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Electric Utilities Unlikely to Spend

Bill Paul, Energy Tech Stocks
Preparing for a Financial Crisis, Electric Utilities Unlikely to Spend Despite Critical Needs, Says Analyst Scotto (Part 1 of 2)

The needs are everywhere – more power plants, more transmission lines, major upgrades to the existing grid. But even as the threat of blackouts grows daily, in the wake of Wall Street’s meltdown the capital-intensive electric utility is unlikely to carry out desperately-needed improvement projects.

So says Daniel Scotto, veteran Wall Street electric utility financial analyst, one of the few on the Street who understands how Wall Street’s woes are likely to impact the Byzantine, multi-trillion-dollar electric utility industry.
(6 October 2008)

Coal Seam Gas Producers – The New Masters Of The Universe?

Big Gav, Peak Energy
… While gas producers in Australia have traditionally focused on natural gas production – originally in central Australia, later in Bass Strait and most recently offshore the north west and northern coastlines – in recent months we’ve seen a surge in interest in coal seam gas (CSG) production and stock market valuations of coal seam gas producers, triggered by a bid by BG for Origin Energy – one of the major players in the sector – a few months ago. The bid eventually failed, with Origin instead choosing to partner with Conoco Phillips in a CSG to LNG development, with Conoco paying $US9.6 billion ($12 billion) for a half-share of Origin Energy’s CSG assets.

In this post I’ll look at recent events in the industry and what they mean for Australian gas production in future.

Coal Seam Gas – What Is It ?

Coal seam gas (also called coal seam methane or coal bed methane) is trapped in coal seams (usually 300-600 metres underground) by water, which must be removed to initiate gas flow. In the past it has been viewed as more of a hazard to miners than a benefit.

CSG is extracted via wells which are drilled down into coal seams – the water is pumped out and the CSG is then released (desorbed) from the coal. If the pressure within the seam is high enough the gas may flow to the surface unaided, otherwise the gas must be pumped.
(8 October 2008)
One of Big Gav’s comprehensive posts of links, excerpts and comments. -BA

Energy’s Future in Latin America

Bracewell & Giuliani LLP via Red Orbin
Peak oil in Latin America is less than 10 years away; energy integration, nuclear power plants, and large-scale renewable power generation are necessities to ensure sufficient energy supplies in the future; the region’s governments should play a stronger role in their respective energy sectors; and Latin America and the Caribbean are ripe for business. These are the significant findings of Bracewell & Giuliani and Business News Americas’ Energy Outlook 2008, which surveyed energy company executives from various countries throughout Latin America.

Making this survey unique was that it distinguished findings between the countries surveyed. Respondents from Brazil, Colombia, Chile, Peru, Argentina, Mexico, Central America, Uruguay, Paraguay, Venezuela, Bolivia, and Ecuador were posed a variety of questions concerning the prospects of the energy market in Latin America.

“With this survey, the energy community, for the first time, is able to explore a wealth of information by country and better determine individual needs and business growth objectives,” said Bracewell Partner Amauri G. Costa who helped spear-head the survey.

Among the survey’s key findings:

Country by Country

— 78% of respondents indicated that the regulatory and legislative outlook has improved in the past five years, with Colombia and Peru making the most advances.

— Responses to questions on risk and return were far from encouraging for the business environment. In Argentina, Bolivia, Ecuador, and Venezuela, over 81% of responses said that in order to commit to long-term investment, investors would want to see above- average returns.

— However, approximately half of the responses for Brazil, Chile, Colombia, Mexico, and Peru were that investors do not expect to see above-average returns.
(7 October 2008)
Press release giving the views of energy company executives. -BA