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