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26 October 2013

Press review 26-10-2013

This week there are good news and bad news; I'll start with the bad first and move on to the good.

There has been a strain of quiet signs from Brasil indicating that all is not right with the pre-salt endeavour. Rumours of lower than expected output rates, lower than expected reserves in place and higher than expected costs have percolated in various ways. This week the near failure of an auction to another pre-salt play put out in the open the bare truth: international oil majors seem to be abandoning ship. I recall what several Brasilian experts told the press back in 2007, when news of the first discovery in the pre-salt broke out, "it is surely an engineering challenge we can conquer, but the question is if it will be worth it".

Deutsche Wella
Uproar as Brazil sells oil rights cheaply
22-10-2013

[...] Oil regulator ANP had expected about 40 oil corporations from around the world to sign up for the auction, but in fact there never was a bidding contest at all.

After oil giants Exxon, Chevron and BP did not even pay the entrance fee, other interested parties bailed out as well. In the end, a single international consortium remained, consisting of Brazil's Petrobras with a 40 percent stake, Anglo-Dutch oil giant Royal Dutch Shell and France's Total with 20 percent each, and China's CNOOC and CNPC with a 10 percent stake each. [...]

"The tender offer wasn't really an auction, it was more of a handover," Ildo Sauer, head of the University of Sao Paulo's Energy and Environment Institute (IEE), said. While the national energy agency appeared to be astonished by the cautious reaction, experts were less surprised. The Constitutional Court is currently examining the legal framework the production contracts are based on. Extraction conditions are considered difficult, as the fields are situated under a thick layer of salt 6,000 meters under the sea surface. In addition, it is not really clear how much oil the field holds.
Earlier next year the IPCC will be issuing its 5th Assessment Report, where it will once again grant us with tales of infinite growth. Beyond the highly questionable reserves figures used by the panel, in recent months I've been pointing to other constraints that make highly doubtful the three or four fold increase in Coal extraction expected by them. The environmental stress imposed by such expansion of mining can alone impair any economic growth.
Al Jazeera
Smog chokes city in China, closing schools and airport
21-10-2013

Choking smog all but shut down one of northeastern China's largest cities Monday, forcing schools to suspend classes, snarling traffic and closing the airport in the country's first major air-pollution crisis of this fall and winter.

Smog — a mixture of atmospheric pollutants, including car exhaust and factory emissions — is measured on an air-quality index measuring PM2.5, or particulate matter less than 2.5 micrometers in diameter. A level above 300 is considered hazardous, and the World Health Organization recommends a daily level of no more than 20.

In some parts of Harbin, the gritty capital of northeastern Heilongjiang province and home to some 11 million people, readings reached 1,000.

The smog not only forced all primary and middle schools to suspend classes but also shut the airport and some public bus routes, the official Xinhua news agency reported, blaming the emergency on the first day of the season that heating was turned on in the city. Visibility was reportedly reduced to 10 meters.
After Petroleum and Coal there also some bleak news on the Gas side. Some cold water has been poured on the hype over the Blak Sea's Gas prospects. As in many other situations, the press and other investment agents have been publicising a resource that is poorly known and is yet far from proving anywhere close to comercial.
Reuters
Analysis: Black Sea gas bonanza remains elusive
[...] Michael Kahn and Nina Chestney, 24-10-2013

Companies such as Shell (RDSa.L), OMV (OMVV.VI), Exxon Mobil Corp. (XOM.N), Petroceltic International (PCI.I) and Vanco International Ltd have exploration licenses in the area. Other firms, such as Eni (ENI.MI), have also expressed interest in exploring Black Sea gas deposits.

However, the Black Sea's gas resource potential remains largely unknown and it could take at least a decade for significant supplies to start flowing, analysts and experts say.

"Offshore gas development is the next great hope but the question is whether there's really (much) there," said Andrew Neff, principal energy analyst at IHS Global Insight in London.

"We need to have more discoveries to catalyze new enthusiasm and investment. We are still looking at a decade for the (Black Sea's) potential to be realized," Neff said.
Platts Energy Week ran a special on solar power a couple of weeks ago. The discourse in the US is still dominated by "grid parity", an outdated concept that can be rather decieving on the potential penetration of solar power (the more solar suppliers are connect to the grid the lower goes the spot price). There are still lots of interesting bits of information in the program that justify its full reproduction here.
Platts Energy Week TV
Clarifying Risks of Financing Solar Projects 13-10-2013


Platts Energy Week TV
Lowering Costs of Solar Materials, Not Quality


Platts Energy Week TV
Big Utilities See Solar Opportunities


One technology that I've been following in recent years is the two-stroke engine. Although more efficient than its four-stroke counter part, this old engine architecture has been plagued by high emissions, hard to conform with modern pollution regulations. Several researchers have proposed improvements that invariably involve opposed pistons and direct fuel injection, thus providing much finer control of intake and exhaust gases. One of these solutions has just got a lump sum of money to bring their architecture to the market.
VentureBeat
Achates Power secures $35M to fuel efficient engine development
Eric Blattberg, 11-10-2013

While hybrid and electric transport get the lion’s share of automotive hype nowadays (at least on technology blogs like this one), most of the world still relies on old-fashioned internal combustion engines to scoot around town. To keep innovating in that sector, engine developer Achates Power raised $35.2 million from investors including Sequoia Capital Partners and four other venture capital firms, the company announced Wednesday.

The San Diego-based company will use the newly raised capital to continue development and commercialization of its opposed-piston technology, which is intended to significantly improve fuel efficiency for gasoline powertrains. Compared to leading alternatives, Achates’ new engine improves gasoline fuel economy by 55 percent and diesel fuel economy by 21 percent, according to a company representative.

“The confidence that our investors have in our technology… further validates the work we’re doing and moves us even closer to production of the Achates Power opposed-piston, two-stroke engine,” said Achates CEO David Johnson in a statement.
Although the architecture proposed by Achates Power isn't exactly my favourite it still has the main ingredients to produce an internal combustion engine of unheard efficiency. This technology can prove decisive in the following decades in a transition phase where fossil fuels are still used but in much lower volumes. At optimal regimes such an engine can burn fuel at an efficiency of 60% or more, coming into the realm of the most efficient combined cycle gas turbines. If proved successful, this technology will be another major force bringing into question the centralised electricity generation paradigm.



And that's all for this week, take care.