Resources in Israel

Israel has found a lot of gas in deep-sea wells off the north of the country. Already this discovery has caused problems with neighboring countries around it. Tension with Lebanon over distinguishing the maritime border is rising. There has been a battle of royalties; some are demanding a sovereign-wealth fund when the gas starts making profit. This discovery of gas can be problematic because of a pipeline positioned across the seabed to Greece and relations with Israel have become a lot tighter as Turkey progresses to shut down its very old alliance with Israel. Israel has been drilling for decades, but has rarely had success. In 1999 a maritime drill struck gas in commercial quantities 250 meters beneath the Mediterranean, 40km (25 miles) out from Israel’s southern port of Ashdod. Production began in 2004 at the Mari-B where about 2.8 billion cubic meters of gas are piped ashore each year from reserves possibly as large as 22 bcm(billion cubic meters). Last year 238 bcm was discovered in the Tamar field 90km off the northern end of Israel’s coast; the gas is much deeper down, Production should begin in 2014. Tamar was the world’s largest gas find in 2009. But this year Noble Energy says that this field called Leviathan, located 45km farther out to sea, has a potential of 453 bcm and an even chance of what they call a “geological success”. An exploratory drill is under way and the results should be known early next year. If the results are good, production could begin by 2016. These two fields combined should provide gas worth $4 billion a year. Tamar should be able to supply all Israel’s domestic gas needs, both for industry and household consumers, for at least 20 years.

Israeli military aircraft, no longer welcome in Turkish skies, are training over Greece with the Greek air force. Recent diplomatic talks in Jerusalem included a session with Israel’s petroleum commissioner. Israel sees Greece as a gas purchaser and a European core where Israeli gas could be sold and piped on. But Greece may not comply until Israel has agreed with Lebanon and Cyprus on where a border is to be drawn in the sea, distinguishing each country’s economic exclusion zone. Israel is close to an agreement with Cyprus on a “median line” to let them share some of the seabed between them since there is an overlap. Then Israel intends to cautiously approach Lebanon (though the two countries are formally in a state of war), in the hope eventually of holding a UN-backed international negotiation. In the meantime, Israel has run a string of buoys into the sea off the coastal border point between Israel and Lebanon. Lebanon says they are angled too far northward, while Israel points out that Tamar and Leviathan are well south of the line that Lebanon claims as the correct maritime one.

-Kelsey Tomlinson
(The Economist)
http://www.economist.com/node/17468208?story_id=17468208

Schlumberger Bribes Yemen

New Emails and Company documents have emerged that implicate Schlumberger Ltd. in bribery for contracts as well as protection. In 2008 Schlumberger employees raised concerns about possible bribery when they reported that Schlumberger was paying nearly six times the market value for cars from the Yemeni government as well as with a customs broker Dhakwan Management Petroleum Co., who had ties to the Yemeni governments. All of this comes at a bad time for Schlumberger who just last month fell under investigation from the U.S. Justice Department for giving improper payments to the nephew of the Yemeni President.
While bribery is never an acceptable option, company documents reveal that Schlumberger felt it had no choice. The company tried to cancel some of its contracts that they felt were in violation of U.S. Bribery laws however once they cancelled the contracts one of their trucks was hijacked in a volatile area of Yemen. The truck had three tons of explosives; however the truck and explosives were all recovered. When Schlumberger did an investigation into Dhakwan they revealed that Dhakwan had close ties to the government. With this new information they tried to cancel all contracts through Dhakwan however once they did that they found that all of their imports in to the country had been stalled so they felt they had no choice but to continue dealing with Dhakwan
All of this plays in to the volatile nature of the oil industry in that most oil exporting countries that allow foreign companies to operate in their borders are hostile and/or corrupt places. Factors like these show that companies cannot operate fairly unless, unfortunately, they act unfair to level the playing field. This fact about the nature of the oil industry will help to move the energy industry as a whole away from the oil industry and towards alternative energies.

-Tom Langevin
http://online.wsj.com/article/SB10001424052748704166204575608580089662298.html?mod=WSJ_Energy_leftHeadlines

Japanese Oil Company on the Rise

Solar Frontier KK's new solar-panel factory in southern Japan has the potential to produce more photovoltaic cells than any factory in the world once it is up and running in July. The solar company is part of one of Japan's largest oil company, Showa Shell Sekiyu KK. While some companies in the US, such as BP, are pulling back their investments in alternative fuel, Japan feels that now is the time to invest and it will begin to see major profits within the next year on solar energy. The new solar panels consist of thin-film CIS cells, which are made from copper, indium and selenium. They cost less overall than the thicker silicon-based crystalline cells. Analysts expect sales for solar panels to increase by five times its current rate.

Current reports state that solar energy is the largest growing source of energy among the alternative energy options and it is expected to keep growing in the future. If these reports stay consistent Japan could in fact change the landscape of the energy industry with this one factory within the next few years.


-Nicole Lombardo (DAISUKE WAKABAYASHI And MARI IWATA, Wall Street Journal)
http://online.wsj.com/article/SB10001424052748703957804575603531119514328.html?mod=WSJ_Energy_leftHeadlines

Report: BP Ignored Warning Signs

Though everyone all over the world realizes that BP made a huge mistake with the oil spill in the Gulf of Mexico, a recent report came out that BP and it contractors missed and ignored warning signs before the oil-well blowout. "Among the hazards highlighted in the panel's report were several tests that indicated the cement at the bottom of the hole wouldn't be an effective barrier to an influx of oil and gas." (Wall Street Journal) There were also reports about month before the oil spill that BP had lost drilling materials deep down in a hole. This was a sign that BP was not paying attention to any of their risks when bad things were occurring.

It is hard to say what actually caused the oil spill still after 11 workers had died from this tragic incident but what the media does know is that there are little incidents that did occur to maybe involve the oil spill. "Interior Secretary Ken Salazar asked in May for the investigation by the academy, saying he wanted "an independent, science-based understanding of what happened." (Wall Street Journal)

-Michael Sheinfeld

http://online.wsj.com/article/SB10001424052748704648604575620511160070900.html?mod=WSJ_Energy_leftHeadlines

Entergy's Future Plans

Entergy Corp., a New Orleans company is considering selling off its Vermont Yankee nuclear plant. The company has been fighting to relicensing it the plant for another 20 years but its 2012 expiration is approaching fast and the state is giving the company a hard time because recently the plant has been leaking nuclear material. With the current state of the economy the value of natural gas has become depressed and the company has faced a decline in returns because it trades at market prices rather than regulated prices to match the new demand. Marc De Croisset, an analyst with FBR Capital Markets & CO., says that new ownership could have better luck getting the plant a new license. The Chairman of the company assures that they have been successfully resolving any issues with obtaining a license and the company has been securing long term deals with local electric companies. This coupled with an 8% profit rise in its third quarter shows that the company has been successful with managing this issue.
This article reveals a startling trend in the energy industry that when oil and gas declines alternative energies will also decline. Without extraneous support coming from outside of the free market alternative energies are unlikely to surpass oil and gas until we physically use up all of our resources or they become so scarce the price skyrockets. The article also reveals that even in the face of radioactive waste being released into the environment the energy industry is very secure. In most industries this would be a PR nightmare however it doesn't seem like it has really effected the company at all.

~Tom Langevin
http://online.wsj.com/article/SB10001424052748703805704575594723506042644.html?mod=WSJ_Energy_leftHeadlines

Sudden Decline in Oil Due to New Storage

In a response to an article posted earlier, while some speculated that the rising oil prices were due to that cold weather would finally prompt heating demand and cut into domestic supplies, a loss from the increasing rate of oil put a dent in this suspicion. Natural gas for December delivery decreased 3.9% after Tuesday. An Analyst from Summit Energy in Louisville Ky. said "while a lower-than-expected build in reserves might normally propel prices upward, the larger matter of oversupply won out on Wednesday"(Wall Street Journal, Ryan Dezember). Prices for oil dropped because the Energy Information Administration said 19 billion cubic feet of gas were added to U.S. inventories.

Although this small draw back to oil prices seems to deflate the claim that oil prices will rise due to the weather, forecasters still seem hopeful. Over the past few years natural gas supply has grown greatly as companies discover new reservoirs in onshore shale formations. The prices for natural gas have steadily increased and has the analyst form Summit Energy states "We've had a decent rally to get up to $4.20; to push it on further from there is really a step too far"(Wall Street Journal, Ryan Dezember). The sudden decrease might just be due to the prices hitting a ceiling and the new imports of oil to the US inventory. Forecasters predict that the new inventory of supplies will still be cut into within the next few weeks as the temperatures drop, so not to worry for the oil companies of the US.


-Nicole Lombardo
(Wall Street Journal, Ryan Dezember)
http://online.wsj.com/article/BT-CO-20101110-716795.html?mod=WSJ_Energy_middleHeadlines

Should the Government Fun Renewable Energy Projects?

Obama’s advisors have recently stated that tax dollars should not be spent on alternative energy projects because there are other areas in which the money would be better allocated. There was a discussion on constructing more wind and solar farms across the country; however, his advisors believe there would be a better time to do this in the future (Power). Understandably, the leaders of our country see the need to improve areas damaged by the recent recession and even though it may be beneficial to use renewable resources, it isn’t a priority compared to other crumbling industries. However, there is still anger held towards this decision because the Obama administration has previously promised to commit to advancing the production and use of renewable energy (Power).

Caithness Energy LLC and General Electric Co. are the two companies who intend to sponsor the project of developing the wind and solar farms. They both agreed that even if the government refuses to provide funding, they will still carry on with the project because they believe it is crucial to continue to develop this industry (Power). The government does wish to eventually subsidize projects similar to this because they believe our country could benefit from wind investment (Power). Obama’s administration has reasonable answers to this issue; however, they will have to hold true to their promise of eventually providing funds to receive popularity and confidence from their supporters.

http://online.wsj.com/article/SB10001424052748703506904575592843603174132.html?mod=WSJ_Energy_leftHeadlines

-Ashley Luddy

Panasonic Invests in Telsa

Panasonic Corp. have indicated that they will invest in Telsa Motors, which is a car company that is known for making electric cars. Panasonic will invest $30 million in the project to see if they can make an electric car with rechargeable batteries in new hybrid cars. "Panasonic, which already supplies lithium-ion batteries for Telsa's automobiles, is said to now hold around 2% of Telsa's shares." (Wall Street Journal) Panasonic is now moving onto the energy industry after they had a tough time selling flat-pannel televisions. They believe since it is a time for everything to be more "green" that Panasonic should invest their shares into Telsa, while also using their lithium-ion batteries.

They have also said that Panasonic and Telsa will jointly plan to sell Telsa battery backs using Panasonic's battery cells. The reason Telsa is picking Panasonic for this joint market is because the world is slowly turning towards lithium-ion batteries and Panasonic is known for making the best around. Panasonic will now be in the running against Sanyo Electric Co. which is working their battery technology for numerous car companies, such as Honda, Volkswagon, etc.

-Michael Sheinfeld

http://online.wsj.com/article/SB10001424052748704506404575593162128563810.html?mod=WSJ_Energy_leftHeadlines

Iraq's Oil Production Threatened

The International Energy Agency (IEA) says that they will not be able to produce their target of 12 million barrels of oil per day by 2017. They say it could take an extra 20 years to produce half of the amount. It is predicted that their oil production will overtake Iran’s production by 2015. Iraq has awarded licenses for the development of 11 major oilfields. Unless the targets are met and the investment of approximately $150 billion takes place, the desired production amount will not be reached in the next seven years. IEA stresses the mammoth nature of the task, saying that the “sheer scale of the required construction of infrastructure, coupled with political uncertainties, suggests that the expansion of capacity will be much slower”.

Due to the size of this operation, the IEA believe that this may progress a lot slower. Other things such as basic infrastructure, including road, bridges, airports and water supply, need to be repaired and expanded. Because Iraq’s existing export routes are fully utilized, a major expansion of the shipping ports will be needed. So the IEA projects Iraqi output of 6.5 million barrels of oil per day in the 2030s, compared to the 2.5 million barrels currently produced per day. A lower oil production in Iraq should help Opec avoid any conflict with its members over output allocation. Analysts warn that a dispute could threaten the cartel’s unity. This could be a threat to the cartel’s ability to manage the global oil prices.

-Kelsey Tomlinson

http://www.ft.com/cms/s/0/def69f28-e76c-11df-b5b4-00144feab49a.html

India's NTPC Plans on Expanding

NTPC Ltd. is a power utility company owned by the Indian government that has recently been planning to purchase $3.85 billion in new equipment. The company plans on purchasing nine sets of coal-fired boilers, turbines and generators that will each produce roughly 800 megawatts of energy. NTPC is also saying that they have “supercritical” technology that allows them to burn less fuel and create more energy. Another Indian company, Reliance Power Ltd. recently made a deal to purchase nearly 30,000 megawatts for a cost of around $10 billion. All of this comes as no surprise from the Indian government because recently they have stated that they intend on doubling their generating capacity in the next six years to match the growing infrastructure. NTPC Ltd. is also in the process of building new plants that will bring 17,000 megawatts of generating power to the country; that is roughly 10% of the total generating power of India.
This is another example of how the energy industry will continue to grow as people and places continue to grow. While alternative energies may help to diminish the global consumption of fossil fuels it will be a long time before the need for these fossil fuels will be significantly diminished, especially if nations continue to grow economically. India has one of the fastest growing populations in the world which is why it is a great country to look at to view this one extreme of energy consumption.

-Tom Langevin
Raghuvanshi, Gaurav. NTPC to invite 3.85 Billion Bids

White House Runs into a Dilemma with Renewable Energy Funds

President Obama and his administration have come across a dilemma in the department of funding for alternative energy. He wants to pull funds from the federal loan gaurantee program that is meant to help the construction of wind and solar farms and other alternative energy projects. He believes the taxpayers money could be spent more wisely elsewhere. His decision to pull money form the program would hurt his alliance with congressman as well as hurt his reputation that has been spent promoting a Recovery Act program. As of now, Obama's senior advisers are reporting that the alternative energy project would move forward without a loan grant because the administration doesn't see any benefits and too many things would have to fall into place in order for the loan guarantee to be effective.
The response to this is provided by GE who says "This project, already under construction, is generating a significant number of jobs in an area of Oregon that has one of the highest unemployment rates in the state,"(Wall Street Journal). Although Obama's stance on this matter seems clear, a spokeswoman for the president says "We are taking steps to streamline the [loan guarantee] process while still protecting taxpayers who, ultimately, are the ones investing in these projects," (Wall Street Journal). This debate has not been resolved yet, but Obama would rather see the taxpayers money go towards.


-Nicole Lombardo

(Wall Street Journal, Stephen Power)
http://online.wsj.com/article/SB10001424052748703506904575592843603174132.html?mod=WSJ_Energy_leftHeadlines

Rising Oil Prices

Recent reports show a rise in oil prices and the prices are likely to continue to rise. Ali Naimi, the Saudi Oil Minister, believes the market would allow the prices to raise up to $90 a barrel (Lin). He came to this conclusion after watching the most recent prices reach the highest they have been in the past five months (Lin). The barrel should cost between $70 and $80 to suit the needs and wants of suppliers and consumers. However, the increase in demand will allow the price of the barrel to be as high as $90 (Lin). Also, the surplus of oil was a major reason the prices remained low because companies wanted to lower their supplies, but with the high demand, this is no longer an issue.

The question is, what is the reason for this increase in demand? The most logical answer at this point would be the impending winter months that we are about to endure and many homes have begun to stock up on oil while prices are still fairly low. As the price continues to fluctuate, the answers to these questions will be found.

http://online.wsj.com/article/SB10001424052748704865104575588660085365170.html?mod=WSJ_Energy_leftHeadlines

-Ashley Luddy

Exxon Mobil Corp. Sees Great Results in the Third Quarter

Exxon Mobil Corp.’s third quarter earnings rose 55% due to stronger refining margins, higher commodity prices and a spike in production. Output increased by 0.8 million barrels because of the addition of production from natural-gas producer XTO Energy Inc. and liquefied natural gas investments in Qatar. Exxon also increased its natural-gas production to 12.2 billion cubic feet per day. Exxon’s current raise in revenue mirrors a rebound seen at other major oil companies such as Royal Dutch Shell and ConocoPhillips because of a larger demand for refined products and chemicals.

Even though Exxon Mobile’s new gains seem to be a product of the purchase of XTO some analysts are concerned because natural-gas prices are low and it was more of an acquisition that would be seen profitable down the road. But others say and Exxon Mobile seems to agree that if they are going to invest in natural gas, they might as well go all the way, seeing as they are already seeing results.



-Nicole Lombardo

(Wall Street Journal, ISABEL ORDóñEZ)
http://online.wsj.com/article/SB10001424052702303362404575579980800711598.html?mod=WSJ_Energy_leftHeadlines

An Advance in the use for Lithium Batteries

Corvus Energy of Vancouver has been looking into new ways to use lithium- ion batteries. One way is to use lithium- ion batteries to run big equipment. Corvus has just won an order to provide a 2.2 megawatt-hour battery the size of a shipping container for use in tests to back up a Chinese coal-fired power station. These lithium batteries are made with lithium nickel manganese cobalt (NMC) instead of the common lithium iron phosphate because it provides a greater energy density; Brent Perry, the boss of Corvus, says this makes the cells 22% more powerful than ones that use iron phosphate. The batteries are made by Dow Kokam from Townsend Kokam. In 2009, Dow Chemical and Townsend Kokam made a joint venture to produce advanced batteries.

Corvus assembles its cells into standard 6.2 kilowatt-hour modules, which when fitted together can make batteries capable of storing several megawatt-hours of energy, which is more than 40 megawatt-hours is technically possible. A module can be charged from flat in as little as 30 minutes and is able to discharge its full 6.2 kilowatt-hours in just six minutes. These batteries are expensive to build, costing about $9,300 each, about $2,000 more than a lithium iron phosphate battery. But Brent Perry assures that the expenses are justified by the performance of the battery. These batteries can withstand harsh environments and an operating life at full capacity of around 20 years. Even when these batteries start to lose capacity, they should be able to be powered by wind farms to produce electricity.

Kelsey Tomlinson
http://www.economist.com/node/17352944?story_id=17352944

Petrobas To Produce 50,000 Barrels A Day

The oil giant of Brazil, "Petrobas has been informing the media that they will plan to produce an average of 50,000 barrels of oil per day from the Tupi presalt offshore Brazil in 2011" (wsj.com) Since 2009, Petrobas has been producing about 14,000 bpd oil at a long duration test in Tupi. Tupi was discovered in 2007. It is a deep underwater field and has been known as one of the biggest discoveries in the Americas since about 30 years ago.

"Petrobas also mentioned that with the conclusion of drilling a ninth at Tupi confirmed that 5-8 billion barrels of oil equivalent of light oil and natural gas are potentially recoverable from the area." (wsj.com) Petrobas will start the commercial production of gas at Tupi in January or February of 2011.

-Michael Sheinfeld

http://online.wsj.com/article/BT-CO-20101027-717634.html?mod=WSJ_Energy_middleHeadlines

California Votes to Repeal Law That Curbs Greenhouse Gas Emissions; Could Spell Trouble for Alternative Energy Industry

California has decided to take a vote on temporarily repealing a 2006 state greenhouse-gas law, which would temporarily set back the goals of cutting gas emissions until unemployment has risen. California has long had a problem with unemployment, and the idea behind the repeal of proposition 23 is it will reduce costs for some companies, most notably in silicon valley. Executives in the Venture-Capital industry argue that Proposition 23 will curb investment in the alternative energy industry. Jim Watson, the managing general of CMEA Capital says that "if lawmakers nationwide block legislation that helps clean-tech firms,... 'we have to start thinking about moving a lot of our investment dollars to China'". This will come as a further hit to these companies since investment is already down from 1.2 billion to 452 million, while in the rest of the world venture capitalist investment in alternative energies is up.
This situation is almost a lose lose situation for California because if the state votes for Proposition 23 they may gain jobs in the short term but they will lose the long term benefits of one of the fastest growing industries in the global marketplace. The best thing for the state of California would be to vote for the short term solution if the California economy is about to collapse. In any other case the best thing for California would be to vote down proposition 23 and secure what could potentially be one of the most profitable industries, and could turn around California's tough economic recession.

~Tom Langevin

http://online.wsj.com/article/SB10001424052702303738504575568812369392150.html?mod=WSJ_Energy_leftHeadlines

Expanding the Pipelines

The Nabucco pipeline, Europe's leading competitor, is now trying to expand their connections to other parts. Backed by the European Union, Nabucco won on $5 billion in loans from the World Bank, the European Investment Bank and the European Bank for Reconstruction and Development. Although granted the money, this new project by Nabucco is not set in stone. They still wait on RWE of Germany and OMV of Austria'a decision on whether or not they plan to invest. RWE would like to build the Turkish part of the project. But Turkey is considering a public tender in which local firms would get a share of the profit. Another problem is the source of gas. Nabucco needs 8 billion cubic meters per year from Azerbaijan, but it wants a lot more. Nabucco is also competing with Russia for Azeri gas; their goal is to bring Azeri gas to southern Italy via Turkey and Greece. Although Russia is not so popular in the energy spector, they continue to gain supportors, from Germany for instance. The Nord Stream pipeline on the Baltic seabed is being built which will bring gas from Russia directly to Germany. It will reduce dependence on transit countries such as Belarus and Ukraine. Russia’s new gas contract with Poland could tie that country to supplies from the east until 2037.

There is also a new plan to create the Azerbaijan-Georgia-Romania Interconnector (AGRI), which aims to use an existing trans-Caucasus pipeline, and then tankers across the Black Sea. This might use liquefied natural gas (LNG), or cheaper (but untried) compression technology. From the Romanian port of Constanta, it would then go through an existing pipeline to Hungary. AGRI will not carry as much gas as Nabucco’s planned annual target but it's cheaper to build, costing around $1 billion and will save on Turkish transit fees. The expansion of interconnecting pipelines will continue to bring energy throughout Europe while also decreasing dependence on Russia's pipeline. With the new technology used for this project, the market should be able to improve.

-Kelsey Tomlinson
http://www.economist.com/node/17260657?story_id=17260657

New Refineries in Iraq

Due to a large supply of oil in Iraq, four new refineries will be built by and to be used by international companies. However, in order to own one of the refineries, countries must submit certain documents and applications to Iraq for review (Hafidh). From these documents, the Iraqi Oil Ministry will decide who is prequalified to build each refinery. Many countries have already completed the application process and all of the other countries have about another two weeks to submit their paperwork (Hafidh). Even though the use of alternative energy has significantly increased, the use and need of oil is still very strong. Having control of one of these new refineries could be extremely economically beneficial for any country because for now, there will be a constant demand for oil, even if it is lower in some places than it was before.

Once a company is prequalified, Iraq will begin to negotiate with the chosen companies to determine who will ultimately receive the rights to the refinery (Hafidh). Each country will then have the ability to choose what they would like to do with their refinery. There are three choices available; build, own, and operate alone, build, operate, and then transfer to another company or country, or begin a joint venture with a local Iraqi company (Hafidh). The cost of each refinery is about $20 million and will produce around 740,000 gallons of refined oil every day. With any of the choices, Iraq and the outside country have the opportunity to seriously profit from the project.

-Ashley Luddy

http://online.wsj.com/article/BT-CO-20101019-

Breaking News in Tidal Energy

Eastport is a coastal town in Maine with some of the greatest tidal variants in the country. The tides in Eastport rise and fall about 20 feet mostly twice-a-day; the current can be powerful enough to turn a turbine. With this being said, many residents hope that the tides can bring about a new way to formulate energy. Tidal- wave power is fairly new but there are a few projects in Eastport. The Ocean Renewable Power Company (OrpC) tested the first prototype this past August, launching a $2.5m tidal grid-compatible power system; this system is the first in the country. This prototype can generate enough power to run the control room and batteries for a coastguard vessel. With a federal commercial permit, OrpC plans to launch a $7million prototype in 2011 which should be able to power 50-75 homes.

Although this seems like a promising product, many are concerned with trying to apply this to the entire country. Majority of the tidal energy capacity comes from Alaska which is far from heavily populated areas. It is estimated that tidal power could generate 13 gigawatts nationwide at maximum capacity, which isn’t enough compared with the 35 gigawatts of wind generation that already exists. This is a minor set back though; a recent study shows that Maine could generate 250 megawatts from the tide, 100 of the megawatts from the Eastport area. Residents of Eastport are still skeptical about the success of tidal power. If it proves to be successful, then Eastport’s economy will thrive. Until then, many are still unclear.

Kelsey Tomlinson

http://www.economist.com/research/articlesbysubject/displaystory.cfm?subjectid=8780295&story_id=17204926

Nuclear Energy Deal Threatens to Fail

Constellation Energy Group Inc.'s recent deal with Electricité de France SA to sell twelve coal-fired energy facilities to the french state owned company, may fall through. Constellation Energy Group (CEG) is forcing Electricité de France (EDF) to pay 2 billion dollars for these energy facilities however EDF claims they will sue CEG if they continue to force them to buy. EDF is the largest shareholder in CEG so in order to avoid a confrontation EDF offered to buy CEG out of a joint venture to build a new nuclear facility if CEG doesn't force EDF to buy these twelve coal-fired facilities. EDF originally agreed to buy these twelve facilities when they were outbidding CEG for MidAmerican Energy to buy out their company they agreed to purchase the 12 facilities.
This on going feud between the two companies has also taken an unexpected political turn with pressure from both the US and French governments to resolve this issue. The US has a strong interest in raising the use of alternative energy for the benefit of the world as a whole. France has a government that is more hands on with their economy and because of that they have a vested interest in getting ahead of the recent trend for the increase of alternative energy by spreading alternative energy facilities not only in their own country but also overseas. Governor O'Malley, a candidate running for reelection in the Maryland gubernatorial race, has also tried to get involved in the business issue to secure his political future. If the Governor can help to resolve this issue it will bring an alternative energy source as well as jobs, greatly increasing his chances of winning.

~Tom Langevin
http://online.wsj.com/article/SB10001424052748704763904575550374068530134.html?mod=WSJ_Energy_leftHeadlines

EPA Approves of Higher Ethanol Blend

The US Environmental Protection Agency has just reported that they will approve of a drastic increase of ethanol levels in gasoline for model-year 2007 cars and newer. They will allow an increase in ethanol fuel blends from 10% to 15%. Auto-makers and experts have been criticizing this change in fuel blends because they believe that more testing can be done before this decision was made so early. Gina McCarthy, the EPA clean air director, assures everyone that they will did many tests before making this decision.

Overall in the Energy industry, technology has been a big part of the growth and development of this industry. From creating new drills for oil in the Gulf of Mexico to changing to nuclear energy across the world, the Energy Industry has grown substantially across the years.

Manufacturing in comparison to domestically to internationally, is very similar. Though the United States is a lot more advanced than Middle Eastern countries, China, UK, and other European countries are very advanced when it comes to manufacturing in the Energy Industry. An example of a poor manufacturing Energy country is Irag. Though they are on the rise and should be very advanced in the next 20 years, they still have problems with security, water shortages, and its infrastructure.

-Michael Sheinfeld

http://online.wsj.com/article/SB10001424052748703673604575550261503126190.html?mod=WSJ_Energy_leftHeadlines

Now that the suspension in activity due to the deep water spill in the Gulf is coming to an end it is only a matter of time before the oil industry can begin economic activity in the area again. The length of time depends on how long it takes the industry to implement new saftey and environmental rules and how long federal regulators take to confirm these new rules legitimate. Some of the new rules the oil companies have come up with include, companies will be required to hire outside auditors to certify that blowout preventers will work, future clean up plans for large spills required, federal regulators will have more input in how companies drill, chief executives of companies will be required to certify that their operations regarding offshore drilling meet the new standards, new-lease sales and deep water drilling projects must meet environmental concerns, and federal regulators must comply with new ethic rules in regards to their personal contact with oil industry officials.

The effects of these new rules is speculated to sufficiently hurt the economic productivity in the Gulf. It is said that the new economic regulations could cost the companies drilling in the Gulf 183 million a year as well decrease the daily production by 12% and increase production in normal deep water wells by 20-25%. These new rules are costing the US government as well. Obama and lawmakers approved a 25$ million dollar funding last month for overseeing the regulation in the gulf. Overall, even though the complete halt on production in the Gulf is over new regulations could keep the activity level where it used to be in the spill after math. The key is making sure the restrictions are enough to prevent further problems but not over the top where there is no hope for successful oil activity in the Gulf.


-Nicole Lombardo

(Wall Street Journal, Stephen Power, Siobhan Hughes)
http://online.wsj.com/article/SB10001424052748704164004575548562706663060.html?mod=WSJ_Energy_leftHeadlines

Google Brings Offshore Wind Power to United States

Google has recently agreed to fund a new project that will build wind farms in the Atlantic Ocean. There would then be underwater cables that would transport the energy from the ocean to the east coast of the U.S. (Efrati). This same concept on a much smaller level has been applied to other places in our country. The amount of energy that will be produced will have the ability to power about 1.9 million houses with clean energy. The total cost, according to the New York Times, will be about $5 billion. Google refused to comment on what they believed would be the estimated cost (Efrati). This project is the first major step in our nation’s switch to wind as alternative energy. Many states such as California, Texas, and Iowa, have started smaller wind plant projects that have helped provide enough energy to reduce their intake of oil for energy. However, the new Atlantic Wind Connection can provide more wind energy than most would have expected and is ideal for our need to assert independence from foreign oil.

The turbines will be located about 10-15 miles offshore in an area where the water is not as deep so they will be easy to install (Efrati). This will also make them invisible to people on the shore of the east coast. This factor would be very important in this project because the reoccurring problem with the production of windmills in the past has been residents not approving of the appearance. Also, wind tends to be stronger further offshore anyways, so it is actually beneficial to have them further out where they could produce more energy. Alternative energy is the future and Google will prosper from this investment.

-Ashley Luddy

http://online.wsj.com/article/SB10001424052748703440004575547381873787098.html?mod=WSJ_Energy_leftHeadlines

Texas Searches for Alternatives to Oil

Although the oil production in Texas has dropped by two-thirds from the early 1970s, the state’s reserves are still large. Texas has nearly a quarter of America’s crude oil reserves,30% of it being natural gas. Taxes on the state oil production allows Texas to be one of the few states without income tax. Texas is a national leader in energy production and consumption, but as the state’s population is grows quickly, oil proves to not be enough as a source of energy. Texas leads the nation in wind- power capacity, and in 2009 around 6% of its electricity was pulled from the air. One of the major considerations for coming up with other forms of energy is job openings. The Cynthia and George Mitchell Foundation reported that the possibilities for renewable-energy investments in Texas could bring an additional 23,000 jobs to the state each year until 2020. Little issues such as new tax and government interference has brought worry among oil companies in the state. Texas continues

-Kelsey Tomlinson

http://www.economist.com/node/17151385?story_id=17151385

Solar Plants in California

The Obama Administration approved the construction of two solar power facilities in California earlier this week. This is just another example of how the energy industry is shifting in nature towards alternative energy. This is only the first project in a long list of future alternative energy facilities expected to be approved and set up by the US government. The two solar power facilities combined will bring a large amount of capital to California's economy, an expected one billion dollars along with 950 new jobs and enough electricity to supply 500,000 homes. California is also planning on building potentially nine new solar energy facilities by the end of the year in order to get a 30% tax break incentive from the government which ends on December 31st. This shift towards alternative energy will bring a large boom in California's economy which it desperately needs. These new projects bring in new jobs and more cash flow which may not have come had it not been for government incentives for creating alternative energies.
Chevron who is unquestionably one of the leaders in the energy industry is in charge of one of these solar energy facilities in California. This shows that even though Chevron receives the majority of its profits from oil they understand that they need to branch out and expand to what the market will be in the future. Not only does this show Chevrons business savvy it also confirms that the largest corporation in the Oil industry believes that the market is beginning to shift towards alternative energy.

-Tom Langevin
http://online.wsj.com/article/SB10001424052748703843804575534392249151072.html?mod=WSJ_Energy_leftHeadlines

American Electric Power

American Electric Power Company has just announced that they will be purchasing solar energy from another company in Turning Point Solar LLC. This would be known as the largest solar development east of the Rocky Mountains in years. Though in the past few years, AEP has been hurt from a fast drop in power demand because of the recession, this purchase with Turning Point Solar LLC will help AEP rise once again. The trend of this company is on the rise after about a couple years declining because of the recession.

Michael G. Morris has been the Chairman and CEO of AEP since 2004 and has made this company one of the largest providers of electricity in the US. Morris has earned almost a total compensation of a little over $7 million, which also includes a base salary of about $1.5 million.

AEP's mission statement is to, "bring comfort to our customers, supporting business and commerce, and building stronger communities." This statement has been apart of this company for a long time and they instill it with their employees and with their marketing tactics.

http://www.aep.com/
http://online.wsj.com/article/SB10001424052748703843804575534323343145464.html?mod=WSJ_Energy_leftHeadlines

-Michael Sheinfeld

Control of Oil Feilds Shifting and New Deals for BP

The Azerbaijan's national oil company holds rights to a oil field, Shafag-Asiman, that is speculated to to have reserves of 17 trillion cubic feet. If confirmed this massive oil field could become very lucrative in the future which is why BP PLC is in the process of making a deal with the Azerbaijan's national oil company to be able to operate and explore the field. The new collaboration consists of a 50-50 production-sharing agreement and is BP's first deal since the addition of Bob Dudley as chief executive in the U.K.

Recently BP has taken on the burden of the Deepwater Horizon oil spill and has been criticized in the U.S. Even though the company has been hurting from the freak accident in the U.S. this new deal shows BP's strong connections in the East and its ability to still attain strong deals. BP has invested in the huge Azeri-Chirag-Gunashli oilfield in the Caspian and the Baku-Tbilisi-Ceyhan pipeline which brings Azeri oil to Turkey's Mediterranean coast (Chazan, WSJ). Meanwhile the assets in Algeria owned by BP are trying to be taken over by Russian oil company TNK-BP LTD. It is not for sure yet that the Algerian oil fields operated by BP will be taken over but Fridman and associates from TNK-BP Ltd. are looking into it as well as assets in Vietnam and Venezuela to help cover costs of the Gulf of Mexico oil spill.

-Nicole Lombardo

(Wall Street Journal, Guy Chazan)
http://online.wsj.com/article/SB10001424052748703735804575535921449969264.html?mod=WSJ_Energy_leftHeadlines

Solar Plants in California

For the first time ever, solar-powered facilities will be constructed on United States’ public land (Sweet). The idea for the two structures, destined to be located in California, was proposed by Chevron and NTR, an Irish renewable energy developer (Sweet). Hopefully, these two are the first of many other facilities that would ultimately double the solar- energy power in the U.S. The government is now on the fast-track with this project and plans to have many facilities similar to these two before the end of the year (Sweet). This is a major advancement for our country’s steps towards becoming less dependent on oil. Government funding on this project by placing the projects on public property demonstrates the seriousness of relying more on renewable resources.

Each unit will be managed by a different company and the resources will be allocated differently (Sweet). However, between the two facilities, it is expected to increase the California’s economy by over one billion dollars, create over 950 jobs, and provide electricity for hundreds of thousands of homes (Sweet). The use of the renewable energy resources should be at the highest priority not only because of the monetary and environmental benefits, but also because this is a time where the government is strongly supporting and funding the idea. The continued development of these solar-powered units will lead to clear benefits for our country’s independence from oil and foreign, oil-distributing countries.

-Ashley Luddy

http://online.wsj.com/article/SB10001424052748703843804575534392249151072.html?mod=WSJ_Energy_leftHeadlines

Renewable Resorces creates possibile opportunities

The talk for clean energy and “green” jobs have been lingering before the recession and have continued to linger across the globe. Meeting targets on greenhouse gas emissions and improving energy security will require hundreds of billions of dollars of investment in renewable technologies, and this opens up the attractive prospect of an explosive growth in jobs in these new industries at a time when more traditional jobs are disappearing. It is still unclear where the availability of jobs will be, but many countries are jumping to the opportunity to “go green” (Harvey). Despite the recession, the clean energy market has been doing very well (Harvey). Even though the market continues to grow, the openings for green jobs will depend on stimulus money (Harvey).

The development of this market will mean job openings for many. There is no knowledge of what positions will be available, but it can benefit many. Because this s a global market, it can benefit many countries, from the industrial busy cities to the rural areas. I am very hopeful that the clean energy market will continue to succeed and create better alternative options for the globe.

-Kelsey Tomlinson


http://www.ft.com/cms/s/0/18dbd5f6-3867-11df-aabd-00144feabdc0,dwp_uuid=5d673f92-3882-11df-aabd-00144feabdc0.html

Sections of the Energy Industry

There are several different areas in the oil and natural gas industry. The industry itself can be broken up into three separate sections; upstream, midstream and downstream. Within each of those sections there are a multitude of jobs unique to that piece.
The upstream sector is the part of the industry that searches for, collects and then sells the oil or natural gas. There are plenty of jobs for scientists who test soil content, jobs for people who create the machines that dig and lay pipe, there are jobs for the people that build the equipment and there are jobs for people who sell the oil to the midstream market.
The midstream sector of the oil industry deals with processing the oil and natural gas, the storage of the resources and the transportation of materials. This sector involves a variety of jobs such as the processing of mass amounts of information, shippers who will physically ship materials. The shipping of these materials can involve anything from physical ships to truckers as well as via pipelines.
The downstream sector is the part of the industry that refines oil and natural gas and then sells it directly to consumers. This sector employs technicians who work in the refinery process, marketers who target the consumers, as well as a large number of franchised gas stations.
The energy industry is massive and it requires a huge range of workers with a variety of skills. There is not only a wide variety of workers there is also an enormously large workforce behind the energy industry alone. From the managers to the truckers every job in this industry is necessary for it to function properly.
-Tom Langevin

Azelton, Aaron. Fisher Investments on Energy. Hoboken New Jersey: John Wiley & Sons, 2009. Non-Fiction.

Germany Approves of New Energy Proposals

This past Tuesday, Germany approved of many different energy proposals. One in particular that sticks out more than the others is expanding the lifespan of the country's nuclear plants. The German government will also draw more energy for renewable energy, the renovations of power grids, and overall improving efficiency by 2050. "Four decades from now, the government wants greenhouse-gas emissions to be 80% lower". (Wall Street Journal) To increase to the reality of this goal, the German government's lifespan of the 17 nuclear reactors will be extended.

I am all for Germany finally approving of the new energy proposals because that will help put pressure on the rest of the nations around the world to progress themselves energy-wise. Even though this is a good thing for the future to have a "green" planet, the BDI Federation of German Industries believes what the government has done is acceptable but they also warned them that the investment for these utilities will be much more expensive than first expected. Even though the expenses will be very high, I feel it is necessary for a European country (such as Germany) to be noticed as a nation making a difference by improving their energy efficiency for the future.

-Michael Sheinfeld

http://online.wsj.com/article/SB10001424052748703882404575519493309998222.html?mod=WSJ_Energy_leftHeadlines

New Rules for Offshore Drilling

After the devastating oil spill in the Gulf of Mexico, the extraction of deepwater oil will never be the same. This topic has already altered the oil industry and continues to impact the regulations that many companies must follow. The United States Interior Secretary, Ken Salazar, plans to instate new laws for future offshore drilling and to soon release the ban that has been up for the past four months to prevent offshore drilling (Hughes). Salazar believes it will be a challenge to convince the government to lift the ban because the president’s administration does not believe the ban should be removed until all oil companies have agreed to comply with all the new laws involving offshore drilling (Hughes). Due to the extreme turmoil this most recent oil spill has caused, it should be obvious that stricter laws should be out in place and more heavily enforced to help avoid another accident.

Even though the new laws that will be put in place are an extremely important factor in the future of offshore oil drilling, the proponents for the case have their share of important reasons as to why the ban should be lifted as soon as possible. A major reason would be the loss of jobs since offshore drilling has been shut down (Hughes). This industry provides thousands of jobs to United States citizens. They are trying to get the ban lifted by November 30th with the understanding that the companies will be following much stricter guidelines (Hughes). The compromise for this solution would be to open the offshore drilling as soon as possible while seriously enforcing the new laws.

-Ashley Luddy

http://online.wsj.com/article/BT-CO-20100929-715409.html?mod=WSJ_Energy_middleHeadlines

China to Collaborate in New Contract With Russia

A new deal is in the works between China and Russia. China plans to offer Russia a large loan to the natural gas giant in Russia as part of a 30 year long gas contract. In this deal Russia seeks to build international competition and China seeks to buy gas more cheaply. The loan would allow the monopoly to apply the credit line toward the construction of gas pipelines therefore lowering the cost of delivering Russian gas to China. The logistics of the deal state that China is to buy 30 billion cubic meters of Russian gas a year over the next 30 years. Exports of gas are expected to begin at the end of 2015 through a pipeline in the Altai Mountains.


Although China is not in a rush to finalize the deal, Russia would like to seeing as they feel they can bring diversity to the gas supply in Asia, while Europe’s demand for Russia’s oil is beginning to lessen. Experts are expecting the pipeline into China to be at first a little more expensive than if they were still able to have Europe as their largest export for gas, but the marginal profit gain to be well worth the extra expense. While China has already has deals for gas with the well off Turkish-men, Russia is really leaning on this new deal to bring in profit for them and boost their gas economy.


-Nicole Lombardo

(Wall Street Journal)
http://online.wsj.com/article/SB10001424052748704116004575521433569135028.html?mod=WSJ_Energy_leftHeadlines

Universal Energy

The United Nations estimates that an average of $35 billion-40 billion a year needs to be invested until 2030 so everyone on the planet will be able to cook, heat and light their premises, and have energy for productive uses such as schooling (The Economist). According to the International Energy Agency, the number of “energy poor” people will barely change, and by 2030 16% of the world will still have no electricity (The Economist). At the “Lighting Africa” conference in Nairobi in May, a World Bank project to encourage private-sector solutions for the poor, 50 lighting firms displayed their products, up from just a handful last year (The Economist). This shows a growing interest in bottom-up solutions and falling prices. Prices of solar cells have also fallen; the cost per kilowatt is half what it was a decade ago (The Economist). Solar cells can be used to power low-energy LEDs, which are energy-efficient and cheap; the cost of a set of LEDs to light a home has fallen by half in the past decade, and is now below $25 (The Economist). Richenda van Leeuwen of the Energy Access Initiative said at the UN Foundation in Washington, DC that this could eliminate kerosene light in the next ten years, which can have positive effects because families spend 30% of their income on kerosene and it causes indoor pollution and fires (The Economist).

Sam Goldman, the chief executive of D.light, pointed out that there is still a barrier
for the billions who cannot afford clean energy (The Economist). D. light has developed a range of solar-powered systems that can provide up to 12 hours of light after charging in sunlight for one day (The Economist). D.light’s most basic solar lantern costs $10;in order to be universally affordable the price would have to fall below $5 according to a International Finance Corporation study (TheEconomist). Much of the turmoil in bottom-up energy entrepreneurialism is focusing on South Asia; according to the International Energy Agency, 570m people in India, Pakistan and Bangladesh, mostly in rural areas, have no access to electricity (The Economist). One idea is to use locally available biomass as a feedstock to generate power for a village-level “micro-grid”. Husk Power Systems, an Indian firm, uses second-world-war-era diesel generators fitted with biomass gasifiers that can use rice husks as a feedstock. Wires are strung on cheap, easy-to-repair bamboo poles to provide power to around 600 families for each generator (The Economist). Husk was co-founded three years ago by a local electrical engineer, Gyanesh Pandey and has established five mini-grids in Bihar, India’s poorest state, where rice is a staple crop (The Economist). Consumers pay door-to-door collectors upfront for power, and Husk collects a 30% government subsidy for construction costs.
Other companies are building off of ideas and expanding them. Emergence BioEnergy, for example, aims to provide many entrepreneurial opportunities around energy production (The Economist). Another project includes aiming to switch women in India from gathering wood, which denudes forests, to using canisters of liquefied petroleum gas (LPG) (The Economist). India’s four state-owned regional power companies, including Bharat Petroleum Corporation, will build a national network of thousands of LPG-powered community kitchens (The Economist). Local entrepreneurs will then provide the LPG and charge villagers to use the kitchens in 15-minute increments (The Economist).

Some of the challenges faced are providing the upfront investment for energy schemes, and building and maintaining the necessary distribution systems to enable them to reach sufficient scale (The Economist). Many of these companies are privately funded and may need non- profit funding in the future. Another problem faced is distribution, specifically in Africa and South Asia where majority of the world’s “energy poor” reside (The Economist). Promotion and education/training groups must be supplied for those areas and they must also be paid for. The main issue is coming up with enough money for this to succeed. Once these solar companies have developed a valid plan, the push for universal energy can begin.

- Kelsey Tomlinson

http://www.economist.com/research/articlesbysubject/displaystory.cfm?subjectid=8780295&story_id=16909923&CFID=148417885&CFTOKEN=36741354

Alternative Energy Will be the New Fossil Fuel

In 2010 the world is predicted to use 150 trillion kilowatt hours of power, a sharp increase from 2009 when the U.S., the largest consumer of power in the world, only used 3.7 trillion kilowatt hours. If this trend of global consumption continues to rise so sharply a shift will need to be made in where the U.S. gets its power. Many speculate that the energy industry will begin to move towards alternative fuels while the price of fossil fuels will undoubtedly rise as they become scarce and oil lines will become more difficult to lay.
As it stands now alternative energy is to expensive to effectively enter in to the market and compete with fossil fuels. Wind energy which is the largest for alternative only accounts for 1.5% of energy to be consumed. Some new promising fields include Algal bio-fuels that will produce fuel that can be used in all automobiles and airplanes. The U.S. government recently granted 141 million dollars for research and development of algal bio-fuels to Sapphire Energy who plans on creating a 300 acre refinery.
While this shift in the energy market is occurring it will still be a while before alternative energy starts to be a real competitor with fossil fuels. Several things will need to happen before alternative energy can have a chance. Government may have to sponsor more alternative energy research and do things like put taxes on oil imports to help make it more profitable for companies to switch their focus on to alternative energy. The change is unquestioningly coming it is simply a matter of time.

-Tom Langevin
http://online.wsj.com/article/SB10001424052748704757904575077312569582760.html?KEYWORDS=alternative+energy

First Solar Emerging as Elite Energy Company

First Solar is a public US solar energy company. As of now it is the world's largest photovoltaic company by market value. They are currently trying to build three new solar plants in North America. Photovoltaics are defined "as a method of generating electrical power by converting solar radiation into direct current electricity" (dictionary.com). The big solar plant they are currently building is in Agua Caliente, California which is about 290 megawatt solar plant. They have plenty of other plants in different countries. Most of their original plants were built in Malaysia and more are currently being built there.

First Solar differentiated themselves from other photovoltaic solar energy plants because they do not use silicon-based cells, instead they use very thin-film cells from cadmium telluride, which is known for turning sunlight into electricity. Because of this new type of solar plant use, they became an instant multi-million dollar company about 5 years ago when their plants started to grow throughout the world. They also recently bought Nextlight Renewable Power in July for $297 million which added more than 500 megawatt projects which First Solar buys which then helps them build more systems throughout the world and then sells them to customers.

First Solar is an elite growing company throughout the world and will soon be the basis of all energy power plants, since we are now focusing on solar energy to make our planet more "green".

-Michael Sheinfeld

Cairn Energy Sees Hope in Greenland Well

Cairn Energy PLC has set up two wells for drilling for oil off the shores of Greenland. Their first well was shut down after no commercial discoveries were made with exploration costs amounting to 84 million dollars. Their second well seems to be more promising. The Chief Executive Bill Gammell made a statement saying that there are presence of both oil and gas in active form in the petroleum system in the basin. Cairn plans to continue exploring this well off Greenland’s west coast over the next few years.

The industry over all reacted well to the discoveries of potential oil despite the closing of their first well and its 84 million dollar write-off. Along with the discoveries of oil, Cairn’s shares have been trading 3% higher in the past few weeks. Though there has been good feedback there has also been bad. Canacccord Genuity said the write off was “clearly a disappointing result, even if there is a reason for long-term optimism.” Cairn has put much of its company in the hands of the Greenland project, but plans to sell the bulk of its stake to a mining company Vedanta Resources PLC for what could be as much as 8.5 billion.

Not only does Cairn have to worry about the fact that they have put so much trust in the shores off of Greenland for finding oil but also the fact that the company Greenpeace has recently targeted Cairn, claiming that their drilling posses too great a risk to the environment there.

-Nicole Lombardo

http://online.wsj.com/article/SB10001424052748704129204575505434270269628.html?mod=WSJ_Energy_leftHeadlines

New Company to Assist in Development of U.S. Power Plants

Currently, Quantum Energy Partners is preparing to launch their newly developed company that will help develop power plants throughout the United States (Peters). Quantum Energy Partners is a leading provider in the global energy industry, and their new company should be just as influential. The new company will be named Quantum Utility Generation LLC, and QEP has gathered about one billion dollars through various resources to start the company (Peters). A considerable amount has been provided by investors signaling a strong belief that this company will thrive. The new company will be run by Larry Kellerman, former president of a power-plant generation subsidiary, and a team of other highly qualified professionals.

Within the next five years QUG should be making a significant impact in the oil industry and they will be getting a quick start by naming their first deal by the end of 2010. QUG is taking advantage of the opportunity to acquire failing energy companies because the prices for buying energy companies are currently very low due to a depressed market. However, the company is more focused on long-term supply needs and getting the energy market back in a better position (Peters). Kellerman believes the company will benefit from the need of new power supplies as coal companies continue to be shut down due to environmental regulations (Peters). This factor could ultimately lead to a huge shift in the energy market in our country.

http://online.wsj.com/article/SB10001424052748704129204575506000363635496.html?mod=WSJ_Energy_leftHeadlines

-Ashley Luddy

Inactive Oil Wells to be Plugged

Oil and gas companies must permanently plug thousands of inactive wells in the Gulf of Mexico of at least five years under a federal order issued Wednesday. This can cost well owners billions of dollars, but it could also create job opportunities for rig workers. The U.S. Interior Department and its offshore-drilling oversight agency said companies must cement 3,500 wells that aren't producing oil or gas. Another 650 oil and gas platforms must be dismantled if they are not being used; this becomes effective October 15. Companies are given 120 days to submit plans to decommission production facilities and wells. Under the regulation, any well that has not been used during the past five years for exploration or production must be plugged. Owners of these wells have to pay for the permanent sealing of the wells and cannot reopen them later for production. Stock prices of some oil-field service and offshore drilling companies have risen because investors have bet that the companies could profit from new government-mandated work. Director of Research and Development at the Center for Energy Studies at Louisiana State University, Mark Kaiser, estimated that the plugging and abandoning inactive wells and removing idle structures could total $1.4- $3.5 billion. He estimated that companies would be losing up $6-$18 billion in revenue from future production.

Many lawmakers have been concerned by abandoned wells after the April 20 oil spill by BP in the Gulf of Mexico. That well is temporarily plugged but could be permanently seal by Sunday, according to Coast Guard Administrator Thad Allen. The Interior Department said idle wells and platforms could threaten the environment and pose a financial liability if destroyed or damaged by an event such as a hurricane. Bureau of Ocean Energy Management Director Michael Bromwich said that the risk of damages increase as the infrastructure ages.

Existing regulations require wells to be plugged and platforms to be dismantled within one year after a lease is terminated. But some lawmakers believe this rule hasn't been enforced. Under the new regulations, companies must decommission unused equipment even if the associated leases are still active. The government's success in overseeing the plugging of abandoned wells could depend on funding. The Interior Department has asked Congress for money to hire six workers to oversee the plugging and decommissioning process.

-Kelsey Tomlinson

Regulation for Natural Gas

In light of the recent gas line explosion on September 9th certain people are calling out for new safety regulations that make it so natural gas lines don't run through residential areas. While PG&E, the company that owned and oversaw the pipeline, said they would set aside 100 million towards a relief fund for damage done to property however this would not cover injuries or wrongful death suits. While this may bring some comfort owners of the 58 destroyed houses, it will bring very little solace to the families of the 4 confirmed dead and to the families of the 4 still missing.
Should PG&E do more to make up for this explosion? The report on who was responsible for this travesty have not been completed yet but should PG&E start off saying that they won't even try to compensate for those injured or killed? If this report finds that PG&E aren't liable should they even pay for the damage done to property?

Offshore Drilling Postponed

The Obama administration have decided to postpone the offshore drilling in the aftermath of the Gulf Shore oil spill because they are battling over the White House's climate-change policy. The Senate Appropriations Committee decided to vote on this offshore drilling issue this Tuesday, but the voting has been cancelled after Sen. Dianne Feinstein needed more time to evaluate the White House's request to raise the funding of offshore oil and gas drilling from $184 million to $250 million.

Michael Bromwich, the head of the agency who directs offshore drilling, pleads his case that if we do not get the additional resources needed, then the job will not be done effectively. The expiration to date to do deep-water drilling is November 30th. Bromwich is confident that the administration would not go past this expiration date. Bromwich also said that his agency is planning on rolling out new offshore drilling regulations by the end of the month once the Coast Guard and his agency and by a presidential panel uncover additional information about the Gulf of Mexico oil spill.

-Michael Sheinfeld

Lousiana Lawsuit Against Transocean Ltd.

After the recent oil spill the US Coast Guard declared that BP PLC and Transocean were responsible for the spill under the oil pollution act. While Transocean still denies there were not responsible for any underwater discharges of oil from the well head, the state of Louisiana is still not convinced. As of Wednesday Louisiana filed a lawsuit against Transocean Ltd. asking the judge to make Transocean broadly liable for the damages of the Gulf spill. Transocean pleaded it only takes responsibility for the oil that leaked from its rig not the oil that gushed from the well. The reason Louisiana wants to file a lawsuit against Transocean is because the liability of Transocean affects Louisiana’s ability to seek recovery of costs and damages related to this oil spill.

This case will be an important factor for the status of Transocean’s company in the future. If the judge rules against the case if could face much harsher financial penalties in the future. In the bigger picture the oil companies are taking a hit from the oil spill and now have to deal with not only the Louisiana lawsuits but many more as well as trying to get their oil in order and sales back on track.


-Nicole Lombardo

http://online.wsj.com/article/SB10001424052748703743504575494253381504666.html?mod=WSJ_Energy_leftHeadlines

China Resources Gas Buying Assets

The Hong Kong gas company, China Resources Gas Group Ltd., is in the process of trying to buy a gas distribution company from its parent company, China Resources Holdings Group. The distribution company, Mega Fair Ltd., is being sold for $324.4 million in U.S. dollars and the price in Hong Kong dollars is about 70 times as much. China Resources Gas is currently attempting to raise as much money as it can in order to fund this large purchase.

Mega Fair Ltd. currently distributes gas to nine major countries in China. The company intends on benefiting from the rising demand for less-polluting energy sources in the country. They are also trying to keep up with Beijing’s push to lower the country’s use of crude oil. China Resources Gas is trying to buy the company for less than it is being offered because, even though they are experiencing difficulty raising the money, they believe they can expand Mega Fair’s market and strengthen customer support which would only benefit all of the parties involved. China Resources Holdings Group would be selling about 230 million of its shares to China Resources Gas. The final decision on this matter will be left to the shareholders of China Resources Holdings Group.

-Ashley Luddy

The push for ethanol

Green Energy is spending $2.5 million on the first national television campaign for ethanol. They said that they planned the campaign before the BP spill, but the spill helped to speed it up. Most policymakers agree that the bio fuel industry must move beyond corn ethanol; it is less efficient than the sugar-derived energy and can increase food prices. The new Renewable Fuel Standard (RFS2) took effect on July 1st, which limits conventional ethanol to 15 billion gallons of the annual 36 billion gallons of renewable fuel which must be used for transport by 2022;the administration has just announced extra funding for algae-based bio fuels.

Corn ethanol is one the well-established among rising bio fuel solutions. From 2000- 2008 it rose from 1%-7% of America’s fuel supply. In February the Environmental Protection Agency (EPA) concluded that ethanol emits 20% less greenhouse gas than petrol. This may seem like a promising future for ethanol but the industry isn't satisfied. Production will soon hit the “blend wall”, which is when ethanol will meet 10% of fuel demand. The EPA only allows blends up to 10% ethanol, for more might corrode engines. The industry wants the EPA to raise the blend amount to 15%, though the decision was delayed in June.

Until the ruling is final, advocates want to continue their campaigns for alternative energy. For instance, they want the tariff on ethanol imports and a tax credit for blenders to be renewed once it expires in December. Also, they insist that the government require most new cars to be flex-fuel vehicles (FFVs), which will allow them to use blends of up to 85% ethanol, as well as petrol stations being required to install pumps that blend petrol with ethanol.

Kelsey Tomlinson

http://www.economist.com/research/articlesbysubject/displaystory.cfm?subjectid=8780295&story_id=16492491

Explanation for Oil Rig Explosion

On September 8, 2010 a report was released by BP stating that there were many factors that contributed to the explosion of the Macondo well which led to the death of 11 workers and a tragic oil spill in the Gulf Coast. This investigation which has been going on for four months was led by BP’s Head of Safety and Operations, Mark Bly. Along with him over 50 other researchers conducted experiments and tests to discover the reason for the explosion. It was determined from these studies that BP was not solely responsible for this accident and bias was not possible because the research team was made up of members outside of the BP industry who would have no reason to try to protect the company.

It was found that barriers at the bottom of the well failed to contain hydrocarbons that allow gas and liquids to safely flow through the well. This led to many other critical components of the rig to be ineffective, including the equipment to help stop the fire after the explosion. This has been the most valuable report thus far for explaining the rig explosion. BP and the research team plan to continue to provide any additional information which they are most likely to find.

-Ashley Luddy

India Law Threatens US Energy Deals

Both the US and India are two of the largest democracies in the world and with that, the US government is scrambling to preserve the benefits of a civil agreement with India. India is about to pass a law that has the potential to exclude US companies from it's market for nuclear power. This law, passed by India last week, would have been the final stage of the law that was beginning to assemble in 2005. The US was expecting India to put together this law so it would open a new market for different American companies. This new market would top nearly $150 billion in the coming years.

This new nuclear-liability law has caused much commotion throughout many American companies and even with the US government. The US and India are now trying to discuss ways for American nuclear suppliers to find a way around the new law. Options have been mentioned for the US and India to propose a government-to-government agreement. Another option that has been floating around the media is for President Obama to make a signing statement on this issue. I agree with the US industries that neither of these options would be viable options to get this nuclear-liability law done because it would ultimately cause havoc with New Delhi.

Overall the US and India are not very close to closing up this law because there are a lot more things that need to be thought about. Not only are there economic issues behind this law but the legal side of things are very confusing right now with both nations. Russia and France are as of now front runners to getting this law done with India. I believe that eventually the US government is going to get this law done with India but the US government needs to figure out with India on how they are going to handle the liability legislation before any of this can get figured out.

-Michael Sheinfeld

Chevron Pursues Oil Search Off the Shores of Liberia

Chevron Corp has said it will begin a three-year exploration program to find oil in the deep water off the shore of Liberia. Liberia doesn’t yet produce crude but has a lot of acreage and is a promising region for the future findings of new crude deposits. Chevron was lucky to find Liberia, a nation that is still accepting of foreign investments in its natural resources. The drilling is scheduled to begin next year and Chevron will have other base locations in countries such as Angola and Nigeria seeing as Chevron has a lot of business in Africa.

This new development in Liberia is the sign of great confidence in the country and could be what the country needs to pull it out of its rut. The country has been suffering from civil war and poverty. The development of oil and investment of a major oil industry could help repair their nation and boost it to the ranks of oil powers in Africa such as Uganda. The president of Liberia believes this foreign interest will help the economy as a whole through the creation of jobs and possible oil finds. Until now, Liberia’s main exports were rubber and timber, but this could change quickly in the future.

-Nicole Lombardo

http://online.wsj.com/article/SB10001424052748703453804575479981224884048.html?mod=WSJ_Energy_leftHeadlines

Gas Prices Fluctuate in the US

This article found in the Wall Street Journal discusses the up and down, but mostly down, trend of the oil industry over the past few months. It states that gas prices have fallen in eight consecutive sessions to an 11 month low and that very little experts see it rising anytime soon.
The article also shows the influence the climate has on the energy and gas industry. As word of a tropical storm comes around, gas prices and demands rise. Some speculate that this short-term rise could be the rally needed to lift the market, seeing as some data suggests that this trend will continue into October.
Seeing that there might be opportunity for the gas industry to have success in the upcoming months is important for the businesses so that they can begin planning on how to maximize the success.
Also mentioned, the storm is endangering 11% of the US gas production companies. Globalization here helps the US to still attain oil by other means. Although they are able to attain it, if the 11% of companies take a hit from the storm, gas prices will most likely rise again.


-Nicole Lombardo

Greenpeace threatens to sue UK Government

The British government has decided to continue to grant licenses for deep water offshore drilling before the causes of the BP oil spill in the Gulf of Mexico has been determined. Lawyers for Greenpeace have written to Chris Huhne, energy and climate change secretary, asking the British government to follow the US and delay any deep water drilling. Greenpeace asks that they stop the licensing process for any current offshore drilling and look into the investigation of the areas.

Greenpeace is upset that the UK government is allowing the deep sea drilling to continue as if the BP spill didn't happen; because no one has figured out what the exact problem is, all licenses need to be suspended. The US has delayed the building of any new wells until all investigations are clear, the European energy commissioner issued a similar demand. Greenpeace has requested a response within 14 days; if not given response then they will claim for a judicial review in order to pursue the lawsuit.

-Kelsey Tomlinson

Mariner Energy Inc. Experiences Another Fire

One of the things Mariner Energy Inc. is known for is the frequent fires they experience with fires and safety issues. This again occurred on Thursday when their platform on the Gulf of Mexico had caught on fire. Since 2007, the company has experienced 16 fires on their platforms right off of the Gulf of Mexico. In 2009, the company experienced 2 of these 16 fires. Though these spills, injuries, and fires are not unusual it is a little concerning that they have been happening so frequently with a huge enterprise like Mariner Energy Inc.

Mariner Energy Inc. is a large oil and gas company that is based out of Houston, TX. In April Mariner Energy agreed to be bought by Apache Corp. for $2.7 billion in cash and stock. Though this deal has yet to close, this is very important since Mariner gets more than 85% of it's oil and gas from the Gulf of Mexico. That is also why fires are such a big deal for this company. They cannot afford to keep having these troubles since they rely on the Gulf of Mexico so much.

The pump that caught on fire Thursday, which is known as a Vermillion 380-A, was built in 1980 and has been pumping gas ever since then and has never experienced any troubles with fires and such. At the end of August, this platform had been pumping about 2,930 barrels/day. Though these fires have been occurring frequently, Brian Lively, an analyst with Tudor Pickering Holt & Co. which is also based out of Houston said that these fires will not interfere with the acquisition. But Apache was not going to comment on the story

-Michael Sheinfeld

Petrobas plans to harvest 5 billion barrels of oil from the Brazilian government

Petrobas is paying the Brazilian government 42.5 billion dollars to harvest 5 billion barrels of oil in government held areas, or approximately 8.51 a barrel for the rights to produce it.

This should not drastically effect the price per barrel for Petrobas because Petrobas wont have to pay special participation taxes on this oil.

Petrobas will use some of this profit to invest in a 4 year plan to double its oil output to 3.9 billion barrels a day. Most of the 224 billion dollar investment will be for drilling off Brazil's south-central coast. This would make Brazil the 5^th largest producer of oil and would place Brazil in the top 10 producers of exports.

This increase in the supply of crude oil will help to keep the price at a controlled level over the next few years. While Portubas doubles its daily output of crude oil it could potentially become an important trader with the United States. Aside from the obvious benefits of trade this would also relieve U.S. dependence on Middle Eastern oil.

Thomas Langevin

Crude Oil Prices Are Rising

Even though it is believed that the United States economy is in a recovery stage, the price of crude oil has recently been low. On Septemper 2, it took a surprising turn and the price raised $1.11 making the new price of a barrell $75.02. The October delivery will be at this price according to the New York Mercantile Exchange. However, on the ICE future exchange the price has been settled on $76.93. It is believed that the increase in the oil demand signifies a healthier economy. Claims for unemployment benefits have fallen by about 6,000 in recent months and this is most likely the reason for the increase in factory orders which in turn will bring a rise in transportation products. These products are the main users of oil and fuel; therefore, creating an even higher demand in fuel.

Currently the major occurance that could have an impact on the price of oil is the impending Hurricane Earl. This hurricane, along with many of the others that will be expected to occur in the Atlantic during this hurricane season, could potentially have a major negative impact on oil production. This and the fact that our country's supply of oil is currently the highest it's been in almost 30 years has been the reason the price of oil has been kept in such a tight, less expensive, range. This industry is on rocky ground right now, but this could definitely be a light at the end of the tunnel for the oil industry.

-Ashley Luddy