The Bullroarer - Tuesday 14th October 2008

frogblog - Well oiled recessions

The worrying thing is that, with peak oil now here, we can expect not just regular increases in the price of oil, but also more random, and larger jumps up in down in its price. It won’t track up slowly but jolt up and plummet down erratically as supply gets harder to extract and oil dependant corners of the economy try to react. And the people who will be hurt the most are those already in poverty.

All of which is why investing in accessible public transport, clean renewable energy and energy efficiency measures such as the $1 billion home insulation fund are the type of fiscally prudent measures that we need to take now while we have the chance.

The Australian - Linc shares spike on GTL news. Should really say "CTL"

LINC Energy has started producing fuel at its gas-to-liquids project in Queensland, a world first according to the company.
The project at Chinchilla involves the introduction of underground coal gasification (UCG) synthesis gas into a reactor that then produces high quality synthetic fuel.

Chief executive Peter Bond said his team had been working towards the gas-to-liquids (GTL) goal for the past two years. “Linc Energy has now proven that it can produce liquid fuels from UCG gas. This process provides the potential for billions of tonnes of stranded coal resources to be converted into transport fuels in an environmentally acceptable way,” he said. “And when you think that each tonne of coal equates to approximately 1.5 barrels of fuel, the potential of what Linc Energy has achieved today is simply enormous.”

SMH - Stand and deliver: how buses will bend rules

WHEN you can't fit any more buses on to Sydney's congested roads, what's the answer? Strip out seats and triple the number of standing passengers. ... In the trial's three different buses, between nine and 12 seats have been removed and the number of standing passengers has been boosted from 20 to up to 69. In total, 115 passengers will cram aboard instead of 70 to 80. If all inner-city buses were reconfigured this way, complete with more standing room and hand rails, total capacity could jump by about 36 per cent.

The Australian - Smart meters to track power

NEXT generation smart living will involve appliances communicating directly with consumers to offer advice on the most economical time for their operation, according to Australian research. This goal is getting closer with the development of a smart energy meter that allows consumers to see in real time where their power is going and how much it is costing. The smart energy meter, created by Victoria's La Trobe University and Australian company Semitech Innovations, is designed to cut energy costs and reduce carbon footprints.

SMH - Oil explorer wants to bump up NZ program

Australian Worldwide Exploration (AWE) managing director Bruce Wood says the big oil miner is looking at accelerating its planned New Zealand exploration program. "As the heat has come out of the oil price, rigs are getting easier to contract," he told The Australian newspaper.

The Australian - Ocean drilling shortage starts to ease

HARD to find ocean drill rigs are getting a little more accessible as oil prices slump. Well, that's according to Australian Worldwide Exploration managing director Bruce Wood, who is currently in talks with a few parties in an effort to bring forward a planned New Zealand exploration program next year. "As the heat has come out of the oil price, rigs are getting easier to contract,'' he said, though he's not certain of getting his hands on them as quickly as he would like.

frogblog - Subsidising the oil burning industry

Sadly we don’t have a strong local Kiwi-made bike industry here in New Zealand to compete with Giant (or a car manufacturing industry either for that matter). Which is a shame, because it is the sort of high-skilled, future focused industry that should have a place on our shores if we could only give it the support it needed to get established. Giant shares are slightly down about 5 percent on their value from this time last year, whereas the Dow Jones industrial is down about 40 percent. Ford and General Motors are down 75 percent and 85 percent respectively. I know which one I think looks the best bet for future investment as peak oil arrives.

The Australian - Financial crisis hits LNG: Don Voelte

OIL prices are likely to continue to fall and petroleum producers will be forced to overhaul plans because of global financial volatility, Woodside boss Don Voelte has warned. Mr Voelte said yesterday Woodside was well placed to withstand the downturn because it had paid down a lot of debt while oil prices were high but he revealed that the gas major was in a hiring freeze. Analysts from Citigroup and Morgan Stanley said that Woodside, Chevron and other liquefied natural gas producers might delay committing to new projects because of lower crude oil prices and the difficulty in raising finance.

The Australian - Coal shipments steady: Wesfarmers

THE head of Wesfarmers resources division says its coal shipments were holding firm despite production cuts in China and Japan.
Stewart Butel said the company's buyers were "blue chip" customers, particularly in North Asia, and Wesfarmers didn't have exposure into China. "From a shipping point of view, things are still relatively firm," Mr Butel told an investor briefing.

SMH - FuelWatch 'would save consumers money'

The federal government's proposed FuelWatch scheme remains set to be defeated in parliament's upper house despite a Senate committee recommending it be passed. ... The Labor-led committee on Tuesday delivered its final report, with the four government senators saying the scheme would bring real advantages. "It will give consumers a fair go," they said. "Consumers using FuelWatch will save themselves time and money by knowing which petrol stations have the lowest prices."

SMH - Parched rice packs up for sea change.

IN ONE of the first big agricultural moves driven by climate change and a lack of irrigation water in the Murray-Darling Basin, the rice industry is looking north. With the world hungry for more rice and the Riverina rice bowl in south-western NSW parched by years of drought, about 30 farmers on the North Coast are about to plant rice for the first time. ...

Recent CSIRO reports say the median climate change estimate for 2030 predicts average surface water availability falling by 9 per cent in the Murrumbidgee and 14 per cent in the Murray. Government water buy-backs will further reduce irrigation supplies. The CSIRO says a reduction in irrigation water is likely to have a significant effect on Australia's rice production, but using rain-fed varieties of rice could help the industry expand to new areas. "Chinese breeders have produced [rain-fed] rice varieties with an estimated yield potential of six to seven tonnes per hectare."

Since 2000, the Northern Rivers farmer Gary Woolley has been trialling rain-fed rice near Coraki and harvested his first commercial crop last year, averaging 3.46 tonnes to the hectare compared with the 10 tonnes to the hectare achieved in the Riverina.

frogblog - National Party to dump the billion dollar Green Home Fund

What Smith revealed is what I have suspected all along. We are hearing many soothing words from the front bench of National in the lead up to the election about how they have changed their ways and how they plan to keep so many of this governmentś programmes. In the usual pattern, it is in a moment of rare honesty that we see that the leopard has not changed his spots at all. Itś the same old plan from the same old party. Slash and burn.

We need to invest in the infrastructure of the future, which includes warm, dry homes for all New Zealanders while the cold winds of global recession blow through the land. How better to prepare for this recesion, peak oil and climate change than to get every home in NZ properly insulated?

SMH - Greenhouse gas threatens food chain

THE predicted rise of atmospheric carbon dioxide will wreak havoc on krill, the tiny crustacean at the heart of the Antarctic food web, a study has shown. Captive-bred krill at the Australian Antarctic Division developed deformities as larvae and lost energy when they were exposed to the greenhouse gas at levels predicted for 2100. The damage meant that the krill were unlikely ever to breed, said a University of Tasmania researcher, Lilli Hale.

The Australian - $1bn Indonesian coalmine deal goes to Leighton unit, Theiss

Peak Energy - Berlin Announces Plans for World's Largest Community Electric Car Infrastructure

Peak Energy - Beacon Power: A Megawatt of Flywheel Energy Storage

Peak Energy - Freegans and FreeCycling On The Rise

Peak Energy - A Libyan Oil Bonanza ?

Peak Energy - Heavy Metal-Eating "Superworms" Unearthed in U.K.

Peak Energy - Kenyan Lakes And Geothermal Power

Peak Energy - Depression-era gardening

Peak Energy - Biodiesel a cautionary tale for investors

Peak Energy - Forecasting the Future of Ocean Power

Can anyone comment on the rapid decline of the AUD against other currencies such as the Euro and Yen and on what this will mean for future energy/commodity projects in Australia? Clearly currency weakness can have both positive and negative effects for economic activity. Anyone care to guess where the Austrlian dollar will go from here? Will it continue its drop or level off? Thanks.

See the article in The Australian quoting Don Voelte (one of the first links in the post).

The falling A$ is good for local exporters, but the falling oil price is partially offsetting the windfall.

The credit crunch is a problem for those who need to raise funds, but the falling oil price has cheapened oil rig prices.

So - swings and roundabouts - as long as Asia doesn't go into recession things look OK.

My guess is the A$ will level off in the low 70c's but I wouldn't bet too much on it...

Regarding the Asian economy, looking at the Baltic Dry index, there is clearly a significant slowdown brewing despite what the governments are saying:

Baltic Dry warns of tough times on the horizon

Do freight rates tell the true story?

True - though it would be interesting to see if anyone has shown how much the index would fall for a European / North American slowdown only vs a full global recession.

Do you know how many of the 26 routes go to Asia and what that subset of rates shows at present ?

Good question. I assume unlimited access to certain shipping sites online would provide a more detailed picture. Container shipping is certainly dropping steeply:

Choppy waters lie ahead for container shipping groups