Blowout Week 90

The oil wars are coming down to the wire:

Telegraph:  OPEC has victory in its sights in oil price war with US shale

(Image credit: Economist)

The Organisation of the Petroleum Exporting Countries (Opec) has given the clearest signal yet that it believes it is winning its oil price war with the US shale industry. The group of 12 mainly Middle Eastern producers has said that output from outside the cartel in 2016 will be over 100,000 barrels per day (bpd) lower than it had previously predicted, as lower prices shut down more production. In its closely-watched monthly market report, Opec said: “There are signs that US production has started to respond to reduced investment and activity. Indeed, all eyes are on how quickly US production falls.” The report said that the number of oil drilling rigs in the US declined in the week ending September 4, down by 13 units to 662 rigs. The overall rig count in the US – which is seen as a key barometer for the industry – is now down 864 units year-on-year. A 50pc slump in the price of oil to levels well below $50 per barrel is putting pressure on higher cost producers outside Opec – which pumps about a third of the world’s crude – in spiralling a price war. Opec has continued to pump over its target ceiling of 30 million bpd in a bid to seize back market share from the threat in sees from the rapid growth in US oil output.

More on the travails of US shale oil below the fold, plus a looming shortage of US natural gas, the forthcoming uranium boom, China burning more coal than thought, nuclear plant decommissioning problems in Germany, more threats to the UK grid, Scotland’s SMAUG anti-fracking group, Australia’s greens unhappy with Turnbull, Ireland missing its renewables target, the Paris climate talks, climate scientists demand that skeptics be prosecuted, killer viruses from melting Arctic Ice and mutant fish from Fukushima.

Financial Times:  US oil and gas battles bank lenders

Energy companies in the US are struggling through the collapse in oil and gas prices, cutting costs and clinging on despite the odds. Now life is set to get a lot tougher as banks re-evaluate their lending agreements with small and midsized oil and gas producers. Negotiations over “bank borrowing bases” will be key to whether or not oil companies file for bankruptcy protection, or restructure their debts with bankers in the next three to six months. The price of oil has nosedived over the past 12 months. Traders had a brief moment of optimism halfway through this year, but now most people are expecting oil and gas prices to stay lower for longer. During the last round of determinations in March, there was still some hope that oil prices might rebound quickly, therefore supporting reserve valuations. This time around there is far less optimism, so borrowing bases are expected to be cut more heavily. The oil and gas market is unique in that the sector is in constant need of capital. Companies can cut capital expenditure to save cash. But cutting capex hurts their production and hence their cash flow, meaning they could end up in a worse position. And without capex they can’t develop new reserves that will add to their borrowing bases. As the Lex column put it recently, it’s a Catch 22.

Bloomberg:  U.S. Shale Drillers Are Drowning in Debt

As much as 400,000 barrels a day of oil production is at risk as U.S. shale companies like Samson Resources Co. run out of money and are forced to slow drilling. Total debt for half of the companies in a Bloomberg index of more than 60 producers has risen to a level that represents 40 percent of their enterprise value. It’s a sign of distress that shows equity values falling in the face of oil’s crash, said Rob Thummel, a managing director and portfolio manager at Tortoise Capital Advisors LLC who helps manage $15.6 billion. The companies facing high debt loads, which include Encana Corp. and Chesapeake Energy Corp., produced 1.1 million barrels of oil a day in the second quarter of this year, according to data compiled by Bloomberg. If more companies file for bankruptcy as Samson did Wednesday, or embrace the kinds of draconian cuts needed to survive, output could fall by 200,000 to 400,000 barrels, Thummel said.A loss of that much crude would be the steepest U.S. decline since 1989, about the amount of oil from Oklahoma, the sixth-largest producing state, which pumped 356,000 barrels a day in June, government data show.“We are going to see a major response because these financially challenged companies won’t be able to produce as much as they did in the past,” he said.

Bloomberg:  Shale Oil’s Retreat Threatens to Leave U.S. Short on Natural Gas

The retrenchment in drilling for U.S. oil is threatening to leave a different market short: natural gas. “The impacts of oil rig counts extend beyond oil: the outlook for U.S. natural gas is critically dependent on the outcome of this balancing act in U.S. oil rigs,” Anthony Yuen, a strategist at Citigroup Inc. in New York, said in a report to clients Wednesday. “If the oil market remains oversupplied and oil-rig counts fall, the decline in associated gas production would leave the market short of gas.” Associated gas is the gas that comes out of oil wells along with the crude. Supplies of this byproduct from fields including the Bakken formation in North Dakota and the Eagle Ford in Texas may fall by about 1 billion cubic feet a day next year as drillers idle rigs in response to the collapse in oil prices, Yuen said. That’s about 7 percent of U.S. residential gas demand. The U.S. Energy Information Administration has already forecast that shale gas production will drop in October for the fourth straight month, a record streak of declines. U.S. oil has lost half its value in the past year amid a worldwide glut of crude. Drillers have responded by sidelining almost 60 percent of the country’s oil rigs since Oct. 10. Crude producers in the lower 48 states may have to keep the number of working rigs low for a while longer to balance the global market, Yuen said. A recovery in the rig count may “exacerbate the current oversupplied environment” and weaken prices, he said.

Reuters:  House panel passes bill to repeal U.S. oil export ban

A bill to repeal the 40-year-old ban on U.S. oil exports easily passed the energy panel in the House of Representatives on Thursday, but the measure faces an uphill battle in the Senate. The legislation, which passed 31 to 19, is expected to be passed by the full House in coming weeks. But the bill is not backed by President Barack Obama. The White House said on Wednesday that oil export decisions are made by the Commerce Department. And a similar bill in the Senate faces an uncertain future because backers need the support of several Democrats to ensure its passage. Congress passed the ban after the 1973 Arab oil embargo led to fears of petroleum shortages. But thanks to fracking, horizontal drilling and other advanced techniques, the United States now vies with Russia and Saudi Arabia for the spot of the world’s top oil producer. Democrats who voted against the bill said they were concerned about the environmental consequences of increased domestic oil drilling and the possible loss of jobs at refineries and in shipbuilding.

Reuters:  China oil market reform paves way for new crude benchmark

China may launch a global crude oil futures contract as early as October to compete with the existing London Brent and the U.S. WTI benchmarks, three sources said, as it pushes ahead with reforms to open up its oil markets. The long-awaited crude contract would better reflect China’s growing importance in setting crude prices, as well as boost the use of the yuan in which it will be traded, although volatile global trading conditions and China’s recent interference in stock markets have raised some concerns. The Shanghai International Energy Exchange, also known as INE, circulated a draft of the futures con-tract to market participants last month, saying the launch could happen as early as October, the sources who saw the draft, told Reuters. The launch of Shanghai crude futures won state approval last year and would be the first Chinese contract that allows direct participation by international investors.

MarketWatch:  Why uranium prices are poised to rebound

The outlook for the uranium market might have brightened in August after Japan restarted the nuclear reactor at the Sendai power plant. Demand for uranium fell in the aftermath of the 2011 disaster at Japan’s Fukushima Daiichi reactor. Uranium investments, including shares of producers and exchange-traded funds, have been slow to recover. Now, analysts say, the first restart of a Japanese reactor since Sept. 2013 presages a revival for prices of the commodity and related investments. How much, and how quickly, those investments rebound is a matter of debate. But many now believe a corner has been turned. “The story for uranium can be summed up as inevitable, if not imminent,” said Brien Lundin, publisher of the metals and natural-resource subscription publication Gold Newsletter, who called the long-term supply and demand outlook “exceptionally bullish.”

Mining:  China’s coal burn rate upped dramatically

After 13 years of rapid growth, China today burns more coal than the rest of the world combined. Over this period the country was responsible for more than 80% of global growth in coal usage since the start of the century. Now a new study shows growth in coal consumption and production in China have been even more spectacular than previously thought. According to newly released international data from the US Energy Information Administration (EIA) data from the China Statistical Abstract 2015 show an upward revision to China’s historical coal consumption and production. According to the EIA energy-content-based coal consumption from 2000 to 2013 is up to 14% higher than previously reported, while coal production is up to 7% higher. These revisions also affect China’s total primary energy consumption and production, which are also higher than previously reported—up to 11% and 7% in some years, respectively, mainly because of revisions to coal. In 2014, energy-content-based coal consumption was essentially flat, and production declined by 2.6%.

Reuters:  CO2 emissions still increasing, according to revised Chinese coal data

When the International Energy Agency reported in March that global carbon emissions had stayed flat in 2014, even as the world economy grew, the news was hailed as a turning point in the struggle to curb climate change. But more recent data about Chinese coal consumption, seen by Reuters, raise doubts about whether that historic decoupling of economic growth and carbon emissions from energy use actually occurred. One of the keys to keeping carbon emissions flat in 2014 was significantly lower coal consumption in China, the world’s top greenhouse gas emitter: a 2.9 per cent drop, reported in preliminary Chinese data in February. It was the first fall in coal use by China this century. But in May, China’s National Bureau of Statistics (NBS) released a China Statistical Abstract, not available online but only on paper, showing that coal consumption edged up by 0.06 percent from 2013. Just that difference between two sets of NBS data would in turn lift global emissions growth in 2014 from a flat line to about 0.5 per cent, in line with an estimate by oil company BP in a report in June. That global growth rate is still low, but would undermine the arguments of many, from environmental groups to governments, who have cited the IEA data to support the idea that cuts in carbon use need not necessarily hamper economic growth.

Guardian:  Will the UK phase out coal in a decade?

The government is wrong to assume its existing policies will be enough to phase out coal power in the UK, analysts have told the Guardian. Minister for energy and climate change Andrea Leadsom said this week that her department expected unabated (meaning without carbon capture) coal would make up just 1% of the country’s electricity generation by 2025.Referring to a Department of Energy and Climate Change (Decc) report from September last year, Leadsom said the decline would occur “as a result of deployment of low carbon alternatives, the cost of generation and the investment needed to meet new pollution abatement standards”. But this prediction is not reinforced by a mandatory end date for electricity generation from coal. Despite rhetoric from the prime minister and his ministers that coal needs to go, the government has been reluctant to set a timeline for the phase-out of the most carbon intensive fossil fuel.Robert Gross, director of Imperial College’s Centre for Energy Policy and Technology, said relying on existing policies and the market for cleaner technologies left the door open for coal generation to continue beyond 2030. “There’s a considerable range of uncertainty about how much coal will be retained on the system. And if it’s at the upper end of the range of possibilities then its going to absolutely blow the carbon budget,” he said.

Bloomberg:  Germany’s Nuclear Power Exit Is Causing Havoc for Utilities

Germany’s largest utilities are facing their biggest challenge yet: Provisioning enough cash to dismantle the nation’s nuclear reactors and make safe equipment and fuel that may be radioactive for 100,000 years. Costs may exceed 38 billion euros ($43 billion), which the utilities estimated at the end of last year. That burden has made EON SE and RWE AG, Germany’s largest power generators, the worst performers on Germany’s benchmark DAX Index in 2015. The latest shot across the bow came from a report Monday in Der Spiegel that said utilities may be as much as 30 billion euros short of the funds needed. The report spurred the biggest intraday plunge in EON and RWE for as much as 16 years, while the government rejected the claims. The shares continued to tumble on Wednesday, with EON sliding as much as 6.4 percent and RWE dropping as much as 7.5 percent. “Politics has to organize the disposal of nuclear waste, the utilities have to pay for it,” Guido Hoymann, an analyst at B. Metzler Seel Sohn & Co. KGaA, said Wednesday by phone from Frankfurt.

Financial Times:  Fast pace of power plant closures threatens UK electricity grid

A wave of power plant closures threatens to push Britain’s creaking electricity system close to breaking point within months, energy experts have warned, with new gas-fired stations not being built quickly enough to plug supply gaps. The latest moves to shut old coal-fired plants deemed uneconomic — the most recent, Eggborough, announced just two weeks ago — could trigger electricity price spikes and put UK businesses with interruptible contracts at greater risk of supply curbs. The rapid pace at which plants are being closed, ahead of a deadline for compliance with new EU rules on air quality, is such that the National Grid has had to buy in emergency back-up this year for the second winter in a row. Worse, just over a year from now, should temperatures plunge on a mid-December evening, it could even find itself without adequate power generation. Jefferies, the investment bank, calculates that for 2016-17 just 53 gigawatts of capacity will be available to meet forecast peak demand of 56 gigawatts.“This would be the first time in living memory that the UK could not cover peak demand with dispatchable generation,” says Peter Atherton, the bank’s utilities analyst.

Business Reporter:  Businesses and unions warn against major cuts to solar power subsidies

Businesses, energy sector bodies and unions have joined calls for the Government not to implement major cuts to solar power subsidies. They warn moves to dramatically cut “feed in tariff” payments for generating electricity from small scale arrays of solar panels on roofs could cost more than 20,000 jobs and stall the “solar revolution” the Government claims to want. Ministers have said the cuts, which are predicted to lead to nearly a million fewer renewables installations over the next five years, are necessary to prevent rising green energy payments hitting consumer bills. But companies including Ikea and Panasonic have joined investors, industry bodies Energy UK and RenewableUK, the National Farmers’ Union, the TUC, and a raft of green and community groups to call on the Government to rethink its plans. Businesses and organisations signing up to the call to rethink the plans say they accept that subsidies for technologies “cannot go on indefinitely”. But they say Government changes should be done in consultation with interested parties to retain investor confidence and allow a smooth transition to solar being the same cost as energy from the grid.

Utility Dive:  California solar energy storage valued at 25 cents/kWh

Using the Public Tool provided to help stakeholders in the state’s grid modernization docket establish a new rate and remuneration mechanism for solar, the California Energy Storage Alliance (CESA) “generated a sizable benefit stack of $0.25 per kWh in levelized value when PV solar is combined with three hours of energy storage,” it reports in its filing with the California Public Utilities Commission (CPUC). That calculation likely underestimates the actual value of solar and storage systems, CESA explained in the filing, because the tool “undervalues energy storage in a variety of ways.” The significance in such a storage valuation scheme is that it helps utilities and regulators determine how much owners of such facilities should be paid for energy and services they offer the grid. “The calculation of $0.25 as the value of solar-plus-storage means something like that could be justified as the amount customers who install solar-plus-storage should be reimbursed at,” explained Strategen Consulting Manager Edward Burgess.

Guardian:  Shale gas fracking should go ahead in UK, says task force

Fracking for shale gas in the UK should be pursued as an alternative to the use of coal, a task force on the controversial technology has concluded, in order to provide a bridge to a low-carbon future. But shale gas should not receive public subsidy or tax breaks, and the tax revenues arising from its exploitation should be redeployed to develop renewable energy and other low-carbon innovations, according to the chairman of the task force, former Labour cabinet minister Lord Smith. The Task Force on Shale Gas, which is funded by the UK’s shale gas industry but operates independently, found that climate change targets could still be met even with an increase in the use of gas, which is less carbon-intensive than coal. When technologies known as “green completion” are used, which means stopping the leaks of methane from shale wells, the fuel is no more carbon-intensive than conventional gas, and less so than imports of liquefied natural gas from countries such as Qatar, according to the report. But the report also found that if gas is to be used for another four decades, as envisaged by the group, then much more effort must be put into carbon capture and storage technologies. These have been problematic, as repeated attempts to set up UK pilot projects over the past decade have yet to produce a result. “The government must get a move on,” said Lord Smith. “I don’t think the reason for the slowness lies in problems with the technology. It is a lack of political will.”

Guardian:  UK loses top ten renewables ranking

The UK has dropped out of the top ten of a respected international league table on renewable energy for the first time since it began 12 years ago. In its quarterly report published on Wednesday, EY said the new Conservative government had sentenced the renewable energy industry to “death by a thousand cuts” and investor confidence in the sector had collapsed because of policy changes over the summer. An EY energy analyst said that “investors are scratching their heads” to understand the government’s policy changes in recent months, putting at risk the UK’s reputation as a “safe harbour” for investment. When the last rankings were published in June, the UK was sat in 8th place, but it has now dropped to 11th. Some environmentalists have described the period since the election of the Conservative government in May as the worst for environmental policy in decades.

Guardian:  Cameron gives top environment policy job to oil man

Environmentalists have criticised a decision to appoint a former consultant to major oil and gas companies as David Cameron’s key adviser on energy and environment policy. Stephen Heidari-Robinson, a little-known consultant from oilfield services company Schlumberger, arrives in Downing Street just months before the prime minister is expected to attend the UN’s global climate change summit which begins in Paris in December. A Number 10 spokesman confirmed the appointment of Heidari-Robinson, who started in the job this week. It is understood he will serve as a lead energy and environment adviser to the prime minister, liaising with senior ministers and officials across Whitehall. He joins Cameron’s top team from Schlumberger’s London-based consulting division where he advised companies including BP, Shell and Chevron and co-authored a paper critical of the tax regime on North Sea oil and gas production.

Scotsman:  SNP’s SMAUG anti-fracking group

SNP members have formed a lobby group to encourage the Scottish Government to extend its temporary moratorium on fracking – and named it after a dwarf-slaying literary dragon. Smaug (SNP Members Against Unconventional Gas) is “awakening to save us from the confused priorities that lead us to damage the very resources that we need to live … and protect the wee inhabitants of Middle Earth from the long blight of falling house prices”, according to its founders. Currently, a moratorium exists in Scotland temporarily halting fracking – fracturing onshore shale sediments to release gas – and also the extraction of coal-bed methane. A vote will be held at next month’s SNP conference calling for it to be extended to include underground coal gasification. Smaug’s founders said its name was consciously inspired by JRR Tolkein’s The Hobbit, in which a dragon is found “living in the depths of the earth and is disturbed by the predatory dwarves going digging for the treasures of its domain”. “The SNP government are focused on delivering a fairer, more prosperous and equal Scotland,” the founders said.

See News:  Scotland lacks funds to take over onshore wind Renewables Obligation subsidies.

Scotland’s energy minister Fergus Ewing has dismissed a call on the Scottish government to continue the Renewables Obligation (RO) subsidy scheme for onshore wind, saying there is no money for that, reported on Thursday. The Scottish government does not have the budget to fund reserved matters that the UK government is responsible for, the minister has said during a Scottish parliament debate on renewable energy. Ewing again criticised the UK government’s move to close the RO to onshore wind a year earlier than planned, calling it an assault on renewables. Labour MSPs urged the Scottish government to take over the scheme. The energy minister was asked by Ken Macintosh whether the government has considered using its power to issue its own Renewables Obligation Certificates (ROCs), paid for in Scotland rather than by the UK consumer, over the transition period, until the scheme is closed. Scotland is particularly affected by the subsidy cut as it is home to about 70% of onshore wind projects in the UK planning system.

RTE:  Ireland in danger of missing renewable energy targets

Ireland is committed to supplying 40% of its energy for electricity from renewable sources by 2020, but NOW Ireland says that under current government policy, that will not be met. The government has identified Ireland’s substantial offshore wind resources as a major asset for export. However, NOW Ireland says that failure to achieve the 2020 targets for renewable energy generation would lead to a bar on Irish renewable energy generators exporting power under existing European Union rules. This, it says, would cost the state many hundreds of millions of euro in revenue. “Successive Governments have placed all their eggs in the basket of onshore wind. Other technologies, such as offshore wind, have been pushed towards the export route to market,” Brian Britton, NOW Ireland Secretary General said. “If the government’s narrow focus fails to deliver, Ireland will face significant fines and the offshore wind industry, which could deliver the entire renewable energy shortfall for Ireland, will be locked out of the export market as well as the home market.”

Guardian:  Malcolm Turnbull’s Faustian pact on climate change

All those Australians who thought that Mr Turnbull’s return to the leadership of the Liberal party would actually mean something — that it would actually hold out the hope of a strong and sensible policy on climate change for Australia — have had their hearts broken, because this prime minister has swallowed Tony Abbott’s Direct Action policy, hook, line and sinker. Those Australians were entitled to hold out those hopes. They were entirely entitled to think that a change of leadership would mean something and would lead to some change in the Liberal party’s attitude to climate change. The old Malcolm had been so crystal clear about his belief that the Direct Action policy, in his words, was “an environmental fig leaf to cover a determination to do nothing”. The old Malcolm Turnbull was clear in his advocacy of an emissions trading scheme as the cheapest and most effective means of reducing carbon pollution. We have heard him say, so many times, particularly in that critical period of debate in 2009 and 2010, that a policy like Tony Abbott’s emissions reduction fund would be “a recipe for fiscal recklessness on a grand scale”. Well, apparently it’s all different now. Tony Abbott’s Direct Action policy is apparently now a “very, very good piece of work”.

EurActiv:  EU ministers unite on mandate for Paris climate talks

EU ministers on Friday (18 September) agreed upon the bloc’s negotiating mandate for the upcoming COP21 talks, including a 40% cut in greenhouse gas emissions by 2030 over 1990 levels, overcoming resistance from eastern member states. EurActiv exclusively revealed on Wednesday (16 September) that the environment ministers would reach a deal, despite the objections of countries such as Poland, Hungary, and the Czech Republic. Poland’s elections next month complicated the debate, as the right-wing Law and Justice party has been campaigning on a promise to resist EU environment law and protect the coal industry. But Friday’s talks were quicker than expected, as EU officials said Poland realised it was isolated and agreed to word changes that made no substantial difference. The haggling to accommodate Poland also switched the word decarbonisation with “climate neutrality”. Polish officials said that allowed for technological solutions, such as carbon capture and storage, to do some of the work, reducing the need to change the fuel mix. “We stand ready to conclude an ambitious, vast and binding global climate deal, and we will settle for nothing less,” EU Climate Commissioner Miguel Arias Cañete told a press conference in Brussels.

Irish Times:  France turns up heat on climate change ahead of Paris conference

With only a few months to go before France hosts the COP21 conference on climate change, the presidential palace offered a sneak preview of events from November 30th to December 11th. The Élysée’s lavish reception rooms were filled with high-ranking officials, scientists, business executives, artists, representatives of NGOs and media. The half-day session was intended “to demonstrate the mobilisation and the unity of France’s team in the last stretch”, the president’s office said. The French prime minister, Manuel Valls, opened the meeting with the usual warning that “the survival of our planet is at stake”, that the first seven months of this year were the hottest ever recorded, and that “if we continue this tendency, temperatures will increase four or five degrees by the end of the century, which would be an ecological, economic, humanitarian and security cataclysm”. In a week dominated by the migrant crisis, the statement by France’s environment minister, Ségolène Royal, that half the world’s migrants were fleeing encroaching deserts and evaporating water supplies struck a chord. “If no substantial measures are taken, we won’t be dealing with hundreds of thousands of refugees but millions over the next 20 or 30 years,” president François Hollande said.

Guardian:  Paris climate summit pledges won’t avoid dangerous warming

The UN’s climate chief, Christiana Figueres, said that so far 62 countries had submitted promises of emissions cuts ahead of the Paris meeting, covering about 70% of global emissions. UK government sources told the Guardian that pledges, called Intended Nationally Determined Contributions (INDCs), were expected from India, Brazil, Indonesia and other nations before Paris. In total, all these pledges would cover 85% of global emissions, according to the source, but the cuts would fall short of those needed to restrict warming to 2C. Figueres said pledged cuts would only limit warming to 3C, while the UK source said about 2.5C, but stressed that these numbers are hard to predict precisely. “What the INDCs will do is mark a very substantial departure from business as usual,” Figueres said. But she added: “Is 3C acceptable? No.”

Daily Caller:  Scientists Ask Obama To Prosecute Global Warming Skeptics

The science on global warming is settled, so settled that 20 climate scientists are asking President Barack Obama to prosecute people who disagree with them on the science behind man-made global warming. Scientists from several universities and research centers even asked Obama to use the Racketeer Influenced and Corrupt Organizations Act (RICO) to prosecute groups that “have knowingly deceived the American people about the risks of climate change, as a means to forestall America’s response to climate change.” RICO was a law designed to take down organized crime syndicates, but scientists now want it to be used against scientists, activists and organizations that voice their disagreement with the so-called “consensus” on global warming. The scientists repeated claims made by environmentalists that groups, especially those with ties to fossil fuels, have engaged in a misinformation campaign to confuse the public on global warming. “The actions of these organizations have been extensively documented in peer-reviewed academic research and in recent books,” the scientists wrote.

The Star:  Killer viruses from melting Arctic ice

Let’s get one thing out of the way really quickly: the ancient, giant virus recently discovered in melting Arctic ice is not going to kill you. But here’s the bad news: It’s not the first ancient virus that scientists have found frozen — it’s the fourth found since 2003. And you can be sure it won’t be the last. And with climate change causing massive melts, it’s not totally alarmist to suggest that something deadly might one day emerge from a long, icy sleep. As if climate change didn’t already suck enough, right?

Independent:  Monstrous Wolf-fish raises fears about Fukushima nuclear disaster

The enormous wolf-fish was caught off the island of Hokkaido, near eastern Russia, by fisherman and adventurer Hiroshi Hirasaka, who is renowned in Japan for catching and eating strange things. The sea beast was caught over a week ago, and has prompted questions about the impact that the 2011 Fukushima nuclear power plant disaster had on surrounding marine life. Giant catfish were discovered near the site of a nuclear disaster at Chernobyl in Russia last year. Wolf-fish typically only grow up to 112cm and weigh 15kg but the one caught by Mr Hirasaka was over two metres long. The terrifying creature has been identified as one of the largest wolf-fish ever recorded.

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38 Responses to Blowout Week 90

  1. How come there’s no talk of the Texas Railroad Commission reprising its role of controlling the oil market? Would benefit most everyone, even consumers in the lomg run.

  2. Graeme No.3 says:

    Re The Guardian Australia:

    It must be very irritating to them to have their “great white hope” on emission reductions, adopt a policy of getting actual reductions cheaply. You can only wonder what they expected.

  3. Peter Lang says:

    Utility Dive: California solar energy storage valued at 25 cents/kWh

    (CESA) “[CESA] generated a sizable benefit stack of $0.25 per kWh in levelized value when PV solar is combined with three hours of energy storage,” …
    The significance in such a storage valuation scheme is that it helps utilities and regulators determine how much owners of such facilities should be paid for energy and services they offer the grid. “The calculation of $0.25 as the value of solar-plus-storage means something like that could be justified as the amount customers who install solar-plus-storage should be reimbursed at,” explained Strategen Consulting Manager Edward Burgess.

    In that case, how much should “owners of [nuclear] facilities … be paid for energy and services they offer the grid”, given that nuclear can provide fully dispatchable energy – it has unlimited energy storage in the fuel? Should we be prepared to pay four times more for nuclear power than solar + storage? If not, how much more should we be prepared to pay for nuclear than for solar + storage?

    • singletonengineer says:

      Hi, Peter.

      That 25 cent figure can be viewed from another angle.
      When it suits them to do so, claims from the PV sector include “cheaper than coal” kWh figures of only a few cents.
      When it suits them, claims from the storage sector place storage at trivial cost… but “in a few years”.
      Both groups ignore intermittency and even the article you quote refers to only 3 hours’ storage, which is close to worthless during a wet week in winter.

      The question remains: What are the true costs, benefits and limitations of solar+storage in today’s world and how do these stack up against the far more reliable and dispatchable alternatives?

      • Euan Mearns says:

        Roger had a post on solar and battery storage a while back. Bottom line is that there is no unique answer. At low latitude, in the tropics, storage is only required to cover the diurnal cycle and makes more sense. But at high latitude, demand is highest in winter and supply lowest and it is impossible to cover that annual cycle from storage.

        • singletonengineer says:

          Absolutely and unmistakably true. Apples with apples is a difficult concept for some folk.

        • glen Mc Millian says:

          I went back and checked read the link and copied this excerpt.


          In Southern California, base rates are $0.11, off-peak, and $0.46, on-peak; which likely is THE best-case scenario in the US for demonstrating the economic viability of the TESLA unit.

          The 8.10 AC kWh, off-peak, would cost $0.89. The avoided cost of 6.05 AC kWh, on-peak, would be $2.78, for a profit of $1.89/day, or $691/yr. The simple payback would be about 10 years, not counting the cost of financing.

          But the TESLA warrantee is for only 10 years, and during these 10 years, there would be 3,650 deep discharge cycles, which far exceeds what such batteries are designed for.


          Now I am the last person to lay claim to any expertise in batteries but there seems to be a general consensus that the cost of batteries is falling fast and will continue to fall for some years yet. The typical opinion I read, posted by many different parties such as banks, engineers, renewables advocates and various reporters ( who generally know hardly anything and seldom take the time to study the opinions they repeat) is that the cost of batteries such as the Tesla Powerwall will probably fall by HALF in five years and almost certainly by half in less than ten years.

          It is just about a foregone conclusion that the cost of installing such batteries will also fall fairly fast based on the assumptions that electrical and building codes will be better standardized and that the contractors who do this work will get faster and growth in the business will drive down their costs- and their prices.

          I am interested in hearing what any and all regulars in this forum THINK when it comes to the price of large batteries five to ten years down the road.

          Given that I lack any expertise beyond reading the opinions easily found on the net, I personally would bet even money that such batteries as the Tesla Powerwall can be bought for half the current cost in constant money within seven and a half years-the midway point in the estimates or guesses I have seen.

          It seems rather likely that short term homeowner and small business storage will be a profitable investment in ten years or less in localities with high peak demand pricing.

          What do you regulars think the odds are of peak demand pricing growing more widespread over the same five to ten year time frame?

          • roberto says:

            It is not a matter of price for battery storage… there simply is not enough “XXXXX” (put your favorite element’s/chemical compound’s name here) to build a battery for the earth… only for niche applications.
            This has been already discussed back in TOD days by a (I think to remember) guest post by Tom Murphy, who used to run a very informative blog on his own, aptly named “Do the Math”:


            “What about cost? At today’s price for lead, $2.50/kg, the national battery would cost $13 trillion in lead alone, and perhaps double this to fashion the raw materials into a battery (today’s deep cycle batteries retail for four times the cost of the lead within them). But I guarantee that if we really want to use more lead than we presently estimate to exist in deposits, we’re not dealing with today’s prices.”

          • Willem Post says:


            Your claims are completely off the mark.

            The chemistry of Li-ion batteries has about reached its limit. A minor improvement was made to the Chevy-Volt batteries, based on an MIT study of the chemistry.

            It would enable the range to be 40 miles, instead of 38 miles, but GM opted not to claim it, thereby making less risky its battery warrantee.

            Here is a full write up from this article.


            The INSTALLED cost of the 10 kWh TESLA unit = $3,500 + S & H + Contractor markup of about 10 percent + $2,000 for an AC to DC inverter + Misc. hardware + Installation by 2 electricians, say 16 hours @ $60/hr = $7,100, or $7,140 per this URL.

            The TESLA warrantee is for only 10 years for manufacturing defects, not performance!!

            Assuming a 50% charge/discharge *, and a 90% AC to DC inverter efficiency, and allocating half of the 8% DC-to-DC loss to the charging side (the TESLA unit has a round-trip DC-to-DC efficiency of 92%, per spec sheet), it would take 0.5 x 10/(0.9 x 0.96) = 5.787 AC kWh of off-peak grid energy to charge 10 DC kWh into the unit. During on-peak hours, one would get back 0.5 x 10 x 0.96 x 0.90 = 4.32 AC kWh to use in the house, for a (1 – 4.32/5.787) x 100% = 25.3% loss of energy!!

            * NO battery exists that can be repeatedly discharged 100% (a flow battery may be the exception), i.e., the charge/discharge likely would need to be much less than 100% to limit capacity degradation and maintain a reasonable useful service life.

            In Southern California, base rates are $0.11, off-peak, and $0.46, on-peak; which likely is THE best-case scenario in the US. But this rate ratio is only for 6 months.

            The off-peak cost would be 5.787 x 0.11. The on-peak avoided cost would be 4.32 x 0.46, for a profit of $1.35/day!!! The monetary gain of this arbitrage is miniscule. The cost of financing, PLUS any costs for O&M, PLUS any capacity degradation due to cycling are ignored.

          • Willem Post says:


            Should read: 5.787 AC kWh of off-peak grid energy to charge up the 10 kWh TESLA unit.

        • Roger Andrews says:

          Euan: According to my follow up post

          it’s far more economic to beef up a rooftop PV system to cover winter demand and waste the surplus summer energy than it is to install storage. But at latitudes much above 40 degrees the system still becomes prohibitively costly:

          • Willem Post says:


            It would work for about 50% of the world population.


          • It would work only for that fraction of the world’s population that a) lived in single-family residences that had enough roof space to install the solar panels and enough space in the backyard to accommodate a gas-powered generator and b) had ~$30,000 in spare cash. This would work out to maybe 100 million people, most of them living in the southern US. And their question would be, why should they fork out ~$30,000 to generate their own power at 25-30 cents/kWh when they can buy it from the grid at half the cost without spending anything?

    • Roberto says:

      You are right, Peter, the best is the final sentence…

      ‘“We are reaching the recognition,” Ko said, “that when you generate energy, when you put energy onto the grid, and when you consume it is a lot more important to value than just taking energy whenever it comes, as we have in the past.”’

      … which is what people critical of pv have been saying for years… you just can’t compare intermittent sources with baseload ones Wh per Wh.

      Are they finally going top see the light?

      • Euan Mearns says:

        Human society evolved around our ability to access energy when needed. Starting with food stores and then wood stores. This evolved to whale oil stores. With the development of electricity grids, our evolutionary dependency on energy stores went up a few gears. In defining energy quality, storability (dispatchability and scale) is likely as important as ERoEI.

        I think my atomic bomb analogy is quite a good one. One can acquire a vast amount of cheap energy in a form that cannot be harnessed or used and at time that is not necessarily convenient.

  4. Leo Smith says:

    “One of the largest wolf fish ever recorded”

    Ok, so presumably you dont need a tiny radiation increase to create a giant wolf fish, and connecting it with Fukushima is completely unwarranted..

    Shame. Could be the answer to England’s Rugby team. Breed giant prop forwards near Sellafield..

  5. Aslangeo says:

    slightly off topic but for UK residents there is an excellent series on the history of North Sea Oil on Radio 4 A crude History of Britain – Today’s episode had a very moving interview with Bryan Crowse ,who was a fire fighter who worked on Piper Alpha available on BBC Iplayer for UK residents. I do not know how non UK people can access this

  6. Aslangeo says:

    link to webpage of Brian Krause interview – a bit of an emotional read for anybody who has worked in the UKCS

  7. Hot off the press:

    A “shocking” military dossier reveals a catalogue of potentially catastrophic air safety incidents, many of them related to unlit turbines and new or uncharted developments. However, the Ministry of Defence withheld more information on national security grounds meaning the real number could be much higher. Last night, campaigners called for an urgent review of the mapping and lighting of wind turbines to prevent a fatal crash involving a low-flying aircraft. The 59 near-misses were classified from negligible to high in terms of severity with 15 cases – most of them from RAF Lossiemouth in Moray – in the high-risk category.

  8. gweberbv says:

    Concerning the capacity gap to supply peak power in UK:

    I guess there should be a few GW of emergency diesel generators in UK. If grid operators have access to them, the problem is solved.

  9. singletonengineer says:

    gweberbv, the problem with unreliable energy sources is not only peaking power. It is what to do when the sun is not shining and the wind isn’t blowing, and this can commonly be across a whole continent.

    What you are proposing is not a couple of GW of diesels. To do the job you will soon find a need for a 100% backup system of fossil-fuelled generation, whether coal or diesel or natural gas. This is essentially doing the job twice, so that the renewables theorists can have their day in the sun. (Pun intended.)

    • gweberbv says:


      as I understand there might be the problem that a few GW capacity is missing in UK to supplay peak demand. This issue could be solved by activating the few thousand emergency diesel generators that (I assume) are available in hospitals, industrial facilites, etc.
      Using such generators as a general backup for renewables is of course a stupid idea. But the last few GW that might be missing for 100 hours or so can be easiliy covered by such systems.

  10. Glen Mc Millian says:

    Every body who commented in answer to my question as to their estimation of the future cost of batteries dodged the actual question.

    The chemistry of lithium ion batteries may or may not have reached fundamental limits. The actual manufacturing process is still in short pants in terms of incremental improvements that will result from scaling up manufacturing.

    The cost of internal combustion engines in relation to the durability, performance, and fuel consumption per horsepower hour of operation of these engines has been falling for a century now and continues to fall.

    The fundamental engineering has remained about the same the entire time, all the improvement has been from incremental improvements.The price per horsepower, and price per horse power hour are at all time lows , and kWh of work per unit of fuel consumption is at an an all time high.

    Now to answer the question, If any of you naysayers DARE answer the actual question.

    How much do you guys think it will cost to buy a large rechargeable battery comparable to a Powerwall in five to ten years in present day money?

    No dodge ball.

    Lithium might go up let us say five times between now and then. Add that it to your estimated price. It doesn’t take a hell of a lot of lithium to manufacture ONE such battery, only a few kilos are needed for one big enough to run a car eighty miles.

    It appears to me that if the cost of such a battery falls by half or a little more, and it lasts ok, it will make excellent financial sense for a person paying high demand rates and low off peak rates to buy one.

    Warranties are important to be sure- but both my old car and my old truck have outlasted the factory warranty by a factor of five.My el cheapo smart phone had a twelve month warranty and is still going strong at twenty four months.

    There is no question at all that fossil fuels deplete and over any extended time frame will cost more and more in terms of constant money.

    Oil cannot be recycled except for lube oil.

    Lithium can be recycled.

    At some point batteries are likely to sell for so little that they can be economically used for household and small business demand management.

    It is true that building enough batteries to manage demand on a national business as usual basis is a pipe dream.

    It is also true that that the idea we can continue to rely on gas and oil long term is a pipe dream as well. World wars have already been fought as much for access to depleting natural resources as for any other reasons.

  11. Willem Post says:


    “The chemistry of lithium ion batteries may or may not have reached fundamental limits.”

    Sorry, but it has. It has to do with physics.

    I know it is difficult for lay people to give up on dream scenarios, but at some stage one needs to be a realist, i.e., scientist.

    Note: At the bottom of my prior comment, I forgot to mention the cost of depreciation.

    Warrantee periods are set by manufacturers to limit warrantee payments, in case products fail due to manufacturing defects before the period expires. Warrantees do NOT cover maintaining design performance.

    Batteries deteriorate over time, some faster than others. Much depends on the depth of charging and discharging, and the number of such cycles, and the temperature at which this takes place.

    If the charging and discharging are shallow, say 20%, then the battery will last many years without loosing much of its capacity, but if 50% or more, its capacity rapidly decreases to uselessness.

  12. singletonengineer says:

    “At some point batteries are likely to sell for so little that they can be economically used for household and small business demand management. ”

    This fallacy is central to any projection which includes massive battery backup. It relies on several assumptions, any one of which can disprove (falsify) the claim.

    Two are:

    The above quotation, which assumes that batteries are analogous to liquid-fueled engines and that future developments will thus result in increased efficiency and decreased costs, seemingly without limit. This remains to be seen. It is crystal ball gazing. I suggest waiting till this happy situation actually arrives before counting on it. Meanwhile, the best available actual, demonstrated option is fission. It works, right now.

    Physical limits to scale, which would thus drive price upwards due to scarcity, rather than as projected by the author. Much work has been done on lithium and other elements. It often arrives at the conclusion that Li and other elements are indeed in short supply, some critically so. This cannot simply be waved away, especially when the geological deposits of these materials are concentrated in a few nations and are thus liable to become strategical negotiating chips. Until this issue is resolved, all options must remain on the table, including the obvious but politically unpalatable (for some) one called fission power.

    However, if the author is considering only off-grid applications, say islands and cars, then price is less of a concern, in which case increasing cost due to resource scarcity will far outweigh reduced prices due to incremental system efficiency.

    There are many authoritative articles re lithium reserves available freely on the web. One, at, is now five years old but interestingly estimates that the global lithium supply will not be adequate for the batteries in even one Nissan Leaf per thousand of the world’s current population. This doesn’t consider the additional demands for battery replacement, losses during recycling and manufacture, etc. Even if incorrect by a factor of 10, it leaves 99% of the lithium battery problem unresolved. Global resource resource depletion cannot be ignored.

    • Willem Post says:


      Agreed. The earlier mentioned ream scenarios have no place on this site.

      Here is a better approach from this article:

      Energy Efficiency and Nuclear:

      A reduction of the US primary energy, PE, from 97.141 in 2013 to 74.313 quads, about 23.5%, by means of energy efficiency, PLUS a build-out of 10 quads of nuclear energy, preferably with breeder reactors. The resulting US energy mix would have about 73% of electrical energy from nuclear. If France can run its grid with 73% nuclear, so can (and should) the US and others. Existing thermal reactors burn about 0.7% of the fuel, breeder reactors burn about 99% of the fuel, i.e., much less waste products. Uranium in seawater is estimated at 4.4 BILLION metric ton, enough to provide the entire world with electricity for many thousands of years. See pg. 4 of URL.

      NOTE: A quad = 10 to the fifteenth Btu.

      Capacity and Capital Cost:

      Here are the estimated capacities, MW, and capital costs, $billion, of the wind and solar alternatives and the nuclear alternative:

      …………………………………………………………Capacity……………….Capital Cost

      Wind, 100% onshore…………………………..783,918…………………….1,960
      Wind, 50% onshore/50% offshore……391,959/266,866…………….2,314
      Solar…………………………………………411,511 PV/38,184 CSP……..1,921

      * Existing nuclear plants, about 100,000 MW, are not counted.

      The $1,672 billion should be compared with the sum of (2,314, wind + 1,921, solar) = $4,235 billion, as the 50% onshore /50% offshore wind alternative would be more likely.

      While the US, Europe and Japan are in a self-induced nuclear coma, Russia and China will take advantage and supply reactors to the rest of the world. In case of Russia, at the 2015 Atomexpo, it was announced, at the start of 2015, Rosatom’s foreign portfolio totaled $101.4 b, of which $66 b was reactors, $21.8 b was contracted sales of EUP and SWU, and $13.6 b was sales of fabricated fuel assemblies and uranium.

      Eventually, after some more years of expensive wind and solar build-outs, that produce expensive, variable, intermittent energy, with less than claimed CO2 emission reduction results, the US, Europe and Japan will wake up from their coma and seriously start implementing nuclear build-outs again, as they did starting in the 1960s. See Traditional Generators and Variable Wind and Solar Energy and Fuel and CO2 Reduction due to Wind and Solar Energy Less Than Claimed.–Nuclear-Power/

      • singletonengineer says:

        Willem, why bother inventing or using silly names such as a “quad”? Quads or no quads, electricity is not the deciding game. Electricity is always only somewhere between 1/3rd and 1/4tr of the total energy budget. It is energy, for transport, airways, ships, trains, trucks, cars and households. It is energy for manufacture of steel, cement and clay products. It is asphalt and bitumen. It is certainly not “quads”.

        If we focus on population and electrical energy and exclude all else, then we have failed.

        BTW, I enjoy the intellectual stimulation of new names for energy units, such as “quads”. However, whatever the name, the CO2 problem remains the same size and shape. Please avoid the game plays and stick to the facts. I very much recommend use of SI units, so that the whole world can understand what we are saying, instead of speaking only to a small part of a single nation north of the Panama Canal.

        So, no more about “quads”, please. If you use silly terms, you risk being ignored by those such as engineers and scientists, who use international units. Effing Quads? What? Who gives a hoot?

        To be entirely frank, I think that anybody who enters an international discussion, as you have, using such idiotic terminology as “quads” has failed at the outset. So, what is your message again, using accessible language?

        • Willem Post says:


          A quad is used by the US DOE and EIA and others.

          My article is about US ENERGY FUTURE.

          If I were writing about Europe, etc, I would use SI units.

          BP uses ktoe as a unit, among others; nothing SI about that.

          SI units would just confuse my US readers.

          A quad = 10 to the 15th Btu, as stated at the beginning of my article, which has 32 likes, meaning well over 3500 views since August 27.

          No one, but you made an SI comment.

          • singletonengineer says:

            Point taken.

            Is there any possibility of USA rejoining the planet anytime soon? It isn’t only Europe which uses SI – it is more like 90%+ of humanity.

            I started out in feet, inches and pounds. Mid-way through training as an engineer, I made the change to SI. Along the way I have also worked professionally in CGS an some other systems of units, so I am no stranger to adaptation to change.

            What’s America’s excuse?

          • Euan Mearns says:

            The US uses more energy per capita than any one else (apart from the Canadians and Saudis) and this must surely entitle them to use whatever system they please 😉

            A quad is a unit of energy equal to 10^15 (a short-scale quadrillion) BTU,[1] or 1.055 × 10^18 joules (1.055 exajoules or EJ) in SI units.

            The unit is used by the U.S. Department of Energy in discussing world and national energy budgets. The global primary energy production in 2004 was 446 quad, equivalent to 471 EJ. [2]

            One of the ironies here is that they are using British Thermal Units (1 btu = the energy required to make a cup of tea 😉 )

            I hate using EJ – can’t relate to them. My preferred unit is MM toe – million tonnes oil equivalent which I normally write as M toe since most readers won’t accept that M is Latin for thousand and prefer to believe it is shorthand for million.

  13. singletonengineer says:

    What a lot of words!

    More simply, if you believe that you have a better proposal, then please start with an assumption of at least 50% of nuclear energy, because unless a lower carbon option appears and we continue to avoid truly zero carbon options, then we and our grandkids’ world are all comprehensively stuffed.

    John Bennetts
    Singleton, Australia

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