Thursday, March 29, 2012

Energy Around The World

Several Energy stories today. From Bloomberg this story on Germany's solar panel production. Germany has always managed to keep an industrial base despite fierce competition from around the world, particularly the Third world. Not any more in this field, they tell us:

Germany’s solar manufacturing industry will disappear within five years because of competition from Chinese companies, said Klaus-Dieter Maubach, a member of the management board at EON AG.

A surge in production of solar cells from Chinese companies is driving down the price of panels and making German companies uncompetitive, Maubach said today at the Bloomberg New Energy Finance Summit in New York.

“In five years, not a single employee will be working at the German solar companies,” he said. “They will all be bankrupt.”

Next Canada, which is taking stock of it's nuclear programs and decideding to ramp them up, never mind the chaos in Japan following the meltdown, reports UPI:

Canadian energy company TransCanada announced it was closer to bringing an idled part of a nuclear power plant in Ontario back online.

The Canadian Nuclear Safety Commission gave approval for TransCanada to restart Unit 2 at the Bruce Power nuclear reactor in Ontario.

"This positive development represents the final major step necessary toward bringing the reactor into service," Russ Girling, TransCanada's president and chief executive officer, said in a statement.

Bruce Power consists of eight nuclear reactors in two generating stations. Six reactors are functioning and producing more than 4,700 megawatts of power for Ontario consumers.

Two units at the Bruce Power reactor were shut down in the 1990s and TransCanada said it aims to spend about $2.4 billion on refurbishment.

"Once the work is complete, Bruce Power will be the world's largest nuclear facility, generating more than 6,200 MW or about 25 percent of Ontario's power," the company said in a statement.

Unit 1, one of the four reactors in section A of the power plant, is expected to start operations at the end of the year, the company added.

And Russia is working on drilling plans for untapped wilderness areas. From Market Watch:

Chief Executive Vagit Alekperov told the Financial Times that Mother Russia is moving toward tossing down the welcome mat for anyone with the capital and technological expertise needed to drill in the Arctic waters north of Siberia.

This is one of the planet’s most remote and least hospitable regions. It’s so remote that Russia hadn’t fully mapped where the coast ended and the polar ice began until the end of the czarist era.

According to Alekperov, the offer would extend to private companies. That would be a radical departure from past Russian policy. While Russia has allowed outside participation in its oil and gas industry elsewhere, the Arctic has been reserved for state-owned energy giants Gazprom.

Why the change? Simple. Russia is the world’s biggest oil producer. Oil and gas exports are its biggest source of revenue. But its production levels will start to decline within a few years if new fields aren’t found, threatening to undo its trade surplus and leave it without the fuel essential for further economic growth.

Geologists believe some of Russia’s most promising oil fields lie off its northern coast. But Gazprom and Rosneft, both without much offshore experience, have had little luck finding them.

This is a source of extreme aggravation for Lukoil and other privately-held Russian oil companies. Apparently it has Prime Minister Vladimir Putin concerned as well, hence all the talk about relaxing the rules and reforming the tax code to attract deep-pocketed foreigners.

Exxon Mobil has deep pockets and, in fact, the company is already involved. The world’s biggest publicly-traded oil company teamed up last year with Rosneft to explore for oil in the frigid Kara Sea. But drilling isn’t slated to begin there until 2015, about the same time Russia’s oil output peaks.

That Exxon has a toehold in Russia’s Arctic is hardly surprising. Frustrated by years of opposition to drilling in the Arctic National Wildlife Refuge, Exxon has pretty much given up on northern Alaska.

More recently, the company has also been booted out of Venezuela. They’ve been getting similar treatment in Iraq.

Russia, famous for its strong-arm politics and distrust of foreigners, is certainly not without risk. But having hit so many dead-ends lately on the exploration front, Exxon and Russia share a need to explore other avenues if they are to avoid a crippling decline in their oil output.

It’s really the same story for the whole industry. Oil is a finite resource. The easy stuff is gone. At some point, drilling in Russia’s Arctic becomes a viable option. With oil stuck atop $100 a barrel and ever fewer prospects to tap, apparently that point is now

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