The Round-Up: October 20th 2006

Shell Says Oil Sands Expansion Would Remain Viable With $30 Oil

Soaring costs for the steel pipe, specialized equipment and labor needed for an oil-sands facility, along with a 27 percent drop in crude prices since July, have raised concern that some projects won't be profitable. The estimated cost of the Shell project, a 65 percent expansion of the company's operation, has already tripled.

"I stopped reading the daily oil price," Mather, 59, said in an interview yesterday at the company's Calgary headquarters. "Of course the lower you go, the less attractive the rates of return." While short-term fluctuations in prices may affect a decision to drill more gas wells, he said, an investment as large as the oil-sands expansion is based on long-term trends.

His comments contrasted with remarks by Nexen Inc. Chief Executive Officer Charlie Fischer, who this week said new projects may need crude prices of $45 a barrel to break even because of the increased costs that have resulted from the rush to develop the oil sands.

Up to C$125 billion ($110 billion) may be invested in the next decade to almost triple production from Canada's oil sands, according to the National Energy Board. Shell's project is in a region known as the Athabasca in northeastern Alberta, where oil- laden sands are strip mined and then processed with heat and solvents to extract the tar-like crude.

PM gives strong defence of energy sector - Canada emerging as a 'superpower'

Prime Minister Stephen Harper offered a sweeping defence of the energy sector yesterday as his government revealed an environmental plan that critics say is not tough enough on oil and gas producers.

Speaking to a convention of insurance brokers in this border city, Mr. Harper said the contributions of energy industries to the Canadian economy sustain the nation's high quality of life.

"For international investors, the most important sector story I have to tell is energy," the Prime Minister told a packed convention hall. "Canada is an emerging energy superpower."

With energy security an increasing preoccupation for countries all over the world, Alberta's oil sands, he said, are the "second-largest proven petroleum reserves on the planet."

Clean Air Act receives rocky reception from MPs

Environmentalists were quick to voice their opposition to the bill.

"There is really no news here," Green party Leader Elizabeth May told the Canadian Press. "Canada stands alone repudiating Kyoto."

Aaron Freeman of Environmental Defence said the proposed Act was effectively abandoning the Kyoto Protocol and the target it set.

"If you can't meet the target, then you are not meeting the Kyoto (Protocol)," he said.

The Sierra Club blasted the vehicle emissions plan as too little too late

Alaskan storm cracks giant iceberg to pieces in faraway Antarctica
Oceanographers have known since the early 1960s that ocean swells can travel half way around the world. But the new study, funded by the National Science Foundation, raises the possibility that an increase in storms driven by climate change could affect far-flung parts of the globe.

"One of the things we're debating in the world right now is whether global warming might increase the storminess in the oceans," said MacAyeal, professor in geophysical sciences at the University of Chicago. "The question we then pose is: Could global storminess have an influence on the Antarctic ice sheet that had never been thought of?"

Inflation plummets to 0.7 per cent in September
Statistics Canada says inflation fell to 0.7 per cent in September from 2.1 per cent in August, a reflection of the drop in gasoline prices from the highs produced by hurricane Katrina.

The Easy Button/Pent-Up Supply
"So let me tell you, simplistically, what we see and hear on the front lines. On the street we are dealing with builders and sellers every single day. And both groups are trying to leap-frog the other on the way down. That means lower margins or no margins for the builders. And that means the banks that have financed the millions of homes flippers bought, as well as the ATM cash drawn down with ARMs, will wind up owning a lot of property they cannot sell. Sure, most banks sell their paper. OK, so the guys like Fannie Mae will own hundreds of thousands of homes they can't sell. The result is the same. Massive amounts of inventory flooding the market at foreclosure sales. And prices drop further....

...The soft money we saw for the last three years from flippers is gone. The funny money drove prices up more than 100% in just three years in many markets. Irrational exuberance was a replay. History repeats again. Surprise? No. So even though we are down 30-40% in many markets year over year, we now have more inventory than we have ever had in the history of the world. In high school I learned about supply and demand. This is a classic example. Too much supply and too little demand. So housing prices will fall further and the entire economy will suffer for our irrational exuberance. Far more so than we suffered during the dot-com boom."

Russian government to call for action on stalled Royal Dutch Shell project
Russia's upper house of parliament will discuss the Royal Dutch Shell-led Sakhalin-2 oil and gas project today and call for government actions over the venture. Sakhalin-2 has come under pressure over ecological and technical compliance from Russia's environmental agency. Analysts say this is part of a broader Kremlin strategy to gain control over the lucrative project. Russian Resources Minister Yuri Trutnev, who will inspect Sakhalin-2 next week, has said Russia is particularly upset by the doubling of costs at the project to US$20-billion, which will delay when the country gets its profit oil from the production sharing deal. The Sakhalin-2 group, which also includes Japan's Mitsui and Mitsubishi, argues that it is not different from other big projects and its costs rose due to higher steel prices and the weaker dollar.

Husky profit rises 23 pct as oil production jumps

10.4% is not excessive. Just so you know. Oil imports increase stood at 10.5% in recent numbers. So economic growth marches in step with oil use. The growth in coal in China is also a factor.

China credits central controls as growth slows to 10.4% from 11.3%

China's annual growth slowed a little in the third quarter to 10.4 %, but the world's fourth-largest economy is still firmly on course to log a fourth consecutive year of double-digit expansion.

The slowdown, from 11.3% in the second quarter, followed a concerted campaign by Beijing to prevent a credit-fuelled investment boom from turning into a bust that could saddle the nation's banks with fresh bad loans.

"Excessive economic growth has been basically brought under control. This data shows that the tightening policies adopted by the central government have been timely and effective," Li Xiaochao, chief spokesman for the National Bureau of Statistics, told a news conference yesterday.

But the third-quarter's annual growth rate was still the second strongest since the fourth quarter of 2003 and Mr. Li said the economy was likely to keep up the momentum in the fourth quarter.

Gross domestic product in the first nine months grew 10.7% from a year earlier, faster than any other major economy.

JPMorgan responded by raising its forecast for 2006 GDP growth to 10.6% from 10.0% and for 2007 to 9.5% from 9.0%.

Wow, 10 % is like doubling the economy every 7 years!

It just went from freakingly fast to a weebit less faster.

It sure tell how the increase in oil consumption will fare in the following month.

I saw several reports through the summer that China's oil demand had decreased, and found that hard to believe.

Not long ago it turned out there was a 10.5% increase. They are also filling their (newly built) reservoirs at the moment, and will do so as fast as they can with the low prices.

Also not long ago, the government said they were aiming to decrease the growth rate to 7-8%. Didn't quite succeed. Providing they were ever serious.

And yes, you're right, they're looking at a doubling in about 6.5 years at this rate. While, what was it, 30%(?!) of the rivers are already too toxic to even stand in, let alone drink the water. I can only see China heading for a huge implosion. Economic growth as a Pandora's box.

Trend to consolidation of Canada's wind power businesses

Wind power generation, by province (megawatts)
British Columbia      0              325
Alberta                   285              235
Saskatchewan         171               25
Manitoba               104                0
Ontario                    221            1,059
Quebec                    212            1,244
New Brunswick             0               20
Nova Scotia               41               61
Prince Edward Island     14               39
Newfoundland              1                0
Yukon                          1                0
And from the same article:
Canada's installed wind power capacity (megawatts)
2000    137
2001    198
2002    236
2003    322
2004    444
2005    683
2006*    1,049

*to June 30


Nice trend, but what is the energy generated?
Still pretty insignificant in the overall picture.  Canada's gross electric power generation in 2002 was around 500,000 GWh. For one wind generating station in Alberta, the capacity factor is around 32%, which would be pretty much at the high end of the range. Scaling that up suggests that the total generation from the 1049 MW installed base is probably less than 3,000 GWh
Hello TOD:Can,

Congratulations on getting this up and running!  Hopefully you can figure out some way to get a lot of Canadian eyeballs drawn to this site.  Maybe featuring some controversial subjects will move you up the hit-tracking sites.  I would suggest doing a lot of Nafta and SuperNafta websearches: I think this will be growing concern for all Canadians.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

NAFTA can be abrogated with 6 months notice - not that this will happen anytime soon however.
Gold mine holds radioactive life, untouched by the Sun

The first known organisms that live totally independently of the sun have been discovered deep in a South African gold mine.

The bacteria exist without the benefit of photosynthesis by harvesting the energy of natural radioactivity to create food for themselves. Similar life forms may exist on other planets, experts speculate.
The bacteria live in ancient water trapped in a crack in basalt rock, 3 to 4 kilometres down.

Scientists from Princeton University in New Jersey, US, and colleagues analysed water from the fissure after it was penetrated by a narrow exploratory shaft in the Mponeng gold mine near Johannesburg, South Africa. The shaft was then closed.

There were many species of bacteria present, but RNA sequencing showed most were a previously-unknown type of bacteria dubbed Desulfotomaculum.

Uranium and other radioactive elements in the rock emit radiation that shatters water molecules, producing high-energy hydrogen gas that is able to cleave chemical bonds.

The bacteria exploit this hydrogen gas to turn sulphate (SO4) molecules from the rock into hydrogen sulphide (H2S). It is the energy-trapping equivalent of photosynthesis. The energy of radiation, which makes hydrogen gas energetic enough to form these bonds, replaces the energy of the Sun.

The team examined the sulphur atoms in the hydrogen sulphide they found. The ratio of isotopes - different chemical forms of the same element - proved the sulphide was produced by living organisms, in a similar way that carbon dating can be used to show whether carbon compounds have been produced by living or non-living processes.

In view of current climate science, it's hard to not wonder how many functioning braincells are at work in the heads of these planners.

When Ontario resolved to close its 5 coal plants (what happened to that?!), someone noted it might not have that much effect, since the fumes of 421 US coal plants reach Ontario. Well, there's more on the way.

Anyone want to talk about clean coal? Wait 30 years, or give up now.

154 new US coal-fired power plants, 1 "clean"

Thanks to the high prices of oil and natural gas, the electricity industry is turning back to coal, America's oldest and most abundant fossil fuel, to drive a new generation of power plants. The upshot is that even as politicians take the threat of global warming more seriously, the problem may get much worse.

Utilities are proposing to build 154 coal-fired power plants in the next 25 years, according to "Coal's Resurgence in Electric Power Generation," a recent Department of Energy report.

Most of those new plants would use conventional coal-burning technology, which would increase carbon dioxide emissions from U.S. coal plants by more than 50 percent by 2030, according to the Energy Information Administration, the analytic division of the Energy Department. A traditional coal plant produces three to four times more CO2 - a potent "greenhouse gas" that traps the sun's heat and helps raise the Earth's temperature - than comes from a modern plant that uses natural gas as its fuel.

Operators of 66 of the proposed coal-fired plants plan to adopt more efficient, advanced technologies - such as turning coal into a gas before burning it - that produce less CO2 and other pollutants, said Erik Shuster, an analyst at the National Energy Technology Laboratory in Morgantown, W.Va.

But the rest would continue to use a 50-year-old technology that burns pulverized coal to create steam. The exhaust going up the stack contains 12 percent to 18 percent carbon dioxide.
Only one power company, Minneapolis-based Xcel Energy Corp., is planning to capture part of the carbon and store it before it enters the atmosphere.