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16 March 2013

Press review 16-03-2013

This week the Catholic Church got a new Pope, after the surprising resignation of Benedict XVI. The much awaited announcement habemum papam was followed by an also surprising name: Jorge Bergoglio. After weeks of speculation and many papable lists issued around, the elected is someone that few where aware even existed. It turns out Bergoglio had been the runner up when Benedict XVI was elected; just to show how clueless the media was, and is, on this particular subject, as it unfortunately is in many other domains. So far I'm well impressed with the new pope and I quite like his choice of Francis for a name. May God be with him.

On more material subjects, the news of the week was the weather (I'd never seen so much snow fall in my life). This meant more trouble for the UK, that continues to struggle with its gas supply. Record low reserves and record high prices again this week and the cold seems to set to continue.

U.K. Natural Gas Jumps to 1-Year High on Weather, Storage Limits
Mathew Carr, 12-03-2013

U.K. day-ahead natural gas prices surged to their highest in more than a year as Centrica Plc (CNA) restricted withdrawals from the nation’s biggest gas store and freezing weather gripped Europe’s biggest market.

Gas for tomorrow jumped as much as 8.3 percent while the within-day contract rose as much as 11 percent. Minimum temperatures in London are forecast to be below freezing in seven of the next 10 days, according to CustomWeather Inc. on Bloomberg. The 30-year average minimum is 3 degrees (37 Fahrenheit).

Cold weather drove withdrawals of the fuel to a six-day high yesterday, when 4.5 percent the nation’s reserves were removed from stores. Centrica Plc’s Rough storage field in the North Sea, Britain’s largest, said today it would limit withdrawal capacity by 25 percent for the four hours through 2:15 p.m. London time. Day-ahead gas has averaged 70 pence so far this year, 17 percent more than in the year-earlier period.
UK Vulnerable to Price Spikes Due to Reliance on Norway’s Natural Gas
Charles Kennedy 10-03-2013

Record high prices for natural gas in Northeast Asia have caused a huge decline in LNG imports being delivered to the UK as exporters prefer to send their product to the Asian market to fetch the higher prices. In the first half of 2012 LNG imports to the UK fell by 53% compared to a year before.

Norway has been the biggest beneficiary, supplying record amounts of natural gas to the UK last year. In January 2013 natural gas imports from Norway rose to 138 million cubic metres a day, compared to an average of 76 million cubic metres a day last year.

This dependence on Norway, which provided 48% of the UK’s gas in December 2012, has left the UK incredibly vulnerable to the possibility of high gas prices if Norway experiences any disruption to production.
Reuters published a good piece on the troubles faced today by traditional electricity suppliers and grid operators. Geert de Clerq calls these companies dinosaurs, that have so far missed the rise of renewable technologies; this goes pretty much along the points I have made in the Solar Power Price post. Another point of note is Germany having crossed the 20% barrier of renewable electricity share in 2012. And yes, there are still good journalists out there.
Analysis: Renewables turn utilities into dinosaurs of the energy world
Geert De Clercq, 08-03-2013

(Reuters) - Every new solar panel installed on European rooftops chips away at power utilities' centralized production model. Unless they reinvent themselves soon, these giants risk becoming the dinosaurs of the energy market.

The industry faces drastic change as renewable energy turns consumers into producers and hollows out the dominance of utilities. With their stocks at decade lows and a millstone of debt around their necks, Europe's utilities have little margin for error.

In Germany, where 22 percent of its electricity came from renewable sources in 2012, the big four utilities - E.ON, RWE, EnBW and Vattenfall Europe - are nearly absent in this new sector.
Another great piece of investigative journalism was published by Al Jazeera on the disastrous policies promoting agro-fuels. Here is an interesting account of how some African villagers have turned around the agro-fuel bandwagon into a story with an happy ending; even if some doubts on the sustainability of the crops remain.
Al Jazeera
Soap security: African home economics after the biofuel hype
Saskia Vermeylen, Dan van der Horst and Terence Kunda Chibwe, 10-03-2013

The development of biofuels over the last decade has been highly controversial, with negative media attention focusing on the impacts of subsidised biofuel production on food prices, the destruction of the rainforest to make way for new plantations or farms, and the trampling of local land rights. This criticism has led to the quest for more sustainable biofuels, with efforts to develop best practice and certification schemes, and to identify new "candidate crops" for sustainable biofuel production. Jatropha curcasrose to prominence among these candidates.

Jatropha is indigenous to Mexico, but has spread across the tropics as an ornamental plant - an inedible perennial that could, optimists hoped, be grown by poor, small-scale farmers on degraded and semi-arid land, thus helping sustain rural livelihoods through biofuel production without infringing on food production. But others feared that jatropha was a veiled excuse for land grabs, a harmful invasive species and detrimental to soil quality.

While these controversies played in the background, biofuel companies arrived in African villages looking for seed to start nurseries. Initially they paid high prices for seeds, which had never been of any commercial use to the villagers. This quickly raised interest in local communities, facilitating subsequent recruitment efforts by these companies to grow jatropha as a crop in the field rather than on marginal lands.
Shale gas has been one of the most fascinating developments in the energy world I ever witnessed. It ends up amounting to some sort of collective deceive, close to a spiritual experience. The numbers tell a rather bleak story, with many investors loosing their shirts over the hype. William Engdahl has put together a long piece detailing where the industry stands at this point. While not having anything exactly new to show, it is a very thorough account for those that are not yet fully familiar with the shale bubble. Arthur Berman is extensively quoted.
The Fracked-up USA Shale Gas Bubble
F. William Engdahl, 13-03-2013

At a time when much of the world is looking with a mix of envy and excitement at the recent boom in USA unconventional gas from shale rock, when countries from China to Poland to France to the UK are beginning to launch their own ventures into unconventional shale gas extraction, hoping it is the cure for their energy woes, the US shale boom is revealing itself to have been a gigantic hyped confidence bubble that is already beginning to deflate. Carpe diem!
To finish off a subject with which I have grown increasingly frustrated in recent years. Over at the European Tribune Cyrille spotted a major blunder published in a high profile peer reviewed publication. Young researchers are constantly under pressure to publish peer reviewed articles, and in great quantities, invariably bumping against an impenetrable wall of rejection. Meanwhile established researchers are able to publish the most egregious rants. Is it a group think issue? or simply the reflection of an elite that instinctively reacts against novelty? Whichever it is, the peer review process is in need of some serious rethinking.
European Tribune
What happened to the scientific process?
Cyrille, 12-03-2013

What you then learn is that, when there is such a clear stratification, you should never make the kind of model called a "regression" on the whole of the data (but you might do so on each strata).

So guess what our four op-ed writers had done? They ran a regression on the whole of the data.

Now, that this could be published in the Wall Street Journal should not necessarily come as a surprise. The WSJ probably has less truth in it than Pravda ever had (although at least its title is not misleading in the way Pravda -truth- was. It really is what Wall Street wants to read). But their op-ed was based on a published paper.
And that's it. Have a nice weekend and don't forget the F1 circus is back.

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