Thursday, January 22, 2009

P22. Pick Points

Half-a dozen or so stories of interest:

India is continuing to struggle through an ongoing power crisis that seems to be getting worse. The problem at present seems to stem from a lack of coal, and even importing significant volumes does not seem to be helping. It is not as though the problem was not predicted. Of course riots that close mines don’t help either.

Daniel Yergin says that oil prices will stay below $100 for at least a couple of years and they fell a little today, in part because of full storage capacity (inventory). It is unlikely that the OPEC and Russian cuts will have a biting impact for a month or so yet.

In non-news Exxon is looking at seismic data from a survey team in West Greenland (perhaps only of interest since Robin Mills, in “The Myth of the Oil Crisis” quotes the USGS as thinking that there is a 50% chance of there being 50 billion barrels of oil there, of which 31.4 billion are in the northeastern corner. While there has been no success yet, the presence of oil seeps has a number of companies interested and investing.

Further to my concern yesterday about deforestation in India, the concern is spreading to Bhutan, where the demand for firewood is three times the available supply, which is predicated on how much can be regrown. At the moment it is a regional, rather than a national problem. Bhutan has the highest per capita wood consumption in Asia, and it is suggested that they use wood worth ten times the price of equivalent natural gas to cook. Trials last summer using solar power to replace wood and kerosene were judged successful, and are being adopted by the yak herders.

Just when you though that the Russian:Ukrainian debacle was over, the Ukrainian Prime Minister is talking about going back to Moscow to negotiate a discount on the prices they have agreed. Ukrainians are left desperately trying to find a silver lining to the result.

Russia is anticipating that Gazprom will increase their reserves from the Arctic regions by 5.6 billion tons of fuel this year, On the other hand their financial reserves have dropped another $30 billion, while rail transport in Russia has dropped 39% y-o-y, reflecting drops in industrial production. And the Shtokman field, currently slated for production to begin in 2013 is increasingly likely to be postponed. And Kazakh oil production is back

Two companies are seeking roughly $2 billion each to build lithium battery plants for cars, a significant part of the move towards plug-in hybrids, however GM has chosen a South Korean firm for the batteries for the Volt. The Volt remember will do 40 miles before needing a battery recharge; having made that choice GM are still working on the price but believe they have the safety issues in hand. At the same time New York has been using sodium-sulphur batteries to store cheap night-time power, and then use it to compress the natural gas for its bus fleet since April.

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