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    U.S. oil prices and Brent crude rocketed to all-time highs again on a record-low dollar, tensions in the Middle East and worries over energy supply shortages ahead of the northern hemisphere's winter. Now even wealthy countries like South Korea are warning that the record prices will damage economic growth. In the developing world, the situation is outright catastrophic. Korea Times - October 26, 2007.

    Ethablog's Henrique Oliveira, a young Brazilian biofuels business expert, is back online. From April to September 2007, he traveled around Brazil comparing the Brazilian and American biofuels markets. In August he was joined by Tom MacDonald, senior alcohol fuels specialist with the California Energy Commission. Henrique reports about his trip with a series of photo essays. EthaBlog - October 24, 2007.

    Italy's Enel is to invest around €400 mln in carbon capture and storage and is looking now for a suitable site to store CO2 underground. Enel's vision of coal's future is one in which coal is used to produce power, to produce ash and gypsum as a by-product for cement, hydrogen as a by-product of coal gasification and CO2 which is stored underground. Carbon capture and storage techniques can be applied to biomass and biofuels, resulting in carbon-negative energy. Reuters - October 22, 2007.

    Gate Petroleum Co. is planning to build a 55 million-gallon liquid biofuels terminal in Jacksonville, Florida. The terminal is expected to cost $90 million and will be the first in the state designed primarily for biofuels. It will receive and ship ethanol and biodiesel via rail, ship and truck and provide storage for Gate and for third parties. The biofuels terminal is set to open in 2010. Florida Times-Union - October 19, 2007.

    China Holdings Inc., through its controlled subsidiary China Power Inc., signed a development contract with the HeBei Province local government for the rights to develop and construct 50 MW of biomass renewable energy projects utilizing straw. The projects have a total expected annual power generating capacity of 400 million kWh and expected annual revenues of approximately US$33.3 million. Total investment in the projects is approximately US$77.2 million, 35 percent in cash and 65 percent from China-based bank loans with preferred interest rates with government policy protection for the biomass renewable energy projects. Full production is expected in about two years. China Holdings - October 18, 2007.

    Canadian Bionenergy Corporation, supplier of biodiesel in Canada, has announced an agreement with Renewable Energy Group, Inc. to partner in the construction of a biodiesel production facility near Edmonton, Alberta. The company broke ground yesterday on the construction of the facility with an expected capacity of 225 million litres (60 million gallons) per year of biodiesel. Together, the companies also intend to forge a strategic marketing alliance to better serve the North American marketplace by supplying biodiesel blends and industrial methyl esters. Canadian Bioenergy - October 17, 2007.

    Leading experts in organic solar cells say the field is being damaged by questionable reports about ever bigger efficiency claims, leading the community into an endless and dangerous tendency to outbid the last report. In reality these solar cells still show low efficiencies that will need to improve significantly before they become a success. To counter the hype, scientists call on the community to press for independent verification of claimed efficiencies. Biopact sees a similar trend in the field of biofuels from algae, in which press releases containing unrealistic yield projections and 'breakthroughs' are released almost monthly. Eurekalert - October 16, 2007.

    The Colorado Wood Utilization and Marketing Program at Colorado State University received a $65,000 grant from the U.S. Forest Service to expand the use of woody biomass throughout Colorado. The purpose of the U.S. Department of Agriculture grant program is to provide financial assistance to state foresters to accelerate the adoption of woody biomass as an alternative energy source. Colorado State University - October 12, 2007.

    Indian company Naturol Bioenergy Limited announced that it will soon start production from its biodiesel facility at Kakinada, in the state of Andhra Pradesh. The facility has an annual production capacity of 100,000 tons of biodiesel and 10,000 tons of pharmaceutical grade glycerin. The primary feedstock is crude palm oil, but the facility was designed to accomodate a variety of vegetable oil feedstocks. Biofuel Review - October 11, 2007.

    Brazil's state energy company Petrobras says it will ship 9 million liters of ethanol to European clients next month in its first shipment via the northeastern port of Suape. Petrobras buys the biofuel from a pool of sugar cane processing plants in the state of Pernambuco, where the port is also located. Reuters - October 11, 2007.

    Dynamotive Energy Systems Corporation, a leader in biomass-to-biofuel technology, announces that it has completed a $10.5 million equity financing with Quercus Trust, an environmentally oriented fund, and several other private investors. Ardour Capital Inc. of New York served as financial advisor in the transaction. Business Wire - October 10, 2007.

    Cuban livestock farmers are buying distillers dried grains (DDG), the main byproduct of corn based ethanol, from biofuel producers in the U.S. During a trade mission of Iowan officials to Cuba, trade officials there said the communist state will double its purchases of the dried grains this year. DesMoines Register - October 9, 2007.

    Brasil Ecodiesel, the leading Brazilian biodiesel producer company, recorded an increase of 57.7% in sales in the third quarter of the current year, in comparison with the previous three months. Sales volume stood at 53,000 cubic metres from August until September, against 34,000 cubic metres of the biofuel between April and June. The company is also concluding negotiations to export between 1,000 to 2,000 tonnes of glycerine per month to the Asian market. ANBA - October 4, 2007.

    PolyOne Corporation, the US supplier of specialised polymer materials, has opened a new colour concentrates manufacturing plant in Kutno, Poland. Located in central Poland, the new plant will produce colour products in the first instance, although the company says the facility can be expanded to handle other products. In March, the Ohio-based firm launched a range of of liquid colourants for use in bioplastics in biodegradable applications. The concentrates are European food contact compliant and can be used in polylactic acid (PLA) or starch-based blends. Plastics & Rubber Weekly - October 2, 2007.

    A turbo-charged, spray-guided direct-injection engine running on pure ethanol (E100) can achieve very high specific output, and shows “significant potential for aggressive engine downsizing for a dedicated or dual-fuel solution”, according to engineers at Orbital Corporation. GreenCarCongress - October 2, 2007.

    UK-based NiTech Solutions receives £800,000 in private funding to commercialize a cost-saving industrial mixing system, dubbed the Continuous Oscillatory Baffled Reactor (COBR), which can lower costs by 50 per cent and reduce process time by as much as 90 per cent during the manufacture of a range of commodities including chemicals, drugs and biofuels. Scotsman - October 2, 2007.

    A group of Spanish investors is building a new bioethanol plant in the western region of Extremadura that should be producing fuel from maize in 2009. Alcoholes Biocarburantes de Extremadura (Albiex) has already started work on the site near Badajoz and expects to spend €42/$59 million on the plant in the next two years. It will produce 110 million litres a year of bioethanol and 87 million kg of grain byproduct that can be used for animal feed. Europapress - September 28, 2007.

    Portuguese fuel company Prio SA and UK based FCL Biofuels have joined forces to launch the Portuguese consumer biodiesel brand, PrioBio, in the UK. PrioBio is scheduled to be available in the UK from 1st November. By the end of this year (2007), says FCL Biofuel, the partnership’s two biodiesel refineries will have a total capacity of 200,000 tonnes which will is set to grow to 400,000 tonnes by the end of 2010. Biofuel Review - September 27, 2007.

    According to Tarja Halonen, the Finnish president, one third of the value of all of Finland's exports consists of environmentally friendly technologies. Finland has invested in climate and energy technologies, particularly in combined heat and power production from biomass, bioenergy and wind power, the president said at the UN secretary-general's high-level event on climate change. Newroom Finland - September 25, 2007.

    Spanish engineering and energy company Abengoa says it had suspended bioethanol production at the biggest of its three Spanish plants because it was unprofitable. It cited high grain prices and uncertainty about the national market for ethanol. Earlier this year, the plant, located in Salamanca, ceased production for similar reasons. To Biopact this is yet another indication that biofuel production in the EU/US does not make sense and must be relocated to the Global South, where the biofuel can be produced competitively and sustainably, without relying on food crops. Reuters - September 24, 2007.

    The Midlands Consortium, comprised of the universities of Birmingham, Loughborough and Nottingham, is chosen to host Britain's new Energy Technologies Institute, a £1 billion national organisation which will aim to develop cleaner energies. University of Nottingham - September 21, 2007.

    The EGGER group, one of the leading European manufacturers of chipboard, MDF and OSB boards has begun work on installing a 50MW biomass boiler for its production site in Rion. The new furnace will recycle 60,000 tonnes of offcuts to be used in the new combined heat and power (CHP) station as an ecological fuel. The facility will reduce consumption of natural gas by 75%. IHB Network - September 21, 2007.

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Monday, October 29, 2007

Energy experts: high oil prices bigger threat than climate change

Rising oil prices are a bigger threat to the world economy than climate change in the next 10 years - that was the surprising verdict of company executives from carbon trading, fuel cell, oil exploration and renewables firms who attended the Reuters Smaller Companies Forum. But climate change is likely to have a greater effect on the global economy over a 50-year timespan, according to those executives from old and new energy companies.

The experts did not comment specifically on the situation in the poorest countries, but there high oil prices are already a real disaster: according to the UN, some of the least developed countries (LDCs) are now forced to spend six times as much on oil than on health care. This obviously has major effects on the lives of millions of poor people.

According to the African Development Bank, for the wealthiest countries (non-oil producing OECD), oil imports make up less than 2% of GDP, whereas for African oil importing nations this was more than 10% of GDP in 2006. In poor oil importing countries, oil price rises of the current magnitude imply a significant reduction of economic growth rates, an erosion of trade balances, the destruction of progress in debt relief, a hike in inflation rates, higher unemployment and deeper poverty for the weakest (earlier post). Of the 47 poorest countries, 38 are net importers of oil, and 25 are fully dependent on imports (more here).

Biofuels are the only immediate alternative to liquid petroleum fuels and products which are so crucial to nearly all processes of an economy (from food production to trade, from mobility to the production of pharmaceuticals). No wonder developing countries want to invest in them: they offer the only strategy to stave off a societal catastrophe. The FAO's chief recently warned increased commodity and energy prices could cause political upheaval in developing countries. India's finance minister echoed the concerns calling high oil prices 'outrageous' and warning that they could significantly damage economic growth.

Over the longer term, a transition away from oil towards electricity would be a major step forward because it would allow for the efficient use of a broad spectrum of renewables, including radically carbon-negative bio-electricity. But it will take decades before electric vehicles and trucks penetrate the market in any significant way. For some transport sectors like aviation and shipping, there is virtually no alternative to liquid fuels.

Oil prices have quadrupled since 2002, and there seems to be no stopping the upward trend. The Reuters Smaller Companies Forum comes at the time when a new study [*.pdf] by Dr Robert L. Hirsh, senior Energy Program Advisor at the Science Applications International Corporation (SAIC) demonstrates the economy-destroying effects of peak oil. His conclusion is that economic growth will decline at a similar rate as oil output, that is, by 2 to 5 percent per year. There is a strict correlation between economic growth and oil supply (graph, click to enlarge). It is unclear whether we have actually reached the peak, but more and more analysts are beginning to suspect that this could be the case.

Recently, the world's leading scientific energy experts from 15 of the world's Academies of Science warned in a major report that the energy crisis is one of the major challenges facing humanity this century. They called for immediate action, especially in the developing world and amongst the poorest (that is, rural and remote populations) (previous post).

The finance director of carbon cutting project developer EcoSecurities told the Forum:
In a short-term scenario it is hard to say climate change is going to be a differentiating factor. If oil prices quadruple it is probably more of a challenge to the economy than climate change. - Jack MacDonald
But he added high oil prices would force businesses to tackle climate change earlier, as it is a greater problem in the longer term. Carbon-negative biofuels and bioenergy (schematic, click to enlarge) offer the advantage of reducing greenhouse gases in a far bigger and more affordable way than all other alternatives, which are carbon-neutral at best (more on negative emissions energy here and recent projects in 'bio-energy with carbon storage', here and here). So in theory, they can prevent two catastrophes: the peak oil disaster and the climate crisis:
:: :: :: :: :: :: :: :: ::

Peter Bance, chief executive of fuel cell domestic boiler maker Ceres Power, whose fuel cell systems run on biofuels, said the world can cope with both pressures in the short term, but there were signs that natural catastrophes were already forcing a radical rethink.
Hurricane Katrina woke people in the U.S. up in a very big way, even though it was not necessarily 100 percent linked to climate change. Droughts and flooding are a much bigger long-term driver (of people's behaviour) than the oil price.
Dr Peter Finnegan, finance director of solar wafer maker PV Crystalox Solar Plc, said oil was a far more obvious threat to the economy than climate change over the next 10 years.
High oil prices have a direct cost implication in terms of industrial output.
However Eugene Whyms, Finance Director of oil and gas explorer EnCore Oil, said he did not think either issue was of much concern:
The threat from climate change -- I'm not sure what that is, apart from panic and extra taxes in case we all go under water," Whyms said, adding that the climate has always changed. And the oil price has doubled in the past few years, without any major consequences.
Note, Whyms, like many in the oil industry are not really concerned about the destructive effects of even marginal increases in oil prices for the developing world. In LDCs, oil imports constitute a major strain on the treasuries of governments and on the energy intensive economy.

The fight to tap oil fields in Alaska, the Arctic and Antarctic will be the key battleground between climate change campaigners and old, fossil-fuel based, energy firms, Whyms added. "The battle will probably come to a head on something emotive, like spoiling Antarctica," he said.

Asked whether those areas should be drilled, he said:
It would be very expensive and I don't think there is a big imbalance between oil supply and demand. I think the price has partly been pushed up by a lot of traders and speculators.
But the energy experts who warn for peak oil are far more concerned and think the petroleum industry is trying to blame high prices on speculation instead of on the real reason: a peaking of production. An oil company can never publicly admit it has hit its peak, because that would mean its immediate collapse.

Reuters: Oil bigger threat than climate change in 10 years - October 26, 2007.

Robert L. Hirsch, "World Oil Shortage Scenarios for Mitigation Planning" [*.pdf], Presentation to ASPO-USA - October 17-20, 2007.

Biopact: Leading scientists: energy crisis poses major 21st century threat, action needed now - October 23, 2007

Biopact: High oil prices disastrous for developing countries - September 12, 2007

Biopact: India: 'outrageous' oil price damages economy, as $80pb could be new floor price - September 27, 2007

Biopact: A quick look at 'fourth generation' biofuels - October 08, 2007

Biopact: Carbon-negative bioenergy is here: GreatPoint Energy to build biomass gasification pilot plant with carbon capture and storage - October 25, 2007

Biopact: Carbon-negative bioenergy recognized as Norwegian CO2 actors join forces to develop carbon capture technologies - October 24, 2007


jcwinnie said...

This is but the beginning of the rhetoric that we shall hear from the Syngas spin doctors as prices rise and there are more shortages of oil and natural gas.

It is amazing blind faith in the power of the all mighty dollar and Business As Usual And Above All Else. We need a re-write of A Christmas Carol for these times.

6:59 PM  
Anonymous said...

What's to spin about syngas?

9:56 PM  

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