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31 May 2014

Press review 31-05-2014 - More "shale" jitters

Shock waves from the radical cut of source rock petroleum reserves estimates in the US have reverberated through the press this past week. Some claim this adjustment to be overdue, others try to convince investors that source rocks still turn a profit. At least one thing is certain: the optimism over these resources has been definitely shattered.

The revision to these source rock reserves came at a specially critical moment. OPEC faces all sorts of political constraints to petroleum extraction; meanwhile NATO plays games with Russia, the world's largest petroleum producer. These past few years have been characterised by remarkably stable prices and a dynamic market, but can it last under present circumstances?

27 May 2014

Woes of a bike commuter

When I joined Tudor I opted for renting a flat at walking distance from the office, in the city of Esch-sur-Alzette. This was the heart of the ancient steel industry in Luxembourg, the capital of a region that once hosted over 400 steel furnaces.

Some years ago the Luxembourgish steel company - ARBED - was sold to Lashki Mittal, who hastily dismantled the whole complex, moving entire furnaces to Asia. Acknowledging the demise of the steel industry, the Luxembourgish government designed a programme to replace it with an academic village, hosting a university, several research centres and a company incubator in an old industrial park in a place called Belval.

With works drawing to a close, the Tudor offices where I work were moved to Belval one year ago. I am no longer in walking distance, but the 4.5 km of bike lanes linking Esch-sur-Alzette to Belval make it perfect for bike commuting. Little would I know that this short ride would be anything but simple.

24 May 2014

Press review 24-05-2014 - "Shale oil" blues

It came pretty much like a bomb. At the beginning of this week, the state of California in the US was supposed to home the largest source rock petroleum reserve in that country. With the official estimate over 13 Gb, California was supposed to have more petroleum reserves in its source rocks than the two major producing regions of the country combined: Bakken in Dakota and Eagle Ford in Texas. No more. A revision by the US Energy Department, made public mid-week, brought down the estimate to a mere 0.6 Gb, about the amount of petroleum the US burns in a month.

There is a lot here to think about. How could have the original estimate been so wrong? How could have it prevailed long enough to become a relevant part of energy policy in California? What happens to the companies that had already positioned themselves to exploit a resource that is now known to be largely unexistent? How trustworthy are other petroleum (and gas) estimates issued by the authorities in the US?

Policy makers in Europe beware. What happened in Poland regarding source rock gas reserves indicates too that these overestimations may be more norm than exception.

17 May 2014

Press review 17-05-2014 - The undercovered

Ukraine continues to be the most relevant story in the Energy world, both for what is happing and for what is not happening. On the field a doubtful democratic process borne an independence decision for the region of Donetsk that no one seems really willing to recognise. Another doubtful election by the end of this month shall decide who presides the insurgents that took power in Kiev. Scattered skirmishes are reported almost daily between forces loyal to Kiev and the separatists.

As alluded in previous press reviews, there seems to be foreign agents on the field playing an important role in the course of events. This week the German press is reporting the presence of some 400 American mercenaries in Ukraine engaging the separatists. One has to wonder what was the role of this force in the massacre in Maidan square and more recently in Odessa.

10 May 2014

Press review 10-05-2014 - Progress on Ukraine

There are signs of progress between the world powers over the Ukraine situation. The pressure exerted by US on Europe to cut its energy imports from Russia seems to have been defused, with the press now even reporting "support for Russia" within the European Council. On the other side, Russia seems to be definitely abandoning any prospects of further military intervention. Convergence seems emerging on how to re-instate democracy in the troubled country.

But on the field tension among Ukrainians keeps mounting. The death toll is now reported on the tenths, after the massacre of over 50 russophones last weekend. Some communities appear especially restless, demanding no less than independence. It is hard to see how any valid democratic process can take place in this setting.

Meanwhile the governors put in Kiev after the coup d'état started to get funds from the IMF; they should now be able to keep paying for the gas they get from Russia.

03 May 2014

Press review 03-05-2014 - Extracted

Two years ago Ugo Bardi invited me to take part in the redaction of a book on raw materials. I spent much of the 2012 summer researching and writing to produce a chapter on two particular metals: silver and gold. After a first edition in German language last year, the English version has finally arrived, to what appears to be a warm reception.

"Extracted" provides an overview on the relationship between our society and economy and the stocks of raw materials found in the Earth's crust. These stocks are sources of negentropy - negative entropy, meaning organised or concentrated matter, as opposed to chaos and dispersion - that feed our industries with low cost inputs. The economic difficulties we live today are closely linked to a decline in the quality of the resources needed to feed our economies - meaning an increase in entropy - that may at some point even translate into a decline of extraction rates.

01 May 2014

The First Presidential Debate

Better late than ever. After 60 years of EU, European elections have finally faces to match the insignias. In great measure due to internal youth movements, European political parties where forced one by one to present a candidate to the post of European Commission President. Euronews took the chance and invited the candidates for the first ever presidential debate in the history of the EU. In an university auditorium packed with students and the door open to citizen participation through the internet, the stage was set for a unique moment in the 28th of April.

Below the fold is a brief analysis of the performance of each candidate.