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Gene Ellis

Europe's dangerous addiction to Russian gas needs radical cure - FT.com - 0 views

www.ft.com/...64-11e3-8b15-00144feabdc0.html

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Europe’s dangerous addiction to Russian gas needs radical cure
  • “It really boils down to this: no nation should use energy to stymie a people’s aspirations,” Mr Kerry said in Brussels, just as Russia’s Gazprom raised the price it charges Ukraine for gas.
  • Bernstein Research has calculated that to do so, Europe needs to eliminate 15 bcm of residential and industrial gas demand, invest $215bn and incur $37bn of annual costs in the form of higher-priced energy. That works out as $160 for every single person in Europe.
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  • A new energy corridor has just been sanctioned that will bring Caspian gas being developed by a BP-led consortium into the heart of Europe.
  • Import terminals are being built to receive liquefied natural gas (LNG) from places such as Qatar and Nigeria.
  • And countries such as the UK are moving ahead with developing their substantial reserves of shale gas.
  • There are 20 operational LNG regasification plants in the EU, with a combined import capacity of about 198 bcm of gas per year. A further 30 bcm/y are under construction. But Europe’s terminals are conspicuously underused. Imports of LNG have fallen sharply, partly because of the 2011 Fukushima nuclear disaster, which prompted Japan to switch to gas-fired generation and diverted LNG cargoes from Europe.
  • The question is: are European customers prepared to pay Japanese prices for LNG?” says one Brussels-based European gas industry official.
  • Arguably a more urgent task is to improve energy security by unifying the EU market – in particular, linking up the countries of eastern Europe.
  • If Europe is serious about reducing its dependence on Russian gas, it will have to take radical measures. Bernstein’s Mr Clint lists some: switching from gas to diesel power, closing gas-intensive industries such as oil refining, reducing gas consumption in heating and adding more coal-fired generation – which would inevitably increase carbon emissions.
  • Added to that, Europe is contractually obliged to continue taking delivery of Russian gas. Bernstein makes the point that Gazprom has about 120 bcm of take-or-pay contracts – with companies such as ENI, Edison and RWE – that require Europe to continue paying about $50bn for Russian gas. Many of these stretch way beyond 2020.
  • Europe accounts for half of Gazprom’s gas revenues, according to the company, and 71 per cent of Russia’s crude oil exports, according to the International Energy Agency.
  • “Gazprom has heard it all before,” said Jonathan Stern, director of gas research at the Oxford Institute of Energy Studies. “For the past 20 years Europe has been trying to diversify away from Russian gas and failed.”
  • A growing share of oil, largely from Rosneft, is flowing directly to China by pipeline. Lukoil last week started commercial production at its enormous West Qurna field in Iraq – much of whose production is likely to be sold in Asian markets, analysts say. And Novatek, together with CNPC of China, is building an LNG terminal that will help shift gas exports towards Asia.
  • Any reduction in imports from Russia thanks to Europe’s diversification strategy “is not a prospect for the next few years,” he said. “And by that time I think Russia will find alternative gas export markets, especially in an environment of strong Asian demand for gas.”
Gene Ellis

Is Europe's gas supply threatened by the Ukraine crisis? | World news | The Guardian - 0 views

www.theguardian.com/...raine-crisis-russsia-pipelines

shared by Gene Ellis on 04 Mar 14 - No Cached
  • Is Europe's gas supply threatened by the Ukraine crisis?
  • more than a quarter of the EU's total gas needs were met by Russian gas, and some 80% of it came via Ukrainian pipelines. Austria, France, Germany, Hungary, Italy and Poland soon reported gas pressure in their own pipelines was down by as much as 30%.
  • While it was eventually resolved through a complex deal that saw Ukraine buying gas from Russia (at full price) and Turkmenistan (at cut price) via a Swiss-registered Gazprom subsidiary
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  • But three years later, the same row erupted again: Gazprom demanded a price hike to $400-plus from $250, Kiev flatly refused, and on New Year's day 2009, Gazprom began pumping only enough gas to meet the needs of its customers beyond Ukraine.
  • Again, the consequences were marked. Inevitably, Russia accused Ukraine of siphoning off supplies meant for European customers to meet its own needs, and cut supplies completely
  • several countries – particularly in south-eastern Europe, almost completely dependent on supplies from Ukraine – simply ran out of gas.
  • Bulgaria shut down production in its main industrial plants; Slovakia declared a state of emergency
  • Many industry experts, though, point out that the world has changed since 2009, and that there are any number of reasons why Moscow's natural gas supplies may not prove quite the potent economic and diplomatic weapon they once were.
  • higher than normal temperatures are forecast to continue for several weeks yet, significantly reducing demand for gas and leaving prices at their lowest for two years
  • since the first "gas war" of 2006, many European countries have made huge efforts to increase their gas storage capacity and stocks are high. Some countries, such as Bulgaria, Slovakia and Moldova, which lack large storage capacity and depend heavily on gas supplies via Ukraine, would certainly suffer from any disruption in supplies
  • New Gazprom pipelines via Belarus and the Baltic Sea to Germany (Nord Stream) have cut the proportion of Gazprom's Europe-bound exports that transit via Ukraine to around half the total, meaning only about 15% of Europe's gas now relies on Ukraine's pipelines. Gazprom is also planning a Black Sea pipeline (South Stream), expected in 2015, meaning its exports to Europe will bypass Ukraine completely. Ukraine itself has cut its domestic gas consumption by nearly 40% over the past few years, halving its imports from Russia in the process.
  • Europe is increasingly installing specialist terminals that will allow gas to be imported from countries such as Qatar in the form of liquefied natural gas – while Norway's Statoil sold more gas to European countries in 2012 than Gazprom did. "Since the Russian supply cuts of 2006 and 2009, the tables have totally turned," Anders åslund, an energy advisor to both the Russian and Ukrainian governments, told the Washington Post.
  • Europe accounts for around a third of Gazprom's total gas sales, and around half of Russia's total budget revenue comes from oil and gas. Moscow needs that source of revenue, and whatever Vladimir Putin's geo-political ambitions, most energy analysts seem to agree he will think twice about jeopardising it.
Gene Ellis

Sasol Betting Big on Gas-to-Liquid Plant in U.S. - NYTimes.com - 0 views

www.nytimes.com/...gas-to-liquid-plant-in-us.html

betting plant natural gas

shared by Gene Ellis on 17 Dec 12 - No Cached
    • Gene Ellis
      Gene Ellis on 17 Dec 12
       
      These are areas with lots of natural gas, and little chance of getting it to market, save for liquefication, but even then lacking access to ports.
  • Sasol is building a gas-to-liquids plant in Uzbekistan with the Malaysian oil company Petronas. It is working with Chevron to build another plant in Nigeria.
  • The process is challenging and complex. First a synthetic gas is made from pure oxygen and methane, the main component of natural gas, which is cleansed of sulfur, metals and other impurities, under intense pressure and heat. Then the synthetic gas is put in giant reactors that make a synthetic crude through the Fischer-Tropsch process. The process essentially forces heated synthetic gas to react with a catalyst, typically cobalt, to convert into a liquid hydrocarbon. Finally that liquid is refined into one fuel or another. The process is far more complex than that at a typical refinery, so the plant is much more expensive to build and operate. Alfred Luaces, a refining specialist at the consultancy IHS, said a conventional oil refinery could be built for $50,000 per barrel of capacity, less than half of what Sasol says it is willing to spend on the proposed Louisiana plant.
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  • Rick Manner, a vice president at consultancy KBC Advanced Technologies who has contributed to gas-to-liquids studies for Sasol and other companies, estimated that the projects must keep capital costs at $100,000 for every barrel a day of production capacity to be worthwhile economically at current prices of about $100 a barrel for oil and $4 per thousand cubic feet for natural gas.
  • Mr. Louw, Sasol’s Qatar president, said that the Oryx plant was designed to be profitable with oil at $25 a barrel. That implies a very low long-term price for the natural gas feedstock. He would not specify what Sasol pays its Qatari partner for gas, but he said it was “not zero.”
  • Gene Ellis on 17 Dec 12
     
    The potential, or lack thereof, of natural gas to diesel conversion.
Gene Ellis

Shifting energy trends blunt Russia's natural-gas weapon - The Washington Post - 0 views

www.washingtonpost.com/...3-a050-dc3322a94fa7_story.html

shared by Gene Ellis on 03 Mar 14 - No Cached
  • As clunky Soviet-era factories and mines have become more efficient or gone out of business, Ukraine’s domestic gas consumption has dropped nearly 40 percent over the past five years, cutting its imports from Russia in half, according to a report by Sberbank Investment Research.
  • Domestic consumption might drop further if Ukraine trims the generous subsidies it gives households using natural gas, although so few households are paying their bills that it might not matter. “People will go from not paying the lower price to not paying the higher price,” said Thane Gustafson, senior director of Russian energy for the consulting firm IHS CERA.
  • Even if residential customers paid up, the Ukrainian state energy company, Naftogaz, would lose money on those sales
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  • “An inefficient and opaque energy sector continues to weigh heavily on public finances and the economy,” the International Monetary Fund said, noting that energy subsidies reached 7.5 percent of Ukraine’s GDP in 2012. “The very low tariffs for residential gas and district heating cover only a fraction of economic costs and encourage one of the highest energy consumption levels in Europe,” the IMF said in December.
  • Now, the upheaval of the past two weeks has thrown Ukraine’s gas strategy into greater confusion. “There is no government and there are no agencies to do business with,” said Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies. “How high up the list of priorities it is is anyone’s guess.”
  • Even if the deals with foreign companies advance, Ukraine will need to import about half of its gas needs,
  • In 2012, many European industrial users and power plants switched to coal, and Russia agreed to renegotiate.
  • The link between gas and oil prices has been severed for about half of Russia’s gas sales.
  • Gazprom also agreed to eliminate contract clauses that said a country such as Germany could reship Russian gas only with Gazprom’s approval.
  • As a result, Ukraine ended up paying more than Gazprom’s customers in Germany, and last year Ukraine imported small quantities of natural gas from Germany and Hungary through pipelines in Slovakia and Poland, experts say. Germany buys gas from a variety of countries, but rerouted Russian gas has effectively been undercutting other Russian gas.
Gene Ellis

A European Energy Executive's Delicate Dance Over Ukraine - NYTimes.com - 0 views

www.nytimes.com/...licate-dance-over-ukraine.html

shared by Gene Ellis on 19 Feb 15 - No Cached
  • A European Energy Executive’s Delicate Dance Over Ukraine
  • Major Western oil companies like BP and Exxon Mobil have extensive exploration deals in Russia that they fear could be jeopardized if the United States and European Union impose stiffer sanctions on the Putin regime.
  • “This is by far the toughest time for European energy security that I have seen,” said Mr. Scaroni. “This issue might stop the supply of Russian gas.”
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  • The goal is to be able to ship gas to Ukraine at an annual rate of more than three billion cubic meters by the time the heating season begins in the autumn, increasing the flow to up to 10 billion cubic meters annually by next spring. Last year Ukraine imported nearly 30 billion cubic meters of gas, according to a recent report by the Oxford Institute for Energy Studies.
  • Part of his message is that, even though gas demand in Europe has been weak because of sluggish economies, imports from Russia actually rose last year by about 16 percent as other sources of supply including Norway and Algeria declined. Europe, he warned, is simply not prepared to do without gas from Russia.
  • But with the gradual introduction of more competitive pricing in the European markets, the gas business has become much less attractive for ENI and other big gas middlemen. They are stuck with high-priced long-term contracts to a handful of suppliers like Gazprom and Sonatrach, the Algerian state-owned company, while their customers are able to secure gas at often lower spot market prices — assuming the gas is flowing.
  • The pipeline would be a major new source of Russian gas for energy-hungry Europe. But European Union authorities have become deeply skeptical about the South Stream plan, seeing it as just another way of making Europe more dependent on Russian energy.
  • Given the balance of interests, tighter sanctions by Western governments might more likely aim to stem the technology that Russia needs to increase its future production, rather than to cut off gas supplies to Europe,
  • hose outages in 2006 and 2009 are a top reason that the European Union had already been trying to chip away at Europe’s dependence on Russia even before the Crimea annexation.
  • One of the most acrimonious battles is between the bloc’s antitrust authorities and Gazprom. That standoff began in 2011 when the European Commission carried out surprise raids on natural gas companies across Europe, including Gazprom affiliates, seeking evidence of blocking access to networks, charging excessive prices and raising barriers to diversification of supplies.
  • That is partly because powerful Eastern European countries like Poland argue that such clean-energy policies would impede their ability to reduce Russian dependence by mining more coal or developing their own shale gas resources.
  • nd this month, the European Commission issued rules aimed at reducing the subsidies that governments use to support the wind and solar industries,
Gene Ellis

Weaning Europe From Russian Gas - NYTimes.com - 1 views

www.nytimes.com/...g-europe-from-russian-gas.html

shared by Gene Ellis on 25 Apr 14 - No Cached
  • Weaning Europe From Russian Gas
  • European Union leaders at a summit meeting last week made a commitment to cut their dependence on Russian gas.
  • Russia gets about 14 percent of its entire export earnings from the gas it sells to other European countries.
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  • Some countries in Central Europe — such as Austria and the Czech Republic — and the Balkans would run out of gas they import through Ukraine.
  • that Russia cuts supplies of gas through Ukraine but continues pumping it through its other two pipelines to the West — one through the Baltic and the other through Poland.
  • In such a scenario,
  • The European Union also responded to the 2009 shutdown by building “interconnectors” between different countries. As a result, it is easier to shunt gas and electricity from countries that have excess energy to those that face a shortage — though these connections are still patchy and need to be built up.
  • n the short run, European Union countries can use more coal and less gas in their electricity generation.
  • The European Union can also increase imports of liquefied natural gas, mainly from Qatar. But there are problems. First, most of the Union’s L.N.G. terminals are in Western Europe, whereas it is the eastern part of the Union that is most vulnerable to a cutoff of Russian gas. So more terminals need to be built, which takes time. What’s more, L.N.G. is expensive — partly because Japan is buying lots of it after closing its nuclear plants in the wake of the Fukushima disaster.
  • Longer term, European Union nations should embrace shale gas. It is cheap and local. Britain and Poland have the most potential.
  • Meanwhile, countries such as Germany should abandon their knee-jerk aversion to nuclear energy.
  • The problem is not the carbon goal, said Raoul Ruparel of Open Europe, a research institute. Rather it is the renewable target, which results in uneconomic wind and solar power being built across the Union.
Gene Ellis

As Drilling Practice Takes Off in U.S., Europe Proves Hesitant - NYTimes.com - 0 views

www.nytimes.com/...us-europe-proves-hesitant.html

shared by Gene Ellis on 29 Oct 13 - No Cached
  • Germany’s decision to eliminate its nuclear plants led it to bring coal-fired power plants out of mothballs to make up the difference. Doing so was a viable option because coal demand in the United States has dropped sharply as American power plants have turned to less expensive gas, driving down the cost of American coal for export to global markets.
  • As a result, carbon dioxide emissions in Germany went up last year, not down
  • “Without shale gas, this would be a world where Russia would have very, very strong market power and there would be very strong dependency on gas supply from geopolitically risky regions in the Middle East, Iran and North Africa,” said Laszlo Varro, the director of the Gas, Coal and Power Markets Division of the International Energy Agency.
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  • Gazprom, the huge Russian gas company, finds its traditional business model in trouble. Under the pressure of a market in which gas is being supplied from more places, Gazprom has had to renegotiate gas contracts with European countries, costing it $6 billion, Mr. Varro said.
  • “Gazprom is not against shale gas,” Mr. Stevens said, “it’s just against everyone else having it.”
  • As Europe becomes a more “contestable market” with more integrated pipelines, more liquefied natural gas and more shale gas, behavior will change. “If people can come in easily, the threat of coming in will make the monopolist behave differently,”
Gene Ellis

What If We Never Run Out of Oil? - Charles C. Mann - The Atlantic - 0 views

www.theatlantic.com/...4

oil

shared by Gene Ellis on 15 Jan 14 - No Cached
  • In most cases, mining tar sands involves drilling two horizontal wells, one above the other, into the bitumen layer; injecting massive gouts of high-pressure steam and solvents into the top well, liquefying the bitumen; sucking up the melted bitumen as it drips into the sand around the lower well; and then refining the bitumen into “synthetic crude oil.”
  • Economists sometimes describe a fuel in terms of its energy return on energy invested (EROEI), a measure of how much energy must be used up to acquire, process, and deliver the fuel in a useful form. OPEC oil, for example, is typically estimated to have an EROEI of 12 to 18, which means that 12 to 18 barrels of oil are produced at the wellhead for every barrel of oil consumed during their production. In this calculation, tar sands look awful: they have an EROEI of 4 to 7. (Steaming out the bitumen also requires a lot of water. Environmentalists ask, with some justification, where it all is going to come from.)
  • To obtain shale gas, companies first dig wells that reach down thousands of feet. Then, with the absurd agility of anime characters, the drills wriggle sideways to bore thousands of feet more through methane-bearing shale. Once in place, the well injects high-pressure water into the stone, creating hairline cracks. The water is mixed with chemicals and “proppant,” particles of sand or ceramic that help keep the cracks open once they have formed. Gas trapped between layers of shale seeps past the proppant and rises through the well to be collected.
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  • Water-assisted fracturing has been in use since the late 1940s, but it became “fracking” only recently, when it was married with horizontal drilling and the advanced sensing techniques that let it be used deep underground. Energy costs are surprisingly small; a Swiss-American research team calculated in 2011 that the average EROEI for fracked gas in a representative Pennsylvania county was about 87—about six times better than for Persian Gulf oil and 16 times better than for tar sands. (Fracking uses a lot of water, though, and activists charge that the chemicals contaminate underground water supplies.)
  • Today, a fifth of U.S. energy consumption is fueled by coal, mainly from Appalachia and the West, a long-term energy source that has provided jobs for millions, a century-old way of life
  • and pollution that kills more than 10,000 Americans a year (that estimate is from a 2010 National Research Council study).
  • Roughly speaking, burning coal produces twice as much carbon dioxide as burning the equivalent amount of natural gas. Almost all domestic coal is used to generate electricity—it produces 38 percent of the U.S. power supply. Fracking is swiftly changing this: in 2011, utilities reported plans to shut down 57 of the nation’s 1,287 coal-fired generators the following year. Largely in consequence, U.S. energy-related carbon-dioxide emissions have dropped to figures last seen in 1995. Since 2006, they have fallen more than those from any other nation in the world.
  • In the sort of development that irresistibly attracts descriptors like ironic, Germany, often touted as an environmental model for its commitment to solar and wind power, has expanded its use of coal, and as a result is steadily increasing its carbon-dioxide output. Unlike Americans, Europeans can’t readily switch to natural gas; Continental nations, which import most of their natural gas, agreed to long-term contracts that tie its price to the price of oil, now quite high.
  • Several researchers told me that the current towel-snapping between Beijing and Tokyo over islands in the East China Sea is due less to nationalistic posturing than to nearby petroleum deposits.)
  • In mid-March, Japan’s Chikyu test ended a week early, after sand got in the well mechanism. But by then the researchers had already retrieved about 4 million cubic feet of natural gas from methane hydrate, at double the expected rate.
  • What is known, says Timothy Collett, the energy-research director for the USGS program, is that some of the gulf’s more than 3,500 oil and gas wells are in gas-hydrate areas.
  • In Dutch-disease scenarios, oil weakens all the pillars but one—the petroleum industry, which bloats steroidally.
  • Because the national petroleum company, with its gush of oil revenues, is the center of national economic power, “the ruler typically puts a loyalist in charge,” says Michael Ross, a UCLA political scientist and the author of The Oil Curse (2012). “The possibilities for corruption are endless.” Governments dip into the oil kitty to reward friends and buy off enemies. Sometimes the money goes to simple bribes; in the early 1990s, hundreds of millions of euros from France’s state oil company, Elf Aquitaine, lined the pockets of businessmen and politicians at home and abroad.
  • How much of Venezuela’s oil wealth Hugo Chávez hijacked for his own political purposes is unknown, because his government stopped publishing the relevant income and expenditure figures. Similarly, Ross points out, Saddam Hussein allocated more than half the government’s funds to the Iraq National Oil Company; nobody has any idea what happened to the stash, though, because INOC never released a budget. (Saddam personally directed the nationalization of Iraqi oil in 1972, then leveraged his control of petroleum revenues to seize power from his rivals.)
  • “How will the royal family contain both the mullahs and the unemployed youth without a slush fund?”
  • It seems fair to say that if autocrats in these places were toppled, most Americans would not mourn. But it seems equally fair to say that they would not necessarily be enthusiastic about their replacements.
Gene Ellis

Chevron and Ukraine Set Shale Gas Deal - NYTimes.com - 0 views

www.nytimes.com/...ne-sign-deal-on-shale-gas.html

shared by Gene Ellis on 06 Nov 13 - No Cached
  • Last year Ukraine consumed about 50 billion cubic meters of natural gas, most of it imported from Russia, while producing about 19 billion cubic meters, according to the BP Statistical Review of World Energy.
  • Shale gas technologies are altering the geopolitics of energy from Russia to the Middle East. Three territories — Russia, Iran and Qatar — hold about half the conventional reserves of natural gas. But shale is found in many other places, including India, China, Australia and in Eastern Europe, undercutting the power of the oil sheikhs and the Kremlin.
  • Ukraine, despite producing some domestic gas by conventional extraction, remains highly dependent on Russia’s Gazprom, which cut off its supplies in 2006 and 2009 in pricing disputes. As a result, Ukraine pays exceptionally high prices for natural gas,
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  • Europe depends on Russia for about 40 percent of its imported gas, most transmitted through Ukraine.
  • The appearance of imported cheap liquefied natural gas on the European market from Qatar and reduced demand have already led Gazprom to negotiate cuts of about 10 percent in contracts with Western European utilities,
Gene Ellis

How Putin Forged a Pipeline Deal That Derailed - NYTimes.com - 0 views

www.nytimes.com/...eline-deal-that-derailed-.html

shared by Gene Ellis on 05 Feb 15 - No Cached
  • How Putin Forged a Pipeline Deal That Derailed
  • The pipeline, known as South Stream, was Mr. Putin’s most important European project, a tool of economic and geopolitical power critical to twin goals: keeping Europe hooked on Russian gas, and further entrenching Russian influence in fragile former Soviet satellite states as part of a broader effort to undermine European unity.
  • The bill that Parliament took up on April 4 was arcane. But it swept aside a host of European regulations — rules that Mr. Putin did not want to abide by — for a pipeline that would deliver gas throughout southern Europe. Continue reading the main story Related Coverage In Diplomatic Defeat, Putin Diverts Pipeline to TurkeyDEC. 1, 2014
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  • In France, the leader of the far-right National Front, Marine Le Pen, recently acknowledged that her party had received a loan for 9 million euros, or about $11 million, from a Kremlin-linked bank.
  • Faced with punishing sanctions, a petro-economy pushed to the brink by plunging oil prices and the wildly gyrating value of the ruble, Mr. Putin this month halted the project.
  • Geological surveys suggested that Bulgaria could be sitting atop an underground ocean of natural gas, enough to be self-sufficient for years, enough to eclipse the advantages of South Stream.
  • On April 4, 2014, soon after Mr. Putin annexed Crimea, Bulgaria’s Parliament gave initial passage to a bill that effectively exempted South Stream from a number of European Union regulations, most important, the one that would have forced Gazprom to allow non-Russian gas to flow through the pipeline.
  • “If I hear one more word about competition, I’m going to freeze your you-know-whats off,” Mr. Putin reportedly shouted.
  • The anti-fracking movement became so broad that in January 2012, Parliament banned not only the extraction of shale gas, but even exploration that would quantify the country’s reserves.
  • When the Bulgarian government refused, the European Union cut off tens of millions of euros in regional development funds.
  • In desperate need of the European funds, the prime minister announced the next day that South Stream would be halted until it had full European Union approval.
  • While “he overreached, and he underestimated the response” to his intervention in Ukraine, said Mr. Gray, the former American diplomat, the Russian leader has been “quite effective” in countries like Bulgaria.“He won a great deal by getting Nabucco stopped,” Mr. Gray said. “Ultimately, his goal is to keep as much control over the former parts of the Soviet empire as possible.”
Gene Ellis

Russia Steps Up Economic Pressure on Kiev - NYTimes.com - 0 views

www.nytimes.com/...economic-pressure-on-kiev.html

shared by Gene Ellis on 24 Mar 14 - No Cached
  • Russia Steps Up Economic Pressure on Kiev
  • Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a price about a third higher than what Russia’s gas company, Gazprom, charges clients elsewhere. Russia says the increase is justified because it seized control of the Crimean Peninsula, where its Black Sea naval fleet is stationed, ending the need to pay rent for the Sevastopol base. The base rent had been paid in the form of a $100 per 1,000 cubic meter discount on natural gas for Ukraine’s national energy company, Naftogaz.
  • Mr. Yatsenyuk raised the pressing need to build an interconnector pipe allowing for a so-called reverse flow from the European Union into the Ukrainian gas system. “We need reverse flows of gas from the European Union to support Ukraine’s energy security,” Mr. Yatsenyuk said.
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  • For years, Gazprom offered successive Ukrainian governments what it called discounts on the fuel, only to continue charging Naftogaz more than other European utilities.
  • Even with the rent for the Sevastopol naval base deducted from the price of gas, Gazprom had charged Naftogaz $395 to $410 for every 1,000 cubic meters of natural gas, for most of 2013. By comparison, Gazprom’s average price in Western Europe for the first nine months of last year was $380 for the same volume.
Gene Ellis

Russia restricting Austria's gas supplies - The Local - 0 views

www.thelocal.at/...tricting-austrias-gas-supplies

shared by Gene Ellis on 05 Feb 15 - No Cached
  • Russia restricting Austria's gas supplies
  • According to the energy regulator E-Control, Gazprom supplied Austria 15 percent less gas than had been previously agreed. Similar issues have hit Poland, which has seen their supplies cut by 45 percent, and Slovakia, which has ten percent less gas than expected for the period.
  • Poland on Thursday accused Russia's Gazprom of slashing gas deliveries by half, which analysts said was likely aimed at sending a message to the EU amid tensions over the Ukraine conflict.
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  • "There's no risk to Polish clients," PGNiG spokeswoman Dorota Gajewska said, but added that it was forced to suspend its so-called "reverse flow" transfers to Ukraine.
  • The move caused the Russian ruble to plunge to another record low against the dollar on Thursday.
  • "It also can be seen as a kind of response to EU sanctions, targeting the smaller EU members in Moscow's former sphere of influence, not its larger Western partner." "But it's a risky policy, as it further undermines Moscow's credibility in Western Europe. It's not the best idea: either you're a reliable supplier of gas or you're not," he said.
Gene Ellis

A Fracking Good Story by Bjørn Lomborg - Project Syndicate - 0 views

www.project-syndicate.org/...ng-good-story-by-bj-rn-lomborg

shared by Gene Ellis on 22 Jan 13 - No Cached
  • Carbon-dioxide emissions in the United States have dropped to their lowest level in 20 years.
  • this year’s expected CO2 emissions have declined by more than 800 million tons, or 14%, from their peak in 2007.
  • The cause is an unprecedented switch to natural gas, which emits 45% less carbon per energy unit. The US used to generate about half its electricity from coal, and roughly 20% from gas. Over the past five years, those numbers have changed, first slowly and now dramatically: in April of this year, coal’s share in power generation plummeted to just 32%, on par with gas.
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  • For starters, fracking has caused gas prices to drop dramatically.
  • Indeed, US carbon emissions have dropped some 20% per capita, and are now at their lowest level since Dwight D. Eisenhower left the White House in 1961.
  • the shift from coal to natural gas has reduced US emissions by 400-500 megatonnes (Mt) of CO2 per year. To put that number in perspective, it is about twice the total effect of the Kyoto Protocol on carbon emissions in the rest of the world, including the European Union.
  • America’s 30,000 wind turbines reduce emissions by just one-tenth the amount that natural gas does. Biofuels reduce emissions by only ten Mt, and solar panels by a paltry three Mt.
  • Since 1990, the EU has heavily subsidized solar and wind energy at a cost of more than $20 billion annually. Yet its per capita CO2 emissions have fallen by less than half of the reduction achieved in the US – even in percentage terms, the US is now doing better.
  • Along with the closure of German nuclear power stations, this has led, ironically, to a resurgence of coal.
Gene Ellis

As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis - NYTimes.com - 0 views

www.nytimes.com/...-crucial-to-ending-crisis.html

shared by Gene Ellis on 04 Mar 14 - No Cached
  • As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis
  • Germany is now heavily reliant on Russia for its energy needs, importing more natural gas from Russia than any other country in Europe
  • the German chancellor has called for a more diplomatic solution, preferring more limited actions like many of her European counterparts.
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  • Germany is the second-largest foreign investor in Ukraine behind Cyprus, which is a transit point for Russian money.
  • About three-quarters of the gas and oil that Germany imported in 2013 came from Russia. The country also acts as a major gas transit hub for countries like France.
  • “Germany in particular is dependent on Russian gas,”
Gene Ellis

Russia Presses Ahead With Plan for Gas Pipeline to Turkey - NYTimes.com - 0 views

www.nytimes.com/...or-gas-pipeline-to-turkey.html

shared by Gene Ellis on 18 Feb 15 - No Cached
  • Russia Presses Ahead With Plan for Gas Pipeline to Turkey
  • But in recent weeks, the Russian state-owned company Gazprom has shown signs that it is serious about proceeding with what it calls Turkish Stream.
  • Gazprom’s chief executive recently made it clear that Turkey is its new focus — and that if Europe wants more Russian gas then it will need to find its own way to tap into it.
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  • Another potential sticking point is Turkey itself. For one thing, the country obtains about 60 percent of its gas from Russia, a dependence the government is not necessarily eager to increase.
  • Industry analysts estimate that the cost of Turkish Stream would be about $10 billion for Gazprom, which so far has spent an estimated $4.7 billion on the Black Sea project.
  • Mr. Putin already publicly offered a 6 percent reduction to Turkey. But Ankara, which pays substantially more for Russian gas than Germany does, is pressing for a better deal.
Gene Ellis

Gazprom Cuts Russia's Natural Gas Supply to Ukraine - NYTimes.com - 0 views

www.nytimes.com/...on-ukraine-in-gas-dispute.html

shared by Gene Ellis on 05 Feb 15 - No Cached
  • The gas flowing into Ukraine as of Monday was meant only to transit the country to Europe. “Gazprom supplies to Ukraine only the amount that has been paid for, and the amount that has been paid for is zero,” Gazprom’s spokesman, Sergei Kupriyanov, told reporters.
  • Gazprom, which has sought for the past decade to convince the Europeans that it is a reliable supplier and not an arm of Russian foreign policy, painted the dispute as strictly commercial.
  • Second, Gazprom has provoked economic ire in Europe over its plans to build an alternative gas route under the Black Sea for the company’s exclusive use, contradicting Europe’s open access laws. That has put the future of what is known as the South Stream pipeline in doubt.
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  • About a fifth of the European Union’s supply of natural gas flows through Ukraine. Ukraine itself imported from Russia 63 percent of the natural gas it consumed in 2012, producing the remaining 37 percent domestically, according to the United States Energy Information Agency.
Gene Ellis

Fear of Fracking by Jeffrey Frankel - Project Syndicate - 0 views

www.project-syndicate.org/...o-shale-gas-by-jeffrey-frankel

fracking

shared by Gene Ellis on 19 Apr 13 - No Cached
  • CAMBRIDGE – Against all expectations, US emissions of carbon dioxide into the atmosphere, since peaking in 2007, have fallen by 12% as of 2012, back to 1995 levels. The primary reason, in a word, is “fracking.”
  • Just ten years ago, the natural-gas industry was so sure that domestic production was reaching its limit that it made large investments in terminals to import liquefied natural gas (LNG). Yet fracking has increased supply so rapidly that these facilities are now being converted to export LNG.
  • Natural gas emits only half as much CO2 as coal, and occupies a rapidly increasing share of electricity generation – up 37% since 2007, while coal’s share has plummeted by 25%.
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  • Meanwhile, the share of coal – the dirtiest fuel – has been rising, not falling, in the rest of the world’s energy mix.
  • Moving beyond economics, America’s reduction in net energy imports – which have already fallen by one-half since 2007 – means that its foreign policy will be less constrained by events in the Middle East. In Europe, the new technology could similarly break Russia’s politically troublesome stranglehold on natural-gas supplies.
  • Put differently, if the world continues to build coal-fired power plants at the current rate, those plants will still be around in 2050, regardless of what other technologies become viable in the meantime.
  • Even a serious fracking mishap would be unlikely to cause as much damage as the Deepwater Horizon oil spill in 2010, the Fukushima nuclear catastrophe in 2011, or coal-mining tragedies that play out dramatically in frequent explosions and collapses (and more insidiously in the form of lung disease, water pollution, and soil erosion).
Gene Ellis

Gas Prices Moving Away From Link to Oil - NYTimes.com - 0 views

www.nytimes.com/...ing-away-from-link-to-oil.html

oil

shared by Gene Ellis on 10 Jan 14 - No Cached
  • That leaves buyers with enormous risk. Oil, which sold for as little as $10 a barrel in the 1990s, when some current contracts were agreed, now costs about $100 per barrel,
  • “Anyone with standard oil-linked contracts is likely losing money in Europe and specifically Italy,
  • Gas bought under such contracts can be 10 percent to 15 percent more expensive than gas bought at spot market prices, he said. Over the past year, Eni's gas and power unit has reported an operating loss of about €812 million, or $1 billion.
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  • “These are not easy discussions,” Mr. Alverà said. “Most sellers are reluctant to sit down and give you big discounts. The more they wait the more they increase their profits.”
  • Still, analysts say it may take decades for Asia to switch from oil linkage to market pricing.
Gene Ellis

Utilities Switch Off Investment in Fossil Fuel Plants - NYTimes.com - 0 views

www.nytimes.com/...ent-in-fossil-fuel-plants.html

utilities switch investment fossil fossil fuel fuel plants

shared by Gene Ellis on 10 Jan 14 - No Cached
    • Gene Ellis
      Gene Ellis on 10 Jan 14
       
      Note:  a LARGE power station =s 40 direct jobs.
  • workers at the large power station known as Keadby 1 are preparing to shut it down at the end of the summer, with the loss of about 40 jobs.
  • fluctuations in global energy markets have made the natural gas power plant unprofitable
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  • It has also delayed new energy investments and is planning to close almost a quarter of its fossil fuel power plants,
  • European energy companies, struggling to respond to weak demand in a flatlining economy, say they need guaranteed pricing to keep open unprofitable plants or to invest in new ones.
  • Their revenue is being hit by dwindling demand for electricity and by new wind and solar projects that undercut the price of the energy produced from many fossil fuel plants.
  • At the same time, record-low prices on carbon emissions trading markets, which were introduced to encourage clean and efficient energy production and use, have perversely become a disincentive to investment.
  • Many of the Continent’s aging power stations, particularly those that burn highly polluting coal, are earmarked for closure by 2020 to meet stringent local environment regulations.
  • Without these investments, industrial companies in Europe may face higher energy prices when local economies eventually recover,
  • “Energy utilities are facing a perfect storm,”
  • In a bid to generate 20 percent of the European Union’s electricity from renewable sources by 2020, Germany, Spain and other E.U. countries have provided hefty subsidies to wind and solar farms, which now constitute a sizable minority of daily electricity generation, often surpassing the 20 percent target.
    • Gene Ellis
      Gene Ellis on 10 Jan 14
       
      In effect, a cheaper overall form of energy (non-renewables) had to compete with heavy subsidies to renewables, which, once built, had low operating costs.  They cannot compete and do not invest, and there are major problems w/investing more in renewables (they are overall more expensive, and they have built-in faults, producing electricity erratically, or during the wrong times.)  The high costs of energy also lie with government, who cemented long-term deals with the ex-USSR linking other energy prices to the price of oil.  In short, they shot themselves in the foot.  Several times.
  • Despite the upfront costs associated with green energy projects, they are inexpensive to run. In contrast, Europe’s gas and coal plants, which also provide backup power when renewables cannot operate, need constant spending on fossil fuels.
  • European utilities like E.On of Germany have announced plans to shut down less-polluting natural gas-fired plants that have been undercut by dirtier coal-burning generators benefiting from a flood of low-cost coal imports and low carbon emissions prices.
  • Policy makers are debating a system of support payments to keep uneconomic power plants open,
  • “Without long-term signals of energy prices, investment won’t happen.”
  • Some analysts also expect domestic regulators to eventually create financial incentives for companies
Gene Ellis

At Anchor Off Lithuania, Its Own Energy Supply - NYTimes.com - 0 views

www.nytimes.com/...s-for-energy-independence.html

gas Russia Lithuania

shared by Gene Ellis on 10 Jan 14 - No Cached
  • The price of natural gas in Lithuania was 15 percent higher than the European average last year, according to the European Commission. Only Bulgaria, where Gazprom has a near monopoly, paid more. Gazprom also has an ownership stake in Lithuania’s natural gas distribution network. Part of Lithuania’s electrical infrastructure is still controlled from Moscow, too, and it is not yet possible to connect the country to the European grid.
  • Lithuania also does not use oil shale, which provides much of the electricity for Estonia, the third Baltic member of the European Union.
  • Lithuania used to rely on nuclear power to supply most of its electricity. But as a condition of joining the union in 2004, the country agreed to shut down its Chernobyl-style nuclear power station at Ignalina.
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  • Klaipedos Nafta, a state-controlled oil terminal operator, is leasing the ship, formally known as a floating gas storage and regasification unit, from a Norwegian company, Hoegh, in a 10-year deal for 430 million euros, or $560 million.
  • Lithuania would need to import L.N.G. at prices 5 to 10 percent less than Gazprom charges for its gas to ensure the project breaks even; Lithuanian officials said the price of L.N.G. imports could be as much as 20 percent less than Gazprom charges.
  • “We will be able for the first time in our history to negotiate, because we have alternative sources,”
  • But Mr. Masiulis said his greatest challenge was overcoming the Lithuanian bureaucracy and fending off attempts to give the project “a shade of corruption.”
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