line in Inner Mongolia, with Harbin providing the linear motor drive systems.The second maglev system is being developed by a joint venture between US-based Magplane Technology, and Chinese partners. This will use a tubular maglev system called MagPipes to move coal from Mongolian mines. A 32-acre (12.9ha) facility (shown above) is being built at Baotou in Inner Mongolia, which will be able to build up 200km of MagPipes a year. Production of components has been sub-contracted to Chinese suppliers.

A description of the pipelines...

Magplane Technology designs and fabricates pipeline transport systems using the linear synchronous motor technology developed for the Magplane system. Typical applications for pipeline transport range from priority mail packages to ore transport. A typical ore application would have an underground pair of 60 cm diameter pipes for outbound and returning capsules, and typically carry 10 millions tons per year over a distance of 50 km.  Electromagnetic drives for pipeline systems are intended to replace pneumatic capsules. Pneumatic capsule pipelines have a long history, and there are several large scale systems in current use. Conventional pneumatic systems use external blowers to move the column of air together with the capsules in the pipe. Full-diameter valves are used to control the injection, removal and subsequent return of capsules. Various practical limits constrain the throughput of these systems and limit their cost effectiveness.A demonstration project which uses a linear synchronous motor to move vehicles has been constructed at the IMC-Agrico Company in Lakeland, FL. The demonstration utilizes 200 m of 60 cm diameter cylindrical cast "waste water" fiberglass tube, and includes a 60 m long
accelerator/decelerator section, a switch, and load and unload stations. The
test vehicle traverses back and forth at a peak speed of 65 km/hr. The 1.8 m
long wheelbase vehicle uses six-wheel assemblies at each end of a rotating
hopper, and has a payload capacity of 270 kg. The vehicle carries an array of neodymium-iron boron permanent magnets which interact with the linear motor
mounted on the outside of the tube to provide propulsion, and with external
coils to provide an electromagnetic switch function.

And there's plenty more to read. Great post!

- Brewskie

Honda Planning Two More Cheap Hybrids

Honda is planning to roll out two more gas-electric hybrids - both cheaper than the current Insight:

With news coming in that Honda isn't selling nearly as many Insight hybrids in the U.S. as it would like, it would seem the Japanese automaker could go one of a few different directions. It's possible that Honda could reverse course on hybrids and focus instead on incremental improvements to its already excellent line of internal combustion engines. Alternatively, Honda could double down on its hybrid program and commit to more models and development. It's this latter path that the automaker seems to favor.

According to a report in the Asahi Shimbun newspaper in Japan (via Green Car Advisor), Honda President Takeo Fukui says the automaker is working on two new hybrids that would cost less than the Insight's already low $19,800 starting price. We've already heard about the planned Fit Hybrid, but we'd be a bit surprised if the second low-cost model were the upcoming CR-Z hybrid hatchback, which is expected to join Honda's lineup as a 2011 model.

- Brewskie

Holy Gigawatts: World's Largest Solar Project Planned for Saharah

What's all that sand, sun and vacant land good for anyway (link)?

If just 0.3% of the Saharan Desert was used for a concentrating solar plant, it would produce enough power to provide all of Europe with clean renewable energy. That is why 20 blue chip German companies are gathering together next month to discuss plans and investments to create such a massive project. Both the meeting and project are being promoted by the Desertec Foundation, which is proposing to erect 100 GW of concentrating solar power plants throughout Northern Africa.

The red squares in the above map represent the land area necessary to meet the energy demand of the world, the EU and MENA in 2005. The last square represents the land necessary for the proposed project to generate 100 GW of concentrating solar power. The project being proposed by Desertec would not all be situated in one location, but scattered throughout politically stable countries. Taken as a whole, the project qualifies as the world’s largest solar installation - 80 times larger than the PG&E and BrightSource project planned for the Mojave Desert. The power generated would be transported over high-voltage DC lines across the Mediterranean Sea to Europe, where it would supply 15% of the energy demand. The project is still 10-15 years from going online, but that’s why major players are getting started now.


To build the 100 GWs worth of solar power a total of €400bn investment is

- Brewskie

Your Fuel is Named Mud

Geeks and freaks have found sludge from waste water treatment plants is nifty stuff to burn - offering productive uses such as partially powering cement factories (link):

Dependency on oil and coal could be coming to an end. Researchers from the Rovira i Virgili University (URV) have analysed the environmental and human health impacts of an alternative fuel that solves various problems simultaneously. This is the solid waste from the water treatment plants of large cities.

The scientists have carried out the first study into this method at a cement plant in Vallcarca (Catalonia), which has been producing cement for more than 100 years, and they confirm in the latest issue of the journal Environmental Science and Pollution Research that it is “the best option for getting rid of mud that would have had to be dumped elsewhere, while also powering the plant”.

As this mud is already waste, burning it does not enter into the atmospheric CO2 emissions assigned to each country under the Kyoto Protocol”, José Luis Domingo, lead author of the study and director of the Toxicology and Environmental Health Laboratory at the URV, tells SINC.

This would enable plants producing cement, one of the most contaminating industries in terms of CO2 as well as emissions of dioxins, furans and heavy metals, to consume energy in a more environmentally-friendly way. Up to 20% of the fossil fuel energy used at the Catalan plant has now been substituted for the fuel from waste water treatment plant mud.

- Brewskie

Milking Diatoms For What They're Worth

Research into algae bio fuels counties at a fantastic pace. It seems evident some company, or someone will nail this. Here's a twist by Indian and Canadian scientists (link):

Richard Gordon, T. V. Ramachandra, Durga Madhab Mahapatra, and Karthick Band note that some geologists believe that much of the world's crude oil originated in diatoms, which produce an oily substance in their bodies. Barely one-third of a strand of hair in diameter, diatoms flourish in enormous numbers in oceans and other water sources. They die, drift to the seafloor, and deposit their shells and oil into the sediments. Estimates suggest that live diatoms could make 10−200 times as much oil per acre of cultivated area compared to oil seeds, Gordon says.

"We propose ways of harvesting oil from diatoms, using biochemical engineering and also a new solar panel approach that utilizes genetically modifiable aspects of diatom biology, offering the prospect of "milking" diatoms for sustainable energy by altering them to actively secrete oil products," the scientists say. "Secretion by and milking of diatoms may provide a way around the puzzle of how to make algae that both grow quickly and have a very high oil content."

- Brewskie

Monday, June 22, 2009

Fat Bears Not Leaving Gas

I found this amusing Seeking Alpha piece on America's natural gas situation:

Natural gas prices stayed remarkably strong this week, despite two very bearish developments. This is actually bullish, when a market won’t go down on bad news. Yet I still think this downturn in natural gas prices could be longer than people think. I am not buying natural gas stocks right now.

The bearish points this week were:

1) An injection into storage this week of 114 bcf, the fourth week in a row of 100 bcf + injections. (I don’t think this has ever happened before.) Expectations were for 105 bcf, and almost double last year’s injection for the same week.

2) The rig counts in North America turned slightly higher this week, for the first time in 2009. In the regular Friday report from Baker Hughes, US gas rigs were up 6 over last week, and horizontal rigs were up 20 - which deliver a lot more gas than verticals. Canadian rigs had a much bigger percentage jump, up 35 to 143. About 66% of all rigs in Canada drill for gas (though this number is surely going lower). Of course, these numbers all half of what they were a year ago.


I think there are a couple points that could prolong this natural gas price downturn longer than people think:

1. Banks did not dramatically cut back on credit lines for the producers this year, despite a big drop in gas prices. So even though a natural gas producer was operating close to its debt limit, it wasn’t forced to make the tough choices to survive. This painful process of keeping alive a dying patient will now be drawn out longer than normal.

2. New junior companies cannot get financed. So when two or more companies merge, one management team is out of a job. And in this market, they won’t get a new one. So management has no incentive to sell or merge.

3. The banks are saying - I have two sick patients, each having 80% of their debt drawn, and they want to create one larger sick patient with 80% of its debt drawn….no thanks.

4. Most junior and perhaps even some intermediate companies are receiving very little cash flow right now and still have some fixed costs - like regular interests payments on their debt…even a little cash flow is better than none. So I think they will be hesitant to turn off the tap, no matter how the small the drip.

5. And again, LNG is a wild card. If Asian demand doesn’t pick up soon, the global fleet could be coming to North America and keeping prices here suppressed.

- Brewskie

US Gas Supplies Peform Sky Jam

Natural gas news seems to be as abundant as the resource itself. US natural gas reserves recently jumped 35% thanks to - yours favorite - shale gas:

Thanks to new technology that has allowed producers to drill for gas in shale rock, the Potential Gas Committee in Golden, Colo., said that the country's estimated reserves are 35 percent higher than just two years ago and have reached the highest level since the group started tracking the information 44 years ago.


The committee, a volunteer group backed by natural gas producers and utilities, estimated the country's total natural gas resources at 2,074 trillion cubic feet, an increase of 542 trillion cubic feet from its last report.

The figure includes 238 trillion cubic feet of proven gas reserves as established by
the Department of Energy and 1,836 trillion cubic feet of reserves it labeled as probable, possible, and speculative.

The report is similar to a study prepared last summer for the natural gas-backed American Clean Skies Foundation that found the country had 2,247 trillion cubic feet of natural gas reserves -- a 118-year supply at 2007 production levels. The U.S. consumes about 22 trillion cubic feet of gas per year, almost all of it produced in the U.S.

Remember, shale gas is in its infancy. Expect more news of reserve jumps in the future. Hmmm... looks like the US gas shortages the peaktard community has been warning about will be put off for a long, long time.

- Brewskie