Energy/Environment – Page 51 – artdiamondblog.com

Oil Output Optimism

Source of graph: online version of the WSJ article quoted and cited below.

(p. A4) Output from the world’s existing oil fields is declining at a rate of about 4.5% annually, a new study concludes, depriving the world of the same amount of oil that No. 4 producer Iran supplies in a year.
Yet the study’s authors, Boston-based Cambridge Energy Research Associates, argue that their assessment supports a generally rosy view of the industry’s future, given that new projects in the works will make up for the decline.
Set for release today, the study, based on data from 811 fields around the world, takes aim at a growing school of thought that the world’s oil production may soon hit its peak just as demand is surging in Asia and the Middle East.
“This study supports a view that there is no impending short-term peak in global oil production,” the paper concludes. CERA, led by oil historian Daniel Yergin, is a prominent adviser to oil companies.
. . .
Mr. Yergin said that the huge number of projects under way in Brazil, Saudi Arabia, West Africa, the Caspian Sea and the Gulf of Mexico will more than make up for natural declines from fields now in production.
“This is a daily, hourly and minute-by-minute challenge for the world’s oil industry,” he said. “But for every Iran you are losing, you are gaining almost two Irans in return.”

For the full story, see:
NEIL KING JR. “Slower Oil-Field Decline Is Seen.” The Wall Street Journal (Thurs., January 17, 2008): A4.
(Note: ellipsis added; the online title is: “New Fields May Offset Oil Drop.”)

Retreat of Ice Is “Opening Up New Possibilities”

Source of map: online version of the WSJ article quoted and cited below.

(p. R12) The Arctic summers have grown longer, raising concerns among scientists and environmentalists that the polar ice cap is melting and that carbon emissions from oil and other fossil fuels are to blame. But for players in the energy industry, the longer summers and the retreat of the permanent ice cover are opening up new possibilities.
. . .
Energy companies already are seeing a “dramatic difference” in the amount of time they can work in the far north, says Mike Watts, exploration director at Cairn Energy PLC, an Edinburgh, Scotland-based company. On Jan. 9 it acquired licenses to explore off the west coast of Greenland, which is a self-governed province of Denmark. Greenland is also considering a sale of east-coast rights in 2012. For the moment, those waters remain choked with ice year-round, but four years from now “that might have changed,” says Mr. Watts.
. . .
Efforts by GustoMSC and other offshore-drilling experts represent the first significant research push into Arctic drilling technology in 20 years. At present, only around five rigs are capable of drilling in Arctic waters more than 300 feet deep, where energy companies are increasingly turning their focus, and even those tend to operate in 2,000 feet of water or less. Rigs now under construction will be able to search for oil in waters up to 12,000 feet. But Bob Long, chief executive at Transocean Inc., the world’s largest offshore driller, estimates it will be 15 years before the supply of deep-water Arctic rigs catches up with demand.
. . .
To create Bully No. 1, GustoMSC took the standard design for its latest generation drillship — which looks like an oil tanker with a derrick on top — and set about winterizing it. The Bully will feature the bow of an icebreaker and be constructed from an ultra-flexible grade of steel to protect the hull from shattering in extreme cold. Heating systems will be installed along every inch of piping. Special heating units will also protect ballast tanks, which use seawater to stabilize the rig and can freeze in extreme cold. Engine vents will be widened and warmed to keep ice from building up.

For the full story, see:
BRIAN BASKIN. “Producers; Northern Exposure; As the Arctic gets warmer, oil and gas producers see the chance for a big expansion. But plenty of technological hurdles remain.” The Wall Street Journal (Mon., February 11, 2008): R12. & R14.
(Note: ellipses added.)

“ARCTIC EXPLORER. The Bully No. 1 drillship, now being built in Shanghai, will start work in 2010.” Source of caption and photo: online version of the WSJ article quoted and cited above.

Ban on DDT is a Lethal Vestige of Colonialism

(p. A16) Environmental leaders must join the 21st century, acknowledge the mistakes Carson made, and balance the hypothetical risks of DDT with the real and devastating consequences of malaria. Uganda has demonstrated that, with the proper support, we can conduct model indoor spraying programs and ensure that money is spent wisely, chemicals are handled properly, our program responds promptly to changing conditions, and malaria is brought under control.
Africa is determined to rise above the contemporary colonialism that keeps us impoverished. We expect strong leadership in G-8 countries to stop paying lip service to African self-determination and start supporting solutions that are already working.

For the full commentary, see:
Sam Zaramba. “Give Us DDT.” Wall Street Journal (Tues., Jun 12, 2007): A16.

Rejecting Environmentalism’s “Politics of Limits”

Source of book image: http://a1055.g.akamai.net/f/1055/1401/5h/images.barnesandnoble.com/images/13180000/13180098.JPG

(p. D5) In survey after survey, American voters say that they care about global warming, but the subject ranks quite low when compared with other concerns (e.g., the economy, health care, the war on terror). Even when Mr. Gore’s Oscar-winning film, “An Inconvenient Truth,” was at the height of its popularity, it did not increase the importance of global warming in the public mind or mobilize greater support for Mr. Gore’s favored remedies–e.g., reducing greenhouse-gas emissions by government fiat. Mr. Gore may seek to make environmental protection civilization’s “central organizing principle,” as he puts it, but there is no constituency for such a regime. Hence even the Democratic Party’s presidential candidates, in their debates, give global warming only cursory treatment, with lofty rhetoric and vague policy proposals.
There is a reason for this political freeze-up. In “Break Through,” Ted Nordhaus and Michael Shellenberger argue that Mr. Gore and the broader environmental movement–in which Mr. Gore plays an almost messianic part–remain wedded to an outmoded vision, seeing global warming as “a problem of pollution to be fixed by a politics of limits.” Such a vision may have worked in the early days of environmentalism, when the first clear-air and clean-water regulations were pushed through Congress, but today it cannot mobilize enough public support for dramatic political change.
What is to be done? Messrs. Nordhaus and Shellenberger want to replace the pollution paradigm with a progressive one. They broached this idea in “The Death of Environmentalism,” a controversial 2004 monograph that ricocheted around the Internet. “Break Through” gives the idea a fuller exposition and even greater urgency. The authors contend that the environmental movement must throw out its “unexamined assumptions, outdated concepts, and exhausted strategies” in favor of something “imaginative, aspirational, and future-oriented.”

For the full review, see:
JONATHAN H. ADLER. “BOOKSHELF; The Lowdown on Doomsday.” The Wall Street Journal (Tuesday, November 27, 2007): D5.

Lomborg Shows How Kyoto Protocol Wastes Money

Source of book image:
http://images.tdaxp.com/tdaxp_upload/cool_it_md.jpg

(p. D7) Standing in the practical middle is Bjorn Lomborg, the free-thinking Dane who, in “The Skeptical Environmentalist” (2001), challenged the belief that the environment is going to pieces. Mr. Lomborg is now back with “Cool It,” a book brimming with useful facts and common sense.
Mr. Lomborg–“liberal, vegetarian, a former member of Greenpeace,” as he describes himself–is hard to fit into any pigeonhole. He believes that global warming is happening, that man has caused it, and that national governments need to act. Yet he also believes that Al Gore is bordering on hysteria, that some global-warming science has been distorted and hyped, and that the Kyoto Protocol and other carbon-reduction schemes are a terrible waste of money. The world needs to think more rationally, he says, about how to tackle this challenge.
. . .
Mr. Lomborg cites studies showing that by implementing Kyoto–at a cost of trillions of dollars–we might be able to achieve a 3% reduction in fluvial and coastal flooding damages. If we instead adopted smart flood policies–e.g., an end to public subsidies that encourage people to settle in flood plains, a shrewder use of levees–we could achieve a 91% reduction in damages at a fraction of the Kyoto cost.

For the full review, see:
KIMBERLEY A. STRASSEL. “BOOKSHELF; A Calm Voice in a Heated Debate.” The Wall Street Journal (Thursday, September 13, 2007): D7.
(Note: ellipsis added.)

“The Quiet Emergence of Pro-Nuke Greens”

Source of book image: http://ecx.images-amazon.com/images/I/41hyNtYMzmL._SS500_.jpg

(p. D8) Start with a novelist and former New Yorker magazine fiction editor living on the East End of Long Island, a sometime antinuclear activist (remember Shoreham?) and a determined organic vegetable gardener who spent her childhood in 1950s New Mexico having atom-bomb nightmares. Team her with another lifelong greenie, a man with a doctorate in organic chemistry who grew up on an Idaho ranch without electricity and whose day job, over the course of a long career, has included pioneering something called probabilistic risk assessment (the underpinnings of climate-change analysis, but that’s another story). Send the pair off on a grand tour of the nuclear-power world, from dust-blown uranium mines to the depths of a pilot facility for Uncle Sam’s waste deposit at Nevada’s Yucca Mountain. And then wait for them to come back with the predictable diatribe against nuclear power.
Happily, you’ll wait in vain. “Power to Save the World” is a picaresque, flat-out love song to the bad boy of the great American energy debate — as good a book as we’re likely to get on a subject mired in political incorrectness, general unfathomability and essentially limitless gut fears. It’s also the latest plot point for one of the few unassailably positive byproducts of global-warming mania: the quiet emergence of pro-nuke greens, led by such impeccable apostates as Whole Earth founder Stewart Brand and James Lovelock, the British chemist best known for his Earth-is-a-living-organism “Gaia ypothesis.”

For the full review, see:
Reiss, Spencer. “BOOKSHELF; Green With (Nuclear) Energy.” The Wall Street Journal (Tues., November 20, 2007): D8.

Southwest Airline Manages Risk Through Oil Price Hedges

Source of graphic: online version of the NYT article quoted and cited below.

(p. C1) Southwest Airlines, in danger for much of this year of losing its quirky dominance in the domestic airline industry, could soon be standing, once again, head and shoulders above the competition.
Better service? Happier and more productive workers?
Not this time. The reason for Southwest’s rapidly increasing advantage over other big airlines is much simpler: it loaded up years ago on hedges against higher fuel prices. And with oil trading above $90 a barrel, most of the rest of the airline industry is facing a huge run-up in costs, and Southwest is not.
Southwest owns long-term contracts to buy most of its fuel through 2009 for what it would cost if oil were $51 a barrel. The value of those hedges soared as oil raced above $90 a barrel, and they are now worth more than $2 billion. Those gains will mostly be realized over the next two years.
Other major airlines passed on buying all but the shortest-term insurance against high fuel prices, allowing Southwest executives a bit of schadenfreude.

For the full story, see:
JEFF BAILEY. “An Airline Shrugs at Oil Prices.” The New York Times (Thurs., November 29, 2007): C1 & C10.

‘A Southwest Airlines worker fueled a plane. Southwest’s chief said the hedges against rising fuel costs “bought us time to retool our company.”” Source of caption and photo: online version of the NYT article quoted and cited above.

Huge Oil Field Discovered Offshore of Brazil

“The Petrobras 54 platform was in Niteroi, Brazil, last August, before its deployment.” Source of the caption and the photo: online version of the NYT article quoted and cited below.

(p. C1) RIO DE JANEIRO — While some of the world’s largest oil producers, including Mexico and Iran, are struggling to remain exporters, Brazil is moving in the opposite direction. A huge underwater oil field discovered late last year has the potential to transform South America’s largest country into a sizable exporter and win it a seat at the table of the world’s oil cartel.
The new oil, along with refining projects under way by Petrobras, the national oil company, could eventually make Brazil a larger exporter of gasoline as well, adding to supplies in the United States and other countries where it is all but impossible to build new refineries.
The subsalt basin that contains Tupi, the new deepwater field estimated to hold the equivalent of five billion to eight billion barrels of light crude oil, is creating a buzz among the world’s largest oil companies. They have struggled lately to find global-scale projects worth investing in, even with oil touching $100 a barrel. Tupi is the world’s biggest oil find since a 12-billion-barrel field discovered in 2000 in Kazakhstan.

For the full story, see:
ALEXEI BARRIONUEVO. “Hot Prospect for Oil’s Big League.” The New York Times (Fri., January 11, 2008): C1 & C4.

“The Tupi deepwater field.” Source of the caption and the map: online version of the NYT article quoted and cited above.

Unintended Consequences of the Government’s Pushing Ethanol

Source of graphs: online version of the NYT article quoted and cited below.

(p. C1) Shopping at a Whole Foods Market in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons. Charles T. Rodgers Jr., an Arkansas cattle rancher, said normal feed rations so expensive and scarce he is scrambling for alternatives. In Oregon, Jack Joyce, the owner of Rogue Ales, said the cost of barley malt has soared 88 percent this year.

For years, cheap food and feed were taken for granted in the United States.
But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.
Among the favorite targets is ethanol, especially for food manufacturers and livestock farmers who seethe at government mandates for ethanol production. The ethanol boom, they contend, is raising corn prices, driving up the cost of producing dairy products and meat, and causing farmers to plant so much corn as to crowd out other crops.
The results are working their way through the marketplace, in this view, with overall consumer grocery costs up roughly 5 percent in a year and feed costs up more than 20 percent.
Now, with Congress poised to adopt a new mandate that would double the volume of ethanol made from corn, ethanol skeptics say a fateful moment has arrived, with the nation about to commit itself to decades of competition between food and fuel for the use (p. C4) of agricultural land.
(p. C4) “This is like a runaway freight train,” said Scott Faber, a lobbyist for the Grocery Manufacturers Association, who complained that ethanol has the same “magical effect” on politicians as the tooth fairy and Santa Claus have on children. “It’s great news for corn farmers, but terrible news for consumers.”
. . .
The price increases for corn have had a broad impact, both because farmers are planting more corn and less of other crops and because livestock producers are scrambling for feed substitutes. For instance, soybeans acreage planted this year was about 16 percent less than in 2006.
Feed costs have increased 25 to 30 percent in the last year, according to David Fairfield, director of feed services at the National Grain and Feed Association. He attributed virtually all of the increase to the demands of the ethanol industry
One consequence of the higher feed costs is rising competition for malt barley between livestock farmers, who want it for feed, and brewers, who need it for beer. Mr. Joyce, the Rogue Ales owner in Newport, Ore., said he has been forced to raise prices to pay for the additional costs of ingredients.
Mr. Rodgers, the Rison, Ark., rancher, said he used to feed his cattle a mixture of corn gluten and soybean hulls. But he said he cannot get corn gluten anymore, and the cost of soybean hulls has risen to $150 a ton from about $105 a ton.

For the full story, see:
ANDREW MARTIN. “The Price of Growing Fuel.” The New York Times (Tues., December 18, 2007): C1 & C4.
(Note: ellipsis added.)

“Jack Joyce, the owner of Rogue Ales in Newport, Ore., says the cost of barley has skyrocketed, forcing him to raise prices.” Source of caption and photo: online version of the NYT article quoted and cited above.

“Public Works Will Just Keep Going Round and Round and Round”

“Environmentalists like Takuo Sugisawa say that restoring bends to the Kushiro actually might cause more damage.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A4) KUSHIRO, Japan — In the early 1980s, engineers straightened out stretches of the Kushiro River, which had meandered some 100 miles under Hokkaido’s big sky here in northern Japan, flowing through green hill country and rural towns, winding through the nation’s largest wetland and this port city’s downtown before emptying into the Pacific Ocean.
Later in November, work is to start again. But this time bulldozers will be moving earth to put curves back in a stretch of the river that had been straightened out, restoring its original, sinuous, shape.
. . .
. . . Trust Sarun Kushiro, a private environmental group that was a member of the committee that endorsed the project but voted against it, said that the reshaping would have little positive effect and that the construction itself would harm the environment. Stanching the flow of sediments from farmland and forests upstream, at their source, is more important, it argued.
And in a case of the left hand’s not knowing what the right hand was stirring up, the Ministry of Agriculture had a project farther upriver that was sending mud and sand downstream, where Mr. Yoshimura’s ministry is to curve the river, said Takuo Sugisawa, 61, the trust’s secretary general. To rehabilitate farmland that had gradually become wetland, the ministry was draining existing land and moving earth there.
“The sediments flowing from upriver will quickly pile up where the river will be curved,” Mr. Sugisawa said, adding that they would eventually bury the Kushiro wetland. To prevent that, workers will eventually have to remove the sediments that are bound to pile up in the recurved stretch, he said.
“So in the name of river management alone, they will be able once again to create public works in the form of removing soil,” he said, walking along an asphalt road and across a bridge built to let trucks and bulldozers move earth for the curving project. “Public works will just keep going round and round and round.”

For the full story, see:
NORIMITSU ONISHI. “KUSHIRO JOURNAL; Forced to Run Straight, a River Must Now Twist.” The New York Times (Weds., November 7, 2007): A4.
(Note: ellipses added.)
A part of the Kushiro River where curves will be added back. Source of photo: online version of the NYT article quoted and cited above.

Source of map: online version of the NYT article quoted and cited above.