Archive for the ‘coal’ Category

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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Coal Trader: Making LNG the fuel of choice for US railroads

The nation’s seven Class I railroads spent $11.5 billion on diesel in 2012. Given that LNG costs roughly half as much as diesel, the majority of the railroads have announced plans to test LNG-fueled locomotives.

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Vermont’s natural gas paradox and its German parallel

We don’t want to keep picking on Vermont. (Maybe we do. The story sort of writes itself.)

But the latest developments there are more interesting chapters in a state that wants to be the greenest in the nation, but keeps running into what some people there might see as “unintended consequences.” But they are utterly predictable to anybody who understands energy tradeoffs.

So here’s a summary of the last few weeks in the Green Mountain State:

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Why did Obama’s climate speech land with a dull thud?

Swallowed up by the Edward Snowden story, a landmark Supreme Court decision on same-sex marriage, immigration reform and even the start of the George Zimmerman trial, President Barack Obama’s long-awaited plan to combat climate change failed to capture America’s hearts and minds last week.

Sure, the plan drew some acclaim from environmentalists, a wave of criticism from fossil fuel interests and a sharp rebuke from congressional Republicans, and even some coal-state Democrats, that Obama was continuing his “war on coal.” But the responses were little more than press release bluster and widely expected.

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