NOTE: With the demise of The Oil Drum I’ve decided to put a current event feed here under the name, “Monday Mayhem” which will run once or twice a week … not just on Monday. If there is interest and after the burial of TOD, the term ‘Drumbeat’ or some variation thereto might or might-not be applied. There might also another catchy term.
Charmian Gooch describes how corruption follows resource extraction including oil and gas
The Oil Drum dies, will be buried at sea, August 31st
Given the lively thoughts here, the board of ISEOF (The Institute for Energy and Our Future that facilitates The Oil Drum), Euan, SuperG, JoulesBurn, and myself, would like to encourage the community here to take the next step to keep the conversation moving forward. We trust with optimism that people among the community will step up (and indeed some have) and spawn a one or more successors, building on some of the experiences at The Oil Drum over the last eight years. Many have commented on the large part that the TOD website itself played in TOD’s success, and it is true that factors such as usability, a clean design, and more were key, but we cannot claim to have a magic formula. We will not endorse any particular successor, but would like to facilitate this development. Therefore, we invite further discussion in the comments below on what makes for a good forum on energy-related topics, as well as specific proposals (or plugs) for sites to be built (or already online).
Climate change will disrupt energy supplies, DOE warns
The report cites prior climate-related energy disruptions. Last year in Connecticut, the Millstone Nuclear Power Station shut down one reactor because the temperature of water needed to cool the facility — taken from the Long Island Sound — was too high. A similar problem caused power reductions in 2010 at the Hope Creek Nuclear Generating Station in New Jersey and the Limerick Generating Station in Pennsylvania.
Reduced snowpack in the Sierra Nevada mountains last year cut California’s hydroelectric power generation 8%, while drought caused the U.S. Army Corps of Engineers to stop the transport of oil and coal along the Mississippi River, where water levels were too low, according to the report. Also, in September 2010, water levels in Nevada’s Lake Mead fell to a 54-year low, prompting a 23% loss in the Hoover Dam’s generation. (USA Today)
Climate Change Will Cause More Energy Breakdowns, U.S. Warns
The nation’s entire energy system is vulnerable to increasingly severe and costly weather events driven by climate change, according to a report from the Department of Energy to be published on Thursday.
The blackouts and other energy disruptions of Hurricane Sandy were just a foretaste, the report says. Every corner of the country’s energy infrastructure — oil wells, hydroelectric dams, nuclear power plants — will be stressed in coming years by more intense storms, rising seas, higher temperatures and more frequent droughts. (NY Times)
Green Energy’s Too Expensive
In April, US News addressed a new Government Accountability Office (GAO) report that points to federal subsidies for wind energy that are rife with wasteful spending: “The GAO report finds substantial overlap in federal wind initiatives. This duplication allows some applicants to receive multiple sources of financial support for deployment of a single project.” (Town Hall)
Africa’s Role in the Future of the Global Energy Sector
Government regulation is always a problem, even to the point of keeping the nation’s population using antiquated forms of energy, according to Azeez Amosun of Oando Marketing PLC, Nigeria’s leading petroleum marketing company. “A large percentage of people are using charcoal and kerosene, even as Nigeria is developing its oil and natural gas resources,” Amosun stated, noting that the government actually subsidizes the kerosene industry, keeping the price down so local consumers use it even though it is more dangerous and less efficient than other sources. “It will still take a long time to get people to use natural gas, even if and when we get the government on the right track.” (Wharton)
EU plans probe on German renewable energy law: Spiegel
– The European Union plans an investigation into Germany’s renewable energy law due to concerns that exemptions for some firms from charges levied on power users breaches competition rules, a German magazine reported on Sunday.
Without citing sources, Der Spiegel weekly said lawyers in Brussels had looked at the law which provides a framework for Germany’s push to renewable energy, and that Commissioner Joaquin Almunia had concluded it may breach EU rules. (Reuters)
2012 Was the Worst Year Ever for Nuclear Energy
There are lots of nuclear energy companies that would like to leave 2012 behind. Of all the major energy sources, it was the only one that saw a global decline in total consumption. The decline in the United States was largely attributed to cheap natural gas, as it captured a much larger chunk of market share, while alternative energy options became more attractive. To compound the problem, the Fukushima Daiichi meltdown made several countries abroad rethink nuclear use. In Japan, 89% of all nuclear power was shut down as a result of the disaster.
So the question remains, where does nuclear go from here? The increasing attractiveness of solar and wind is going to make it harder and harder to justify using nuclear as a base-load power source, because the economics of doing so is not as attractive as that for natural gas or even coal. (Motley Fool)
U.S. Energy Secretary Moves to Create Two New Panels Focused on National Laboratory Reform
After less than 2 months on the job, Energy Secretary Ernest Moniz is beginning to spell out how he plans to approach some of the Department of Energy’s (DOE’s) thornier issues, including improving the management of its expansive network of 17 national laboratories. In a letter that he wrote earlier this week to members of the U.S. House of Representatives Committee on Science, Space, and Technology, Moniz describes plans to create two internal panels that will advise him on possible reforms to the $12-billion-a-year network of science, weapons, and environmental cleanup facilities. (Science Magazine)
17 National laboratories and none of them can figure out Peak Oil … speaking of National Laboratories:
Solar Energy: The New Gold Rush?
Nationwide, solar energy is booming, and nowhere is it booming like California. Between 1999 and 2011, the number of rooftop solar arrays in our state grew from 500 to more than 50,000. Late last year, California’s installed solar capacity surpassed 2 gigawatts — the equivalent of two large coal-fired power plants and almost a third of all the solar energy production capacity in the country. Of the United States’ 120,000 solar jobs, a quarter are located here, in The Golden State.
Impressive as these numbers are, they’re just a start. The National Renewable Energy Laboratory calculates that we can run our entire state on rooftop solar and still have energy left over to sell. (Energy Collective)
Quakes, injection disposal of fracking water linked
A new study in the journal Science finds that the number of temblors shaking the central and eastern United States has soared in recent years, even as the controversial practice of hydraulic fracturing has opened up those regions to oil and gas drilling.
More than 300 earthquakes stronger than magnitude 3 struck in the last three years, according to the study. In the past, the central and eastern states experienced an average of 21 similarly sized quakes each year.
The problem does not appear to be hydraulic fracturing – or fracking – itself. Instead, many of the quakes erupt near wells where the dirty water left over from fracking, or other oil and gas operations, is injected deep underground for permanent disposal. (SF Gate)
Fracking spawns a sand mining boom
Sand is a principal component in the hydraulic fracturing process. It has been mined in the United States in rapidly increasing volumes since the oil and gas shale boom began. From the northern banks of the Mississippi to the Red River, the flow of sand to drilling operations has created what geologists say amounts to a mining boom.
The exact scale of the industry is unknown. But a U.S. Geological Survey study released earlier this year estimated that 47.8 million tons of sand were mined in 2011, an increase of more than 60 percent from two years earlier — and analysts say that estimate is probably sizably short of the real number.
“I think you’d have to go back to the industrial revolution to see that sort of change,” said Mark Ellis, president of the National Industrial Sand Association. “Horizontal drilling and shale gas has completely changed the landscape.” (Dallas News)
China faces a difficult credit bubble workout
China is in the midst of a classic credit bubble. The ratio of total credit to gross domestic product has risen from around 115 per cent in 2008 to an estimated 173 per cent, an acceleration in credit expansion that has spelt danger in many other economies. Much of this has come in the poorly regulated shadow banking sector, where the annual rate of credit expansion exceeds 50 per cent. The Chinese authorities are signalling, correctly, that this must slow sharply.
The credit explosion has massively increased the debt service ratio in the economy, an indicator that the Bank for International Settlements says “reliably signals the risk of a banking crisis” (see BIS Quarterly Review, September 2012). (FT)
Thug Politics
Hezbollah’s army is a secret one. It’s like an old fashioned spy agency.
It doesn’t exist.
If you’re enrolled in it, you don’t tell anyone. The war was rife with stories of soldiers being killed, and their families finding out for the first time that they were even in Hezbollah’s army. This, of course, is to make it impossible to use assassination, mostly aerial assassination, to take out key leaders.
Hezbollah is an almost perfect Darwinian organization. Israel uses informants and assassination? Great – we’ll keep even our membership secret. Israel uses air power? We’ll dig tunnels and set up aerial blinds for our missile launchers. Israel doesn’t like taking heavy infantry casualties – fine then, we’ll set up overlapping bunkers which simply cannot be cleared without taking losses.
Hezbollah has created the new model army, and a new model state. Call it the Hidden Army. An army that blends in with the population, that moves only when it cannot be seen, that sets up in the expectation of surveillance. An army that knows all the high tech games, and spent the time to figure out how to nullify them. It sounds like a guerilla army, and it is, but it’s also much more: it’s an army capable of engaging in strategic warfare and an army capable of engaging in full on attrition defense warfare against Israeli main battle forces. It’s hard to overstate how impressive this is. (Naked Capitalism)
Trillions of Paper and a $1,000 Wager
Social Security is sitting on a $2.8Tn portfolio of T Bills and Notes. Take a guess on how much of that was ‘turned over’ (redeemed/acquired/matured) in June of 2013?
$600 Billion! 22% of the nut went back in forth in a single day. That blows my mind. A pic of the “transactions” that took place …
SSA “bought” $178 BILLION of bonds due in 2028 at measly 1.75%. This return is going to be less than inflation. The market yield for 15-year Treasury paper is 3%. SSA is underwater on this bond by 1.25%, that comes to a revenue loss of $2.3Bn every year. Blame this result on a 50-year old formula and Bernanke’s endless squeeze on interest rates. (Bruce Krasting)
How One West African Gas Deal Makes BG Group Billions
New York/London, July 12 (Reuters) – In signing up to buy all of Equatorial Guinea’s liquefied natural gas for 17 years, Britain’s BG Group unknowingly sealed one of the most lucrative LNG deals ever.
The 2004 contract generates nearly $1 billion a year for BG, and lets it keep almost all profit from gas it sells at five times the price in Asia, according to trading, legal and industry sources who spoke on condition of anonymity. (gCaptain)
Charters for Supertankers Surge to 6-Year High
July 12 — Bookings of the largest oil tankers jumped to the highest for the time of year since at least 2007 as demand for crude cargoes accelerates before a surge in oil refining projected by the International Energy Agency.
Traders and oil companies hired 126 very large crude carriers to load in July, according to data today from Marex Spectron Group, a London-based commodities and freight- derivatives broker. There are still more charters to arrange and it’s the second consecutive month when bookings have been at the highest for the period in Marex data starting in January 2007. The vessels each carry 2 million barrels. (Bloomberg – gCaptain)
Japanese nuclear plant may have been leaking for two years – ‘We’ve seen for a fact that levels of radioactivity in the seawater remain high, and contamination continues’
TOKYO (The New York Times) – The stricken nuclear power plant at Fukushima has probably been leaking contaminated water into the ocean for two years, ever since an earthquake and tsunami badly damaged the plant, Japan’s chief nuclear regulator said on Wednesday.
In unusually candid comments, Shunichi Tanaka, the head of the Nuclear Regulation Authority, also said that neither his staff nor the plant’s operator knew exactly where the leaks were coming from, or how to stop them.
The operator, Tokyo Electric Power, has reported spikes in the amounts of radioactive cesium, tritium and strontium detected in groundwater at the plant, adding urgency to the task of sealing any leaks. Radioactive cesium and strontium, especially, are known to raise risks of cancer in humans. (NY Times)
Floods and mudslides in Western China, 13 July 2013
13 July 2013 – Torrential rain and landslides in the west of China have left more than 200 people dead or missing.
Sichuan and Shaanxi provinces have been the worst affected by severe flooding and mudslides.
Now more than 300,000 people have been evacuated as Typhoon Soulik hits the country’s eastern coastline. (BBC – Desdemona Despair)
China readies for typhoon amid deadly floods – Typhoon Soulik expected to hit Taiwan, then mainland
12 July 2013 – China and Taiwan braced on Friday for the impact of Typhoon Soulik as the toll of dead and missing from torrential rain across a broad swathe of China climbed beyond 200.
Soulik is expected to hit northern Taiwan later in the day, before crossing the narrow Taiwan Strait and slamming into China’s provinces of Fujian and Zhejiang on Saturday. (Reuters – Desdemona Despair)
Defense agency looks for ways to spend
That’s the distinct impression created by a recent e-mail sent by Defense Information Systems Agency (DISA) contracting and budget officers to their colleagues.
“Our available funding balances remain large in all appropriations — too large to spend” just on small supplemental funds often required by existing contracts, the June 27 e-mail said. DISA’s budget is $2 billion.
“It is critical in our efforts to [spend] 100% of our available resources this fiscal year,” said the e-mail from budget officer Sannadean Sims and procurement officer Kathleen Miller. “It is also imperative that your organization meets its projected spending goal for June … ” (Washington Post)
In Italy, desperation as every statistic heads the wrong way
In the past two quarters, for instance, hirings in Greece have exceeded firings, even though the economy remains in recession. French manufacturing has apparently stopped contracting and Spanish unemployment, the highest in the Western World, has fallen a bit.
The exception is Italy. Almost every number is going in the wrong direction and a sense of desperation is hitting everyone from retailers and cabinet ministers, who have gone begging to the European Union for job-creation funds, to consumers and manufacturers, whose factory output has fallen by a quarter since the European crisis started in 2008. (Globe and Mail)
China growth of 6.5%? Um, not a problem!
Well, not a problem apart from all that confusion that arises when a senior Chinese official apparently contradicts official GDP targets and expectations…
Chinese Finance Minister Lou Jiwei said a 6.5 percent economic-growth rate wouldn’t be a “big problem,” signaling the government may tolerate a slower pace of expansion than officials have previously indicated.
That’s from Bloomberg, and Lou made the comments at a press conference in Washington, so he knew it would be picked up by the western media. Xinhua also has a report that paraphrases Lou as saying he expects 7 per cent growth this year. (The official target, remember, is 7.5 per cent). (FT Alphaville)
The wheels are coming off the whole of southern Europe
Der Spiegel reports that the German-led bloc fought vehemently against a rate cut at the last ECB meeting, even though Germany itself has slowed to a crawl as China and the BRICS come off the rails.
Markets have reacted insouciantly so far to these gestating crises across Club Med. They remain entranced by the “Draghi Put”, the ECB’s slowly fraying pledge to backstop Italian and Spanish debt, forgetting that the ECB can only act under strict conditions, triggered first by a vote in the Bundestag.
These conditions can no longer be fulfilled. The politics have curdled everywhere. (Ambrose Evans-Pritchard)
Smoke Signals
Next stop, Portugal. Senior employees of JP Morgan are piling into Lisbon bigtime. Their job? Helping expats and the other Portuguese who really need to make advance plans about getting their savings and occasionally ill-gotten gains out of Portobanks and offshore.
The Great Portuguese bailin, they think, is imminent. (John Ward)
Creating a Military-Industrial-Immigration Complex
Until you visit the yearly Expo, it’s easy enough to forget that the U.S. borderlands are today ground zero for the rise, growth, and spread of a domestic surveillance state. On June 27th, the Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act. Along with the claim that it offers a path to citizenship to millions of the undocumented living in the United States (with many stringent requirements), in its more than 1,000 pages it promises to build the largest border-policing and surveillance apparatus ever seen in the United States. The result, Senator John McCain proudly said, will be the “most militarized border since the fall of the Berlin Wall.” (Tom Dispatch)
European Political Crisis Spreads – Leaked Texts Prove Rajoy Link To Illegal Party Funding
Amid the turmoil in Portugal, the Barcenas-Affair in Spain had dropped to the back-pages of the European press… until now. The illegal party-funding that ex-Treasurer Barcenas is now whistle-blowing on has been linked directly to Spanish prime-minister – despite Rajoy’s ongoing denial of everything – via text messages uncovered by Spain’s El Mundo newspaper. The opposition leadership is demanding Rajoy’s “immediate resignation,” noting he “is incapacitated,” amid the damage that the texts – which prove an ongoing and direct link to the man at the hub of the funding debacle for at least the last two years (when Rajoy has expressly denied any relationship). “You cannot govern well,” another congressman noted, when there is “very clear data” linking Barcenas with the PP (Rajoy’s party) and the alleged illegal funding. Only a few screen shots have been released of the dozens of texts that the paper has apparently received … (ZeroHedge>
Report: Israeli submarine strike hit Syrian arms depot
Israeli Dolphin-class submarines carried out a July 5 attack on an arms depot in the Syrian port city of Latakia, according to a report in the British Sunday Times, which contradicted a previous CNN report that the attack was the work of the Israel Air Force.
The alleged Israeli naval strike was closely coordinated with the United States and targeted a contingent of 50 Russian-made Yakhont P-800 anti-ship missiles that had arrived earlier in the year for Syrian President Bashar Assad’s regime, the Times cited Middle East intelligence sources as stating.
According to the report, the Israeli fleet of German-built submarines launched a cruise missile at the weapons cache after which Syrian rebels reportedly attested to hearing early-morning explosions at a Syrian port-side naval barracks. (Jerusalem Post)
A good reason for Brent crude prices to rise …
IMF cuts global growth forecast amid cooling conditions in China and European recession
The International Monetary Fund has cut its outlook for the global economy, as emerging market nations like China slow, and Europe’s recession deepens.
It is the fifth time since early last year that the IMF has trimmed its forecasts.
It now expects global growth of 3.1 per cent, down from the 3.3 per cent it tipped back in April.
It tips US growth of 1.7 per cent, down from 1.9 per cent in April.
Forecasts for developing countries are down 0.25 per cent to 5 per cent, including a reduction for China.
The IMF says cooling in China could have implications for commodity-exposed nations like Australia as export prices fall. (Yahoo)
IPhones Stuck to Windshields Threaten Dashboard Maps
“If you have a choice between paying a lot of money on an expensive in-car nav system or a free app on your iPhone, which are you going to choose?” Di-Ann Eisnor, head of Waze’s U.S. business, said in an interview. “It is a considerable threat” to automakers.” (Bloomberg)
Robbins Redux
Reporter Jim Robbins has written another lament for trees, this time for the UK Guardian – moaning about beetles and fungus and temperatures – without making clear that the worst threat to their survival is air pollution. This is especially ironic because in it, he refers to David Milarch, and his program to propagate new trees from old champion stock. As I wrote last December in “No One Knows Where This Will Lead”, Mr. Milarch left his nursery in Michigan and went to California seeking trees that were more resistant to tropospheric ozone, because after two decades watching his stock die in the Midwest, he determined that air pollution was killing the trees. (Gail Zawacki)