P15. Pick Points

Half-a-dozen or so stories of interest.

Further to the post yesterday on Bulgaria and Slovakia’s options to find natural gas, one of the suggestions has been to see if Turkey could let them have some. Slovakia’s problems have also got worse, since a fire in a coal-fired plant has caused a partial shut-down. Russia has said that the problem with the Ukrainian codicil’s to the agreement have been resolved, and they are going to start pumping today , though it will take until late Wednesday for the gas to reach Western Europe. And there is still the matter of the 12 million cu m/day which now it transpires is claimed to be needed to power the pumps that drive the gas through Ukraine, and which Ukraine thinks Gazprom should provide. However, unless there is a prolonged cold spell, it is anticipated that gas prices may drop by as much as 40% this summer. It is suggested that part of the reason this is over so soon is that Gazprom needs the revenue to service its debt, and it wants to get the current good price, before it collapses. Current losses are estimated to be in the $127 - $141 million a day range. (Prices are thought likely to fall from the current $418 per tcm to $180 in the third quarter).

Uganda is facing more rationing of electricity (read load shedding and power outages) as they continue to have problems getting enough fuel for their power stations. Power is very limited, and so they are considering using geothermal energy to help out.

Power shortages in Nepal are now threatening the drinking water supplies. Volumes of water that can be pumped have been cut in half as the power outages limit how long the pumps can run. The company is trying to bring in diesel generators to help solve the problem in the short term. The local rickshaws are electric powered, and no longer can be charged because of the outages, which is causing outrage. So relying on electricity to power cars can also have problems.

Stanford has created a new energy center to look into such problems, starting with $100 million, the center is headed by a petroleum engineer, and funded by successful graduates. Meanwhile the Gulf states are also looking for good investments in green energy and will be hosting a World Future Energy Conference in Abu Dhabi, which will soon have a satellite campus of MIT.

We will need a lot of that research since there are a fair number of questions, already on what the new Aministration is going to be able to do to switch over to sustainable fuels. And the President of Exxon Mobil has expressed doubt, given that there are increasing questions on the ability of biofuels to meet targets, while there isn’t enough manufacturing capacity to build the wind turbines in the numbers needed. POET the “top” ethanol producer has just opened a plant to produce 20,000 gallons a year (that’s 1.3 barrels a day, folks) as a pilot scale demonstration of their first plant capable of producing at a commercial scale that will hopefully be on stream in 2011, given that the mandate is 16 billion gallons a year by 2022, we need that progress. The goal is for about the same amount of corn ethanol, but with today’s futures price being $4.26 and it costing between $0.80 and $1.20 per bushel to run the plant, there’s not a lot of profit in the 2.5 gallons per bushel the average plant produces, when it sells for $1.68 a gallon. However Pursuit Dynamics is working with Iroquois Bio-Energy on a new system that should come on line next month, and which should increase yield by 8-12%., and there is hope that they can increase yield to 3.3 gal/bushel. Not that this will help the Russian farmers who brought in a record harvest, and had to watch their prices fall.

For more energy related news visit the Energy Bulletin or Drumbeats at The Oil Drum.