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15 February 2014

Press review 15-02-2014 - 90% renewable electricity possible today

In the midst of not so pleasant times there are also good news to go about. Last month over 90% of the electricity consumed in Portugal was generated by renewable energy sources. Persistent stormy weather meant both the hydraulic and wind parks functioned at high power outputs. Hydraulic sources supplied 51% of the electricity consumed, with wind providing 35%. Even though this record has been greatly facilitated by the reduction of economic activity imposed on the country, it still serves to prove, yet again, the viability of these modern electricity sources.

In spite of the negative press renewable energy sources receive, their dominance in the supply to Portuguese households hasn't meant high prices. Electricity rates were kept artificially low throughout the last decade, masking a tripling of coal and gas prices. A slow adjustment to cover the deficit created during those years translates into rates today in the order of 0.14 €/kWh, on par with the European average and, for instance, with France, a country that generates most of its electricity from nuclear. Electricity prices in Portugal should peak somewhere between 0.15-0.16 €/kWh still this decade, to then entail a slow decline as fossil fuels phase out of the electrical mix.

Read the robotic translation of this article here.
Renováveis garantiram 91% da eletricidade consumida em janeiro

No mês de janeiro a produção de eletricidade a partir de fontes renováveis garantiu 91% do consumo em Portugal Continental.

Os dados hoje revelados pela Associação de Energias Renováveis, que cita o levantamento mensal efetuado pela REN - Redes Energéticas Nacionais, indicam ainda que este é um recorde absoluto, em que os valores ficaram muito acima dos 64% registados em janeiro de 2013.

As barragens foram responsáveis por mais de metade daquele valor (51%) e as eólicas com a percentagem mais elevada de sempre (da ordem dos 35%).
Further details surfaced this week on the plans by the German government to Feudalise the Sun. For now, systems below 10 kWp remain untouched by this abhorrent legislation. Small and medium enterprises - the fabric of the German economy - and energy cooperatives seem to be the main target of this ill conceived policy.
Deutsche Wella
Germany to charge fee for off-grid electricity

[...] If the plan is approved, businesses which have their own solar grid or wind systems larger than 10 kilowatts will pay a one cent surcharge on the power they generate. Newly installed on-site power systems will be hit with the full 6.24 euro cent surcharge, whether they are powered by fossil fuels or alternative energy.

Ralph Schneider from Priosol Energy Investments, an alternative energy producer based in Munich, says he is not surprised by the developments.

"These days more and more clients are becoming independent, and are leaving the big utilities," Schneider says. "I've spoken with these energy companies and they are worried."

Schneider says that the surcharge is a government concession to big energy companies, which have wrestled with the transition to renewables.
If on the one hand the German government is poised to choke any sort of alternative energy, it is propping up fossil production on the other. Even though an indigenous resource, the environmental costs of coal do not seem to deter the government. In the following piece National Geographic repeats the mantra that coal is a cheap energy source, choosing to ignore the 2 G€ the industry costs to German taxpayers every year, in direct subsidies alone.
National Geographic
Germany Plans to Raze Towns for Brown Coal and Cheap Energy
Andrew Curry, 11-02-2014

The German village of Atterwasch is tiny, its single street lined with sturdy brick and stone houses. The village has a single church whose bells peal out at noon each day, a small volunteer fire department, and a cemetery with a special section devoted to German soldiers who died nearby in the closing months of World War II.

Atterwasch may soon be gone.

Vattenfall, a Swedish energy company, hopes to relocate the village and its residents in order to strip-mine the ground underneath for lignite, or "brown coal."
Water usage by hydraulic fracturation techniques is a subject that I have followed regularly in this review. This week there's a new report on the subject making the rounds.
Study: Fracking, agriculture are on water demand 'collision course'

Hydraulic fracturing, or fracking, is increasing competitive pressures for water in some of the most water-stressed and drought-ridden U.S. regions, a study indicated.

Fracking involves massive amounts of water, sand and chemicals injected at high pressure to fracture rock and release stored gas. The technique has unleashed a U.S. oil and gas boom.

The study by Ceres -- an investor group based in Boston that focuses on sustainability issues -- is based on water use data from 39,294 oil and gas wells reported to FracFocus.org from January 2011 through May 2013 and water stress indicator maps developed by the World Resources Institute.
The war in Iraq rages on, with consequences that are seldom reflected on the western media. Attacks on the country's energy infrastructure are becoming common and with increased intensity. It is hard to see how can Iraq continue being a major petroleum exporter.
Iraqi pipeline attacks raise fears of threat to oil

Fifteen soldiers were killed this week guarding an oil pipeline in northern Iraq, the first assault to involve so many casualties amid concerns an al-Qaida insurgency in western Iraq is spreading to vital oil-producing regions.

Iraqi security authorities said Tuesday's attack on the camp in Nineveh province took place the same day that Iraqi security forces captured three al-Qaida suspects as they tried to blow up a pipeline near the northern Kirkuk oilfields, which hold about a third of Iraq's oil reserves of 431 billion barrels. Twin pipelines that carry Kirkuk's oil production to Turkey's Ceyhan terminal on the Mediterranean for export are a frequent target for saboteurs.

[...] "Attacking the energy sector has been among their top priorities to deprive the country of its main revenue sources," Shahristani said. "The attacks have been focused on oil export pipelines, power generation and transmission lines."
The turmoil lived in recent years in Egypt is intimately linked to the country's energy predicament: a fast growing population meeting declining fossil fuel extraction. And things have likely to get worse before they can turn for the better.
Egypt’s Precarious Energy Position
Rory Johnston, 11-02-2014

Egypt faces a serious energy crunch in securing the required petroleum and natural gas imports to meet expected summer requirements, Egyptian Oil Minister Sherif Ismail told Reuters on Monday. While keeping the geographic company of hydrocarbon giants, Egypt is a net energy importer and currently relies on regional allies for oil and natural gas shipments. The country has been in a state of political flux since the ousting of Hosni Mubarak in 2011 and the subsequent turmoil has all but frozen the government. The resulting uncertainty in the policy process has hobbled Egyptian energy security, making it difficult for Cairo to ensure sufficient energy supplies for the summer months.

“The first estimate … is that we will need to import petroleum products of around $250 million per month during the four summer months,” Ismail said. Last year, fuel shortages caused winding lines at gas stations around the country and sparked protests. To avoid these shortages, Egypt will depend on the continued support of Saudi Arabia, Kuwait, and the United Arab Emirates, which have supplied more than $4 billion in fuel since Mohamed Morsi was ousted last summer.

The natural gas situation is even more complicated as Egypt’s planned liquefied natural gas (LNG) terminal has yet to materialize. Originally planned to be up and running before April, the contract for its construction has experienced delays and it is now unlikely that it will be operational before it is needed most in summer 2014. If sufficient natural gas supplies are not found, Egypt may have to shift to more expensive fuel oil to meet electricity demand.
The surprising propane shortage in North America has a multitude of causes that beg for deep reflection. In all likelihood this is an extraordinary event that wont repeat any time soon, but still brings to question the full reliance on the market on energy matters.
The Oil Boom Doesn't Care if Your Chickens Are Freezing to Death

So, to recap, American corn producers operating with help from government farm subsidies were buying propane with, in some part, your money to dry out their corn harvest. For reasons that remain somewhat a mystery, the American propane infrastructure, which is about as resilient as a dog fart, apparently, didn't recover or refill in time for our current full-on epic winter. And, to mess things up even more, only a month before the corn harvest propane crisis, producers were racing like hell to get propane out of the domestic market with help from brand new export terminals.

There's your oil boom: paying for others' profits while your chickens die horribly and people you didn't vote for figure out the economics of offering relief during a heating fuel crisis. Good times.
Jim Rickards has been one of the most lucid currency analysts in recent years. He is one of the few that considers the petro-dollar system created with the Plaza Accord a thing of the past and that the present crisis is but a step towards a new world monetary system. I suspect Jim Rickards is not entirely awere of the resource constraints that brought about this transition, but in any case his thoughts are highly stimulating. Note also how the press still tries to pass him as a "gold bug".
The Epoch Times
Interview with Jim Rickards: Gold Set for Massive Rally
Valentin Schmid, 07-02-2014

What I try to do is provide a more in-depth analysis describing what will come next, what the future international monetary system will look like.

I point out that the international monetary system has already collapsed three times within the last 100 years—1914, 1939, and 1971—and that another collapse would not be at all unusual. But it’s not the end of the world. It’s just that the major powers sit down and reform the system. I talk about what that reformation will look like.
Ugo Bardi presented days ago his upcoming book - Extracted - that will be published this April. I am the author of one of the chapters, reflecting on the future of Gold and Silver. Accompanying this book is the peer reviewed article The mineral question, published by Frontiers. Absolutely mandatory reading.
Cassandra's Legacy
The mineral question: how energy and technology will determine the future of mining
Ugo Bardi

Almost 150 years after that Jevons (1866) published his paper “The Coal Question” a debate on mineral depletion has been ongoing between two main schools of thought: one that sees depletion as an important problem for the near future and another that sees technology and human ingenuity as making depletion only a problem for the remote future. Today, however, we have created intellectual tools that permit us to frame the problem on the basis of physical factors, in particular on the basis of thermodynamics. The present paper examines the problem of mineral depletion from a broad viewpoint, with a specific view on the role of energy in the mining and production processes. The conclusion is that energy is a fundamental factor in determining how long we can expect the supply of mineral resources to last at the present prices and production levels. The rapid depletion of our main energy resources, fossil fuels, is creating a serious supply problem that is already being felt in terms of high prices of all mineral commodities. Technology can mitigate the problem, but not solve it. In a non-remote future, the world’s industrial system will have to undergo fundamental changes in order to adapt to a reduced supply of mineral commodities.
Enjoy your weekend.

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