September 30, 2009
Greenpeace takes action again, blocking Suncor tar sands operations International activists join Canadians in saying no to tar sands
Greenpeace Canada
September 30, 2009
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Fort McMurray, Canada — Greenpeace activists are disrupting Suncor operations today in the heart of the tar sands north of Fort McMurray by stopping two bitumen conveyor belts to highlight the climate crime of tar sands operations.
The 23 activists from Canada, France, Brazil and Germany entered the site early this morning. A team went to the open-pit mine and is stopping the conveyor belts that carry bitumen from the mine across the river to the upgrader. The activists are joined by Greenpeace Canada executive director Bruce Cox.
Live streaming video is at www.greenpeace.org/stoptarsands
Today’s action comes two weeks after Greenpeace successfully stopped a mining operation at Shell and just a week after Rajendra Pachauri, head of the Intergovernmental Panel on Climate Change (IPCC), the world’s leading body on climate science, said that Canada is failing on climate action, and should consider putting the tar sands on hold.
“Greenpeace has taken action here today in the heart of climate destruction to drive the message home to world leaders that we need urgent climate leadership, and that means stopping the tar sands,” said Bruce Cox, Greenpeace Canada Executive Director. “We are here to drive the message home to world governments that we need urgent climate leadership, and that means stopping the tar sands.” —Bruce Cox, Greenpeace Canada Executive Director from the bridge blockade.
“Greenhouse gas emissions are just one element of the crimes happening in the tar sands. Around 11 million litres of toxic chemicals, including carcinogens and other deadly poisons are leaking into groundwater and the Athabasca and poisoning entire communities. Their food is contaminated, their water unsafe to swim in, let alone drink. This is not what the world expects from Canada, but it’s the grim reality.”—Mike Hudema, Greenpeace climate and energy campaigner.
See also:
Tar sands action 1: Activists block tar sands mining operation to send message to Obama and Harper: Climate leaders don’t buy tar sands
September 28, 2009
As Oil Enriches Australia, Spill Is Seen as a Warning
COMMENT: Some statements from this article:
By MERAIAH FOLEY
New York Times
September 27, 2009
SYDNEY, Australia — Visitors hoping to peek at Australia’s exotic marine life usually head straight for the Great Barrier Reef. But conservationists say that an equally remarkable, but lesser known, marine environment is under threat from the booming oil and gas exploration taking place among the reefs and atolls off Australia’s northwest coast.
 Oil and gas leaking from a well in the Timor Sea, about 155 miles off the northwestern coast of Australia, on Sept. 12. (Environs Kimberly, via Reuters) |
A damaged oil well in the region has been spewing thousands of gallons of crude oil into the Timor Sea since Aug. 21, when a blowout forced the evacuation of all 69 workers on the platform. Emergency crews have been working overtime to contain the spill, but officials say it could take about three more weeks to plug the leak.
The platform is above the Montara oil field, about 155 miles northwest of Mungalalu Truscott Airbase in the remote Kimberley region of Australia. The leaking well head is owned by Thailand’s national petroleum company, PTT Exploration and Production, one of many energy companies that have set up operations in western Australia to feed Asia’s growing appetite for oil and gas.
In the first half of this year, more than 50 wells were drilled in the tropical waters off western Australia, adding to hundreds of other recent projects. Last month, the government gave Chevron the green light to expand its exploration of the huge Gorgon gas field, a $40 billion project that was opposed by conservationists because of its potential environmental impact.
Economists credit the booming trade in petroleum and other mineral resources for helping Australia escape the brunt of the global economic downturn, but environmentalists say this prosperity comes at a price. They say the Montara oil spill is merely a sign of things to come unless greater protections are extended to vast stretches of tropical reefs off northwestern Australia.
“It’s a classic conflict between development and the ecological values of the region,” said John Carey, manager of the Kimberley Conservation Program with the Pew Environment Group. “We need to get the balance right. But the balance at the moment is that less than 1 percent of this globally significant area is under any form of protection.”
The Thai oil company said it was still investigating what had caused the blowout. To stop the spill, the company has hired a specialist rig to drill 1.6 miles below the seabed and flood the area with heavy mud.
But such highly specialized equipment is not easy to come by. It took three weeks to tow the rig from Singapore.
The company has declined to estimate how much oil has spilled into the sea, saying it is too dangerous to take accurate measurements from the damaged rig. The company and Australian maritime officials, who are helping to clean up the spill, say that the slick is around 25 miles wide and 85 miles long, but that the leakage appears to be slowing.
The federal environment minister, Peter Garrett, said this month that the government believed that 300 to 400 barrels of oil were leaking into the sea each day. That amounts to more than 450,000 gallons of oil, and unknown quantities of gas and condensate, since the blowout began. By that count, the Montara leak is relatively small. The Exxon Valdez, by comparison, dumped around 11 million gallons when it ran aground off the Alaskan coast in 1989.
The oil slick has not reached any coastlines, thanks in part to mild weather conditions and efforts by the Australian government to break up the slick by spraying it with chemical dispersant. But conservationists worry that the spill could take a heavy toll on marine animals that feed and travel on or close to the ocean’s surface.
“We need to shatter the myth that an oil spill is only a problem when it washes up on beaches,” said Gilly Llewellyn, the manager of conservation programs with WWF-Australia.
PTT, the Thai company, has said it is committed to helping clean up the spill and plans to conduct environmental monitoring of the region to assess the damage. Australia’s energy minister, Martin Ferguson, has announced plans for a thorough investigation into the cause.
Mr. Ferguson and the Australian Petroleum Production and Exploration Association, which represents 98 percent of oil and gas operators in the country, have defended the industry’s record, saying the Montara well head leak is the first offshore blowout since 1984.
Marine researchers and conservation groups say they are realistic about the economic drive to continue developing the region, but want the government to designate more marine sanctuaries and to enact stronger environmental regulations in western Australia. The government is expected to release a strategy for the region next year.
“You can’t stop production; this is a huge area of future exploration,” said Nic Bax, the principal investigator of the Marine Biodiversity Research Hub. “We need to make sure we’re working cooperatively with industry to work out what is the best and safest way to do this.”
Past spills and ongoing risks of oil companies are omens
By BOB SHAVELSON
Anchorage Daily News
September 24th, 2009
 Bob Shavelson is Executive Director of Cook Inlet Keeper, a citizen-based nonprofit organization with offices in Anchorage and Homer. |
Now, we're seeing the very same historical shape-shifting with the Drift River Oil Terminal incident.
Chevron operates the Drift River Oil Terminal at the base of the Mount Redoubt volcano in Cook Inlet. When Mount Redoubt awoke in late 2008, Chevron refused to disclose how much oil remained in its storage tanks.
Why?
The Homeland Security Act -- al-Qaida apparently posed a greater threat to our fisheries than a simmering volcano. When Redoubt's massive eruption on March 22 sent trees, mud and debris through the facility, Chevron finally revealed the truth: More than 6 million gallons of oil remained perched above our salmon, cod and halibut fisheries.
Chevron knew the risks. The same scenario unfolded during the 1989-90 Redoubt eruption. They reinforced protective dikes, but reinforced dikes can only do so much against the forces of nature. In fact, volcanic floods this year over-topped the dikes, showing the dikes had no safety margin for a slightly larger eruption.
Despite months of warning, there was no actionable plan in place to address a catastrophic spill from the facility. The spill plan required by laws passed after the Exxon Valdez didn't address a 6 million gallon spill, and it didn't even envision oil from the tank farm hitting open water.
In what should have been a day, it took more than a week to activate a Unified Command to coordinate spill prevention and response. And most disturbingly, the initial response priorities were not to protect our invaluable fisheries, but instead to ensure the continued flow of oil.
Chevron also had no plan to address significant economic losses when the facility went offline. Aside from contractor layoffs and their debilitating effects on local families, Alaska lost up to $2 million a month in revenues while the facility remained closed, according to state figures.
Finally, Chevron repeatedly put workers in harm's way at Drift River, and in some cases left them stranded on the ground while eruptions, lightning and lahars raged around the facility. Oil field work is dangerous enough, and the bravery of those who went back into Drift River at the peak of seismic activity was exceptional.
Had Chevron truly been concerned about worker safety, it would have reconfigured the facility to bypass the tank farm prior to the latest eruption. That way, the size of the eruption would not have been a risk factor, operations would not have been so drastically disrupted, and fewer people would have been put at risk.
Chevron Corp. knew all this, but its only plan was to hunker down and hope for the best. Hoping for the best, however, is not a lesson we learned from the Exxon Valdez.
So, we dodged a bullet at Drift River. Yet to hear the corporate public relations machine recount the story, you would think the Drift River response was flawless. No oil spilled, no injuries. No harm, no foul.
We appreciate all the incredible work done to help avoid a catastrophe, but whitewashing this incident prevents us from learning from our mistakes and having better preparedness and worker safety in the future.
The fact remains the Drift River Oil Terminal incident stands as the most significant breakdown in spill prevention and response in Alaska since the Exxon Valdez. That breakdown put our fisherman, workers and countless families and businesses around Cook Inlet at extreme risk. And know that what we see in Cook Inlet will invariably unfold in Bristol Bay and the Beaufort and Chukchi Seas if we allow our governments and the corporations to push into those frontier waters.
Bob Shavelson is Executive Director of Cook Inletkeeper, a citizen-based nonprofit organization with offices in Homer and Anchorage that is dedicated to clean water and healthy salmon.
COMMENT: Mt. Redoubt eruptions took place overnight, in the dark, so the only photographic images of the event are from preceding days and the day after. This YouTube video gives time-elapsed images of steam venting on March 15, seven days before the event. More information and a large collection of images of Mt. Redoubt are available at the Alaska Volcano Observatory. March 23, 2009 are the first images after the major eruptions on the night of March 22.
 Location of Redoubt volcano, in relationship to surrounding towns, roads, and other volcanoes. Picture Date: September 26, 2008; Image Creator: Schaefer, Janet; Image courtesy of the AVO/ADGGS.; Source |
Redoubt - Hut webcam image from March 23, 2009 at 20:43:47; Picture Date: March 23, 2009 20:43:47; Image Creator: Redoubt Hut webcam; Image courtesy of AVO/USGS.; Source |
 Massive flooding in Drift Valley from the eruption of Redoubt Volcano. High-water marks on the valley walls estimated to be about 6-8 meters (20-25 ft.). View is up-valley from about mid-way up valley to the Drift Glacier. Picture Date: March 23, 2009; Image Creator: McGimsey, Game; Image courtesy of AVO/USGS; Source |
 Photos of the flooding in Drift Valley and tephra deposits from the eruption of Redoubt Volcano. Picture Date: March 23, 2009; Image Creator: Read, Cyrus; Image courtesy of AVO/USGS; Source |
Will the Electric Car Ever Make It to the Mass Market?
By Christian Wüst
Der Spiegel
September 16, 2009
From internal combustion to electric (Der Spiegel) |
Part 1: Will the Electric Car Ever Make It to the Mass Market?
Not Much Will to Power
Germany's automakers are proudly showing off their concept electric cars at the Frankfurt motor show, which opens to the public Thursday. But the shiny new designs on display are just a pipe dream. It's still not clear when, or even if, viable electric cars will make it onto the mass market.
Amid widespread concerns about global warming, it's practically official policy at the European Commission these days to see electricity consumption as a sin. The bureaucrats in Brussels have recently gone so far as to ban the production of 100-watt incandescent light bulbs.
So far, however, there have been no limits set on a much bigger consumer of electricity -- the automobile. When the 63rd International Motor Show (IAA) opens to the public this Thursday in Frankfurt, visitors can check out designs for electric cars whose power rating will exceed that of the banned bulb by a factor of many thousands.
Mercedes-Benz will be showing a 392-kilowatt concept electric sports car, while Audi is presenting a similarly powerful electric version of its top-of-the-range R8 model. BMW will demonstrate alternative engine systems with its "Vision Efficient Dynamics," a hybrid composed of a three-cylinder diesel engine flanked by two electric motors, which is supposed to have a top speed of 250 kilometers per hour (155 miles per hour). "Economizing is getting sexy!" is the verdict of the German car magazine Auto Bild.
But before environmental organizations show up to point out the real carbon footprint of such energy guzzlers, the manufacturers would do well to point out an important fact up front, namely that such high horsepower electric cars are not market-ready, and not a serious option even in the long run. Even the best batteries would run out within a few minutes of being driven at full power.
Pure Fantasy
And so the first IAA to take place in the age of the electric car proves one thing above all -- that giving up gasoline, which can still provide energy in abundance, won't be easy. The desire to create similarly powerful engines using electricity is, for the time being, pure fantasy.
Nonetheless, a conviction seems to have spread throughout the industry that there will be a mass market for electric cars, and that it will probably happen in the decade between 2020 and 2030. Developers estimate that by then storage capacity will have increased two- or three-fold. That could be enough, at least for a car with a small engine.
Electrochemical parameters still set rather narrow limits on the potential of electric cars. The best lithium-ion batteries currently weigh slightly less than 10 kilograms (22 pounds) per kilowatt hour. The first small-series production cars, such as those from Smart or Mitsubishi, have a capacity of 16 to 20 kilowatt hours. That's the equivalent of the energy content of about two liters (0.5 gallons) of gas.
Manufacturers calculate this can provide a driving distance of 100 kilometers (62 miles) or more. But these consumption measurements use extremely slow standard driving cycles as their basis -- the ideal conditions for an electric motor.
Short Range
In practice, these figures could shrink by as much as half when higher speed driving is combined with further sources of energy consumption such as heating or air conditioning. And who wants to buy a car whose range is so small that even a short trip to the outskirts of town would entail constant worries that the batteries might die? One BMW manager sneers that "people won't be able to think about anything but electrical outlets."
In addition, this extremely limited mobility comes with a very high price tag. Lithium batteries with a capacity of 20 kilowatt hours cost around €20,000 ($29,000). That price should sink by about a third when the batteries one day go into mass production. This is the manufacturers' second big hope -- the batteries eventually need to be three times as good and three times as cheap as those available today. Then things start looking more promising for the electric car.
Until electric cars really do hit the streets en masse, so-called plug-in hybrids present a practical interim solution. These are cars that include a conventional internal combustion engine along with the electric motor. Toyota, the pioneer in hybrid technology, has followed precisely this pragmatic path, and will be showing the plug-in version of its Prius model at the IAA.
This partially electric vehicle has a comparatively small battery pack, which is charged from an electrical outlet and can power the car for about 20 kilometers (12 miles). Once the charge is used up, the gasoline-powered motor kicks in, and the ride continues with an economical hybrid system that continues to switch between the electric and combustion engines.
Daimler too will present an S-Class model with a plug-in hybrid system in Frankfurt. The car's energy consumption, fuelled by both gasoline and the power grid, is supposed to be equivalent to a conventional vehicle with a fuel efficiency of three liters of gas per 100 kilometers (78 miles per gallon). This constellation should be ready for series production with the next generation of the company's luxury model in 2013.
Gradual Evolution
This approach -- using a gradual evolution of hybrid technology to eventually reach purely electric-powered vehicles -- is the only plausible strategy. But Western manufacturers are perceptibly lagging behind. The previous IAA, in September 2005, marked a turning point. At the time, car companies in Europe and the US admitted to having missed the boat. Without exception, they all announced their own hybrid systems.
The gap, however, is still enormous. Toyota has already sold more than a million hybrid cars. Volkswagen dealerships, meanwhile, have yet to see a single one. It's the same with Opel, Peugeot, Fiat and Renault. Mercedes is currently producing a very limited number of S-Class hybrids, about 40 a day. They have a so-called "mild hybrid" engine -- a simpler variation following Honda's example, in which the electric engine can only act as support, not power the car alone.
The far more ambitious full hybrid system has been presenting developers with formidable hurdles. Mercedes, BMW and General Motors spent four years on a project called "Two Mode." It outdid Toyota's system considerably in terms of complexity -- and also ended up being far too expensive. The elaborate electromechanical systems created in the project will be used in a few hefty sport utility vehicles and then disappear off the market again. All the participating companies have agreed not to continuing developing the system.
Volkswagen together with its new subsidiary Porsche wanted to present the hybrid versions of their Touareg and Cayenne models at this year's Frankfurt motor show, but they still haven't got the project under control. Integrating a full hybrid system into a traditional powertrain requires a very complicated control system. Both vehicles won't be released until next year, and they'll also be sold at a very high price -- to which the manufacturers are apparently still adding. "We can congratulate any customer who decides against the Touareg hybrid," one VW manager admits.
There is a certain bitter humor in the fact that the same companies which are delivering such pitiful results when it comes to relatively basic electric car technology also want to make IAA visitors believe they already have electric sports cars in the works.
Part 2: German Companies Play Catch-Up
In any case, the arduous pursuit of the electric car has created centers of expertise, albeit less with the car manufacturers than with their suppliers. While Toyota develops nearly all its electrical motor components in house, down to semiconductors and batteries, its Western counterparts outsource this area.
Many car companies and suppliers have now forged relationships with battery manufacturers. The field is largely dominated by Japanese and South Korean producers. German auto parts producer Bosch relies on Samsung, VW gets components from Toshiba, among others, while Opel works with LG Chem in South Korea. Only Daimler gets its electronics locally, from an Evonic subsidiary in eastern Germany called Li-Tec.
"Three to four major battery producers will prevail in the end," estimates Bernd Bohr, the head of Bosch's automotive group. He believes that large system suppliers like Bosch will dominate the market when it comes to the integration of electric engine components, especially the development of the power electronics that control the flow of electrical current.
Stuttgart-based Bosch was long considered Germany's champion as far as automobile electronics were concerned -- even if the focus was previously on the combustion engine. After all, the company logo even features an armature from a magneto ignition.
However Bohr admits that Bosch underestimated the hybrid and electric engine business for too long and entered the field too late. But he believes his company is catching up. "Bosch has always had considerable stamina when it has to sprint," he says. He adds that order volume for hybrid and electric engines is now looking good.
Bold Plans
Noticeably better positioned is a competitor usually associated more with rubber tires, although more recently it gained a doleful prominence as the object of a corporate takeover which ended in tears. Continental, of all companies, is Germany's pivotal technology company in the field of hybrid and electric engines.
The company was already producing the first hybrid components for GM five years ago, and so far Continental has invested more than €500 million in the segment. About 800 employees -- around twice as many as Bosch employs in the sector -- work here on more than 20 projects related to electric motors, including Mercedes' S-Class hybrid, the electric Smart, and the Opel Ampera.
The most spectacular electric car project to be announced so far will apparently also take to the streets with Continental technology. The French-Japanese alliance of Renault and Nissan has signaled that it will soon be manufacturing 100,000 electric cars a year -- a bold plan.
In the run-up to the IAA, Continental was planning to reveal that it has started to develop the central engine components for an electric vehicle which will be launched on the market in large-scale production in 2011. The supplier isn't at liberty to say which manufacturer is involved in this project, but in this case the point is moot -- aside from Renault/Nissan, no other company has comparable plans.
Revolutionary Concept?
The mass-produced electric car is supposed to help Shai Agassi's "Better Place" project to get off the ground. A former board member at the software giant SAP, Agassi was a shooting star in the IT industry and now seems to be taking over the media role that the entrepreneur Nicolas Hayek, a co-founder of the watch company Swatch, occupied in the 1990's. Hayek seduced the industry's major players with his vision of an ultra-ecological "Swatch car," ultimately winning over VW and later Daimler as partners. The end result was the Smart car, a purely Daimler product with some memorable birth defects.
A similar development is foreseeable with Renault and Better Place. Agassi has taken on the role of the virtuoso public speaker, calling his company "the leading electric vehicle services provider," without much substance to show for it. The battery switch stations that are supposed to be Better Place's great idea will for the time being only be available in limited numbers in Agassi's native Israel. And the project's revolutionary concept still relies on the time-tested electrical outlet.
In the end, all car companies are going to have to tackle this problem. It's not the infrastructure for electric cars that's missing, but practical and affordable storage technology.
Renault and Nissan are risking the leap to series production using batteries from the Japanese manufacturer NEC. The goal is an impressive capacity of 24 kilowatt hours. But the prototypes shown so far have had little over half of that.
September 27, 2009
Study shows high level of potentially toxic air pollution in DISH
COMMENT: This is the second article from Fort Worth we've posted recently. Three days ago, it was about Quicksilver Resources, a Texan company, and its stunningly productive new well from the Horn River shales in northeast BC.
Texas & BC, the Barnett shale and BC's Horn River and Montney shale plays.
This article is about pollution from the compression and processing facilities which handle the gas from the Barnett shale.
Hello. Little observed fact: all the gas in northeast BC also needs to be compressed and processed. Don't think it doesn't emit the same nasty stuff that is reported in this study from Texas.
Encana is building the huge Cabin Gas Plant in 60 km northeast of Fort Nelson. The first phase alone, twice the size of the largest gas processing facility in the province, is estimated to cost $400 - $500 million and will process 400 million cubic feet per day (BC's total production is about three times that, and we're already producing 600 mcf from shale). At full build-out the plant will handle 800 mcf daily.
But heck, the provincial government has no monitoring capability, and has no desire to obstruct or deter the big gas investment. Out of sight, out of mind. Animals of other species might suffer the toxic consequences.
And the greenhouse gas emissions? Well, they'll just be vented - all 2 million plus tonnes per year. If suitable nearby disposal areas are proven up, and IF suitable federal and provincial subsidies are made available, the company may be able to sequester and reinject the CO2 (and the H2S) from the plant. Otherwise? It becomes the biggest single source of greenhouse has emissions in the province.
So pay some attention to this report from Texas where a heck of a lot more people live near the Barnett shale plays. If this is what industry gets away with there, just think of what it can get away with 60 km northeast of Fort Nelson.
As to who is paying attention, the answer is virtually no-one - other than government and industry. The public comment period on the Environmental Assessment expired on August 21. Four, that's FOUR, comments were received. Ignace Burke made the point that he and his family live only 5 km from the plant site, but that "nobody mentions that to you people." Karen Campbell and Matt Horne of Pembina Institute submitted the only substantial comment, demanding in effect that all carbon emissions be sequestered and that the downstream carbon emissions from end-use of the gas also be attributed to the project. Yea. Nice try. Fat chance.
This is not an accusation, but it has been proved countless times that the government will not serve as a watchdog for citizens, so citizen watchdogs are essential to protection of our health, our communities, and our environment. What can we do where the citizen watchdogs are non-existent, or unable to take on the work?
Project site at the Environmental Assessment Office
See also:
Gas plant must curb emissions, watchdog says
Multibillion-dollar gas plant planned in B.C.
Huge gas project set for 2011
Curious about the unusual spelling - all capitals - of DISH?
Wikipedia says:
DISH is a town in Denton County, Texas, United States. The town had an estimated population of 181 as of July 1, 2008, according to the United States Census Bureau. Formerly called Clark, the town was officially renamed DISH (all capital letters) on November 16, 2005.The municipality was previously named after its founder, Landis Clark, who incorporated it in June 2000 and served as its first mayor. Clark was beaten by one vote in the Spring 2005 election by Bill Merritt.
In exchange for renaming the town, all residents of the town have received free basic television service for ten years and a free DVR from DISH Network. There was no formal opposition to renaming Clark; twelve citizens attended the council meeting to support the measure.
Dish Network Corporation is a direct broadcast satellite service provider that ... serves approximately 13.58 million subscribers.
Imagine that. Are you ready for Encana BC?
By MIKE LEE
Star-Telegram (Fort Worth)
Saturday, Sep. 26, 2009
A new study shows high level of potentially harmful air pollution in the town of DISH in Denton County.
DISH sits next to several large compressor stations, which process natural gas from the Barnett Shale and pressurize it for shipment across the country. Residents have complained for years about the smell and the noise.
The study, done by Wolf Eagle Environmental and paid for by the Town Council, found high levels of 15 chemicals, including benzene, xylene, naphthalene and carbon disulfide at five of seven test sites. In some cases the levels were 10 times the recommended level for short-term exposure, and some levels were high enough to be an immediate danger, according to the study. It said, however, that the results were only a one-time snapshot.
Mayor Calvin Tillman, who has been fighting the pipeline companies for about a year, said the study proves that state regulators need to take action.
"I don’t believe this was a one-day event," he said. And even if it was, "you still broke some thresholds for short-term exposure to these chemicals."
Terry Clawson, a spokesman for the Texas Commission on Environmental Quality, said the agency was already planning testing for airborne toxins in Denton County.
The companies that run the compressor stations, including Atmos Energy, Chesapeake Energy, Enbridge, Energy Transfer Partners and Crosstex Energy, paid for a study in DISH this year that concluded that gas levels in the air weren’t high enough to be dangerous.
However, that study didn’t check for toxic chemicals, said Scott McLAren of Apogee Scientific, who conducted the survey.
"We were only looking for leaks in natural gas pipelines," he said.
Still, two of the companies referred to the previous study when asked about the latest study.
"We believe we’ve taken ample steps to communicate the details of our investigation to the mayor and will continue to monitor our operations in the area," said Jill McMillan of Crosstex Energy.
Justin Bond of Chesapeake Energy said, "The last time several operators spoke with Mayor Tillman and presented this information, he complimented our efforts."
Mike Lee, 817-390-7539, mikelee@star-telegram.com
Read the DISH, Texas, air study (pdf)
September 25, 2009
Canada and climate change: Nothing gets done, fingers get pointed
Jeffrey Simpson
Globe and Mail
September 25, 2009
 Global warming simply is not an issue on which Prime Minister Stephen Harper wants to expend one ounce of political capital. (REUTERS) |
The Liberals' lame record doesn't excuse the Conservatives' part in our national shame
The “tragedy of the commons” occurs when something – a pasture, a lake, a fish stock, the atmosphere – becomes degraded by the actions of all.
No single action by a person, property owner or government causes the degradation, and no single action will materially reverse the negative trend. So nothing gets done, fingers get pointed and the “commons” degradation continues.
The world faces its greatest tragedy of the commons with the warming of the planet's atmosphere that is overwhelmingly caused by human activities, especially emissions of carbon dioxide and methane. Crank scientists and their dwindling band of supporters contest this warming, but the overwhelming majority of scientists have declared it to be a fact. Indeed, the latest scientific evidence suggests an acceleration of warming trends.
Although some are far more than others, no one industry or country is responsible. So, for example, in Canada, which produces roughly 2 per cent of the world's emissions, it is easy for those who want little or nothing done at home to point fingers at others.
Creating 2 per cent of the world's emissions is actually a terrible record for a country with a population of just 33 million. On a per capita basis, Canada is one of the worst emitters on the planet.
Canada's emissions record is the worst in the industrialized world, because since a previous government signed the Kyoto accord, the country's emissions have grown by 27 per cent, instead of declining the promised 6 per cent. The latest government report has shown Canada's emissions rising again after a slight decline in the previous two years.
You might think that for a country bathing in its own moral superiority, believing “the world needs more Canada,” this record would be a source of national shame, such that citizens would demand the government take a leading role in reversing the domestic record while urging the world to do much more to reverse the ominous trends.
If so, you would be wrong.
The Liberals' record on this file while in office was appalling. Never forget this. But the Liberals' dreadful record of empty rhetoric, failed plans and false targets does not excuse the Conservatives' lame efforts since arriving in office.
Global warming simply is not an issue on which Prime Minister Stephen Harper wants to expend one ounce of political capital. Earlier this week, while other world leaders took the podium for a special United Nations session on climate change, he preferred a meeting and photo opportunity with the mayor of New York. He did attend a private leaders' dinner, but then rushed back to Canada for another of his patented economic “announcements” at a Tim Hortons facility.
Mr. Harper sent Environment Minister Jim Prentice to the UN, where he criticized the Chinese and Americans for not presenting carbon reduction targets, despite the fact that every expert in Canada (and many overseas) knows that Mr. Harper's own government's target – a 20-per-cent reduction by 2020 – cannot possibly be met under current policies.
Not for Mr. Harper the kind of carbon tax being imposed in France by President Nicolas Sarkozy. Not for him the urgency with which Britain's Gordon Brown, Germany's Angela Merkel and Australia's Kevin Rudd approach climate change. Not for him the moral imperative that infuses President Barack Obama's speeches on the subject, although congressional politics will ultimately dilute his actions.
No, climate change is something Mr. Harper has been forced to tackle with the greatest reluctance. He was long a skeptic about the science, and he has always feared the economic fallout of serious action.
Politically, he has calculated that action on climate change doesn't have any upside for his party, since few voters associate the Conservatives with environmentalism. He certainly does not want to upset anyone in the fossil-fuel-producing provinces of Alberta and Saskatchewan, which are the core of his party's political base. He wants his own reputation to be associated with economic management and lower taxes, not climate change.
After all, those Tim Hortons voters are quite literally the bull's eye of Conservative political ambitions, and they don't seem terribly worried about climate change. So Mr. Harper isn't going to spend an ounce of political capital being associated with the issue, or providing serious leadership at home and abroad.
September 24, 2009
Carbon capture plan 'sheer folly'
Nathan VanderKlippe
Globe and Mail
Thursday, Sep. 24, 2009
 Production foreman Ron Toly visually inspects the carbon capturing research facility near Redwater, Alberta, June 26, 2009. (John Ulan/The Canadian Press) |
Main pillar of climate-change plan too risky for Canada to pursue, policy paper says
A major prong of Canada's climate change plan is so flawed that to pursue it now – with neither the proper science nor proper laws in place – would be “sheer folly,” concludes a new report.
The risks of building a system to capture and store carbon dioxide underground include arsenic leaching into groundwater, unforeseen leaks, cross-border disputes and spiralling costs, according to a paper that will be released by the Munk Centre for International Studies Wednesday.
“Given the paucity of groundwater information in Canada and lack of national water standards, the push to accelerate [carbon capture and storage] could pose real risks to our groundwater resources,” argues Graham Thomson, the Edmonton Journal columnist who authored the 63-page document. The research compendium draws from published reports and expert interviews.
“In sum, the marriage of a brave new technology with a political fix for an immediate climate problem could have negative long-term consequences for Canadian taxpayers and water drinkers without stabilizing the climate.”
| Read the Munk Centre for International Studies paper: Burying Carbon Dioxide in Underground Saline Aquifers: Political Folly or Climate Change Fix? Download this file (.pdf) |
Carbon capture and storage, or CCS, involves siphoning off, then pumping underground, carbon dioxide from emissions coal-fired power plants and oil refineries. It has become a key element of Canada – and the world's— strategy to beat emissions.
The United Nations believes 55 per cent of emission reductions can come from CCS. U.S. President Barack Obama has pointed to the technology as an area where Canada and the U.S. can collaborate. Ottawa has put up to $140-million into funding eight projects. And the Alberta government, despite plunging into a nearly $7-billion deficit, has steadfastly defended the $2-billion it committed to building three CCS pilot plants.
The problem, Mr. Thomson finds, is that Canada has yet to draft the regulations, create the oversight regimes or lay the proper scientific groundwork to launch a project that could see vast quantities of carbon dioxide buried kilometres beneath the earth in saltwater aquifers.
Moving forward without any of those things in place, he writes, “would be sheer folly.”
The findings rankled some in Alberta, who argued that it is unfair to point to flaws in a system that has yet to be developed.
Jerry Bellikka, the director of communications with Alberta Energy, questioned Mr. Thomson's scientific credentials – he is a journalist, and the report presents no new findings – and argued that Alberta's long experience in regulating industry's underground injections of poisonous gas makes it fit to properly manage CCS.
“I don't think it should be alarming to everybody that we don't have everything mapped out ahead of time, because we're just starting the process,” he said.
But even the sheer scale of what's required for CCS is worrisome, Mr. Thomson writes. For example, sequestering just 25 per cent of global carbon emissions will mean erecting an infrastructure twice the size of what today's entire oil and gas industry has built in the past century, according to one estimate.
That would use such a vast amount of resources “that it would be a colossal diversion of energy and actually a real waste of time,” said Andrew Miall, a University of Toronto geology professor who has reviewed the paper, and agrees with many of its conclusions. “How much CO2 are you going to generate to make the steel [pipelines] to transmit the CO2? It just gets plain silly.”
Prof. Miall, along with representatives of the U.S. Environmental Protection Agency, Natural Resources Canada and environmental groups will debate the paper's findings today in Toronto.
Among those: Pumping compressed carbon dioxide into an earth pin-pricked with holes is inherently risky. In Alberta alone, 400,000 wells have been drilled – and those that have been forgotten or poorly built present a potential carbon escape route. Huge volumes of carbon dioxide pumped into saline aquifers could displace some of that briny water into drinking supplies – exactly what happened with underground wastewater injections in Florida.
Badly designed projects may cause arsenic and lead to leach into drinking water. And massive injections of high-pressure gas into the ground can create micro-earthquakes, fracturing rock and leading to even more possible leakage points.
The costs, too, could rise, as they have with technology like nuclear power generation, making an already-expensive solution even pricier.
Still, others say industrial experience in capturing sulphur emissions has shown that costs can fall dramatically with time. And the Intergovernmental Panel on Climate Change has concluded that leakage risks are minor, especially from aquifers thousands of metres below groundwater supplies.
“There are always doubters and people that have fears,” said Jim Carter, who chairs Alberta's Carbon Capture Council. “But CCS has the most promise of anything out there. And I think we'd be irresponsible if we didn't really begin to develop in a meaningful way the opportunity to implement this technology.”
Oil sands: The muddied message
COMMENT: Environmentalist campaigns against tar sands exploitation appear to have fostered a growth opportunity - and the advertising industry is pouncing on it with all the tools in its arsenal. But this article suggests the tar sands producers aren't falling for it.
Nathan VanderKlippe and Katherine O'Neill
Globe and Mail
Thursday, Sep. 24, 2009
 A Syncrude oil sands facility in Alberta (AFP/Getty Images) |
Recent Greenpeace stunt reveals need for industry to tackle its ‘dirty oil' image problem head on, observers say
Alberta's former energy minister warned the oil sands industry to “wake up” and start fighting an aggressive public relations battle, telling producers they should be embarrassed that 25 protesters were able to sneak into and temporarily shut down a major mine last week.
In a passionate call for the oil patch to more fiercely fight the public image battle it is waging – and, by some accounts, losing – Pat Nelson called a Greenpeace stunt a moment of shame in an address to the Oil Sands Trade Show and Conference in Edmonton Wednesday.
“Wake up, people! It's no wonder what we are getting [out are] the wrong messages,” said Ms. Nelson, who left office in 2004 and is now the vice-chairman of an industry group called the In Situ Oil Sands Alliance. “Every other country in the world would have stopped them at the gates, even if it meant using force. What a message to send.”
For an industry that has faced a growing line of opponents, the Greenpeace stunt reveals a dire need for a concerted campaign to tackle its “dirty oil” image problem head on, observers say.
The protest serves as evidence that efforts to counter the environmentalist message have been far too passive, Ms. Nelson said, showing conference-goers images of a huge “Tar Sands: Climate Crime” banner that Greenpeace unfurled inside the Albian Sands mine, owned by Royal Dutch Shell. The protest succeeded in closing down the mine north of Fort McMurray, Alta., for several hours.
Pictures of that banner were sent across the world. For industry to undo the damage they have done, it needs to show the public “the real pictures of the oil sands,” she said.
It is an argument that strikes at the heart of the oil patch's response to its growing chorus of critics. Rather than strike back with a broad-based marketing campaign, aimed at putting its message before large swaths of the public, the industry has relied instead on websites and conversations with smaller audiences. Its rationale has been that it can be more influential by making a stronger connection with fewer people.
Marketers, however, say that's a mistake. By failing to push back more aggressively, they say, the campaign against oil sands is going largely unchallenged. In part, that may be because the oil industry simply has not been wired to fight back in public, said Russell Stedman, the managing director at the Calgary office of ad firm Taxi Canada Inc.
“Most of these companies have been successful in spite of their marketing,” he said.
But, he said, an effective response may require that those attitudes change. “[Better marketing is] going to have to play a role,” Mr. Stedman said.
The industry could highlight some progress it's made in reducing emissions, oil extraction technologies that step more lightly on the boreal forest, and ongoing efforts to reclaim exploited lands. Critics, of course, say an image overhaul is impossible because the industry is inherently environmentally destructive.
Industry has done some mass marketing – including ads in several smaller U.S. publications such as the Washington Times, and The Hill, last week.
But rather than spend on big-budget advertising, companies have instead worked to stir up a “conversation” on oil sands. The Canadian Association of Petroleum Producers launched a Twitter feed this summer, and spends the bulk of its advertising budget on Google ad buys, which for $10,000 a month have delivered 10,000 monthly hits to its website. It has worked to build up canadasoilsands.ca, where it lays out industry positions on issues like water use and emissions. And it has tendered favoured numbers-heavy slideshow presentations to get its message out.
But the volume of that response appears to be outmatched by critics, who have taken out ads in some of the biggest U.S. newspapers, launched a satirical oil sands travel website (inviting guests to mornings that start with a “propane cannon wake-up call”) and greeted both travelling senators and President Barack Obama with published anti-tar sands messages.
Industry itself admits it has been slow to respond.
“We have to a large degree neglected the broader NGO communities, and some of the concerns that have related to our operations,” said Janet Annesley, Shell's senior manager of external relations. “We do know we need to do better. That's the bottom line. Industry has been on the back foot.”
Damaged reputations aren't the only danger of unchallenged criticism. Public opposition could also hurt the “social licence” of oil sands companies to operate, and potentially affect policy.
But industry hasn't yet seen evidence of that – U.S. leaders, in fact, have made recent statements supporting oil sands in the name of energy security. And the oil patch believes firing back with a mass market salvo won't work. For one, there's the question of whether anyone would actually believe them. “We don't have the credibility to tell our story in a one-way medium,” said CAPP spokesman Travis Davies, who acknowledges the PR battle will likely become more strident in the months ahead of the Copenhagen climate talks in December.
Still, rather than fight fire with fire, he believes industry first needs to build a base of believable supporters.
“We need to build some advocates on both the media side and the public side that will engage us in a bigger conversation, and then maybe we'll have some legs to stand on in terms of traditional messaging,” he said. “But until we do that, we just don't have the luxury of sloganeering.”
Oil sands under attack on environment
Shawn McCarthyGlobe and Mail
Tuesday, Sep. 15, 2009
 Oil sands emissions (Nathan VanderKlippe/The Globe and Mail) |
The industry is accustomed to defending its image in North America, but it now faces a multifront war, with opposition growing from Norway to Washington
The environmental battle over Alberta's oil sands is going global, forcing the industry to respond to new attacks on its record and putting fresh pressure on Ottawa.
The Calgary-based industry is accustomed to defending its image in North America, but it now faces a multifront war. That growing global opposition is highlighted by its role in today's federal election in Norway, where the state-owned oil company's plans for the oil sands have sparked controversy.
As well, a documentary that premiered in Switzerland and is now playing at the Toronto International Film Festival depicts the projects' devastating environmental impact; and a delegation of Chinese journalists is planning a visit to the scarred landscape of northeastern Alberta.
At the same time, U.S. activists are continuing their attacks in Washington, scheduling a news conference this week ahead of Prime Minister Stephen Harper's visit with President Barack Obama to highlight the dramatic increase in emissions that would occur if oil sands production is expanded as planned.
The industry expects the anti-oil sands campaigns will heighten in the runup to the international climate change conference in Copenhagen in December, which aims to replace the Kyoto Protocol with a new, binding international treaty to control emissions.
“We're not surprised that the discussion has migrated overseas to some extent, and we would expect that certainly in the lead-up to the international meeting in Copenhagen, we may see more of that,” said David Collyer, president of the Canadian Association of Petroleum Producers.
Critics are seeking to discourage foreign investment and force Canada to make more-aggressive commitments on climate change by targeting what has become a symbol of Canada's failure to cut emissions: Alberta's massive, open-pit bitumen mines.
The backlash goes beyond some adverse publicity.
Global companies such StatoilHydro ASA or Royal Dutch Shell PLC are encountering growing pressure in their home countries to revisit plans to invest in the oil sands, while Ottawa will have to table a credible climate-change plan – including real limits on oil sands emissions – or face international censure and perhaps even barriers to trade.
The industry is responding. Statoil chief executive officer Helge Lund wrote an op-ed piece in a Norwegian newspaper defending the company's role in the oil sands, while companies are themselves inviting international journalists to visit the Fort McMurray region.
Mr. Collyer expressed optimism that Canadian governments will balance environmental needs with economic development and energy security, and expects the U.S. government to take a similarly “balanced” approach. But he acknowledged there will be mounting pressure on Canada – and on the oil sands – in some international capitals.
The industry executive said oil sands represent only 5 per cent of Canadian emissions, and the country produces a mere 2 per cent of global greenhouse gases.
He said the typical oil-sands project produces 5- to 15-per-cent more carbon dioxide per barrel of oil than conventional oil supplies on a so-called “wells to wheels basis,” which calculates emissions from the production, refining and consumption of the petroleum.
Later this month, Mr. Harper will travel to Pittsburgh to attend a meeting of the Group of 20 nations, where leaders will attempt to narrow the gaping divisions between developing and developed countries, and Europe and North America, in hopes of reaching a climate treaty in Copenhagen.
Mr. Harper has insisted developing countries like China and India must accept some commitment to reduce greenhouse-gas emissions.
But Canada's credibility is undermined by its own modest targets and its failure to even come close to meeting its commitments under the Kyoto Protocol, said Andrei Marcu, a climate-change adviser with Calgary-based law firm Bennett Jones LLP.
The federal government is slated to release a revised climate-change strategy this fall that is expected to force companies to further reduce their emissions per barrel of oil produced, but not include absolute caps that would limit expansion of oil sands projects.
Environmentalists argue the oil sands represent one of the fastest-growing sources of emissions in the world.
They say that in order to protect its domestic oil industry, Canada has been a laggard in the international climate-change debate.
In a report to be released today, Greenpeace calculates total emissions from the oil sands region will triple by 2020 if proposed projects come on-stream.
Environmental writer Andrew Nikiforuk, who wrote the report, said the oils sands will have larger emissions than some mid-sized European countries, including Belgium, Ireland and Denmark.
That prospect has prompted politicians in Norway to assail Statoil for its plans to expand in the oil sands. In fact, Greenpeace has helped instigate the backlash in the Nordic country, hosting Norwegian journalists visiting northeastern Alberta, and sending a delegation, including Mr. Nikiforuk, to Oslo prior to Statoil's annual meeting in May.
In advance of today's vote, virtually every party in the country's multiparty system has said it will review the state-owned company's Canadian strategy after the election. Minister of Environment Erik Solheim is a member of the Socialist Left Party, a member of the governing coalition led by the Labour Party.
He said his party will demand new environmental laws that “will make it impossible for a company like Statoil to enter such [oil sands] projects,” he told the Norwegian daily Aftenposten.
Statoil moved aggressively into Alberta in 2007, when it paid $2.2-billion for North American Oil Sands Corp.
The company says it is committed to reducing emissions in the oil sands, including possible adoption of carbon capture and storage (CCS) technology.
Though many in the oil industry tout CCS has a key to improving its carbon footprint, the technology remains untried and prohibitively expensive without major government subsidies.
With a file by The Canadian Press
Quicksilver Resources stock jumps on news of Canadian well output
COMMENT: Quicksilver is not just producing natural gas from BC's shales, but is also Canada's largest producer of coalbed methane.
By JACK Z. SMITH
Star-Telegram.com (Fort Worth, TX)
Posted Tuesday, Sep. 22, 2009
The stock of Fort Worth-based Quicksilver Resources soared to a yearly high Tuesday, buoyed by an announcement of strong results from a Canadian natural gas well.
Quicksilver (ticker: KWK) closed at $14.43 a share, up $1.31, or 10 percent.
The stock vaulted as high as $15.10 in heavy early morning trading, after a company announcement late Monday that a Quicksilver horizontal well in the remote Horn River Basin of northeast British Columbia had an impressive initial production rate of 13 million cubic feet of natural gas a day and an average daily yield of 10 million cubic feet in its first month of production.
The stock’s trading volume topped 7.1 million shares Tuesday, more than quadruple its daily average of about 1.69 million shares traded over the past five years, according to Bloomberg data.
Quicksilver CEO Glenn Darden said Monday that he is "very pleased" with the well and hopes to realize "even greater production volumes per well" in future drilling there.
Quicksilver has a substantial lease holding of 127,000 net contiguous acres in the basin, which has some geological characteristics similar to the Barnett Shale of North Texas, where Quicksilver is a significant player and has a projected 10-year drilling inventory on its lease holdings of 192,000 net acres.
Quicksilver’s stock price gains since March have been especially substantial given that it is predominantly a natural gas producer. Gas prices, which have spiked recently, are still at less than one-third of their July 2008 peak of more than $13 per million British thermal units. In futures trading Tuesday on the New York Mercantile Exchange, gas for October delivery settled at $3.61 per million BTUs.
Quicksilver’s stock was exceptionally volatile in 2008, trading as high as $44.98 on May 7 and as low as $3.74 on Dec. 5. The stock rose and fell largely in sync with natural gas prices, as did stocks of other independent gas producers.
On Monday in a briefing at company headquarters before a drilling site tour for three state legislators, Darden said that the gas glut should eventually dissipate, with prices likely to rebound to a "more reasonable" level of $6 to $8 per million BTUs. If that price can be sustained, drilling activity should rebound significantly, energy analysts have forecast.
Jack Z. Smith, 817-390-7724, jzsmith@star-telegram.com
Extended OCS comment period produces 350,000 comments, Salazar says
Nick Snow
OGJ Washington Editor
Oil and Gas Journal
Sep 22, 2009
WASHINGTON, DC, Sept. 22 -- The US government received more than 350,000 public comments on possible Outer Continental Shelf resource development strategies during the 6-month comment period that expired Sept. 21, US Interior Secretary Ken Salazar said on Sept. 22.
Many of the comments came from public meetings he hosted in New Jersey, Louisiana, Alaska, and California, he said. “I heard broad agreement that we must confront our dangerous dependence on foreign oil, build a clean energy future, and make use of the limited resources we have while protecting our land, water, and wildlife,” he said.
Salazar said the US Minerals Management Service is reviewing all of the comments, which will take several weeks. Once that is complete, it will initiate environmental analysis and what he termed “public scoping opportunities” associated with the 5-Year Plan for oil and gas development on the OCS.
“The offshore energy program we are developing must address our nation’s energy security challenges, deliver a fair return to the taxpayers who own the resources, and account for the views of local communities, states, and tribal nations,” the secretary said.
It also must take several key considerations into account, including ocean areas critical to military training and the national defense; other economic benefits of the oceans including fishing, tourism, and subsistence uses; environmental considerations; existing oil and gas infrastructure; interest from the oil and gas industry; and the availability of seismic and scientific data, he said.
“I am confident that we will be able to expand our nation’s offshore energy portfolio by focusing on development in the right way in the right places,” Salazar said.
Move aggressively
Meanwhile, oil and gas industry groups urged MMS to move ahead aggressively on developing more OCS energy resources the 6-month public comment period on a draft proposed 5-year OCS plan expired.
“In about a week’s time, we will mark the 1-year anniversary of the end of the moratoria for new oil and natural gas leasing in federal waters off our Atlantic and Pacific coasts,” noted American Petroleum Institute Pres. Jack N. Gerard. “Despite the public’s clear desire for more domestic energy development and the industry’s years of experience operating offshore in an environmentally sensitive way, this administration repeatedly has slow-pedaled this plan which would benefit all Americans, especially in these tough economic times.”
Gerard said new oil and gas development could create thousands of jobs, add more than $1 trillion to government coffers, strengthen US energy security, and encourage a domestic economic recovery. “It’s time to end the delays. The administration now has comments in hand. It knows that oil and natural gas will be integral to the nation’s economy for decades to come. It must act now to ensure that America has the energy it needs today, and in the future,” he said on Sept. 21.
In comments submitted to MMS on Sept. 15, Independent Petroleum Association of American Pres. Barry Russell warned: “As our nation’s energy demand continues to increase, a failure to provide needed access to the OCS will increase domestic energy prices, slow US economic growth, and create hardships for consumers.”
“The next 5-Year Plan will define the shape and scope of domestic offshore energy development. It is essential that MMS develop a leasing program that provides maximum flexibility for our nation to address its energy needs,” Russell said.
Prompt review
National Ocean Industries Association Pres. Tom Fry urged US Interior Secretary Ken Salazar to review the comments promptly and analyze all OCS planning areas now that the 6-month comment period extension the secretary imposed on Feb. 10 has expired.
“Today’s volatile energy prices and supplies have created many problems for ordinary Americans. In part, this is because the government has denied access to energy resources owned by the American people,” Fry said on Sept. 21. “The energy resources on the OCS are vital to the nation’s economic prosperity, and safety records show that they can be produced in an environmentally responsible manner.”
Jenny Fordham, energy markets and government affairs director at the Natural Gas Supply Association, said the draft proposed plan (DPP) was a step in the right direction “and industry supports a robust plan as a foundation to our future domestic energy supply.” She said, “MMS should not delay the 5-Year Plan process, but should move forward quickly after the close of the comment period to develop the proposed plan and complete the necessary environmental work.”
In comments submitted to Renee Orr, MMS’s 5-Year Plan program director on Sept. 21, Fordham said NGSA was pleased that MMS added areas not included in previous 5-year OCS plans to this one’s DPP, including lease sales in the eastern Gulf of Mexico “which is known to contain vast resources of natural gas.” The industry association supports the proposal of 31 lease sales with no restrictions, such as buffer zones, and encourages MMS to prioritize the schedule of lease sales to be held in those areas known to have the highest resource potential, she said.
The federal government locked up OCS areas believed to contain 18 billion bbl of oil and 77 tcf of gas for more than 20 years, Doug Morris, API’s upstream and industry operations group director, noted in comments that API submitted to MMS on Sept. 21.
‘May be conservative’
“These resource estimates may be conservative since the areas in question are largely unexplored,” Morris said. “But if given access to them, the industry could use today’s highly sophisticated technology to locate and tap new domestic resources in an environmentally responsible manner as it has in other areas for decades.”
Past decisions to restrict OCS acreage available for exploration compelled the oil and gas industry to “pick over the bones” in search of commercial hydrocarbon quantities, Morris said. He cited expenditures of $2.2 billion for leases in 1996-97, with only 6% of the tracts eventually producing oil and gas and the remainder returned to the government. “Over 50% of the leases were eventually resold in subsequent sales for an additional $6.2 billion as the industry continued to search for the ‘needle in the haystack’ in a limited geographic area using new exploration technologies,” he said.
Morris conceded that successive exploration over some of the same areas led to new discoveries because new geologic concepts were tested, aided by the evolution of exploration and production technologies. “Nevertheless, over the period that moratoria restricted access to as much as 80% of the OCS, other opportunities for discovery went unexplored and untested,” he said.
Access to areas where technologies and concepts can be tested, and where lessons learned from exploration elsewhere in the world can be applied, will increase the likelihood that new domestic offshore oil and gas resources will be discovered and domestic energy security improved, Morris said. “We will continue to rely on oil and gas in the long term, so we need to make decisions now that provide us with the resource in the long term,” he said.
Include all areas
In IPAA’s comments, Russell urged MMS to keep all areas, including the eastern Gulf of Mexico, Alaska, and the entire Atlantic and Pacific OCS under consideration during the planning process’s next phase. Doing so would mean that “essential preparatory work will have been completed enabling that area to be offered for leasing more quickly should Congress mandate a sale,” he said.
Russell also suggested that MMS use area-wide lease sales wherever possible, and focused leasing for places where it is not. “Area-wide leasing allows IPAA members, the smaller independent companies, to actively acquire, explore, and produce low-risk fields. It also encourages innovative exploration strategies and is consistent with maintaining financially sound geophysical contracting and processing industries,” he said.
Fordham said in NGSA’s comment that the association also was encouraged by MMS’s including areas previously off-limits in the DPP. NGSA and API separately expressed in their submissions to MMS their opposition to the idea of coastal buffer zones and support for sharing new federal OCS oil and gas revenues with states directly feeling the impacts of development.
Morris and Fordham each noted that in August 2008, when MMS requested comments as then-Interior Secretary Dirk A. Kempthorne accelerated the OCS planning process to produce a 5-Year Plan for the 2010-15 period, some 60% of the responses said that the agency should “new program to provide some level of expanded access to domestic sources of oil and natural gas.” It was a significant indication that the general public understood the importance of developing more domestic oil and gas supplies, the API and NGSA officials separately said.
Contact Nick Snow at nicks@pennwell.com.
September 22, 2009
Poop-to-power plant now online
By JOHN STANG
Seattle Post Intelligencer
September 21, 2009
It takes slightly more than three gallons of liquid cow manure to create one kilowatt-hour of electricity.
A lot of poop. A small amount of electricity. A big environmental boost to a dairy farmer.
A fledgling anaerobic manure digester is now running at roughly 80 percent capacity near Rexville in southwestern Skagit County. The plant produced its first power on Aug. 30 and will host Gov. Chris Gregoire at a ceremony next Monday.
The digester accepts the liquid manure in a big holding tank, where it gives off methane gas that is then burned to produce electricity.
It is the first or fourth of its kind in Washington -- depending on how you catalog the device. Ferndale-based Andgar Corp. built all four.
Washington already has three conventional poop-to-methane-to-power digesters near Lynden, Monroe and Sunnyside. However, they essentially accept manure from one dairy farm each.
The Rexville operation -- built and run by Farm Power -- is different in a couple ways.
It is set up to accept manure from two or more dairy farms -- enabling smaller operations to participate.
And it is designed to accept and extract methane from icky, slop-like wastes from seafood and chicken processing -- as well as other food wastes. Farm Power had to get a bill passed in the Legislature this past spring to make combining the food and cattle wastes easier from a regulatory aspect.
Dairy farms produce huge amounts of manure that can ooze into groundwater and eventually into streams and rivers to cause pollution problems.
Farmers take many measures to deal with this problem, but digesters are a more cost-efficient way to tackle the matter, said Daryl Maas, one of two brothers behind the Rexville operation.
Kevin and Daryl Maas -- who grew up around Skagit County dairy operations -- saw Washington's first digester built near Lynden in 2004 and became fascinated by its potential.
But they saw that very few farmers could afford to build similar digesters, Daryl Maas said.
The brothers created Farm Power in 2007, which raised $3.5 million -- including $1 million in federal and state grants -- to build the Rexville facility that is currently taking manure from two nearby dairy farms. The site has the capability to expand to accept manure from additional farms.
At full capacity, the Rexville site can handle 55,000 gallons of liquid manure a day. That translates to 750 kilowatt-hours -- enough to power about 500 homes.
That's one-tenth of 1 percent of the roughly 500,000 homes served by Puget Sound Energy (PSE).
The Rexville facility adds to what PSE can offer in "Green Power," a program in which utility customers can request to have their electricity partly or totally supplied by renewable sources such as wind, solar and biomass facilties.
Roughly 24,000 of PSE's 1.1 million overall customers have signed up for Green Power sources, said utility spokesman Andy Wappler.
"Now farmers have a brand-new product to sell -- renewable energy," Wappler said. Maas said the brothers have three more digesters on the drawing board
-- two in Whatcom County and one near Enumclaw. They hope to build an average of one per year.
Meanwhile, Maas said the manure can be returned to the farmers in better shape after the methane is extracted.
The returned manure has its nutrients broken down, which makes it a better fertilizer. Without going through the digester, the same manure would take longer to break down into essential nutrients for fertilizer.
Also, the process produces a mulch that can be used for livestock bedding.
John Stang can be reached at 206-448-8030 or johnstang@seattlepi.com.
September 21, 2009
Renewable power decisions create a tangled web
David R. Baker
San Francisco Chronicle
Monday, September 21, 2009
More big solar power plants in the Mojave Desert. Fewer solar panels on homes and businesses. More hydroelectric dams in British Columbia.
 Gov. Arnold Schwarzenegger passes a solar energy field to sign an executive order he signed giving California the nation's most aggressive energy standards, during ceremonies held at a solar energy field in Rancho Cordova, Calif., Tuesday, Sept. 15, 2009. The order requires utilities to get a third of their power from renewable sources by 2020.(AP Photo/Rich Pedroncelli) |
The flurry of recent renewable power decisions in Sacramento could have far-reaching - even contradictory - results.
Gov. Arnold Schwarzenegger last week signed an executive order forcing California utilities to get 33 percent of their electricity from renewable sources by 2020. At the same time, he promised to veto two bills passed by the Legislature days earlier that would have done the same thing, but with far more restrictions on how those goals could be met.
Meanwhile, a bill to increase the amount of electricity that utilities get from home solar systems never reached a final vote. Its backers must wait for the next legislative session and try again.
Gov. Arnold Schwarzenegger signs an executive order California the nation's most aggressive energy standards, during ceremonies held at a solar energy field in Rancho Cordova, Calif., Tuesday, Sept. 15, 2009. The order requires utilities to get a third of their power from renewable sources by 2020. (AP Photo/Rich Pedroncelli) |
"It's kind of a best-of-times, worst-of-times story," said Adam Browning, executive director of the Vote Solar Initiative advocacy group. "There are some things that didn't happen, but still, there really is a lot of development going on."
Renewable power advocates are still trying to assess the effects of all the things that Sacramento did and didn't do. But they see several likely results.
-- California's renewable power industry will grow, but it also will spill over into neighboring states. Many of the solar and wind farms built to help utilities meet California's new renewable power targets will be in Nevada, Oregon or Washington.
-- Companies planning large solar power plants in the Southern California desert won't need to jump through a new bureaucratic hoop to do it. One of the bills Schwarzenegger vowed to veto would have forced those projects to get an additional government permit - from the state's Department of Fish and Game - on top of the permits already required.
-- Companies that install solar systems on homes and businesses may see their sales drop next year because the Legislature didn't pass a key bill on "net metering."
Under current law, homeowners and businesses with solar systems can get credit from the utilities for generating excess electricity and sending it to the state's electrical grid. But the utilities are only required to take so much of it - up to 2.5 percent of each utility's total electrical load - and Pacific Gas and Electric Co. will reach that level next year. The failed bill would have expanded the amount to 5 percent.
Solar impact
"I'm not a person who usually goes around saying 'The sky is falling,' but this is really going to impact solar starting next year," said Angiolo Laviziano, chief executive officer of REC Solar in San Luis Obispo.
The bill's failure means that once PG&E hits the 2.5 percent limit, the utility's customers will no longer have as much financial incentive to go solar. Although REC Solar operates in other states, cushioning the potential blow, Laviziano said he could be forced to cut as many as 120 jobs if business in California dries up as much as he fears.
"Even for us, it would be an extremely painful hit," he said. "For companies that are focused solely on California, it would put their whole operations at risk."
As the California Legislature neared the end of its session, most of the attention focused on a pair of bills that would have dramatically expanded the amount of renewable power used in the state. California law now requires the utilities to get 20 percent of their electricity from renewable sources by the end of 2010, a deadline they are almost certain to miss. The bills would have raised that requirement to 33 percent by 2020.
But the bills rankled the utilities and large-scale solar developers. The developers didn't want to face another bureaucratic hurdle - the proposed fish and game permit - that would have slowed them down. In order to qualify for federal stimulus grants, they need to start construction by the end of 2010. "They were already running behind, and adding another layer of siting permits wouldn't help," said Jan Smutny-Jones, executive director of the Independent Energy Producers Association.
The utilities wanted more flexibility to buy power from outside California. Under the bills, out-of-state wind farms and solar plants could only make up 30 percent of each utility's renewable energy supply. The limit was designed to keep new renewable power projects and jobs here in California, rather than letting them go to neighboring states.
Schwarzenegger, however, sided with the utilities, saying the limit smacked of protectionism. As a result of his decision to veto the bills, renewable energy experts say states such as Nevada and Oregon will see more solar and wind projects.
Some people fear his executive order will open California to types of renewable power that current laws discourage.
Changes considered
The California Air Resources Board has the responsibility of drafting rules to carry out Schwarzenegger's order, and a spokesman for the board said the panel will consider changing the types of alternative energy that could count toward the 33 percent goal. Nuclear power and large hydroelectric dams won't be considered, said spokesman Stanley Young, but other types of generation will.
That worries Lannie Keller, who lives near Bute Inlet on the coast of British Columbia. Canadian companies have proposed building "run of the river" hydroelectric projects on 18 rivers that feed into the inlet, and opponents fear the electricity could be sent south to meet California's demand for renewable power.
Such projects don't use large dams, but they do divert part of each river's flow to run through a turbine. They don't pass muster with California's current renewable power law, but that could change. PG&E, for example, has already expressed interest in buying hydropower from British Columbia.
"It will create a viable market for what's proposed up here," said Keller, an organizer with Friends of Bute Inlet, which opposes the hydropower projects. "The so-called green energy down there will be coming at a significant environmental cost in British Columbia."
E-mail David R. Baker at dbaker@sfchronicle.com.
New gas supplies 'could eat Arctic gas's lunch'
Rena Delbridge
Alaska Dispatch
Sep 19, 2009
For decades, Alaskans have dreamed of another pipeline boom, hoping for a giant natural gas project to generate tens of billions of dollars in tax revenue and put thousands of people to work.
Even people who didn't live here in the 1970s, when the trans-Alaska oil pipeline transformed Alaska from a poor, struggling state to one with a multibillion-dollar savings account that hands out checks to people just for living here, have heard the stories. And those handed-down memories of healthy economic times are enough to make plenty of Alaskans bullish on the long-sought-after natural gas pipeline.
Proponents of two separate pipeline proposals say they're moving along as intended, with a near-term goal of an open season in 2010. But as much as Alaskans pin their future on one of the projects, there are no guarantees either will be built.
There's a lot of gas out there right now, and prices are low. Then there's the gas line's enormous price tag -- an estimated $30 billion to $40 billion. Will the companies that hold leases to develop Alaska's vast gas reserves commit to such a massive investment (they like to say the pipeline would be the largest private energy project in U.S. history) under the weight of a struggling global economy?
Here are two views on Alaska's chances of another boom. The first comes from an industry gathering last week in Anchorage, when one analyst shared his doubts on the gas pipeline.
Gerry Goobie, managing consultant with the international energy consulting firm Purvin & Gertz, painted a picture at the Alaska Oil and Gas Congress conference of a buyer's market bloated with global supply, including in the United States, where much of Alaska's gas would be sold under current proposals. That's led to bottom-of-the-barrel Henry Hub natural gas prices in recent weeks - at one point, as low as $1.83 per million British thermal unit. Prices a year ago this time reached more than $7.80 per Btu.
Gas prices will remain depressed in North America until supply and demand level out, Goobie predicted. No one is clamoring for North Slope gas, and competition between supply sources will be fierce. Other supplies, including liquefied natural gas (LNG) imports to North America, are a real threat to Alaska's gas. And when prices rebound, some energy companies will focus on their ongoing shale gas developments around the country.
"They could eat Arctic gas's lunch," Goobie warned. "I'm not saying they will, but they have the potential. There is a lot of shale gas, and there is a lot of LNG."
Alaska's gas must compete with other supplies, some much closer to the cities and industrial centers where they are needed most. That leaves plans for a large-diameter natural gas pipeline -- as currently proposed in each of the two competing Alaska gas projects -- "technically feasible, but economically uncertain," Goobie said. A large pipeline increases risks for prospective investors, some whom may also be troubled by the other uncertainties - chiefly, a lack of precise details, such as regulatory and construction delays, and questions about how much the state might tax the companies that produce the gas.
If those issues aren't resolved soon, Goobie warned, other sources will flood the market. Further, he said, access to capital for the $40 billion line is critical, yet the severe market crash has left the global economy "in a period of maximum uncertainty."
Bill Gwozd, vice president of gas services for Ziff Energy Group in Calgary, is another analyst who has closely followed Alaska's gas pipeline quest and his own assessment of the situation. Although he believes North America will need Alaska's natural gas eventually, he said, the market doesn't discriminate for gas sources.
"The Johnny-on-the-spot that shows up is the gas supply that the market will consume," Gwozd added in a phone interview from his Calgary office last week.
It's a question of timing. If Alaska's gas isn't unleashed before emerging LNG, shale or other gas supplies corner the market, the state could lose out, he said.
Gwozd is still hopeful for Alaska. Like pipeline proponents, he estimates Alaska gas could hit North American markets at the end of the next decade, when prices have had a chance to rebound and supply and demand have balanced out. The project could change between now and then, he said. For example, the pipe size could be expanded to accommodate northwest Canada's large gas reserves, or the line's route could be redirected to LNG export terminals. (Asian markets may pay more for Alaska's natural gas than the American market.)
But both Gwozd and Goobie are clear one point: Alaska is running out of time.
"The world is not going to wait for Arctic gas," Goobie said.
Contact Rena Delbridge at rena@alaskadispatch.com
September 20, 2009
Greenpeace protest sparks questions about security of Alberta oilsands
By Lisa Arrowsmith
The Canadian Press
Canadian Business
September 20, 2009
 A pickup truck passes a mining shovel filling a haul truck at the Shell Albian Sands oilsands mine near Fort McMurray, Alta. While the oilsands industry tries to calm any frayed nerves after a splashy protest by Greenpeace at a Shell work site in northern Alberta, some analysts say the infiltration of such a huge operation should serve as a warning about the security of energy installations. (THE CANADIAN PRESS/Jeff McIntosh) |
EDMONTON - While the oilsands industry tries to calm any frayed nerves after a splashy protest by Greenpeace at a Shell work site in northern Alberta, some analysts say the infiltration of such a huge operation should serve as a warning about the security of energy installations.
If demonstrators can get into the site, so could terrorists intent on doing real damage, says Tom Flanagan, a University of Calgary political science professor and author of a report about groups opposed to development of Western Canada's resource sector.
"It does raise concerns," Flanagan says. "It would be wise to take this as a warning of the importance of reviewing procedures to make sure this kind of thing couldn't happen again."
About two dozen protesters from Canada, the United States and France gained access to Shell's (NYSE:RDS.D) Muskeg River mine site north of Fort McMurray, Alta., last Tuesday, chaining themselves to giant dump trucks and a four-storey-tall shovel that scoops oily sand from the bottom of a massive pit.
After unfurling a banner which read, "Tarsands: Climate Crime" and spending 31 hours at the mine, the protesters left the fenced and gated site without any charges laid.
Fred Lindsay, Alberta's solicitor general and minister of public security, says he'd also like to know how the Greenpeace protesters gained access to the tightly controlled site.
But he notes that Alberta's energy infrastructure is spread over a vast area and not all incidents can be prevented.
"You look at the amount of infrastructure we have in this province, the large resource developments and the miles and miles of pipeline - obviously we can't fence it all in," Lindsay says.
"This particular case with Greenpeace has turned out to be a publicity stunt but nonetheless, they gained access which created safety concerns for them as well as the site. So we're going to mark that to see what we can do to make those sites more secure."
The province watches for any possible terrorist threats and has counter-terrorism protocols in place.
Canada has a stable political climate and has few violent incidents directed at the resource sector. Lindsay doesn't expect this latest incident will affect the country's reputation as a secure supplier of energy.
Toronto-based security analyst Mercedes Stephenson says the Greenpeace action likely took time to plan and noted that the group specializes in such actions.
"I was surprised they got into the facility... but it's Greenpeace," Stephenson says. "It has a history of being able to get into all kinds of places that nobody expects them to be able to."
Oilsands operations likely wouldn't be the first target of terrorists determined to halt the flow of oil or gas from Alberta, she says.
It's more likely those groups would choose a vulnerable area along the thousands of kilometres of pipelines that snake across the province.
In recent months pipelines in northeastern British Columbia owned by EnCana Corp. (TSX:ECA) have been the target of explosions and police have yet to make any arrests.
"If somebody really wanted to do damage, they probably wouldn't go to an oilsands mining facility," Stephenson says. "You'd be far more effective if you actually disrupted the flow. Because the flow is what supplying energy."
Alberta's oilsands currently produce about 1.2 million barrels per day and the United States has called the Canadian oilsands "critically important" to energy security in North America.
Shell hasn't determined where the Greenpeace protesters gained access to the mine.
Paul Hagel, a spokesman for Shell Canada, says the incident has prompted a full-scale security review which includes its adjacent Albian Sands site.
"We're talking about 155,000 barrel a day operation and so obviously, to ensure the future security of it is paramount," Hagel says.
Hagel calls this latest incident a "blip," but added Shell will learn from it.
"These sorts of events call for wild speculation. People get the what ifs: 'What if this happened, what if that happened.' Our oilsands operation is safe and secure and I would challenge anyone who would say otherwise."
Cheryl Robb, a spokeswoman with Syncrude, which operates two oilsands mines in the same region about 450 kilometres north of Edmonton, says the company has stepped up security in the wake of the Greenpeace action.
The incident has also renewed Syncrude's efforts to seek a court injunction that would prevent Greenpeace activists from coming near company property. In July 2008, Greenpeace protesters gained access to Syncrude's Aurora mine site, netting each of them a fine for trespassing.
Mike Hudema, a Greenpeace activist who took part in the latest action, refused to discuss how the protesters gained access to the Shell site.
This latest incident doesn't change Canada's international reputation as a reliable supplier, said Greg Stringham, a spokesman with the Canadian Association of Petroleum Producers, based in Calgary.
Between conventional production and oilsands mining, there's quite a lot of diversity in how Canada supplies oil to the North American market, he said. About half of all oil production in Canada comes from the oilsands, he said.
That diversity is partly what ensures that energy supplies are secure. If an incident does occur at a specific site, there are always other production facilities and other pipelines or storage facilities that can ensure the delivery of oil to market, Stringham said.
"The individual site access is something that companies will deal with, but the overall reliability of Canada as a friendly and reliable supplier of energy I don't think has changed because of an event like this."
September 19, 2009
Alaska Gov Says Gas Pipeline Competitors Should Work Together
By Cassandra Sweet and Siobhan Hughes
Wall Street Journal
September 18, 2009
WASHINGTON (Dow Jones)--Alaska Gov. Sean Parnell said Thursday that he expects developers of two competing natural gas pipelines, from Alaska's North Slope to Canada and the contiguous U.S., to find a way to work together before he will consider agreements on production tax incentives for the projects.
Even before Parnell replaced former governor and vice presidential nominee Sarah Palin in July, he was under pressure to show that a $30 billion gas pipeline being developed by TransCanada Corp. (TRP) and backed by the state would succeed, despite competition from another project, economic challenges and headwinds from some state lawmakers who question the project's viability.
BP Plc (BP) and ConocoPhillips (COP), which control major chunks of Alaska's North Slope oil and gas production, are developing a competing gas pipeline called Denali, without state backing.
Both pipelines would ship at least 4 billion cubic feet a day of gas from Alaska's Prudhoe Bay to Alberta, Canada, and start deliveries as early as 2018.
Parnell said he would wait for TransCanada to reach some kind of deal with BP and ConocoPhillips before he would agree to any tax incentives for producers.
"Until there is more commercial alignment between the parties, those talks and those negotiations would be premature," Parnell said. He added that "alignment" doesn't necessarily mean merging the two projects, as some federal officials and analysts have suggested.
Alaska's government has pledged more than $500 million and granted an exclusive license to TransCanada to build the 1,700-mile pipeline in hopes that it will create a new source of revenue for the state to offset declining oil production. The project has been criticized by a small but vocal group of lawmakers who are concerned that low natural gas prices and healthy gas supplies in the lower 48 states make the pipeline a risky financial bet.
Exxon Mobil Corp. (XOM), another major North Slope oil and gas producer, is partnering with TransCanada on the engineering component of the state-backed pipeline. But the Canadian firm has yet to line up commitments from Exxon or other producers to ship gas on the pipeline. TransCanada plans to hold an open season from May through July to solicit gas producers' interest in the line. But a TransCanada executive said earlier this week it could take several months, and an agreement with the state, to nail down commitments.
TransCanada's vice president for Alaska development, Tony Palmer, said Tuesday that he expects potential gas shippers will seek fiscal pre-conditions, including a long-term agreement by the state to lock in production taxes, before they agree to any pipeline commitments.
But Gov. Parnell said companies should use the open season as a forum to negotiate with each other, rather than press the state for production tax incentives.
Denali executives have said they plan to hold an open season in 2010, but haven't publicly set a date.
Meanwhile, some state lawmakers question whether the state should continue backing the TransCanada pipeline. State Rep. Jay Ramras, a Republican, said Alaska could end up paying TransCanada $850 million even if the pipeline is never built, due to agreements made during Palin's administration.
"We're inside an impossible transaction that has punitive clauses," Ramras said in an interview. Ramras said he plans to introduce legislation in January that would require the state to pay TransCanada from its general budget, so that the payments would have to compete for funding with road construction, schools and emergency services, adding more scrutiny to the project.
The North Slope holds some 35 trillion cubic feet of known gas reserves and the state estimates there could be 215 trillion cubic feet of undiscovered reserves. By comparison, U.S. consumption in 2007 was just over 23 trillion cubic feet.
By Cassandra Sweet and Siobhan Hughes, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com
September 17, 2009
Shell, Greenpeace negotiate calm end to protest
By Richard Warnica
Edmonton Journal
September 17, 2009
Oilsands giant to probe how environmental demonstrators infiltrated high-security site
Shell officials and Greenpeace activists negotiated a peaceful end Wednesday to a demonstration that saw protesters chain themselves to heavy machinery at Shell's Muskeg River oilsands mine ahead of a Washington meeting between Prime Minister Stephen Harper and U. S. President Barack Obama.
The 30-hour protest wound down in the hours after the morning summit. By mid-afternoon, the chains were off and the two sides were talking. By about 4 p. m., the group, a mix of activists from Canada, the U. S. and France, had agreed to leave.
Jessica Wilson, a spokeswoman for Greenpeace, said the protest ended amicably. No one was arrested, although the RCMP did record the names of each activist.
Paul Hagel, a spokesman for Shell, said the company agreed not to pursue charges, a move he doesn't think will encourage more protests.
"We feel strongly that we want to get these reasonable critics to the table and explain our views," he said.
"We acknowledge the impact of climate change. So we come on an even foot with Greenpeace. And we thought that would be enough to sit down and listen to their views and have them listen to our views."
The group of more than 20 activists entered the remote site north of Fort McMurray on Tuesday morning, chained themselves to three pieces of equipment and unfurled a banner that read: Tar sands: Climate Crime. Five of the protesters left the site Wednesday night.
The protest came a day after Greenpeace released a report calling oilsands development a climate catastrophe and was one of a series of actions that targeted the Washington meeting.
The United States is by far the largest consumer of Canadian oil. Since Obama's election last fall, oilsands opponents have increasingly targeted that market, urging politicians to shut the door to what they call Alberta's "dirty oil."
News of the Muskeg River protest made it into global coverage of the Harper/Obama summit.
Paul Joosse, a University of Alberta sociologist, said that kind of coverage may have been the goal of the Greenpeace protest.
"The interesting thing about this story is the strategy of communication Greenpeace uses," he said in an e-mail.
"First, they release their new report, then they conduct their action at the Shell site to draw attention to (it) ahead of Harper's meetings in Washington. The measure of success for the protest is therefore whether or not they are able to penetrate these high-level discussions."
The protest also raised questions about security in the oilsands, with one expert saying earlier the infiltration revealed serious vulnerabilities in the industry-run system. Shell's Hagel said the company will conduct a full security review of their site.
"This is the most serious piece of the puzzle here," he said. "We need to make sure the investigation looks at all different aspects of the site and how security procedures fell to make sure this doesn't happen again."
Shell shuttered the Muskeg River mine, which is part of their Albian Oilsands operation, for about six hours on Tuesday.
Production at the 155,000 barrel-a-day site was restarted at about 2 p. m. It was operating at full capacity a few hours later.
rwarnica@thejournal.canwest.com
© Copyright (c) The Edmonton Journal
Nuclear power costly: Wall
By James Wood,
The StarPhoenix (Saskatoon)
September 17, 2009
Province should keep options open on energy: premier
Nuclear power may be too large and too costly for a province like Saskatchewan, which needs to keep its energy options open, Premier Brad Wall said Wednesday.
The comments appeared to be another indication of the Saskatchewan Party government's diminishing enthusiasm for nuclear power a day after the release of the report on the public consultations on the government's Uranium Development Partnership. That report showed an "overwhelming" rejection of nuclear power from respondents. Energy and Resources Minister Bill Boyd said Tuesday the government had become increasingly cautious on nuclear energy's potential because of the cost.
In an interview before Wednesday's cabinet meeting at the legislature, Wall did not close the door on nuclear power, saying it was still on the agenda.
But while the high costs of nuclear reactor construction are nothing new, he said there are factors that have led to the increased concern over price.
Those include the cost of upgrading the province's transmission system to accommodate the large scale of a reactor, uncertainty around the ability to export the power generated and the increasing potential of electricity generation from natural gas that could remain cheap for some time to come.
The government also remains bullish on the prospects of carbon capture and sequestration technology, with a $1.4-billion SaskPower "clean coal" project already on tap.
"That is one of the challenges of nuclear power. . . . The cost is significant enough that it may just, on a de facto basis, rule out pursuing some of the rest of the envelope, the rest of the options, including clean coal, which is not an inexpensive technology," said Wall.
The premier said it would be a mistake for a government-owned electrical utility such as SaskPower to be reliant on a single source of power. The government envisions a mix of energy sources -- including clean coal, natural gas and renewables such as wind power -- in the province's power supply.
The work of the legislature's Crown and Central Agencies Committee, which will hold hearings in October on Saskatchewan's energy future, will be important in determining that mix and whether it could include nuclear, he said.
The Opposition NDP has accused the Sask. Party of rushing the process, but Wall said Wednesday the government may be amenable to expanding the hearings.
Nevertheless, the premier said he remains comfortable with his end-of-the-year deadline for a government decision on whether to greenlight nuclear power.
Ontario-based Bruce Power, which has not commented on the public consultation report or the government's comments on nuclear power, is eyeing Saskatchewan as the potential site of two 1,000-megawatt reactors.
Wall said he believes there is still majority support for nuclear power in the province, but only if environmental, health and safety and cost issues are addressed.
"I think cost, even for (nuclear) proponents and supporters, is the most important consideration . . . even for those who are comfortable with the health and safety, comfortable with the environmental implications, the cost issue is still there," he said.
NDP Leader Dwain Lingenfelter said the government does not need to wait until December to reject the Bruce Power proposal, which he describes as fundamentally flawed.
But he said nuclear should continue to be looked at among potential energy options for Saskatchewan.
The government's cooling toward nuclear power seems to indicate an emerging -- if inadvertent -- political consensus on the nuclear power issue.
Lingenfelter, a strong advocate for nuclear development in Saskatchewan during his hiatus from politics as an energy executive, says there is currently no business case for nuclear power in the province. He said Wednesday his past promotion was always based on having export markets in hand for the power generated.
© Copyright (c) The StarPhoenix
No special treatment for tar sands
COMMENT: More than forty years ago Buffy Sainte-Marie sang "My country tis of thy people you're dying." She was singing of the tragic, genocidal, inhumane abuse of aboriginal people at the hands of European "leeches" who had come to this land and evicted its indigenous people. I don't actually know if in the titular chorus, "My country tis of thy people you're dying", whether Sainte-Marie means that aboriginal people are dying because of the actions of "fellow countrymen" - America is explicitly mentioned in the song, but Canada doesn't escape, or is the more revolutionary interpretation correct: that Americans will start to die at the hands of too-long-abused natives?
We're here again. In the global human family, millions of people are suffering, and more are starting to die, because of climate change, and it is our doing.
James Hansen
Opinion
The Star
Sep 16, 2009
In 1988, when I addressed the U.S. Congress on the dangers of global warming, I warned leaders that it was time to stop waffling. Humans were changing the climate in new and dangerous ways and we needed to take action. At the time, I knew we could expect stiff resistance from the usual suspects, but if you had told me that 20 years later, one of the most stubborn holdouts would be a self-interested Canada, I wouldn't have believed you.
That's because then, as now, Canadians are a compassionate people, concerned about the environment and the role their government plays on the international stage. And yet, there are few countries I can think of that have done more to undermine international efforts to fight climate change in recent years, than Canada. The evidence is easy to find:
In California, as recently as April of this year, Minister of Natural Resources Lisa Raitt personally lobbied the governor of California to oppose a law that would curb California's appetite for carbon-intensive fuels, and would dramatically reduce greenhouse gas emissions.
In Bali, Indonesia, Canadian officials worked behind the scenes to scuttle a potential climate deal by insisting that developing countries make emission cuts they couldn't afford to make. This, while the tiny island nation of Tuvalu, home to some of the world's first climate refugees, was pleading its case to the international community.
Further afield, in Bonn, Germany, Canada recently refused to join the International Renewable Energy Agency (IRENA) whose membership includes almost every developed nation, including the United States, and whose stated goal is: "... promoting the adoption of renewable energy worldwide."
In your own backyard, 74 per cent of Canadians believe the government should do more to protect the environment (Harris/Decima, Aug. 23, 2009), and yet this past month, Environment Minister Jim Prentice made a pitch for a pipeline project to send tar sands oil from Alberta to British Columbia, where it would be loaded onto supertankers and shipped to Asia, all in a bid to avoid North American climate regulations and to, in his words, "keep the market honest."
How is all of this possible? Does the Canadian government know better than its own people what is in the best interests of the country? That's a dangerous delusion, and it's one I've seen before in my own country. "It's not time," "Wait and see," "It's someone else's turn" – these stalls are the opposite of leadership, and in the climate era, they are downright dangerous.
There's a small price for being too early, but a huge penalty for being too late when it comes to fighting climate change. The huge penalty, in Canada's case, ranges from species extinction and extreme weather events, such as raging forest fires and tornadoes, to losses in agricultural productivity and new security threats posed by terrorism and the prospect of climate refugees.
When Prime Minister Stephen Harper meets with President Barack Obama in Washington this week to discuss clean energy and climate, I hope the Canadian public and media keep him honest. Close attention should be paid to any special treatment Harper attempts to gain for Canada's tar sands, your country's fastest growing source of greenhouse gas emissions, and a problematic industry linked to serious environmental degradation and human health issues. If he's still lobbying for "intensity targets," or pitting one part of the country against the other under a hard cap, you'll know he's stalling.
When it comes to fighting climate change, the will of Canadians is clear. The world is waiting to hear your voice and to see your country take action. You just need a government that's willing to actually represent you, free of distortion, beholden to no other special interest besides the best interest of Canadians.
That's true leadership, and in the climate era, it's a prerequisite for survival.
James Hansen is a world-renowned climatologist and adjunct professor at Columbia University. He is the 2009 recipient of the Carl-Gustaf Rossby Research Medal, the highest honour bestowed by the American Meteorological Society.
September 16, 2009
Activists block tar sands mining operation to send message to Obama and Harper: Climate leaders don’t buy tar sands
Greenpeace Canada
September 15, 2009
Fort McMurray, Canada — On the eve of the Harper-Obama meeting in Washington D.C., Greenpeace activists are locking down and blockading a giant dump truck and shovel at Shell’s massive Albian Sands open-pit mine in northern Alberta to send the message that the tar sands are a global climate crime that must be stopped.
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“Through this action, Greenpeace put this destruction centre stage to show the world why we must stop the tar sands.” — Mike Hudema, Greenpeace climate and energy campaigner. Read the full news release.
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The 25 activists from Canada, the United States and France entered the mine, about 60 kilometres north of Fort McMurray, at 8:00 a.m. They blockaded a giant three-storey dump truck and hydraulic shovel by chaining together pick-up trucks. Two teams then scaled the truck and shovel and chained themselves to them, while another team placed giant banners on the tarry ground reading, “Tar Sands: Climate Crime.”
“Greenpeace has come here today, to the frontiers of climate destruction to block this giant mining operation and tell Harper and Obama meeting tomorrow that climate leaders don’t buy tar sands” said Mike Hudema, Greenpeace Canada climate and energy campaigner, from inside the blockade. “The tar sands are a devastating example of how our future will look unless urgent action is taken to protect the climate.”
Canada is now the number one exporter of oil to the US, most of which is dirty tar sands oil. The climate crimes of tar sands development—rising energy intensity, greenhouse gas (GHG) emissions, and Boreal forest destruction—are leading the world to climate chaos.
The world’s oil addiction has turned the tar sands into the biggest industrial project on the planet, occupying an area the size of England. Tar sands GHG emissions, already nearing those of Norway, could soon more than triple to 140 million tonnes a year, as outlined in a Greenpeace report by award winning author Andrew Nikiforuk released this week. At that point they would equal or exceed those of Belgium, a county of 10 million. These numbers account only for the production of tar sands oil, and do not account for the massive additional GHG impact of burning the fuel.
“The tar sands are at the leading edge of climate chaos. Climate leadership from President Obama, Prime Minister Harper and other world leaders means abandoning the dirty oil that is pushing our planet to climate collapse and forging a green energy economy and a healthy world for our children.”
Today’s action targeted Shell, but other major companies including BP, Suncor, Syncrude, ExxonMobil, Total and StatoilHydro run tar sands operations that put them at the forefront of oil addiction.
Urgent action on the climate must be front and centre at the United Nations climate conference in Copenhagen in December. With fewer than 90 days left to the most important climate negotiations in history, Greenpeace is calling on world leaders to end to the climate catastrophe that is the Alberta tar sands and to commit to deep emissions cuts at Copenhagen.
“World leaders need to turn away from the dirtiest oil on the planet and embrace clean energy alternatives” said Greenpeace climate and energy campaigner Melina Laboucan-Massimo. “Until they do, oil interests will continue to dominate and Canada will continue to obstruct crucial international climate talks like those in Copenhagen.”
Through its KYOTOplus campaign, Greenpeace Canada is working to convince the Harper government to become a leader at the United Nations climate conference in Copenhagen in December.
September 15, 2009
Revealed: The ghost fleet of the recession
By Simon Parry
London Daily Mail
13th September 2009
The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination - and is why your Christmas stocking may be on the light side this year
The 'ghost fleet' near Singapore
The 'ghost fleet' near Singapore. The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies |
The tropical waters that lap the jungle shores of southern Malaysia could not be described as a paradisical shimmering turquoise. They are more of a dark, soupy green. They also carry a suspicious smell. Not that this is of any concern to the lone Indian face that has just peeped anxiously down at me from the rusting deck of a towering container ship; he is more disturbed by the fact that I may be a pirate, which, right now, on top of everything else, is the last thing he needs.
His appearance, in a peaked cap and uniform, seems rather odd; an o fficer without a crew. But there is something slightly odder about the vast distance between my jolly boat and his lofty position, which I can't immediately put my finger on.
Then I have it - his 750ft-long merchant vessel is standing absurdly high in the water. The low waves don't even bother the lowest mark on its Plimsoll line. It's the same with all the ships parked here, and there are a lot of them. Close to 500. An armada of freighters with no cargo, no crew, and without a destination between them.
 Simon Parry among the ships in southern Malaysia |
My ramshackle wooden fishing boat has floated perilously close to this giant sheet of steel. But the face is clearly more scared of me than I am of him. He shoos me away and scurries back into the vastness of his ship. His footsteps leave an echo behind them.
Navigating a precarious course around the hull of this Panama-registered hulk, I reach its bow and notice something else extraordinary. It is tied side by side to a container ship of almost the same size. The mighty sister ship sits empty, high in the water again, with apparently only the sailor and a few lengths of rope for company.
Nearby, as we meander in searing midday heat and dripping humidity between the hulls of the silent armada, a young European offi cer peers at us from the bridge of an oil tanker owned by the world's biggest container shipping line, Maersk. We circle and ask to go on board, but are waved away by two Indian crewmen who appear to be the only other people on the ship.
'They are telling us to go away,' the boat driver explains. 'No one is supposed to be here. They are very frightened of pirates.'
Here, on a sleepy stretch of shoreline at the far end of Asia, is surely the biggest and most secretive gathering of ships in maritime history. Their numbers are equivalent to the entire British and American navies combined; their tonnage is far greater. Container ships, bulk carriers, oil tankers - all should be steaming fully laden between China, Britain, Europe and the US, stocking camera shops, PC Worlds and Argos depots ahead of the retail pandemonium of 2009. But their water has been stolen.
They are a powerful and tangible representation of the hurricanes that have been wrought by the global economic crisis; an iron curtain drawn along the coastline of the southern edge of Malaysia's rural Johor state, 50 miles east of Singapore harbour.
Fisherman Ah Wat |
'We don't understand why they are here. There are so many ships but no one seems to be on board,' said local fisherman Ah Wat
It is so far off the beaten track that nobody ever really comes close, which is why these ships are here. The world's ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world's economies.
So they have been quietly retired to this equatorial backwater, to be maintained only by a handful of bored sailors. The skeleton crews are left alone to fend off the ever-present threats of piracy and collisions in the congested waters as the hulls gather rust and seaweed at what should be their busiest time of year.
Local fisherman Ah Wat, 42, who for more than 20 years has made a living fishing for prawns from his home in Sungai Rengit, says: 'Before, there was nothing out there - just sea. Then the big ships just suddenly came one day, and every day there are more of them.
'Some of them stay for a few weeks and then go away. But most of them just stay. You used to look Christmas from here straight over to Indonesia and see nothing but a few passing boats. Now you can no longer see the horizon.'
The size of the idle fleet becomes more palpable when the ships' lights are switched on after sunset. From the small fishing villages that dot the coastline, a seemingly endless blaze of light stretches from one end of the horizon to another. Standing in the darkness among the palm trees and bamboo huts, as calls to prayer ring out from mosques further inland, is a surreal and strangely disorientating experience. It makes you feel as if you are adrift on a dark sea, staring at a city of light.
Ah Wat says: 'We don't understand why they are here. There are so many ships but no one seems to be on board. When we sail past them in our fishing boats we never see anyone. They are like real ghost ships and some people are scared of them. They believe they may bring a curse with them and that there may be bad spirits on the ships.'
Two container ships tied together in Sungai Rengit, southern Malaysia
Two container ships tied together in southern Malaysia, waiting for the next charter |
As daylight creeps across the waters, flags of convenience from destinations such as Panama and the Bahamas become visible. In reality, though, these vessels belong to some of the world's biggest Western shipping companies. And the sickness that has ravaged them began far away - in London, where the industry's heart beats, and where the plummeting profits and hugely reduced cargo prices are most keenly felt.
The Aframax-class oil tanker is the camel of the world's high seas. By definition, it is smaller than 132,000 tons deadweight and with a breadth above 106ft. It is used in the basins of the Black Sea, the North Sea, the Caribbean Sea, the China Sea and the Mediterranean - or anywhere where non-OPEC exporting countries have harbours and canals too small to accommodate very large crude carriers (VLCC) or ultra-large crude carriers (ULCCs). The term is based on the Average Freight Rate Assessment (AFRA) tanker rate system and is an industry standard.
A couple of years ago these ships would be steaming back and forth. Now 12 per cent are doing nothing
You may wish to know this because, if ever you had an irrational desire to charter one, now would be the time. This time last year, an Aframax tanker capable of carrying 80,000 tons of cargo would cost £31,000 a day ($50,000). Now it is about £3,400 ($5,500).
This is why the chilliest financial winds anywhere in the City of London are to be found blowing through its 400-plus shipping brokers.
Between them, they manage about half of the world's chartering business. The bonuses are long gone. The last to feel the tail of the economic whiplash, they - and their insurers and lawyers - await a wave of redundancies and business failures in the next six months. Commerce is contracting, fleets rust away - yet new ship-builds ordered years ago are still coming on stream.
World shipping is tracked by satellite service Vesseltracker |
Just 12 months ago these financiers and brokers were enjoying fat bonuses as they traded cargo space. But nobody wants the space any more, and those that still need to ship goods across the world are demanding vast reductions in price.
Do not tell these men and women about green shoots of recovery. As Briton Tim Huxley, one of Asia's leading ship brokers, says, if the world is really pulling itself out of recession, then all these idle ships should be back on the move.
 South China Sea map |
'This is the time of year when everyone is doing all the Christmas stuff,' he points out.
'A couple of years ago those ships would have been steaming back and forth, going at full speed. But now you've got something like 12 per cent of the world's container ships doing nothing.'
Aframaxes are oil bearers. But the slump is industry-wide. The cost of sending a 40ft steel container of merchandise from China to the UK has fallen from £850 plus fuel charges last year to £180 this year. The cost of chartering an entire bulk freighter suitable for carrying raw materials has plunged even further, from close to £185,000 ($300,000) last summer to an incredible £6,100 ($10,000) earlier this year.
Business for bulk carriers has picked up slightly in recent months, largely because of China's rediscovered appetite for raw materials such as iron ore, says Huxley. But this is a small part of international trade, and the prospects for the container ships remain bleak.
Some experts believe the ratio of container ships sitting idle could rise to 25 per cent within two years in an extraordinary downturn that shipping giant Maersk has called a 'crisis of historic dimensions'. Last month the company reported its first half-year loss in its 105-year history.
Martin Stopford, managing director of Clarksons, London's biggest ship broker, says container shipping has been hit particularly hard: 'In 2006 and 2007 trade was growing at 11 per cent. In 2008 it slowed down by 4.7 per cent. This year we think it might go down by as much as eight per cent. If it costs £7,000 a day to put the ship to sea and if you only get £6,000 a day, than you have got a decision to make.
'Yet at the same time, the supply of container ships is growing. This year, supply could be up by around 12 per cent and demand is down by eight per cent. Twenty per cent spare is a lot of spare of anything - and it's come out of nowhere.'
These empty ships should be carrying Christmas over to the West. All retailers will have already ordered their stock for the festive season long ago. With more than 92 per cent of all goods coming into the UK by sea, much of it should be on its way here if it is going to make it to the shelves before Christmas.
Large ships off the coastline close to Sungai Rengit |
But retailers are running on very low stock levels, not only because they expect consumer spending to be down, but also because they simply do not have the same levels of credit that they had in the past and so are unable to keep big stockpiles.
Stopford explains: 'Globalisation and shipping go hand in hand. Worldwide, we ship about 8.2 billion tons of cargo a year. That's more than one ton per person and probably two to three tons for richer people like us in the West. If the total goes down by five per cent or so, that's a lot of cargo that isn't moving.'
The knock-on effect of so many ships sitting idle rather than moving consumer goods between Asia and Europe could become apparent in Britain in the months ahead.
'We will find out at Christmas whether there are enough PlayStations in the shops or not. There will certainly be fewer goods coming in to Britain during the run-up to Christmas.'
Three thousand miles north-east of the ghost fleet of Johor, the shipbuilding capital of the world rocks to an unpunctuated chorus of hammer-guns blasting rivets the size of dustbin lids into shining steel panels that are then lowered onto the decks of massive new vessels.
As the shipping industry teeters on the brink of collapse, the activity at boatyards like Mokpo and Ulsan in South Korea all looks like a sick joke. But the workers in these bustling shipyards, who teem around giant tankers and mega-vessels the length of several football pitches and capable of carrying 10,000 or more containers each, have no choice; they are trapped in a cruel time warp.
There have hardly been any new orders. In 2011 the shipyards will simply run out of ships to build
A decade ago, South Korean President Kim Dae-jung (who died last month) issued a decree to his industrial captains: he wished to make his nation the market leader in shipbuilding. He knew the market intimately. Before entering politics, he studied economics and worked for a Japanese-owned freight-shipping business. Within a few years he was heading his own business, starting out with a fleet of nine ships.
Thus, by 2004, Kim Dae-jung's presidential vision was made real. His country's low-cost yards were winning 40 per cent of world orders, with Japan second with 24 per cent and China way behind on 14 per cent.
But shipbuilding is a horrendously hard market to plan. There is a three-year lag between the placing of an order and the delivery of a ship. With contracts signed, down-payments made and work under way, stopping work on a new ship is the economic equivalent of trying to change direction in an ocean liner travelling at full speed towards an iceberg.
Thus the labours of today's Korean shipbuilders merely represent the completion of contracts ordered in the fat years of 2006 and 2007. Those ships will now sail out into a global economy that no longer wants them.
Maersk announced last week that it was renegotiating terms and prices with Asian shipyards for 39 ordered tankers and gas carriers. One of the company's executives, Kristian Morch, said the shipping industry was in uncharted waters.
More...
As he told the global shipping newspaper Lloyd's List only last week: 'You have a contraction of oil demand, you have a falling world economy and you have a contraction of financing capabilities - and at the same time as a lot of new ships are being delivered.'
Demand peaked in 2005 when, with surplus tonnage worldwide standing at just 0.7 per cent, ship owners raced to order, fearing docks and berths at major shipyards would soon be fully booked. That spell of 'panic buying' has heightened today's alarming mismatch between supply and demand.
Keith Wallis, East Asia editor of Lloyd's List, says, 'There was an ordering frenzy on all types of vessel, particularly container ships, because of the booming trade between Asia and Europe and the United States. It was fuelled in particular by consumer demand in the UK, Europe and North America, as well as the demand for raw materials from China.'
Cranes at Singapore Dock stand idle, waiting for work |
Orders for most existing ships to be delivered within the next six to nine months would be honoured, he predicted, and the ships would go into service at the expense of older vessels in the fleet, which would be scrapped or end up anchored off places like southern Malaysia.
But, says Wallis, 'some ship owners won't be able to pay their final instalments when the vessels are completed. Normally, they pay ten per cent down when they order the ship and there are three or four stages of payment. But 50 to 60 per cent is paid on delivery.'
South Korean shipyard Hanjin Heavy Industries last week said it had been forced to put up for sale three container ships ordered at a cost of £60 million ($100 million) by the Iranian state shipping line after the Iranians said they could not pay the bill.
'The prospects for shipyards are bleak, particularly for the South Koreans, where they have a high proportion of foreign orders. Whole communities in places like Mokpo and Ulsan are involved in shipbuilding and there is a lot of sub-contracting to local companies,' Wallis says.
'So far the shipyards are continuing to work, but the problems will start to emerge next year and certainly in 2011, because that is when the current orders will have been delivered. There have hardly been any new orders in the past year. In 2011, the shipyards will simply run out of ships to build.'
Christopher Palsson, a senior consultant at London-based Lloyd's Register-Fairplay Research, believes the situation will worsen before it gets better.
'Some ships will be sold for demolition but the net balance will be even further pressure on the freight rates and the market itself. A lot of ship owners and operators are going to find themselves in a very difficult situation.'
The current downturn is the worst in living memory and more severe even than the slump of the early Eighties, Palsson believes.
'Back then the majority of the crash was for tankers carrying crude oil. Today we have almost every aspect of shipping affected - bulk carriers, tankers, container carriers... the lot.
'It is a much wider-spread situation that we have today. China was not a major player in the world economy at that time. Neither was India. We had the Soviet Union. We had shipbuilding in the United Kingdom and Europe.
'But then, back in those days the world was a very different place.'
September 10, 2009
Cap and trade debate heats up
By Shaun Polczer
Calgary Herald
September 10, 2009
CALGARY - The debate surrounding Canada's position on capping greenhouse gas emissions is heating up ahead of a global warming summit in Copenhagen this year.
The Fraser Institute waded into the discussion Wednesday after a leading U. S. economist and columnist for the Wall Street Journal lambasted the idea of a cap and trade system as "disastrous" for both Canada and the United States.
Stephen Moore, who co-authored the book The End of Prosperity, called the U. S. energy bill working its way through Congress a "dressed up protectionist measure" in a speech to a Calgary audience. Moore said the economic consequences of cap and trade will dwarf any of the presumed benefits without resulting in substantial emissions reductions. Instead, he said such a policy would make energy more expensive, lowering North Americans' standard of living.
"The Obama people have drunk the Kool-Aid on this."
Meanwhile, Calgary's oilpatch is eagerly hanging on details of Ottawa's greenhouse gas reduction strategy ahead of the UN conference on climate change in December.
Already, companies like Shell Canada are preparing for what are expected to be tough new standards on emissions reductions, said spokesman Phil Vircoe.
Shell is in favour of a cap and trade system that would give oil and gas producers incentives to reduce emissions, he said. Shell executives including regulatory affairs manager Gerry Ertel have been lobbying for a system of caps and offsets as a means of achieving meaningful reduction targets. Ertel was not immediately available to comment, but he told the Herald last week that Shell has been participating in the European cap and trade program since its inception.
"Emissions trading on its own is not enough, however. It is just one part of a much broader climate policy framework that also needs . . . to address emissions from other sources such as transportation and buildings."
Environmentalists remain cautious over what such a system will look like. Clare Demerse, a climate change expert with the Pembina Institute in Ottawa, said it's important to design a system without loopholes that would allow big oilsands companies to trade emissions without making real reductions.
This country is falling behind politicians such as U. S. President Barack Obama and even California Gov. Arnold Schwarzenegger who have emerged as champions of the green movement. The lack of a cohesive policy platform is a disadvantage for Canada in any talks over a North American emissions reduction strategy, she said.
"You don't hear that kind of commitment from our government," she told the Herald. "We need a stronger focus on exactly the kinds of things we're hearing in the U. S. Canada hasn't brought anything to the table."
spolczer@theherald.canwest.com
© Copyright (c) The Calgary Herald
Sqwalk.com takes a collateral hit in Whatcom County council election mudslinging
On September 10, www.sqwalk.com received this letter by email:
From: Shirley, Julie [mailto:julie.shirley@bellinghamherald.com]
Sent: September-10-09 9:31 AM
To: query@sqwalk.com
Subject: Copyright violation on your siteDear Sirs,
It has been brought to my attention that the website located at http://www.sqwalk.com/ has content in written form reproduced from The Bellingham Herald and TheBellinghamHerald.com.
Please remove all Bellingham Herald content present on your site immediately. You are also urged to not publish future stories or images from The Herald or The BellinghamHerald.com on your site without prior written consent.
The content in question includes but is not limited to the following items on your website:
http://www.sqwalk.com/blog2004/000016.html
Please remove the materials cited above immediately, and any others that you may know of in violation of The Bellingham Herald's copyright within the next 5 business days.
Please reply with confirmation of action taken within 5 business days or this matter will be forwarded to the McClatchy Company's legal department for further action.
If you have comments or concerns, please feel free to contact me.
Regards,
Julie ShirleyJulie Shirley, Executive Editor
The Bellingham Herald and TheBellinghamHerald.com1155 N. State St., Bellingham WA 98225
Voice: (360) 715-2261
Fax: (360) 756-2826
E-mail: julie.shirley@bellinghamherald.com
Visit us at thebellinghamherald.comNEW MOBILE SITE: iPhone users can now follow the news at www.bellinghamherald.com/mobile.
Readers might like to know how it came about.
Back in 1999, a pipeline spilling gasoline blew up in a park in Bellingham, killing two boys and a young man. Carl Weimer was incensed and led a local, then state-wide, and now national initiative for greater pipeline safety - better information, better regulation and oversight, more transparency throughout. He now leads the Bellingham-based Pipeline Safety Trust (www.pstrust.org), which was started with funding provided by the families whose children were killed, using funds from an award paid by the pipeline company. Carl is also running for a second term as a Whatcom County Councillor.
In 2000 or 2001 I met Carl and a friendship started.
In 2004, the fifth anniversary of the deaths, the Bellingham Herald published an excellent series of articles about the incident, the tragedy and its aftermath. One of those articles is posted on www.sqwalk.com, and it includes a picture of Carl Weimer. (It also commemorated the tragedy appropriately in June 2009, on the tenth anniversary.)
Fast forward to August 2009. A conservative group which was created to work for conservate candidates in the Whatcom County Council election, and which is associated with the local Republican Party, put together a two-page brochure "aiming at the left-leaning Council candidates". It included pictures of those candidates. One of those pictures, the one of Carl, it apparently obtained from this website. Strange choice - there are many photos of Carl available, and in this one he's barely recognizable.
Permission is being sought from the Bellingham Herald to post its picture of the front of the Rural Neighbors PAC brochure. In the meantime, you can find it here.
A furor broke out about the brochure, someone asked questions about the photos used on it, one thing led to another, and eventually the Executive Editor of the Bellingham Herald wrote the letter copied above.
Here are links to two blogs by Sam Taylor, from the Bellingham Herald on September 9 & 10.
Rural Neighbors PAC aims at left-leaning County Council candidates
Herald photos used in Dow’s conservative mailer, action won’t be taken
The second blog says this:
"The photo of Carl Weimer is from 2004 in which he’s near Whatcom Creek regarding the Olympic Pipeline Explosion. It appears that a group calling themselves the Concerned Citizens Coalition in regards to the Georgia Strait Crossing Pipeline took the article the photo was related to — and the photo — and reprinted it online, right here."Both of those links and photos have been sent around to various people in the community now who are discussing the taking of Herald photos.
"Bellingham Herald Executive Editor Julie Shirley issued the following statement about the photos:
"If the photos are ours, I’m disappointed anyone would take content without permission. However, because it appears only a small portion of the total photo was used, we’re not going to take legal action at this time. After conversations with our legal counsel, we’ve decided this isn’t a case in which to test “fair use” in court. The Web site that appears to have taken content without license or permission has been contacted and asked to remove our story."
And thus, sqwalk.com takes a collateral hit from Whatcom County politics.
Carl Weimer says in an email: "Just a heads up that there are some political shenanigans going on here in Bellingham and you may get dragged in. Some local conservatives have run a campaign hit piece (it's election time around here and I am running again) and they used a Bellingham Herald picture in their mailer. Seems that photo has been tracked back to the Sqwalk website ...."
Arthur Caldicott
September 07, 2009
Natural Gas Hits a Roadblock in New Energy Bill
By CLIFFORD KRAUSS
New York Times
September 6, 2009
HOUSTON — The natural gas industry has enjoyed something of a winning streak in recent years. It found gigantic new reserves, low prices are encouraging utilities to substitute gas for coal, and cities are switching to buses fueled by natural gas.
 Aubrey McClendon of Chesapeake Energy blamed “Congressional apathy” for coal’s price advantages. (F. Carter Smith/Bloomberg News) |
For all its pronouncements that gas could be used to replace aging, inefficient coal-fired power plants — and reduce greenhouse gas emissions in the process — lawmakers from coal-producing states appear committed to keeping coal as the nation’s primary producer of power.
Those influential lawmakers, from both parties, say that new technologies under development to capture and bury emissions of coal are a better bet than gas for long-term solutions to climate change.
The difference of opinion is about more than what is best for the environment, of course. Industry profits are riding on the outcome of the discussion — a rich mix of politics, environment, science and business.
A climate-change bill that passed the House in June, intended to cap greenhouse gas emissions, delivered benefits to renewable fuels like wind and solar and strengthened building codes to conserve energy.
But the cost of emitting carbon dioxide emissions under the terms of the bill remained at levels that would continue to provide a price advantage for coal in many regions of the country.
The Senate is planning to begin writing its own bill later this month.
“The Senate is more open to natural gas as a transition fuel than the House was,” said Senator Charles E. Schumer, Democrat of New York, “but the senators from the coal states who are crucial votes are going to want first consideration for coal.”
The gas industry’s leaders say they will descend on Capitol Hill in coming weeks to press their case about the advantage of gas, including that it emits about half the greenhouse gases as coal.
The industry has formed a new lobbying group, and it is planning a national campaign that includes television advertising. Executives want fewer allowances for coal. They also want legislation that gives incentives for companies to convert truck fleets from diesel to natural gas.
“Never in my life have I been confronted with something so obviously easy and good to do and have such Congressional apathy,” said Aubrey McClendon, chief executive of Chesapeake Energy and a leading voice in the industry. He added that he was still hopeful the Senate can improve the House bill.
But the coal industry will also be active. Vic Svec, a senior vice president at Peabody Energy, a large coal company, said coal was still a better fuel because its price is more stable than gas.
“Coal with carbon capture and storage is the low cost, low carbon solution and has fantastic implications for the nation’s energy security,” he said.
But it is not only coal-industry lobbyists and their Congressional supporters who favor the concept of carbon sequestration. David Hawkins, a climate change expert at the Natural Resources Defense Council, said simply replacing coal with natural gas for power generation was “not a viable strategy” because that would merely delay climate change by a few decades.
“A coal plant with carbon capture and storage is a cleaner plant than an uncontrolled natural gas plant,” he said.
Natural gas gets some benefits from the House bill, which includes a cap-and-trade system that sets limits on emissions of greenhouse gases while requiring manufacturers and utilities to acquire pollution permits.
Utilities that burn natural gas would earn $30 billion over 10 years in pollution credits that could be sold on the carbon-trading market. But utilities that burn coal will receive tens of billions of dollars worth of free pollution credits, savings that will be passed on to consumers but may serve to delay the closing of some coal plants.
The House bill also offers $10 billion for research and development of techniques to capture and store carbon dioxide emissions, which would help keep some coal plants open that might otherwise close.
The Environmental Protection Agency projects that if the House bill became law, electricity generation from gas would increase by less than 1 percent from 2015 to 2025, while generation from coal would remain nearly unchanged.
There will be more use of renewables, but power generation as a whole is expected to decline because of conservation efforts, including tightening of building energy codes.
“By allowing free emission allowances to maintain coal production from existing coal plants, while providing mandates that there be more wind and solar, you squeeze gas out in the middle,” said William F. Whitsitt, an executive vice president at Devon Energy, a major natural gas producer.
Without any new legislation, and if current policies remain in place, gas would beat out coal by a far larger margin, according to E.P.A. projections.
There would be nearly 30 percent more power generated by gas by 2025 than in 2015, while coal fired generation would grow by a more modest 7 percent.
Many legislators believe that carbon capture and sequestration — a largely untested system that would bury carbon at power plants so it does not escape into the atmosphere — can be made to work.
Developing the technology was particularly important for any global solution to climate change, since China and India depend on coal for their energy and growing economies, said Paul W. Bledsoe, director of communications and strategy at the National Commission on Energy Policy, a bipartisan research organization.
Currently, coal provides almost half the electrical power in the United States while natural gas provides more than 20 percent.
Proponents of natural gas say they can deliver immediate reductions in greenhouse gases, an advantage that should not be discarded for an untested technology.
Senate officials and energy officials say it will be difficult to develop legislation that benefits both the gas and coal industries and reduces greenhouse gases.
Gas executives say their day in Washington will come, especially as more jobs are produced in gas fields that now stretch across 32 states.
“The politics of natural gas are going to change dramatically,” predicted Rodney Lowman, president of the American Natural Gas Alliance, the new gas lobby group. But, he added, “it won’t be overnight.”
Another Astroturf Campaign
Editorial
NY Times
September 4, 2009
It was probably only a matter of time, but the oil lobby has taken a page from the anti-health-care-reform manual in an effort to drum up opposition to climate change legislation in Congress. Behind the overall effort — billed, naturally, as a grass-roots citizen movement — lie the string-pullers at the American Petroleum Institute, the industry’s main trade organization and a wily, well-funded veteran of the legislative wars.
Greenpeace, the advocacy group, uncovered a letter last month from the A.P.I. president, Jack Gerard, to industry C.E.O.’s revealing that the campaign’s central objective is to “put a human face on the impacts of unsound energy policy,” specifically the Waxman-Markey bill recently passed by the House.
The Waxman-Markey bill seeks a 17 percent reduction in greenhouse gas emissions by 2020, partly by requiring emitters like power plants and oil refineries to invest in cleaner technologies or, if they cannot reduce their own emissions, to buy permits from companies that can. Either way, the bill will saddle polluters with new costs. The Senate will take up its own version of the bill this month.
So far, A.P.I. has organized nearly 20 rallies in oil-producing centers like Houston and smaller Rust Belt towns like Lima, Ohio, and Elkhart, Ind. The immediate audience typically consists of several hundred local residents, and the atmosphere is festive — marching bands and hot dogs.
The ultimate audience is fence-sitting senators who may be persuaded to reshape the House bill to the industry’s liking or vote against it altogether.
Local residents are not, of course, invited to debate the consequences of global warming, or dwell upon those parts of the bill that could lead to a whole new industry — and the jobs that would go with it — based on alternative energy sources, or to a future in which people save money by buying more fuel-efficient cars. The narrative they get is one of unrelenting gloom —unaffordable gasoline, stratospheric home heating bills and shuttered industries.
One can always expect hyperbole from Washington lobbyists when billions are at stake, but two elements of the industry’s campaign are particularly annoying. One is the assertion that Waxman-Markey will inevitably mean $4-a-gallon gasoline. Two reputable studies of the bill — by the Environmental Protection Agency and the Energy Information Administration — say that gasoline prices will increase by about 20 cents a gallon at most by 2020, an estimate that does not account for the effects of new investments in clean vehicle technology.
The second claim is that the bill treats the oil industry unfairly compared with, say, the electric utilities. But the bill does not prevent the oil companies from passing along whatever costs they incur to consumers. And let’s not forget that over the years few industries have profited as handsomely from government policies as the oil and gas industries.
What the oil companies are probably worried about is that people and industries will use less of their product as alternatives appear and consumers become more energy-efficient. But isn’t that the point of the exercise?
see also:
Oil Industry Backs Protests of Emissions Bill, 18-Aug-2009
Oil lobby to fund campaign against Obama's climate change strategy, 14-Aug-2009
Renewable-power fight at crossroads
David R. Baker,
San Francisco Chronicle
September 4, 2009
A fierce and complicated fight has broken out in Sacramento over a simple idea with broad support - increasing California's use of renewable power.
The fight isn't over the basic goal.
Two bills pending in the Legislature would force the state's electrical utilities to get 33 percent of their power from renewable sources by 2020, up from the current requirement of 20 percent by the end of 2010. A priority of Gov. Arnold Schwarzenegger, the 33 percent goal has the backing of environmentalists, legislators and - grudgingly - the utilities.
But the details involved in reaching such an ambitious goal have touched off a complex debate, one that will probably reach its climax in the next week when the Assembly votes on one of the bills.
The utilities want maximum flexibility in how they meet the requirement. They want to tap large amounts of power from out-of-state wind farms, solar plants and hydroelectric dams, and they want the ability to get extensions if they blow the deadline.
"If policymakers want to take us to 33 percent, we can be supportive of that, but it has to come with the right framework that takes into account the realities in the market," said Pedro Pizarro, executive vice president for Southern California Edison.
Environmentalists' concerns
Environmentalists want to make sure the bills don't weaken the state's standards for the kinds of renewable-power projects that would count toward the 33 percent goal. Consumer advocates want to keep Californians' electric bills from soaring. They also want to limit power imports so that most of the solar and wind farms built as a result of the 33 percent requirement are built in California.
There's also the question of feasibility.
The state's three major, investor-owned utilities probably won't reach the current 20 percent target by the end of 2010. They'll need until 2013 or 2014, according to a recent report from the California Public Utilities Commission. Cost estimates have varied widely, but one analysis released by the commission this spring showed that reaching the 33 percent goal by 2020 could require as much as $115 billion.
"It's a lot harder to do renewable development on this scale than we realized," said Matt Freedman, staff attorney for The Utility Reform Network, a consumer watchdog group. "These are all somewhat aspirational goals, and it's good for public policy to work that way. If it's too easy to achieve, you probably set the bar too low."
Debate over imports
Much of the debate has focused on importing renewable power from other states - or from another country altogether. The utilities argue that California probably won't build enough solar plants, geothermal plants or wind farms in the next decade to meet the 33 percent goal.
Pacific Gas and Electric Co., in particular, wants hydroelectric power from British Columbia that possibly would be brought to California on a new high-voltage transmission line.
"We believe that we're going to need to have access to out-of-state renewable power to meet these goals," said PG&E spokeswoman Cindy Pollard. "There just isn't enough here in California without it."
That worries Freedman, who says it could end up creating more renewable power projects - and therefore, more jobs - in states other than California.
"This is about creating a green economy in California," he said. "But what happens if it turns out that most of the development doesn't happen in California?"
Senate Bill 14, which will probably face an Assembly vote in the next week, would allow imported power, but only to a point. Long-distance imports could make up 20 percent of each utility's total renewable power portfolio.
That limit works for the Union of Concerned Scientists, one of the many environmental groups eyeing the bill. But Laura Wisland, an energy analyst for the group, wants to make sure the bill's final language doesn't change the kinds of renewable power projects that could count toward the 33 percent goal.
'Run-of-the-river' projects
PG&E, she said, is interested in Canadian "run-of-the-river" hydro projects that might not meet California's environmental management standards. Under current state law, utilities can't count renewable power from projects that don't meet those standards, she said. Run-of-the-river hydro projects divert water from a river to turn turbines but don't block the entire stream.
"Run of river doesn't necessarily mean no environmental impact - it just means no big dam," Wisland said.
Oil Sands: Destroyer or Savior?
By TOM ZELLER Jr.
New York Times
September 6, 2009
" An open-pit mine for oil sands north of Fort McMurray in Alberta, Canada in 2008. (Eamon Mac Mahon/Associated Press) |
NEW YORK — Few energy resources stir passions like Canada’s oil sands.
The vast, gooey mixture of clay, sand, water and, most notably, bitumen — a hydrocarbon paste that, with a fair amount of work, can be separated from the granular stuff and eventually refined into a variety of petroleum products — has the potential to produce upwards of a trillion barrels of oil, by some estimates.
Accomplishing that, however, is a profoundly expensive, dirty and energy-intensive affair. Huge inputs of natural gas, for example, are needed to separate and process the bitumen, and according to one study by RAND, production from oil sands generates perhaps 30 percent more greenhouse gases than conventional oil extraction.
As my colleague Ian Austen noted for The New York Times this year, the process amounts to the most capital-intensive method for extracting oil. “Each of the tires on the cartoonishly oversize dump trucks used in oil sands mining,” he noted, “costs about $60,000.”
The question in the United States, then, is how to weigh the disadvantages against the very real benefit of securing access to a substantial — and friendly — source of foreign oil for decades to come.
Among those giving more weight to the benefits: the U.S. State Department, which issued final approval late last month for the construction of a new pipeline aimed at widening the United States’ tap on Canadian tar sands. Last week, a coalition of environmental groups, invoking the downsides of oil sands production, called the State Department’s review of the pipeline project slipshod and filed a lawsuit to block it.
In its decision, the State Department, citing numbers from the Energy Information Administration, estimated that the “balance between domestic supply and demand” will require imports of unconventional oil from Canada to grow from current levels of roughly 1.5 million barrels a day to some 4.3 million barrels by 2030.
The pipeline project, the State Department asserted, “would serve the national interest, in a time of considerable political tension in other major oil-producing regions and countries, by providing additional access to a proximate, stable, secure supply of crude oil.”
As for the added intensity of greenhouse gas emissions associated with tar sands development, the State Department decision stated, “The administration has considered these concerns and considers that on balance they do not outweigh the benefits to the national interests identified above.”
Sarah Burt, a lawyer with Earthjustice, a California-based law firm spearheading the suit, which targets the State Department and the U.S. Army Corps of Engineers, said that one of the goals was to “provide some space for decision makers to consider some of the central issues these pipeline projects raise.”
Not least among those, Ms. Burt said, was whether the new supply line — dubbed the Alberta Clipper Project by its builder, Enbridge Energy Partners of Houston — unnecessarily expands the already voracious U.S. appetite for fossil fuels even as the nation is on the hunt for alternatives.
In its attempt to focus attention on that larger question, the lawsuit, in which Earthjustice is joined by a variety of state and national environmental groups, takes aim at smaller game, including what it sees as holes in the decision-making process.
According to the suit, for example, the State Department, failed properly to review expansion of an auxiliary pipeline that would carry a substance to Alberta to dilute the viscous oil-sands product so that it can flow back down through the Alberta Clipper line. Earthjustice claims that this diluent pipeline should have been wholly examined as part of the larger environmental impact assessment required for permitting the Clipper.
The group also argues that the State Department overlooked a variety of “indirect and cumulative” effects of the new pipeline, the U.S. portion of which will run more than 300 miles, or 480 kilometers, from the Canadian border just west of Minnesota, across the north of that state, to the western tip of Lake Superior near Duluth. Among those effects are environmental and climatic ones resulting from the inevitable expansion of bitumen refining facilities in the United States.
And, of course, there are the effects on forest and wetland associated with construction of a new pipeline, and the potential for harm to the “health, recreational, economic, aesthetic and cultural interests” of American Indian tribes on whose land portions of the pipeline will run.
The State Department did not return calls for comment, but Denise Hamsher, a spokeswoman for Enbridge (which is not named in the lawsuit), more than once summed up the company’s opinion of the litany of charges made by Earthjustice this way: “Nonsense.”
The pipeline and the U.S. government permit, Ms. Hamsher noted, did not come about overnight, but after years of deliberation, public comments and the acquisition of dozens of accompanying state and tribal permits. The U.S. environmental impact statement, she pointed out, is nearly 4,000 pages long — and it includes, Ms. Hamsher said, an analysis of both the Clipper line and the accompanying diluent line.
The project, too, runs along an existing pipeline corridor, Ms. Hamsher said, and isn’t cutting through virgin territory — though she conceded that a new pipeline might expand that the width of that corridor as much as 100 feet, or 30 meters.
Even here, Ms. Hamsher argued, the footprint would be minimal, and the company is required to perform reclamation measures to compensate for its effect on surrounding land.
As for American Indians on affected lands, Ms. Hamsher said Enbridge had the tribal leaders’ blessing.
Indeed, Frank Bibeau, legal director for the Leech Lake Band of the Minnesota Chippewa Tribe, suggested in a phone call that he and other tribal leaders viewed the pipeline as a boon to the tribe — and the country — despite a petition drive among some tribal members seeking a referendum on the project.
According to Mr. Bibeau, the Leech Lake Band is receiving $10 million from Enbridge as part of the deal. “That $10 million is very important for jobs and tribal members and the whole Northern Minnesota area,” Mr. Bibeau said, “which is economically depressed.”
“My belief as a citizen of the U.S. is if we were able to completely stop the new pipelines,” he added, “I believe that the Chinese and Japanese will just build pipelines to the Pacific Coast, and they’ll take the crude.”
Whatever the merits of either side of the pipeline debate — and the larger one over Alberta’s oil sands — that possibility may already be under way. Just last week, PetroChina, a Chinese state-owned oil company, agreed to pay $1.7 billion for a majority stake in two tar sands projects.
September 06, 2009
China Oil Deal Is New Source of Strife Among Iraqis
COMMENT: Here in Canada we're making a big to-do out of China's recent $1.9 billion investment in the tar sands.
Tar sands boosters trumpet it as proof that the tar sands are not dead, that the cyle has turned a corner, yadda yadda.
But hold on. What is $1.9 billion in global oil investments? Not so much. What is it in the context of China's energy investments globally in the last, say, five years? Not so much. Prices are down on everything, and China with its huge US dollar holdings is building up a portfolio of energy insurance around the globe. If (when) in future years oil again hits or exceeds those $150 price-points, China will be laughing all the way to the $ bank. If instead, or in addition, China needs the energy, it will have it - on every continent, and in most of the world's major oil-producing regions.
But that's not what this article is about. It talks about an emergent citizen movement to retrieve some of the value of oil removed from Iraq's Wasit Province and apply it to badly needed local infrastructure. The China National Petroleum Corporation in Iraq, Chevron/Texaco in Ecuador, Shell in Nigeria, EnCana in northeastern BC - they're not so different.
By TIMOTHY WILLIAMS
New York Times
September 5, 2009
WASIT PROVINCE, Iraq — When China’s biggest oil company signed the first post-invasion oil field development contract in Iraq last year, the deal was seen as a test of Iraq’s willingness to open an industry that had previously prohibited foreign investment.
 A Chinese guard at the Ahdab oil field southeast of Baghdad. (Thaier al-Sudani/Reuters) |
“We get nothing directly from the Chinese company, and we are suffering,” said Mahmoud Abdul Ridha, head of the Wasit provincial council, whose budget has been cut in half by Baghdad in the past year because of lower international oil prices. “There is an unemployment crisis. We need roads, schools, water treatment plants. We need everything.”
The result has been a local-rights movement — extraordinary in a country where political dissent has historically carried the risk of death — that in the past few months has begun demanding that at least $1 of each barrel of oil produced at the Ahdab field be used to improve access to clean water, health services, schools, paved roads and other needs in the province, which is among Iraq’s poorest.
The ripples are traveling far beyond this province, too. Frustrations have spilled over into sabotage and intimidation of Chinese oil workers, turning the Ahdab field into a cautionary tale for international oil companies seeking to join the rush to profit from Iraq’s vast untapped oil reserves.
 Wasit Province is among the poorest provinces in Iraq. (The New York Times) |
The Iraqi government has so far rejected the locals’ demands, but people here are clearly beginning to feel that something new is possible.
“No one would have dared to ask for such a thing during Saddam’s regime; if he did, he would definitely be executed,” said Ghassan Ali, a 43-year-old farmer who lives near the oil field. “But now we are a democratic country, so we have the right to ask for our rights like any other province in Iraq.”
The basis of the complaints here is that, aside from the hiring of a few hundred residents as laborers and security guards at salaries of less than $600 a month, the Ahdab field — a roughly $3 billion development project — has provided no local benefit.
Some local farmers began reacting by destroying the company’s generators and severing electrical hoses, angry because they believed that their fields were being unfairly handed over to the company. Other residents began expressing outrage that very few jobs were being opened to them.
China National Petroleum says it needs relatively few workers because it is still in the exploration phase of its 23-year project at the Ahdab field. Oil production is not scheduled to begin for two and a half years.
Now, the field’s 100 or so Chinese workers rarely leave their spartan compound for fear of being kidnapped, the company said, even though the Iraqi government recently deployed extra security to the area.
But the Iraqis’ anger has been increasingly channeled into an above-board labor movement, expressing concerns about workers’ rights, local government authority, pollution, transparent hiring practices and public accountability, among other issues.
Ghassan Atiyyah, executive director of the nonprofit Iraq Foundation for Development and Democracy, said the nascent activism in Wasit Province was part of a broader shift in a society that had until recently been resistant to such demands because of years of dictatorship, economic sanctions, war and a culture that retains a strong tribal influence.
September 05, 2009
Quebec Innu wage battle to halt huge hydroelectric project
see also The Fifty Marathons Campaign
Marianne White
National Post
Friday, September 04, 2009
QUEBEC -- Nearly 40 years after Cree and Inuit won an injunction to stop the massive James Bay hydro project, an Innu community is waging a similar battle against Hydro-Quebec, the province and the federal government to halt another major hydroelectric project on Quebec's Lower North Shore.
The Innu of Uashat Mani-Utenam, near Sept-Iles, want a permanent injunction to stop the construction of the Romaine project, a $6.5-billion plan to build four dams along the Romaine River and produce 1,550-megawatts of power starting in 2020.
Last May, Premier Jean Charest announced the undertaking, which is among the largest infrastructure projects in Canada. Charest said the new project is crucial to secure Quebec's energy supply, but his government has made it clear any extra power will be offered for export to Ontario, Eastern Canada and the United States.
The province has signed agreements with some Innu communities regarding the Romaine project, but not with the Sept-Iles band that is ferociously opposed to it.
"It's an all-out fight against Hydro-Quebec and Canada, make no mistake about it," said the band's lawyer, James O'Reilly.
"Forty years ago, we attacked the first James Bay project. We were not bluffing then and we're not bluffing now," added the Montreal lawyer, who has represented native bands, including the James Bay Cree, for more than 40 years.
Mr. O'Reilly won an injunction in 1973 to stop the massive James Bay hydro project on grounds the Cree of northern Quebec had rights in the vast area where Hydro-Quebec had started building it.
That ruling led to the James Bay and Northern Quebec Agreement in 1975 and a cash settlement of $225-million to Cree and Inuit for giving up aboriginal claims to about half the territory of Quebec and clearing the way for the James Bay hydro project.
Since then, the Supreme Court of Canada has also established that Aboriginal peoples do have ancestral rights.
In documents filed with the Quebec Superior Court and the Federal Court, lawyers for the plaintiffs contend a huge portion of the Romaine project, notably the transmission lines, is going to be built on what they consider the backbone of their traditional Innu territory.
The native group says it has not been consulted nor given its consent to the project and the governments are infringing on their ancestral rights on the territory. The Innu add that the four dams will have negative impacts on the territory, the ecosystem and their way of life, notably their fishing and hunting traditions.
The native community is also asking the courts to force the provincial and federal governments to redo their environmental-assessment process of the project to include the construction of the transmission lines.
"We think we have a very good chance at stopping at least the construction of the transmission lines," Mr. O'Reilly said.
The action filed in Quebec Superior Court is against Hydro-Quebec, the Quebec environment minister, the Quebec attorney general and Canada's attorney general.
The Innu have filed two legal proceedings in Federal Court, one against the transport minister and another one against the environment minister and minister of fisheries and oceans.
Mr. O'Reilly noted the cases are being specially managed by a judge and that meetings are scheduled in the coming weeks.
He stressed the Innu have the right to ask at any time for an immediate and temporary injunction to block the project.
"For now we have decided not to resort to that, but our deadline expires at end of September," he said.
A spokeswoman for Hydro-Quebec said Friday the proceedings are "taking their course" and that the provincially owned agency has met several times with the plaintiffs to discuss the next steps.
The Fifty Marathons Campaign
Alliance RomaineRun for our Rivers
As a cornerstone of our political strategy, Alliance Romaine is launching an ambitious marathon campaign designed to physically and figuratively connect the fates of two separate rivers.
Starting in early September 2009, a team of volunteer athletes will run 42-kilometer relays on a route stretching from James Bay to the Lower North Shore.
The event will kick off at the spectacular Oatmeal Rapids, where the historic and soon-to-be diverted Rupert River crosses the James Bay Highway.
Embodying the traditional role of runner as messenger, the marathoners will transmit the experiences and disappointments of the James Bay Cree communities which have been impacted by forty years of aggressive hydroelectric development on their lands. As we run through the communities of southern and eastern Quebec, we will showcase the struggles of local activists who have fought to protect wild rivers including the Dumoine, the Magpie and the Moisie. We will hold seminars and public presentations to discuss energy strategy, and we will expose the cumulative loss to biodiversity, fisheries, and recreational and cultural values that is occasioned by a policy that involves damming the majority of Quebec’s large rivers.
Divided into a set of approximately fifty marathons, the event will span two thousand kilometers, and last five weeks, before concluding on traditional Innu territory at the spot where the now-threatened Romaine River flows into the St. Lawrence.
This campaign’s aim is to mobilize and give a voice to the large numbers of Quebecers who believe that our rivers should be valued as something more than potential treadmills to produce cheap energy.
Our demands:
1. A halt to the recently-initiated hydroelectric project on the Romaine River
2. A moratorium on hydroelectric dam development, including the Little Mecatina
3. Protected status for the full length of the Romaine River
4. Good-faith land title negotiations with First Nations
5. Adopt a conservation based energy strategy with full public accountability
6. End energy subsidies to big business
7. A system of government grants and incentives to support small-scale renewable energies
Energy for Export and the Romaine River Hydroelectric Complex in Québec
September 04, 2009
Native & Green Groups Challenge State Dept. Permit for Dirty Oil Pipeline
Media Release
Earthjustice
September 3, 2009
‘Alberta Clipper’ Would Bring Canadian Tar Sands Crude to U.S.
San Francisco, CA -- Native American and environmental groups filed suit in federal court today challenging a proposed tar sands oil pipeline that would bring the dirtiest oil on Earth from Canada to the United States.
The U.S. State Department's approval on August 20 of Enbridge Energy's Alberta Clipper pipeline permits 450,000 barrels of tar sands oil per day to be pumped from northern Alberta to Superior, Wisconsin, for refining.
Tar sands oil is dirtier and, over its lifecycle, emits more global warming pollution than any other type of oil. Tar sands development in Alberta is creating an environmental catastrophe, with toxic tailings ponds so large they can be seen from space, and plans to strip away forests and peat lands of an area the size of Florida. (Photos at www.dirtyoilsands.org.)
The Indigenous Environmental Network, Minnesota Center for Environmental Advocacy, National Wildlife Federation and Sierra Club filed the suit in the U.S. District Court for Northern California. They are represented by the nonprofit law firm Earthjustice.
Read the complaint (PDF)
Enbridge pipeline faces U.S. court challenge
Canwest News ServiceVancouver Sun
September 4, 2009
Environmental and aboriginal groups in the United States have filed a federal suit against Enbridge's Alberta Clipper pipeline, alleging recent approval for the heavy oil pipeline goes against the public interest. The coalition, represented by legal firm EarthJustice, launched the legal challenge Thursday in the U.S. District Court for Northern California. Enbridge received approval by the U.S. State Department on Aug. 19 for the $1.2-billion leg of the project. Thursday's motion alleged the department violated the U.S. National Environmental Policy Act by failing to analyze and assess environmental impacts of the pipeline, including indirect and cumulative effects of bitumen production.
© Copyright (c) The Vancouver Sun
September 03, 2009
CO2 'white elephant'
Fred Langford
National Post
September 02, 2009
Re: Hell yes, back CCS, letter to the editor, Aug. 29.
In criticizing Lawrence Solomon’s “Carbon disaster” (Aug. 15), Eric Beynon of the industry group, Integrated CO2 Network, and Marlo Raynolds of the environmental group, the Pembina Institute, do not deal with the amount of CO2 that would have to be removed by “carbon capture and storage” (CCS) facilities. The quantities of CO2 to be removed are huge.
The United States burns a billion tonnes of coal each year, which produces 2.4 billion tonnes of CO2. If the gas is highly compressed until it has about the same density as water, it has a volume of two and a half cubic kilometres. China also produces 2.5 billion tonnes per year; and India, and Germany and so on.
It is not obvious where we can store this huge volume of gas under such high pressure. Depleted oil and gas reservoirs are mentioned, but many are used by gas companies to store gas in the summer for use in the heating season, which limits the supply of suitable fields. Because of the high pressure required, the gas cannot be placed in shallow oil fields where it will cause small earthquakes as the rocks crack and the gas escapes. The more stringent the safety requirements, the fewer the number of suitable sites.
Messrs. Benyon and Raynolds describe storage at Weyburn Sask. and in the sea off Norway, but each of these two places only store about 1 million cubic meters per year. That means we still need another 2,488 disposal sites of that size for the U.S. and Canada.
The costs are huge. To develop an adequate number of sites would require in the order of 150,000 disposal wells at a cost of about $1.5-trillion. That is only a part of the capital cost of a CCS system that includes recovery and compression plants and extensive networks of pipelines. We also have to burn another 30% of the coal to power this system, which requires another 1000 disposal sites.
CCS is a white elephant.
Fred Langford,
Sidney, B.C.
September 01, 2009
Yukon minister's resignation threatens to collapse government
Bill Curry
Globe and Mail
Sep. 01, 2009
 Prime Minister Stephen Harper shakes hands with Yukon Premier Dennis Fentie in Whitehorse on Aug. 21, 2009. (The Canadian Press) |
Energy minister quits, saying Premier 'lied' to public in denying that private talks took place regarding selling off energy assets
Yukon Premier Dennis Fentie's government is at risk of collapse after the resignation of the territory's energy minister, who says the Premier "lied" to the public in denying that private talks took place regarding selling off the government's energy assets.
The decision of Brad Cathers, who was also the Yukon Party's House leader, to sit as an independent reduces Mr. Fentie's government to minority status. As a result, the development could trigger an election this fall, should the opposition parties move a no-confidence motion when the legislature reconvenes.
It is a dramatic twist for a Premier whose plans to expand the territory's hydro grid were praised in person this month by Prime Minister Stephen Harper. On the last day of a week-long tour of the territories, the Prime Minister toured the site of future hydro expansion in central Yukon with Mr. Fentie by helicopter. The two men then held an official signing ceremony in Whitehorse.
The expansion of the Mayo B hydro facility and the Carmacks-Stewart transmission line was first announced in May. The $160-million project will receive up to $71-million from the federal government's Green Infrastructure Fund.
Mr. Cathers told reporters at a news conference Friday that the Premier considered selling off publicly owned Yukon Energy assets to Calgary-based ATCO. Mr. Fentie denied such talks took place.
"The Premier lied to the public and to MLAs about his involvement in discussions with ATCO, and about what was on the table," Mr. Cathers said, according to media reports.
The minister went on to describe the Premier as "belligerent and confrontational" in his treatment of MLAs and senior staff.
Federal opposition MPs want to know whether the Conservative government was aware of the possible privatization when it committed the federal tax dollars.
Larry Bagnell, the Liberal MP for Yukon, said he supports the hydro expansion but does not want to see public assets sold off to the private sector.
"I'd want to make sure that the assets purchased in this particular project remain with the Yukon people," Mr. Bagnell said. "Many Yukoners are outraged about this particular issue."
In contrast to the former energy minister's remarks, the Prime Minister offered a far more flattering description of Mr. Fentie during his Aug. 20 visit. At the signing ceremony, Mr. Harper said he appointed Daniel Lang as the territory's senator this year on the advice of the Premier.
Mr. Harper said Mr. Fentie first raised the hydro project with him in private and then worked to ensure it received federal funding.
"It is always a pleasure to be here with Premier Fentie," said Mr. Harper in Whitehorse. "He is always clear in what he wants, reasonable about how he gets it and a pleasure to work with. It doesn't always work that way with premiers, I have to tell you."
Mr. Harper said the public investments in Yukon's hydro power will create hundreds of jobs and will reduce the territory's dependence on diesel by 40 per cent.
Neither Mr. Fentie nor Mr. Cathers could be reached yesterday. Dimitri Soudas, a spokesman for the Prime Minister, said talk of privatizing Yukon's energy assets is "hypothetical" at this point and declined further comment.
During the event in Whitehorse, the Premier described the project as a "massive" investment in the territory and praised the Prime Minister.
"Under the leadership of Prime Minister Stephen Harper and his government, the North has finally come of age," he said.
Alberta to U.S.: Use the oil sands or lose them
COMMENT: Some of the tone of this article is offensive. Don Martin disparages the emerging US desire to put some climate change/environmental filters on the fuel it buys - "the delusional swagger that [Americans] can be picky about which oil is good enough to buy". That really is rude!
But the line that leaps out is this one: "the cost and complications of a new west-bound pipeline may be prohibitive for the private sector to go it alone."
First time it has been suggested that Enbridge's Northern Gateway Pipeline be subsidized into existence. We've commented before on subsidies, and the fact that many large energy pipeline projects would (or will) not exist without subsidies (link) But Gateway to this point has always been Enbridge exploring a profiteering opportunity. Uh-oh.
The federal and provincial governments have been pushing cash at First Nations to gain their consent for energy projects (link), and the amount of cash that might get pushed at FNs for Gateway could be stunning.
Nevertheless, I don't think that's quite what Martin is getting at in this article. Is there is an appetite for a more direct subsidy for Gateway in either the federal or provincial government? Martin suggests that Environment Minister Jim Prentice might be a likely champion of such a subsidy - Environment Minister??!!
Don Martin
National Post
August 31, 2009
OTTAWA -- To lift a quip from Prime Minister Stephen Harper’s Arctic sovereignty policy and apply it to the American view of Alberta’s oil sands: use it or lose it.
The Chinese government pushed its shovel deep into Canada’s energy motherlode on Monday when it announced a $2-billion stake in a five-billion-barrel reserve of “dirty oil” that Americans increasingly find unworthy of fuelling their vehicles.
The 60% claim by PetroChina in two projects owned by Athabasca Oil Sands Corp., while small compared to the great gobs of capital pouring into oil sands expansion and extraction, are the global giant’s largest investment in Canadian energy yet.
And China usually buys into product it aims to consume.
Sources in Washington predict politicians there will not be pleased at having a massive supply of secure energy on their northern doorstep slipping under Chinese ownership.
Well, too bad.
Under the greenish Obama administration, “oil sands” is becoming a dirty word as Americans take on the delusional swagger that they can be picky about which oil is good enough to buy in a recession when supply is temporarily ahead of demand.
Canadian oil sands exports are increasingly encountering U.S. political resistance at federal, state and municipal levels as low-carbon fuel standards move through the legislative process to erect barricades against an energy with an extraction problem.
But it is delusional because there is no post-refining difference between conventional and non-conventional oil and banning it in one state or city merely moves it to another, with no corresponding reduction in carbon emissions.
Yet the difference between the American and Chinese views of oilsand imports suggests that Canada is nearing a moment of decision.
It can be forever held captive to the whims of U.S. refineries, which import 60% of oilsand production or about 780,000 barrels a day. Or it can create a battle of demand between the two energy-consuming superpowers that will soon find there is not enough oil to satisfy their combined thirsts.
That will require Canada, whose pipelines now head only north and south, to punch a hole in the Rockies and open up a crude flow to the west coast, from where oil could head overseas.
Environment Minister Jim Prentice is no fan of a single-buyer market for exported bitumen, which actually sells at a discount in the U.S. compared to Middle East oil despite coming from a friendly neighbour. He’d like competition injected into the system.
“Doesn’t it help Canada’s exporter to have alternative market choices?,” he noted in a recent interview. “We need transportation mechanisms to ship it to the West Coast. Refineries in the U.S. have limited capacity and we don’t have anywhere else to sell it. Having the capacity to ship it to the West Coast would keep everybody honest, so I think it’s good policy.”
That’s so obvious as to be rhetorical, but the cost and complications of a new west-bound pipeline may be prohibitive for the private sector to go it alone.
The proposed Enbridge Inc. Northern Gateway pipeline, which was been on ice for several years, is being thawed for reconsideration.
That’s at least five years off and the project faces numerous environmental, aboriginal land claim and geographical hurdles, which is probably why they weren’t talking it yesterday — although they weren’t ruling it out in the longer term either.
But to understand China’s strategic investment interest, keep in mind that 2009 will likely go down as the first year when car sales in the Communist country beat the United States, making it the world’s largest car-buying nation.
At the risk of stating the obvious, cars consume gasoline, gasoline comes from oil and the world’s largest deposits of oil, albeit locked in tar, straddle northern Alberta and Saskatchewan.
If America doesn’t want to use it on environmental grounds, they’re only one pipeline away from losing it to someone else.
China's bold move into the oil sands
"The deal does not commit the company to delivering oil to the Chinese.... 'At the end of the day, there was nothing tied in terms of transporting or pipelining. This was just strictly an energy venture that PetroChina identified that had very high quality, and had a great management team that can move this forward in a timely manner.'”
Nathan VanderKlippe
Globe and Mail
Tuesday, Sep. 01, 2009
 Workers at a PetroChina oil field in Tongnan, southwest China's Sichuan province. REUTERS |
PetroChina's $1.9-billion acquisition of stake in Athabasca Oil shows deep-pocketed investors still see value in Alberta resource
A major Chinese energy company has delivered a jolt of confidence to Canada's oil patch with a $1.9-billion investment that marks China's biggest entry into Alberta's oil sands.
In a deal that many took as proof of the oil sands' continued attractiveness to deep-pocketed investors, Calgary-based Athabasca Oil Sands Corp. on Monday sold a 60-per-cent interest in two of its undeveloped projects near Fort McMurray to the international unit of PetroChina Co. Ltd. (PTR-N110.440.690.63%) .
The transaction will hand approximately three billion barrels of Alberta oil to PetroChina, whose parent is the state-owned China National Petroleum Corp., but will leave operation of those projects, named MacKay River and Dover, in Canadian hands.
Chinese companies have engaged in a months-long buying spree of global petroleum assets, snapping up a refinery and oil and gas properties in Asia, Russia, South America and Africa. But for those in the oil patch, the acquisition of Alberta assets serves as a much-needed vote of confidence.
Canada's energy industry has spent more than a year watching oil prices fall and, in their wake, tens of billions in capital spending cancelled or delayed. Many see the Athabasca deal as a sign that stability – and even growth – is returning.
On a day when falling crude prices sank shares in most energy companies, several small oil sands players, most notably UTS Energy Corp. and OPTI Canada Inc., saw big gains on hopes that they, too, could become acquisition targets.
“It signals the return of a higher level of capital spending in the oil sands,” said Mike Tims, the chairman of Calgary investment firm Peters and Co.
“When Kearl was approved, it lifted the psychology significantly, because people could see the return of capital spending again. And I suspect this will have the same kind of effect.”
In May, Imperial Oil Ltd. decided to begin construction of its $8-billion Kearl oil sands mine, the first major oil sands project to be revived after last year's crash.
The Athabasca deal will provide the Calgary-headquartered company, which is 25-per-cent owned by management and directors, with enough capital to finance its share of a planned series of oil sands extraction plants that could one day produce between 400,000 and 500,0000 barrels of crude per day. The company estimates the capital required for those plans at $15-billion to $20-billion, but says it will benefit from technological advances being developed by PetroChina at some of its heavy oil assets in China, which have similar characteristics to the oil sands.
“From our perspective, we're very excited about having the opportunity to partner with such a large and substantial company that has the technological capabilities to help move this forward,” Athabasca chairman Bill Gallacher said.
The deal does not commit the company to delivering oil to the Chinese, he added. “At the end of the day, there was nothing tied in terms of transporting or pipelining. This was just strictly an energy venture that PetroChina identified that had very high quality, and had a great management team that can move this forward in a timely manner.”
The deal also includes a “financing arrangement” that Athabasca will use to refinance a $400-million bond it secured last year, although the company declined to provide any details. Athabasca will continue to operate the rest of its assets independently. It expects the PetroChina deal to close Oct. 31, and said it expects government approvals to pose little obstacle.
Chinese companies have attracted attention for their bids this year to buy two Canadian-listed companies with foreign assets – Verenex Energy Inc. and Addax Petroleum Corp. – but they have made steady inroads into the oil sands as well. Earlier this year, Sinopec raised its stake in French giant Total SA's Northern Lights project to 50 per cent. In 2005, the Chinese National Offshore Oil Corp. spent $150-million for a 16.7-per-cent stake in privately-held MEG Energy Corp, while in 2007, CNPC bought 11 oil sands leases containing reserves of about 1.9 billion barrels.
For many, however, the Athabasca deal was notable for the value it assigned to oil sands assets, whose worth has been debated ever since Total made a hostile bid for UTS earlier this year that analysts said ascribed no value to its oil reserves. Analysts calculated that PetroChina will pay just over 60 cents a barrel for Athabasca, which marks a return to some of the valuations seen in 2007 and 2008, and implies a value for companies like UTS that is roughly double their current trading price.
“I think you'll probably hear UTS speak up a lot more and saying, ‘Look, here's the valuation,'” said FirstEnergy Capital analyst William Lacey.
Athabasca's MacKay River and Dover projects contain an estimated five billion barrels of recoverable bitumen. Athabasca plans to extract those barrels with technology known as steam-assisted gravity drainage (SAGD). Unlike oil sands mines, SAGD operators use underground injections of high-pressure steam to coax the thick bitumen to the surface.
Athabasca has applied for permission to build two pilot projects, but does not expect to begin commercial production until at least 2014, when it hopes to turn on an initial, 35,000 barrel-a-day phase of production from MacKay River.
BRAZIL: New Law Would Put Oil Revenue into Development
COMMENT: "If the new plan goes through, the state would be the owner of the oilfields and private companies would operate as service providers, replacing the current concessions system, under which companies bid for the rights to explore new oil blocks."
Should we be exploring this model for gas production and electricity production in BC?
Having made this declaration of intent, President Lula has opened himself up to an assault by oil companies and other national governments opposed to such thinking.
Unless they already know he's just playing politics, negotiating, and doesn't really intend to do any such thing. After all, it's a long way between this kind of musing out loud, and passing legislation.
By Fabiana Frayssinet
Inter Press Service News Agency
August 31, 2009
RIO DE JANEIRO, Aug 31 (IPS) - On what he referred to as "a new independence day for Brazil," President Luiz Inacio Lula da Silva announced Monday proposed new legislation that would increase state control over the management of the country's enormous offshore oil finds, with the aim of channeling much of the state's oil revenue into a national social fund.
The oilfield was discovered two years ago in an area of nearly 800 square km, at a depth of seven km, beneath a layer of salt up to two km thick which extends 500 km offshore in the Atlantic Ocean from the state of Espíritu Santo to Santa Catarina.
Lula said Brazil must take advantage of the reserves to strengthen Brazil's state oil company, Petrobras, which trades on national and international stock exchanges.
On his weekly radio programme "Coffee with the President", Lula said "We are talking about very large reserves that put Brazil among the world's largest oil producers."
"The subsalt oilfields are a gift from God - wealth which, if properly managed, can drive major transformations in Brazil, improving living conditions for our people," Lula added later, during the official ceremony held to announce the proposal, which must still be approved by Congress.
He also stressed that Brazil does not want to be a "mere exporter of crude oil," and that the plan is to create a powerful petrochemical industry to refine the oil into derivatives in order to export value-added products like gasoline.
If the new plan goes through, the state would be the owner of the oilfields and private companies would operate as service providers, replacing the current concessions system, under which companies bid for the rights to explore new oil blocks.
With the new framework, the government could hire Petrobras as operator of the subsalt oilfields, or open them up to competitive bids, in which the winner would be the company "that guarantees the greatest percentage of profits for the state," according to cabinet chief Dilma Rousseff.
If Petrobras is the operator, it would have a minimum 30 percent stake in the oil project – a privilege that Rousseff justified by the need for the operator to have access to strategic information on the reserves and control the pace of production and technological development.
These decisions were reached, according to Lula, on the premise that the country's oil and natural gas belong to "all of the Brazilian people," and in order to ensure that "most of the revenues generated remain in Brazilian hands."
Under the new plan, which was discussed for the past two years, the government's share of oil revenues would go into a national development fund, to be spent on education, science, technology and anti-poverty projects.
"We don't have a right to take that money and spend it on the government's budget," said Lula.
He added that the newfound wealth must bring development, and must not be allowed to undermine other industries, as has occurred in other oil-producing nations.
Rousseff, Lula's candidate for the 2010 elections, said the national social fund will also make it possible for Brazil to avoid the "curse of oil, which has kept the people of so many oil-rich nations in poverty."
Minister of Mines and Energy Edison Lobao called the reserves "a treasure that belongs to all Brazilians," and said they will help Brazil play "a leading role" in "global geopolitics."
The production-sharing model is seen by some market analysts as a step backwards from the concession model, which resulted from the process described as the "flexibilisation" of the state oil monopoly, launched by then president Fernando Henrique Cardoso (1995-2003) in 1995.
In an interview with IPS, Rafael Schechtman with the Brazilian Infrastructure Centre described the proposed new legislation as "a complete setback," and said the government's plan would "restore Petrobras' monopoly."
According to Schechtman, there are no guarantees that the government will not expand the minimum 30 percent stake for Petrobras in oil operations into a 100 percent stake, "to give total control back to the company."
Anticipating such criticism, Lula described the years during which the system of concessions for local and foreign private companies was put in place as a time of "market worshippers" when "the presence of the state was shrinking."
According to official estimates, the new offshore subsalt oilfields could hold 50 to 80 billion barrels of oil – up to six times the country's entire proven reserves of 14 billion barrels.
The Tupi oilfield alone, where Petrobras has already begun to extract crude, holds an estimated five to eight billion barrels.
Fighting over future riches
The leading oil-producing states, Rio de Janeiro, São Paulo and Espíritu Santo, are determined to secure a large share of the future oil earnings.
They are opposed to the new system, which would create a profit distribution mechanism under which the largest share of the state's revenues would go to the central government while the rest would be shared out with non-oil-producing states.
The governors of the three oil-rich states – who did not participate in Monday's ceremony – want the current system of state royalties to remain in place.
The touchy question will be left up to Congress to work out.
Referring to the proposed national social fund, Rio de Janeiro Governor Sergio Cabral said the government was playing "Robin Hood."
Another controversial point is the creation of a new state holding company, Petrosal, to manage new projects and contracts in the subsalt oilfields.
The proposed legislation would apply to the subsalt reserves not yet granted in concession to local or foreign private firms – in other words, 70 percent of the offshore reserves.
Lula said Petrobras would invest 174 billion dollars from here to 2011 in exploration in the subsalt oilfields, which makes it important, he added, to create safeguards guaranteeing that the wealth "will function as an unprecedented industrial revolution in the economic history" of Brazil.
Such a massive investment is due to the fact that the oil is located in an extremely difficult-to-reach area, which implies greater costs and requires new technological developments.
Not only is the oil located around seven km below the surface of the ocean, but it is beneath thick layers of sand, rock and salt.