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    The market trend to heavier, more powerful hybrids is eroding the fuel consumption advantage of hybrid technology, according to a study done by researchers at the University of British Columbia. GreenCarCongress - March 30, 2007.

    Hungarian privately-owned bio-ethanol project firm Mabio is planning to complete an €80-85 million ethanol plant in Southeast Hungary's Csabacsud by end-2008. Onet/Interfax - March 29, 2007.

    Energy and engineering group Abengoa announces it has applied for planning permission to build a bioethanol plant in north-east England with a capacity of about 400,000 tonnes a year. Reuters - March 29, 2007.

    The second European Summer School on Renewable Motor Fuels will be held in Warsaw, Poland, from 29 to 31 August 2007. The goal of the event is to disseminate the knowledge generated within the EU-funded RENEW (Renewable Fuels for Advanced Powertrains) project and present it to the European academic audience and stakeholders. Topics on the agenda include generation of synthetic gas from biomass and gas cleaning; transport fuel synthesis from synthetic gas; biofuel use in different motors; biomass potentials, supply and logistics, and technology, cost and life-cycle assessment of BtL pathways. Cordis News - March 27, 2007.

    Green Swedes want even more renewables, according to a study from Gothenburg University. Support for hydroelectricity and biofuels has increased, whereas three-quarters of people want Sweden to concentrate more on wind and solar too. Swedes still back the nuclear phase-out plans. The country is Europe's largest ethanol user. It imports 75% of the biofuel from Brazil. Sveriges Radio International - March 27, 2007.

    Fiat will launch its Brazilian-built flex-fuel Uno in South Africa later this year. The flex-fuel Uno, which can run on gasoline, ethanol or any combination of the two fuels, was displayed at the Durban Auto Show, and is set to become popular as South Africa enters the ethanol era. Automotive World - March 27, 2007.

    Siemens Power Generation (PG) is to supply two steam turbine gensets to a biomass-fired plant in Três Lagoas, 600 kilometers northwest of São Paulo. The order, valued at €22 million, was placed by the Brazilian company Pöyry Empreendimentos, part of VCP (Votorantim Celulose e Papel), one of the biggest cellulose producers in the Americas. PRDomain - March 25, 2007.

    Asia’s demand for oil will nearly double over the next 25 years and will account for 85% of the increased demand in 2007, Organization of Petroleum Exporting Countries (Opec) officials forecast yesterday at a Bangkok-hosted energy conference. Daily Times - March 24, 2007.

    Portugal's government expects total investment in biomass energy will reach €500 million in 2012, when its target of 250MW capacity is reached. By that date, biomass will reduce 700,000 tonnes of carbon emissions. By 2010, biomass will represent 5% of the country's energy production. Forbes - March 22, 2007.

    The Scottish Executive has announced a biomass action plan for Scotland, through which dozens of green energy projects across the region are set to benefit from an additional £3 million of funding. The plan includes greater use of the forestry and agriculture sectors, together with grant support to encourage greater use of biomass products. Energy Business Review Online - March 21, 2007.

    The U.S. Dep't of Agriculture's Forest Service has selected 26 small businesses and community groups to receive US$6.2 million in grants from for the development of innovative uses for woody biomass. American Agriculturalist - March 21, 2007.

    Three universities, a government laboratory, and several companies are joining forces in Colorado to create what organizers hope will be a major player in the emerging field of converting biomass into fuels and other products. The Colorado Center for Biorefining & Biofuels, or C2B2, combines the biofuels and biorefining expertise of the University of Colorado, Colorado State University, the Colorado School of Mines, and the Colorado-based National Renewable Energy Laboratory (NREL). Founding corporate members include Dow Chemical, Chevron, ConocoPhillips, and Shell. C&EN - March 20, 2007.

    The city of Rome has announced plans to run its public bus fleet on a fuel mix of 20 per cent biodiesel. The city council has signed an accord that would see its 2800 buses switch to the blended fuel in order to cut greenhouse gas emissions and local air pollution. A trial of 200 buses, if successful, would see the entire fleet running on the biofuel mix by the end of 2008. Estimates put the annual emission savings at 40,000 tonnes of carbon dioxide. CarbonPositive - March 19, 2007.

    CODON (Dutch Biotech Study Association) organises a symposium on the 'Biobased Economy' in Wageningen, Netherlands, home of one of Europe's largest agricultural universities. In a biobased economy, chemistry companies and other non-food enterprises primarily use renewable materials and biomass as their resources, instead of petroleum. The Netherlands has the ambition to have 30% of all used materials biobased, by 2030. FoodHolland - March 19, 2007.

    Energy giants BP and China National Petroleum Corp, the PRC's biggest oil producer, are among the companies that are in talks with Guangxi Xintiande Energy Co about buying a stake in the southern China ethanol producer to expand output. Xintiande Energy currently produces ethanol from cassava. ChinaDaily - March 16, 2007.

    Researchers at eTEC Business Development Ltd., a biofuels research company based in Vienna, Austria, have devised mobile facilities that successfully convert the biodiesel by-product glycerin into electricity. The facilities, according to researchers, will provide substantial economic growth for biodiesel plants while turning glycerin into productive renewable energy. Biodiesel Magazine - March 16, 2007.

    Ethanol Africa, which plans to build eight biofuel plants in the maize belt, has secured funding of €83/US$110 million (825 million Rand) for the first facility in Bothaville, its principal shareholder announced. Business Report - March 16, 2007.

    A joint venture between Energias de Portugal SGPS and Altri SGPS will be awarded licences to build five 100 MW biomass power stations in Portugal's eastern Castelo Branco region. EDP's EDP Bioelectrica unit and Altri's Celulose de Caima plan to fuel the power stations with forestry waste material. Total investment on the programme is projected at €250/US$333 million with 800 jobs being created. Forbes - March 16, 2007.

    Indian bioprocess engineering firm Praj wins €11/US$14.5 million contract for the construction of the wheat and beet based bio-ethanol plant for Biowanze SA in Belgium, a subsidiary of CropEnergies AG (a Sudzucker Group Company). The plant has an ethanol production capacity of 300,000 tons per year. IndiaPRWire - March 15, 2007.

    Shimadzu Scientific Instruments announced the availability of its new white paper, “Overview of Biofuels and the Analytical Processes Used in their Manufacture.” The paper is available for free download at the company’s website. The paper offers an overview of the rapidly expanding global biofuel market with specific focus on ethanol and biodiesel used in auto transportation. It provides context for these products within the fuel market and explains raw materials and manufacturing. Most important, the paper describes the analytical processes and equipment used for QA testing of raw materials, in-process materials, and end products. BusinessWire - March 15, 2007.

    Côte d'Ivoire's agriculture minister Amadou Gon has visited the biofuels section of the Salon de l'Agriculture in Paris, one of the largest fairs of its kind. According to his communication office, the minister is looking into drafting a plan for the introduction of biofuels in the West African country. AllAfrica [*French] - March 13, 2007.

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Sunday, April 01, 2007

Swedish scientist predicts 'Peak Oil' to occur between 2008 and 2018

The idea that 'Peak Oil' is closing in on us, is of course highly relevant to the future of biofuels. When the era of cheap petroleum is over, our heavily oil-dependent economies face serious risks, and the planet's environment is set to suffer. Biofuels offer a way out.

However, predicting the arrival of 'Peak Oil' remains a largely speculative affair that has long been the terrain of amateurs, obscure oil experts, marginal pseudo-scientists and shrude entrepreneurs looking to write bestsellers on the topic to cash-in on peak oil panic. But gradually, the topic has come out of its shadows, and credible voices are now having their say about it.

Fredrik Robelius, researcher at Uppsala University's, Department of Nuclear and Particle Physics, wrote his PhD thesis on the subject, titled "Giant Oil Fields - The Highway to Oil: Giant Oil Fields and their Importance for Future Oil Production". In it, he takes the analysis of the depletion trend in the largest oil fields as a starting point for a prediction about Peak Oil. Robelius made four scenarios for the arrival of the peak, which he situates anywhere between 2008 and 2018 (see graph, click to enlarge).

Looking at giant oil fields offers more reliable indicators than analysing the mere price of oil. The reliability of the oil price as a single parameter can be questioned, as earlier times of high prices have occurred without having anything to do with a lack of oil.

So what is a 'giant' oil field? It is a field that contains at least 500 million barrels of recoverable oil. Only 507, or 1 % of the total number of fields, are giants:
Although the number of giant oil fields is very limited, only 507 out of some 47 500, their contribution is far from limited. About 65 per cent of the global ultimate recoverable reserves (URR) is found in them. Historically, giant fields have been the main contributor to global oil production and in 2005, their share was over 60 per cent. Thus, giant oil fields are and will continue to be important for global oil production. However, the largest giantfields are old and many of them have been producing oil for over 50 years.
The greatest number of giant fields were discovered during the 1960s. This decade also proved to be the time when the largest URR in giant fields were discovered. Since then, both the number of giant fields discovered and the reserves discovered in giant fields have been declining. Although indications of two possible giant field discoveries during 2006, the last confirmed giant oil field discovery was in 2003.
At a first look, the importance of this might not be obvious, but the crucial point is the oil production rate in giant fields compared to smaller fields. In general, giant oil fields can sustain a high oil production rate for a long time. Even a large amount of small fields might not be enough to offset declining production from a giant field. This is the case with Norway,where the giant fields peaked a few years before the total production peaked. On a larger scale, the same is true for both Europe and North America. Consequently, this in combination with the declining discovery trend, strongly suggests a concept of peak oil governed by giant oil fields.
By looking at the investment patterns of the largest oil companies into advanced technology involved in deepwater exploration, Robelius found that in all likeliness the good prospects have already been drilled:
The declining trend in giant field discoveries suggests the good prospects are already drilled. Studying the four largest private oil companies and their effort in exploration and production during a 10 year period of both high and low prices should indicate the role of the oil price. Although their investments in exploration and production has increased, the companies have not succeeded in increasing neither production nor reserves despite an increase of the oil price. On the contrary, from 2003, reserve additions have decreased below annual production and the companies have produced oil from old discoveries, a situation which also applies on the global scale.
Robelius then created four scenarios around his giant oil field model, which show different dates for the arrival of Peak Oil:
:: :: :: :: :: :: ::

The giant oil field model is based on past annual production, URR and three different assumed decline rates. The results from the modeling of 333 giant fields are used in combination with the other forecasts in order to predict future oil production. Four different scenarios have been modeled and peak oil governed by the giant oil fields is a common result for the scenarios. The worst case scenario shows a peak in 2008, while the best case peaks in 2013 although at a higher production level. The production in the best case scenario increases more rapidly than a future demand growth of 1.4 per cent. Therefore the production can be adjusted to follow the demand growth, resulting in a postponed peak oil to 2018. Thus, global peak oil will occur in the ten year span between 2008 and 2018.
Analysing the economic, social, political and geopolitical effects of Peak Oil for the world economy is a highly controversial, difficult and complex affair. The concept also puts investors before great difficulties and unknowns: to invest in biofuels today without knowing for sure whether oil prices will remain high, is risky. Some bioenergy investors, like Vinod Khosla, have even asked for some kind of government intervention in the form of bottom price guarantee, to protect biofuels investments against a potential collapse of oil prices. The perception that Peak Oil is real may drive investments into bioenergy, but as long as Peak Oil is not 'real' enough, strong doubts remain and the fear for falling prices stiffles further investments.

One thing is certain, though, if Peak Oil were to arrive and show itself clearly, then the rush towards biofuels will be unstoppable. Only biofuels can immediately supply liquid fuels that can be used in existing infrastructures and vehicles, trains, airplanes and ships. However, the consequences of such a massive rally around biofuels could be disastrous for the environment, as the easiest lands and biofuel sources would be used up first (this could mean rapid deforestation for the production of annual crops like soy and semi-perennials like sugarcane).

It is therefor important to start to invest in biofuels today, but in places where production costs are low (that is in the subtropics and the tropics). This way, biofuels investors are guaranteed a return, and will invest more, which results in the gradual build up of a global 'green reserve' that is economically and environmentally sustainable. Such a broadly defined investment strategy may push back the actual Peak Oil date and give us more time to invest in advanced technologies and science (such as cellulosic ethanol and new crops).

More information:
Robelius, Fredrik, Giant Oil Fields - The Highway to Oil: Giant Oil Fields and their Importance for Future Oil Production [*.pdf], Uppsala: Uppsala University, Interfaculty Units, Acta Universitatis Upsaliensis, March 30, 2007.


rufus said...

Fellas, you may want to consult with those American Companies that made those "No-Lose" Investments in Venezuela, Equador, and Bolivia before you close out the chapter on "Risk."

7:45 PM  

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