Cheng Siwei, a leading Chinese economist said that China will reduce its reliance on fossil fuel from current 91% of energy mix to 85% in 2020.  Improvement in energy efficiency and costing of pollution via Carbon Credit will enable China to reduce consumption of fossil fuel.   China Daily

Al Neft >  Assuming China continues to grow at 8% a year, China will need to replace 1.12 million bbl / day via alternative clean energy.  This translate to 22,000 wind farms of 100 MW capacity.

China Daily reports that China will begin its domestic carbon trading program during its five year plan period (2011-2015) to help meet its carbon intensity targets.  Carbon trading in pipeline.

According to IEA, Growth of Global Biofuel supply in 2011 will be 211,000 bbl per day equivalent to Brazil’s total crude oil production increase stemming from its massive deepwater reserves. (FT Energy Source)

A new paper published by Lloyds of London and Chatham House (pdf download) on sustainable energy security predicts a coming crunch in supply of oil by 2013.

• Oil consumption which usually was dominated by advanced countries is shifting to non-OECD (China & India) will mean increasingly oil deficit over time.

… Continue Reading

It seems that Masdar, Abu Dhabi’s US$ 22 billion giant renewable energy flagship company , is re-thinking its ambitious strategy  with the departure of two its key senior officers.   The idea behind Masdar is to make Abu Dhabi the first Carbon neutral city by investing in renewable energy as well as carbon capture and storage. It remains to be seen whether a project like Masdar will succeed instead of  promoting efficient use of energy on a micro scale and building infrastructure projects such as the Metro in Dubai that can one day replace car-centric culture in the UAE.   (Bloomberg)

The National Newspaper reports that ADNOC (Abu Dhabi National Oil Company) is planning to snuff out “flared” natural gas within 5 to 7 years with aim of reducing the emirates carbon footprint. Together with Masdar, ADNOC hopes to receive Carbon Credits on the projects to be completed by 2Q of 2012 reducing emission in the process.  Associated natural gas in Abu Dhabi is high in Sulphur. Recently, ConocoPhilips puled out of project with ADNOC to develop de-sulphurisation plant in the emirates to process Natural Gas.

Related articles

• ConocoPhillips Said to Pull Out From Adnoc Shah Gas (Update2) (businessweek​.com)

While Saudi is the largest oil producer in the world, it suffers from water shortage. Oil is consumed (some 1.5 million barrels a day) to produce power & water desalination plants.  IBM has been working for two years on a solar powered desalination plant in a Al Khafji town that will eventually produce 7.9 million gallons of water per day.  The project aim is to produce all of Saudi’s drinking water using solar energy and reduce Saudi’s reliance on expensive desalination plants. (BNET Energy Blog)

It sounds too good to be true; Calera, a US company backed by some famous venture capital,is aiming to capture carbon dioxide from coal and gas power plants and turn CO2 into cement. The process is similar to what occurs in marine coral formation.  Nevertheless, there are some skeptics who see difficulties in scaling up the process as well as other harmful by-product.   Joseph Romm, senior fellow at Center for American progress notes:

People have the impression that the energy sector is like the I.T. sector and you just have to build an iPhone and suddenly it will be everywhere, which is simply not the case..You have to build up so much infrastructure.     (NYTimes)

A recent Gallop poll has recently found that the number of people surveyed who see climate change as a ‘serious threat’ is a mere 32%. This is not assuring for the Climate Change movement. (FT Energy Source)

Storage : China has started on building second phase of emergency oil reserves in Guangdong to help bolster energy security and meet demand. (China Daily)

Green Cars: China is to offer up to $8,800 to consumers that purchase energy efficient cars. The subsidy will also include hybrid buses ($61,600) and $88,000 for electric and fuel cell buses. The Minister of Industry and Information Technology, Li Yizhong, reiterated that encouraging consumers to buy green vehicles will be top priority. (Shanghai daily)

The National Newspaper reports on large profit that could be made from carbon or emission trading. Emission trading is central mechanism for cutting carbon emission, granting clean energy project under the Kyoto Protocol credits that can be sold to polluters.

The current holding of Euro 500 million could be worth Euro 3.2 billion in 2012.  Companies such as ArcelorMittal, Lafarge and Tata Steel have the largest holdings.

Al Neft quick recap of the oil markets on a rainy Dubai morning :

• Saudi Arabia to double oil supply to India to 770,000 bpd following visit by India’s Prime Minister to the country. (Bloomberg)
• ADNOC, Abu Dhabi National Oil Co, is unlikely to drop significantly Naphtha prices to Asia. Naphtha prices in Asia have gained over 66% since Feb 09. Adnoc is offering its Naphtha at premiums ranging from $23.50 a ton for lower quality to $ 25.50 a ton for its highest quality pentane-plus. (Bloomberg)
• China drafts 10 year Green energy program under which clean energy will account for 15% of China’s total consumption mix by 2020. (China daily)
• Asia imports record volume of  1.79 million bpd of West African Crude in first quarter. The main African exporting countries are Nigeria and Angola. (Reuters)
• Finally, FT Energy Source, notes that a more competitive gas market is bad news for BP as well as Gazprom. The rise of Shale gas in US and move by Gazprom to offer spot prices to its customers in Europe, will affect BP’s revenue stream. Gas accounts for a third of BP’s production.

Berkshire Hathaway‘s little known investment couple of years ago in an obscure maker of batteries and automobiles called BYD Inc pays off handsomely for the old sage. Buffett & his long time partner, Charlie Munger, invested $ 232 million in 2008 for 10% of the company. Today the stake is valued at $ 1.99 billion.  Buffett says :

“When he [Charlie Munger] encounters genius and sees it operating in a practical way, he gets blown away.” (WSJ)

Good views in this Video by Jeff Rubin, former Chief Economist at CIBC World Markets on the oil markets, global economy & climate change. He is the author of Why Your World Is About To Get A Whole Lot Smaller.

The major point is that at $150 oil price, Distance will cost money. High Fuel cost coupled with Carbon Tariffs, manufacturing cost advantage of exporting countries like China will cease. Regions such as North America, will have to go back to manufacturing and agriculture at home.

Oil Monthly report (can be downloaded as PDF) main points:

• International Oil Companies over estimate / upbeat future production forecast – gives examples of Petrobras & Shell
• Bio-Fuels increasing contribution to World Oil Supply. As of January 2010, EIA estimate total biofuels production at 1.93 million b/d with USA being the largest producer with 845,000 b/d followed by Brazil 630,000 b/d.
• Increased utilization of other unconventional form of liquid fuels such as Biofuels, Extra Heavy Oil, Tar Sands, Natural Gas Liquids and Polar Oil.  Unconventional liquid fuel production constituted 15% to the world’s total liquid fuels production with remaining 85% coming from conventional crude.

… Continue Reading