P29 Pick Points

Half-a-dozen or so stories of interest:

In 2006 ethanol was still the biofuel of the future, and while cellulosic ethanol was still a bit of a dream, corn-based ethanol was already seen as riding to the rescue both of farmers and fuel users. Two years later the emphasis seems to be moving towards cellulosic ethanol, with a more negative view of corn-based. US capacity has dropped 5% to about 10 billion gallons a year, while in contrast POET has just opened the first cellulosic ethanol pilot plant. The University of Minnesota has just issued a study that shows cellulosic is better for human health, and will help slow climate change. It is an idea whose time appears to have come, and the Chinese are also moving forward, using corn stover as a feedstock.

Oil output from Russia has declined by 0.9% y-o-y to average 9.7 mbd in January this year. This may be in sympathy with OPEC fuel cuts, or it may be an indication of another peaking in their production. It is always a little hard to tell, however, since though supply dropped 60,000 bd in January, some of this may be weather related, with field production falling in the worst of the weather. However the difficulty in restarting wells under Arctic conditions after they have stopped flowing are considerable. Dave Cohen looked at the data last April suspecting that Russia had peaked, and their performance since has not been reassuring. Thus Prime Minister Putin may be sufficiently concerned to reopen Russian markets to foreign companies. If this is one signal that investment is not ongoing, then at least in some eyes, shortages may come within the next three years.

Turkmenistan continues to try and build its global visibility based on its gas reserves, and that both Russia and the West would like that gas in their pipelines, it now hints it can supply Nabucco. Iran is also going to be helping develop the gas reserve and with work continuing on the pipeline to China,their gas business is booming. They may even seek help from Belgium.

First there was the Barnett, then the Fayetteville, then Haynesville and the Marcellus, and the Bakken, now there is the Moosebar, a new gas shale that is being explored in Northeast British Columbia. In the meanwhile producers are still expecting that the Barnett and Fayetteville will remain productive. Back in October Southwestern Energy were planning to use 19 rigs to get production in the Fayetteville up to a 100 million cu ft/day. A TV program – Shale TV that was supposed to premier late last year on the Barnett was shelved, because of the economy as part of the problems that Chesapeake, the sponsor, was having at the time. And there has been some growing resistance to the development of the Barnett, while a new pipeline is going into the Haynesville. Meanwhile Statoilhydro has purchased a large part of Chesapeake’s holdings in the Marcellus shale, now if only the price would go back up . . .

On a climate related note there has been a volcanic eruption at Mount Asama 90 m from Tokyo while Mount Redoubt, a volcano in Alaska, also prepares to blow its stack.

And even as southern Australia bakes in a drought, in Northern Queensland there is massive flooding.