Sunday, February 22, 2009

P42. Pick Points

Half-a-dozen or so stories of interest:

Back in March Switzerland signed a deal with Iran for a 25-year supply of natural gas it appears that this will bring a fourth gas corridor though Turkey, that will provide an additional connection to Europe, and it remains under criticism. Iran sees it as the start of a new relationship with Europe, and a possible model for others. The gas will come from Assalouyeh and require a new pipeline that will be built by the Turks. Germany has taken the hint, and Gerhard Schroeder is now in Tehran to see what sort of a deal they can cut. The pipeline will also provide a pathway for Turkmenistan gas to get into Europe without going through Russia. Iran, meanwhile still considers the discussions ongoing with Bahrein, even though the latter cut them off when some Iranians claimed the kingdom belonged to them. Iran is discounting those statements.

Russia, meanwhile has apparently not been sending the agreed amount of natural gas to Poland. So far it has only got 75% of the agreed amount, and now Gazprom wants a new deal. The Council on Foreign Relations has just released a special report on Eurasian Energy Security that calls, among other things for a better network of interconnections and integrating Russia more into the energy picture in Western Europe. It also calls for a common regulatory framework. Rune’s work on whether the UK will get through the winter without problems, suggests it will be close.

Iceland is looking to exploit its Geothermal power in the face of major financial problems. Of the three natural resources the country has, fish, hydro and geothermal, the first two are in some trouble, and with an increasing amount of geothermal due to come on line in the next few years all they need are investors. For those in the US looking at using geothermal, the more likely domestic source will be ground-source heat pumps, and the cap of $2,000 for a tax credit which would otherwise be 30% of the cost, has been removed. In an earlier post at TOD I heard that the going price was in the $20,000 to $30,000 range, and so this is a significant change (but not enough to justify my doing it yet).

The numbers for oil production from Mexico, of which I have written in an earlier post, are growing worse quite quickly. Country production fell 9.2% in January , with Cantarell now down to 772,000 bd. Pemex claim they can keep it to an average of 700,000 bd this year, but this may be doubtful, and will hurt exports. That did not help oil and gas futures (the latter at $4 per million btu). There is a new documentary on the oil situation now out called Blind Spot which has got a favorable review at TOD but since they were out of copies when I tried to order one, it will be a wee while before I can do a review.

Last week China was tying up loans with Russia to ensure long-term delivery, and then with Brazil. This week it is Australia’s turn with Exxon Mobil signing a long term agreement for LNG from the Gorgon project that will send 2 million tons a year of gas north for 20-25 years. Projections for the LNG plants being put into Gladstone in Australia have slipped from 2011 to 2012 for the first LNG plant, which will liquefy coalbed methane, and the customer has not been defined. (Though as I noted last week I wouldn’t be surprised if they had a South Asian accent).

The current low prices for energy, taken with flooding from the fire-fighting last year, means that the historic Barentsburg coal mine in Norway may not reopen.

More stories can be found at The Energy Bulletin and Drumbeat at The Oil Drum.

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