Archive for the ‘coal’ Category

US Supreme Court opens the “BACT” door for EPA on CO2, but it could swing two ways

The US Supreme Court last week rejected the methodology the Environmental Protection Agency used to implement its first-ever regulations on carbon dioxide emissions, but did lay out a path the agency can follow to achieve the same end by using the Clean Air Act’s the “Best Available Control Technology,” or BACT, provisions.

And although the ruling could be viewed as a win for EPA, it may end up being a victory that does not advance the agency toward its ultimate goal.

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Letter from the IAEE meeting: competitive response

To visit an energy conference in New York, or perhaps anywhere in the United States, is to feel the full force of the shale gale that has swept across the US oil and gas industry, transforming the country’s domestic and foreign perspectives. Its founding fathers have achieved legendary status and are provided the veneration that only America appears capable of giving business leaders.

Shale is variously described as a “revolution,” even a “miracle.” Benjamin Schlesinger, president of Benjamin Schlesinger and Associates, went that one step further to state that “natural gas is a renewable fuel.”

This was the international conference of the International Association for Energy Economics held in New York from June 15-18, where it was clear that America is the cat that has got the cream. It is the crucible of the revolution in drilling technology that has reduced the cost of previously unrecoverable oil and gas resources to affordable levels, and it is beginning to export those technologies to the rest of the world. It no longer has to concern itself with existing and emerging import dependencies. Instead it is discussing the possibility that it may soon be a net exporter of oil.

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Can energy sources get bigger and slower in a world going the other way?

Robert Bryce is no easy-to-pigeonhole right-winger. “The Second Iraq War, costing more than $800 billion, will be remembered as one of the biggest strategic errors in modern US history,” he writes in his new book, Smaller Faster Lighter Denser Cheaper. That comes soon after he says “I’ve never believed in American ‘exceptionalism,’ whatever that dubious term might mean.”

The main premise of Bryce’s new book is that lots and lots of things are getting SmallerFasterLighterDenserCheaper, and he strings together those five words into one word frequently in his book.

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What is India’s BJP thinking about the country’s energy policy?

India’s oil and gas sector saw some unprecedented decisions taken last year under the Congress Party-led government.

These ranged from a partial deregulation of diesel prices to a new gas pricing mechanism that would have seen the wellhead price of gas double to over $8/MMBtu. However, the hike — which was ratified twice by the Cabinet — was never implemented as scheduled on April 1 due to India’s upcoming elections.

The Congress-led government last year also started revamping and streamlining upstream policy to incentivise exploration and production.

All in all, 2013 was a busy year for journalists as we struggled to keep pace with and understand all that was going on in India’s energy sector.

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The continuing demise of US fuel oil consumption

When commentators talk about the US cutting its oil consumption, they often cite the reductions in usage that were spurred by the first oil shock in 1973-1974. “See,” they say. “We did it back then, and we can do it again!”

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What they often fail to note is that one of the ways in which the US did dial back on its oil consumption is by drastically changing over its use of fuel oil for electricity generation to lots of other things: coal, natural gas, nuclear, alternatives. In 40 years, there have been plenty of things.

But the fact is if you’ve all but zeroed out your consumption of fuel oil, you can only do that once. That’s why the whole “we can do it again!” comes up short.

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The changing world of energy commodity trading

The world of energy commodity trading has gone through a rather extensive reshuffling over the past few months. The key thing to note is that banks involved in energy have pulled back from the sector while merchant traders known largely for their secrecy are strengthening their position.

The most notable deal came last week when Swiss-based merchant firm Mercuria agreed to buy the entire physical commodity trading business of JPMorgan Chase for $3.5 billion. Mercuria, which is headquartered in Geneva and is predominantly a crude and refined products trading shop, has a team of approximately 1,200 people working in some 37 offices around the globe and has annual “turnover,” or essentially gross annual revenues of around $100 billion.

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Key steel themes in 2013 will impact markets this year

The past twelve months saw a number of developments in global steelmaking raw materials markets, most of which will have a bearing on markets in 2014:

Chinese steel output unstoppable: Despite a steel sector that seems permanently bearish, full of cash-strapped traders, unprofitable mills and stuttering end-user markets, China keeps on making more steel. Crude steel production in 2013 rose 7.5% year-on-year to reach around 780 million mt and the Asian giant is expected to produce close to 810 million mt this year. Even if output starts to plateau, incremental increases on such a large base will continue to drive strong demand for raw materials.

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Energy Economist: The burden that Japan is facing in its higher energy costs

Energy costs in Japan are reaching a critical point. The economy is growing too slowly to offset the burden of increased commodity energy imports. Renewables will add further costs. Bringing the country’s nuclear capacity back on-line appears to be the only option, but the process is proving slow. As it progresses, Japanese oil imports will fall, but LNG and coal usage in fiscal 2014 are still expected to reach historic highs. Ross McCracken looks at the issue in this month’s entry to The Barrel from Platts Energy Economist.

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There’s nothing romantic about pirates, and they’re very much still around

Hollywood’s latest depiction of piracy on the high seas on the silver screen in Captain Phillips may not have been an accurate portrayal of the real character of Richard Philips himself, if the critics are right — I have never met him so am in no position to judge — but it did serve to alert a broader audience to the scourge and danger of piracy that remains a menace to international shipping and, more importantly, a threat to the lives of innocent seafarers.

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Energy Economist: The ambition to reach zero coal consumption

Whether practical or not, the unstated implication behind current emissions abatement policies is that zero coal-fired generation is the ultimate ambition. However, the reality is that zero coal can only be contemplated from a privileged, developed world perspective, and even then no coal at all may prove to be a sub-optimal solution. Ross McCracken discusses that perspective in this offering taken from the pages of Platts Energy Economist.

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