The energy lobby is not thrilled about the latest plans to increase taxes on the industry and is now forming a group to speak up for the industry. As an alternative North Dakota is thinking about putting 25% of the oil generated income into a trust fund. While Ecuador is going after some unpaid taxes that it claims Perenco, a French oil company, owes due to the “extraordinary profits” the company has made. Michigan’s Governor is asking for a gas tax to fix the crumbling roads in the state. The intent is to shift the rate from a per gallon, to a percentage of the price. Because state and federal revenues from existing taxes are no longer enough the Congress is also looking at ways to restructure the system to raise more revenue, one of the thoughts being considered is a mileage charge. Massachusetts has a similar problem, and are considering a 25% increase in the state gas tax (which would bring in about $650 million), as is Oregon.
Ugo Bardi has his post on “Fire and Ice” up on the main TOD board, (it was on TOD Europe before) and just for the historical record, it was I (not some guy from the USGS) who disagreed with Dave Rutledge down at ASPO 2007 – which did not stop the pair of us, with a group of others, adjourning to the bar to discuss the topic thereafter.
Speaking of conferences the MIT student Energy Club just held their conference at which the Swedish company Vattenfall said that they would be carbon neutral by 2050. Sweden has previously said that it will wean itself from oil within the next fifteen years . Sweden gets most of its electricity from nuclear and from hydro, so that the major use of fossil fuels is in transportation. I should be in Sweden this weekend (there will be a slight hiatus since it is a long flight and I am going to work) so I will post on what I hear.
At the start of an Energy Conference in Qatar the Exxon CEO has used their success with Qatar (they will have doubled the LNG production to 62 million tonnes this year, leading to the establishment of fourth and fifth LNG trains). Half the vessels for the 4th train are now delivered, and 5 of the 6 for the 5th train. The LNG is coming into a market that is currently seeing (outside of South Asia) a surplus of natural gas (hence all the rig closures in the US) and the LNG entry is likely to soften the market further. However if the predictions of a drop in US well production hold up, then the LNG will be coming on market just as it would otherwise tighten. China, which currently uses 13 million tonnes of LNG , with imports from Russia and Kazakhstan, is also aiming for a target of 60 million tonnes a year by 2020, with some of that to come from Qatar. A local shortage of natural gas is also causing Saudi Arabia to fast-track the development of two off-shore gas fields.
Development of the Arabiyah and Hisbah gas fields, which are not associated with oil production, would supply around 1.8 billion cubic feet per day, MEES reported. The projects were included in Aramco's expansion plan through 2014, it said.Success offshore has not been matched with equivalent searches for natural gas on land, and particularly in the Empty Quarter.
"Bringing these fields on line would make sense," one industry source in the kingdom told Reuters yesterday. "They really need the gas."
Utility operators in the United States continue to be concerned over the future of coal, and are scrapping even more plans for expansion, part of the problem lies in the uncertainty over future regulation. Just this past week a utility in Montana has given up on the fight with local environmentalists and will now be installing a gas-fired plant, even though the costs may be higher. There are still, however, some 28 coal-fired plants under construction. To prevent more ash dam failures, EPA is seeking the necessary information on the sites where such impoundments exist. There may be as many as 300. Idaho Power, having seen the writing on the wall, has also changed its mind, and instead of a coal-fired plant will be installing a 300 MW plant in Payette county. The site is close to an existing gas pipeline, and an existing 230-kV transmission line. Now all they need to worry about is the long-term availability of the fuel.
A small note, it appears that having not had them built for very long, China has already filled the current round of tanks for their Strategic Petroleum Reserve and is thinking of adding more storage using tankers. (Which suggests they don’t think prices will stay down much longer, either). They currently have 34 days of supply in storage., but this may not count the 100 million barrels in the reserve. China is actively chasing after oil, and trying to ensure supplies when the price is right. And there are still those who think that the floor of the market has not yet arrived and that prices can sink some more.
And Pakistan has decided to go ahead with a gas pipeline from Iran, without having Indian participation.
More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.