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Energy industries - Oct 30

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Dark side of a boom town (Alberta tar sands)

Original: Mud, sweat and tears
Aida Edemariam, Guardian
The vast tar sands of Alberta in Canada hold oil reserves six times the size of Saudi Arabia's. But this 'black gold' is proving a mixed blessing for the frontier town of Fort McMurray, fuelling both prosperity and misery. As the social and environmental toll mounts, Aida Edemariam reports on the dark side of a boom town.
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...As the Middle East has become more unstable, as Iraq has boiled into chaos, other, more unexpected places have flourished, and none more so than Fort McMurray. Five hours' drive north of Edmonton, in Alberta, it has always been a frontier town, and even before the first white explorers came fur-trapping, the Indians knew that this place sat on oil - they used it to waterproof their canoes. The trouble has always been that it's not conventional crude, easily liberated from the earth, but tar sands (also known as oil sands) - a mixture of sand, water and heavy crude which is much more difficult and expensive to extract. It can cost about Can$26 ($US27; £13) a barrel to do so - so when that was comparable to the price of oil, there was no point in trying; now that oil is close to breaking the $100-a-barrel barrier, there definitely is.

For years there were only two outfits mining the Athabasca oil sands, which occupies 141,000 square kilometres; now there are seven, including Shell, whose first plant became operational in 2003, the year the Iraq war started (the remaining four have not yet started production). Eventually, Shell alone intends to extract 500,000 barrels a day, and to do so for 50 years; in total 1.2 m barrels are extracted each day, a number projected to rise, when all the plants are operational, to 3.5m. The companies intend to invest $100bn in the area in the next 15 years; if oil prices stay as they are, or rise, and once the capital costs are paid off, they're playing for possible profits of tens of billions a year - much of which will come from America, gleeful at this sudden access to so much "safe" oil right next door.

Current technology means companies can reach only about 10% of deposits, but even that makes the Athabasca oil sands the second largest proven oil reserve in the world. Add in the so far unreachable 90%, and Alberta's oil reserves would be at least six times the size of Saudi Arabia's. Already Canada produces as much oil as Kuwait. Soon it'll be two Kuwaits. Canada is the biggest single supplier of crude oil to the US. Small wonder Canada is increasingly described as the world's next great energy superpower.
(30 October 2007)


The Green Goals of the Delta-Montrose Electric Association

Allen Best, Telluride Watch (Colorado)
MONTROSE - Delta-Montrose Electric Association is gaining a reputation as both an iconic, and ironic, rural co-op.

Located between Aspen and Telluride in west-central Colorado, the co-op is determined to at least partially unhitch its wagon to centralized coal-fired electrical production. It is studying local renewable resources with the goal of generating 5 percent of electricity from those sources. At the same time, Delta-Montrose earlier this year attracted broad attention in the Rocky Mountains when it turned a cold shoulder to a new coal-fired power plant proposed in Kansas.

The irony is that Delta-Montrose has high-producing coal mines in its service territory, near Paonia, which might well have contributed coal to that power plant.

It’s a balancing act, one noted by Les Renfrow, chairman of the utility’s directors in his remarks to launch a recent two-day forum on renewable energy.

“Coal is now and will be for many years to come the ‘workhorse’ energy source for electricity,” he said. But for both economic and environmental reasons, he added, “we need to explore alternatives to supplement coal for the future.”

Steven Metheny, the assistant general manager, summarized the approach somewhat differently: “Yogi Berra said, ‘When you come to a fork in the road take it,’ and that’s what we intend to do at Delta-Montrose Electric.”

More than most, Delta-Montrose promotes energy efficiency.

[Rick Gilliam, of Sun Edison] said that he believes electricity will become a much larger part of transportation, both for private cars and public transportation.

The key for investors is to be ahead of the changes. He believes we are at peak oil, and he also notes more rapid glacial melting in Greenland than had been predicted by global warming computer models.

“I don’t think those trends are fully recognized, and when they are, that’s when things will happen,” he said.
(29 October 2007)


Opposition takes on coal plants

Bobby Carmichael, USA TODAY
BLAKELY, Ga. - Sammy Prim says he always thought environmentalists were "a little bit nutty."

Then a New Jersey-based utility, LS Power, decided to build a $2 billion coal-fired power plant here, just a few miles across the Chattahoochee River from his rural Alabama home. If built, it could emit up to 9 million tons of carbon dioxide, the primary gas blamed for global warming, every year.

"I've been a Republican my whole life, but I'll be doggoned if Al Gore isn't right," says Prim, 64, a retired radiologist. "Is it fair for you and me - this generation - to pollute for all the generations to come when we're already seeing the effects - global warming, mercury, particulate matter?"

So Prim joined Friends of the Chattahoochee, a local group opposed since 2001 to the plant, now a joint venture of LS Power and the Texas-based utility Dynegy. The group is appealing the plant's state-approved air permit, arguing it would allow emissions to exceed standards while pumping out mercury, soot and greenhouse gases.
(29 October 2007)


Rise in Heavy Oil Refining Could Put Pop in Shares of Hydrogen Producers Praxair, Air Products, & More

Energy Tech Stocks
A new report from SRI Consulting, a leading research service for the global chemical industry, forecasts that hydrogen consumption will increase more than 40% over the next five years due to an increase in heavy oil refining and stricter environmental regulations on sulfur in diesel.

If SRI is correct, it could put a pop in the shares of major hydrogen producers such as Air Products & Chemicals, Praxair and Air Liquide. To be sure, shares of these and other industrial gas manufacturers already are doing well this year. Last week both Air Products and Praxair reported quarterly earnings that exceeded analysts’ expectations.

The report is further evidence that, whether or not the world has reached “peak oil” production, it has hit peak production of light oil and will increasingly have to rely on less desirable heavy oil (and even heavier unconventional oil sources such as tar sands) which are more difficult to refine.

In order to turn heavy oil into lighter more usable products, hydrogen is added, triggering a chemical reaction that removes most of the sulfur and other undesirable elements, and increasing the amount of hydrogen to desired levels. The heavier the oil, the more hydrogen is needed.

According to SRI Consulting, “The increasing use of hydrogen deficient heavy crude as feedstock material in refineries (will) contribute to the growing hydrogen consumption. In addition, (tar-sands) processing, gas-to-liquids, and coal gasification projects that are ongoing all require enormous amounts of hydrogen and will boost the market significantly.”
(30 October 2007)

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