Cal on May 5th, 2016

Something Different

Cal on May 4th, 2016

The international ITER project to build a prototype nuclear fusion reactor will be delayed by more than a decade and faces another 4 billion euros of cost overruns, its director told the French daily Les Echos. (ITER stands for the International Thermonuclear Experimental Reactor currently under construction in the south of France.) ITER chief Bernard Bigot said the experimental fusion reactor would not see the first test of its super-heated plasma before 2025 and its first full-power fusion not before 2035. He also said he expected the new delay to add 4 billion euros ($4.6 billion) of cost overruns to the 14 billion to 15 billion euros estimated so far. Moreover, the extra money needed is unlikely to be available soon given global economic conditions. The project was launched 10 years ago by its seven partners –  Europe, the US, China, India, Japan, Russia, and South Korea. See MIT Technology Review, Why the World’s Largest Nuclear Fusion Project May Never Succeed

The California city of San Diego announced it plans to run on 100% renewable energy (solar and wind) by the year 2035. Other targets include cutting automobile trips by half by that year. To reduce private automobile use, the city would make major investments in public transportation and bicycling infrastructure. The city would also make half of its vehicles electric.

In India, renewable energy (including hydropower) represents 5.7% of the south Asian country’s total energy mix, according to data released by the Central Electricity Authority. The country has set a target of 8% renewables (excluding hydro) by 2022. Natural Resources Defense Council this week said that over US$140 billion of investment is required in the next six years to reach India’s solar, wind and efficiency targets.

European Union laws requiring member states to use “at least 10%” renewable energy in transport will be done away with after 2020. The mandate has drawn criticism in the UK, where reaching the 10% target will require a doubling of the current biofuel supply. First generation biofuels – those derived from food crops – have been at the centre of an intense controversy in Europe regarding their effects on the environment, with scientists warning they contribute to deforestation and food scarcity.

Denmark has immediately ended receiving applications for a solar installation subsidy scheme after it received over 9,000 applications for a combined 4.5 gigawatts.   The “60/40” scheme offered solar power producers a fixed power purchase price of DKK 0.60 ($US 0.094/Euro 0.081) per kilowatt-hours for 10 years and then DKK 0.40/kWh for another 10 years. This compares to a power price of some DKK 0.18/kWh at present. The subsidy would be paid by billing consumers with higher electricity costs.

A study by IHS Automotive says that about 17 models of hydrogen vehicles will be available over the next decade.  Most will be in Japan and South Korea with a few in Europe.  By 2027 IHS predicts the production of fuel cell vehicles will reach 70,000 units, yet this will represent less than 0.01% of all vehicles produced. This year there are 3 hydrogen vehicles for sale. They are produced by Toyota, Hyundai and Honda and sales are confined to Japan and the US state of California.  The major barrier facing fuel cell vehicles is hydrogen fuel infrastructure.  There are only about 100 public refueling stations in the world right now and cost about $3 million each. IHS comments that if fuel cells don’t move past the early adopter phase in the next 20-25 years, they probably will remain as a niche product.

Brazil produced produced slightly more than 1 billion gallons of biodiesel in 2015, up from 898 million gallons the year before. Recently the country enacted legislation to increase the amount of biodiesel in diesel from 7% to 8% with plans to increase this number to to 9% by 2018 and 10% by 2019. The new law provides for further increasing biodiesel content in diesel fuel to 15% beyond 2019 after successful engine testing is completed and the results are approved by the country’s National Energy Policy Council.

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Cal on May 4th, 2016

European Union Market for Biofuels

(2012 and 2020 estimate)

 

Biodiesel Use in Europe

The market size for biodiesel in the EU was 10 million metric tons per year in 2012. This is likely to increase to approximately 21 million metric tons by 2020, according to Kaidi Finland, a company making 2nd generation biodiesel from wood-based biomass.

First generation biofuels are those derived from food crops.  Second generation biofuels are made from the non-food parts of plants.

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Cal on May 4th, 2016

Earth's Energy

Cal on May 3rd, 2016

As with most efforts to forecast oil prices, there are simply too many forces at work to come to a conclusion as to which just which forces will prevail, even in the short run. Over the next two years or so, oil prices will almost certainly be higher due the drop in investment and contraction of the industry. It is the timing of this increase where the uncertainty lies.

—-   Oil market observer, Tom Whipple

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Cal on May 2nd, 2016

The International Monetary Fund reports that Middle Eastern crude oil exporters are on track to receive about $500 billion less for their oil this year as compared to 2014.

Iran’s crude oil production in April is estimated to have increased by 300,000 barrels per day to 3.5 million. The Iranian production increase surprised oil analysts who were predicting that it would take many months to get back to the country’s pre-nuclear sanctions levels.

By every measure, Venezuela is a country on the verge of collapse. Some see the South American nation degenerating into a Somalia-like situation with armed gangs running various parts of the country and trying to make deals to export its crude oil. The workweek is down to two days a week for many if not most workers. Inflation is at 700%. Imports soon will be down by 60%.  Foreign companies are not being paid and are pulling out.  The government no longer reveals information about the impact of drought on the Guri dam which now is providing almost 70% or more of the country’s electricity.  Nationwide blackouts of at least 4 and probably more hours a day are in place. Medicines and other vital supplies are no longer available. Should the dam have to close in the next few weeks to avoid damage to its turbines, it is difficult to see how much longer the country can keep exporting oil. Oil services companies, Schlumberger and Halliburton, are cutting back their activity in Venezuela due to lack of payments for their services.  This alone will likely cut into the country’s crude oil exports.

International oil companies continue to report a drastic decrease in their profits and revenues due to the slump in world crude oil prices. This week Norway’s state-owned Stat Oil, Italy’s ENI, Mexico’s Petroleos Mexicanos, Exxon-Mobil, Chevron, and British Petroleum revealed major losses. The companies are responding by cutting costs and shelving crude oil investment plans for the next few years. Chevron announced it is cutting its workforce by 12%.

Oil rigs in the US are now down 80% from their peak in 2014.

Over the past 6 months, almost 120,000 of US oil and gas employees (22% of the total) were laid off.

According to US ratings agency Standard & Poor, more than half of the corporate defaults in that country this year are by oil and natural gas and coal companies.

African countries Uganda and Tanzania are expected to meet this week to finalize plans for the development of a proposed 1,400 kilometer crude oil export pipeline that will run from Uganda to the Indian Ocean port of Tanga in Tanzania. The target date for completion of the pipeline is likely to be 2020.

A new study published by the Massachusetts Institute of Technology says renewable energy sources will be unable to compete with conventional energy in the US for at least a decade without government support or high taxes on fossil fuels. The authors also conclude renewable energy may always need government assistance to stay in business. While renewable energy has made promising cost efficiency gains in the past few years, the trend of cheaper renewables has been outpaced by even cheaper fossil fuels led by shale oil and gas. Conventional energy is expected to be less expensive than renewable energy for the next 10 years.  Developing enough wind and solar power to substantially impact or displace fossil fuels could cost $16.5 trillion by 2030. (“Will We Ever Stop Using Fossil Fuels?” Journal of Economic Perspectives 30, no. 1 February, 2016)

The American Wind Energy Association said it expects wind’s contribution to America’s electricity supply to double over the next five years.

The Australian Capital Territory (ACT) where the country’s capital, Canberra, is located has set a goal of getting its electricity from 100% renewable sources (solar and wind) by 2020. The move, however, comes at a cost. Residents will see a $300-per-year increase on their electricity bill — or an extra $5.50 per week.

 

 

with h/t Tom Whipple

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Cal on May 2nd, 2016

Something Different

Cal on May 1st, 2016

Earth's Energy