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Other Energy Headlines - 2 October, 2005

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Pemex expects to cancel oil exports

BusinessWeek

Mexican state oil monopoly Petroleos Mexicanos said it expects shipments of 10 million barrels in crude oil exports to be canceled after Hurricane Rita roared through the U.S. Gulf Coast last weekend.

Despite the disruption, Pemex said Wednesday the company will maintain its crude production of roughly 3.4 million barrels a day, since the company has been able to store the homeless crude or find new buyers for it in Europe, Asia and even parts of the United States.

Pemex is the world's third-biggest oil producer and a major supplier to the United States. However, the company lacks refining capacity to process all of its crude, so it exports more than half of its daily production, mostly to the United States.
(29 September 2005)
Includes details of S.USA refinery closures/restarts and oil shipment impacts.


Saudi Aramco to double its oil rig fleet

Khalid Altowelli & Sami Al-Saeed, Asharq alawsat
London, Asharq Al-Awsat- Saudi Aramco is expanding its drilling rig fleet by 100 percent over a two-year period, going from 55 in 2004 to a planned 110 in 2006.

The oil company, which is the biggest producer of crude oil in the world, announced the increase in a statement on its web site saying that it is to meet plans to drill several hundred wells in the next several years, part of the ambitious expansion of Saudi Arabia 's crude oil and gas program. "This is the most aggressive ramp-up of drilling activity in the history of the oil industry." said the statement. ...

"The strong outlook for energy makes it necessary for Saudi Aramco to invest in this type of exploration," said Mansour Al-Hammad, a superintendent in Northern Area Oil Drilling Operations. "This is very expensive and can cost three to four times as much as drilling on land." ...
(28 September 2005)


Norwegian oil production continues to fall

NRK via
Preliminary figures from the Oil Directorate show that the oil production on the Norwegian Shelf is dropping. In August the daily production averaged 2,497,000 barrels, against 2,576,000 in July.

One reason was planned maintenance on the Visund and Vale fields, which closed down all production there. Also in July the production was down due to maintenance work.

Figures for the first seven months of the year show that the production of oil was altogether 11.2 % lower than in the same period last year. Production of gas, on the other hand, has increased by 5.1 % compared with the same period last year.
(9 September 2005)


Ethanol Starting to Trade Like a World Commodity

Inae Riveras, Reuters via Planet Ark
SAO PAULO - Ethanol export contracts from Brazil are looking more like contracts for other goods, such as sugar, soy and oil -- a sign that the renewable fuel may be on its way to becoming a world commodity.

Brazilian sugar cane mills say they are getting better deals to sell ethanol fuel abroad by extending what used to be only spot market sales into longer-term contracts with flexible pricing, especially with the rise in world oil prices.

The shift, which is seen as a sign that the fuel is becoming a fully fledged world commodity, is occurring this year across the ethanol export sector, which is on course to repeat the record shipments of more than 2.3 billion liters in 2004.

The recent boom in ethanol use, which is as big within Brazil as it is abroad due to the debut of flex-fuel cars in 2004, has world sugar markets closely watching how much cane may be diverted from sugar production to feed demand for fuel.

Brazil is the world's leading producer and exporter of sugar and ethanol.
(29 September 2005)


US investors circle ailing Sellafield

Terry Macalister and Tania Branigan, The Guardian
Harold Wilson's old Labour government saw the new state-owned nuclear power industry as a major British success story that would meet all of our future energy needs. But while New Labour might still push the button on a new generation of atomic power stations to take up the slack from a dwindling domestic oil and gas industry, it seems relaxed about whether ultimate control of reactors lies overseas.

Last night, such a possibility came a step closer with the emergence of plans to sell generating, reprocessing and clear-up operations worth billions of pounds at a string of nuclear sites operated by British Nuclear Group, part of BNFL.

It is the latest example of British willingness to sell off sensitive industries once considered vital to national strategic interests. Despite astonishment from other countries, which balk at foreign ownership of of their defence and energy complexes, the government seems relaxed about key national assets such as missile ranges and the operation of nuclear plants moving into private - and foreign - hands despite security issues in both sectors at a time of heightened concern about terrorism.

The proposals over the nuclear sale come as the government has indicated as greater willingness to build a second generation of nuclear power stations. All but one of the existing ones are due to be decommissioned by 2023. This week Tony Blair told the Labour party conference in Brighton that a successful energy policy required "an assessment of all options, including civil nuclear power". He also stressed the "serious" threat posed by global warming and warned that the developed world could not afford to rely on unstable regions for its energy needs.
(30 September 2005)


Labour's £10bn nuclear sell-off
US firms tipped to bid for Sellafield

Terry Macalister, The Guardian
Operations at Sellafield and other major nuclear plants such as Sizewell and Dungeness are to be sold off to the private sector for more than £10bn under plans drawn up yesterday by the board of British Nuclear Fuels Ltd (BNFL).

American companies such as Halliburton and Fluor are seen as likely contenders in any race to take over British Nuclear Group, which is the main operating arm of the government-owned BNFL, handling nuclear generation, reprocessing and clean-up businesses.
(30 September 2005)


UK Cabinet challenge to nuclear proposals

Patrick Wintour and Mark Milner, Guardian
Tony Blair will have to face down opposition within the cabinet if he goes ahead with plans to build a new generation of nuclear power stations as the best way of meeting the country's climate change targets. Cabinet ministers hope to enlist the support of the Treasury in opposing the prime minister. They argue that the achilles heel of nuclear power is the cost of decommissioning sites and storing radioactive waste, which they put as high as £90bn, substantially higher than the £48bn cited for Britain in April 2003.

...Mr Blair is chairing the relevant cabinet committee and believes his commitment to combat global warming will help him overcome the opposition. He is increasingly convinced that Britain must build new stations because he believes the industry is more efficient than a massive investment in renewables, such as wind and wave power. The new stations would be privately built, without subsidy, mainly on existing civil nuclear sites.

At party conference Mr Blair announced an energy white paper for publication next year, three years after a previous white paper in 2003 put the emphasis on renewables. The announcement, the subject of lengthy prior discussion and nervousness in Downing Street, is a clear sign that Mr Blair has decided to follow the French, and the Americans in leaning on nuclear.

At present, Britain's 12 nuclear power stations provide 22% of the UK's electricity. Unless they are replaced, there will only be three nuclear power stations in operation by 2020, producing just 7% of the UK's requirements. A new generation of nuclear plants would only add around 10% to the UK's volume of existing radioactive waste over a 60-year operating lifetime, the nuclear industry claims.

Green groups say nuclear would only cut British carbon emissions by 8%. They also question the methodolgy behind claims that nuclear energy will be cheap. They claim the planned sell-off of BNG, is another sign of the special treatment given to nuclear industry.
(1 October 2005)


Pre-empting debate on UK nuclear

Leader, The Guardian
At the Labour conference this week Tony Blair called for a much-needed debate on the future of nuclear power. But a couple of days later, as we reported yesterday, it emerged that there are plans to privatise British Nuclear Group, which handles nuclear reprocessing, clean-up and some generation with the likelihood that it would be bought by a big US corporation.

BNG is a subsidiary of British Nuclear Fuels which has already announced plans to sell Westinghouse, its US based nuclear construction company. There are increasing signals that key cabinet ministers are determined to go ahead with a nuclear power station construction programme without a serious debate that might affect the outcome of the decision.

Behind these moves lies a problem in Britain's nuclear industry whose management appears to lack the confidence to manage its own assets or build new power stations at a time when the challenge of global warming has ushered in a new lease of life for the world's hitherto beleaguered nuclear industry.
(1 October 2005)


Designs of offshore platforms at issue
Records indicate they are not built to meet criteria of Category 5 storms

Bill Finch and Ben Raines, Mobile Register via Houston Chronicle
MOBILE, ALA. - In the days after Katrina, as hundreds of oil-producing platforms remained off line — and some continued to leave a conspicuous trail of petroleum in the Gulf of Mexico — federal officials insisted to Congress that they were doing everything they could to make this infrastructure stable during hurricanes, designing platforms to withstand Category 5 storms.

But federal and industry documents obtained by the Mobile Register show that the latest design criteria for offshore oil and natural gas platforms require only that these structures withstand winds and seas typical of a borderline Category 2/Category 3 storm, well below the Category 4 and 5 winds that affected Gulf oil fields at least four times in the last five years. ...

Many of the more than 4,000 platforms now operating in the Gulf may not have been built to the Petroleum Institute's current 100-year design criteria. That's because a large percentage of those platforms were built in the 1970s and early 1980s, before the latest Minerals Management Service regulations were passed by Congress in 1988, according to agency officials.

But not all the platforms damaged during Katrina were older-design platforms. A Helmerich & Payne platform built in 1996 lost its derrick and had "major damage" to the rig floor and substructure, according to the industry online magazine Rigzone. A Pride International platform built in 1989 is being inspected "to determine if rig will be scrapped," Rigzone wrote. ...
(23 September 2005)


Oil sands worth $1.4-trillion, study finds

Dave Ebner, Globe and Mail (Canada)
The oil sands are a $1.4-trillion bonanza, according to a study that forecasts the economic impact generated by the world's second-largest deposit of crude in the 2000-2020 period.

And that conclusion is based on prices of just $40 (U.S.) a barrel of synthetic crude, the type pumped out of northern Alberta, roughly the same quality as West Texas intermediate, which traded at almost $67 Thursday.

Some of the benefits will be spread outside of Alberta, especially in the areas of government revenue and employment. the study says.

But based solely on gross domestic product generated by oil sands activity and expansion, Canada's richest province is the jurisdiction that will grab most of the riches springing from the gooey black mud surrounding Fort McMurray, it says.

The study, released Thursday, is the result of work conducted by the Calgary-based Canadian Energy Research Institute, a 30-year-old group that was formed to analyze energy economics and that describes itself as independent and non-profit.
(29 September 2005)

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