Quote of the Week
“It’s very clear that the production of oil and gas has carried [Texas] through this boomlet. Once the golden goose leaves, there’s nothing left but them regular gooses.”
Texas state Representative Garnet Coleman
1. Oil and the Global Economy
2. The Middle East & North Africa
5. The Climate Conference
6. The Briefs
1. Oil and the Global Economy
The long-awaited OPEC decision came on Friday. With the Saudis and their close allies adamant that they would not cut production unless Russia and Iran and other OPEC members agreed to cut too, the meeting had no where to go but to continue existing policies. Indonesia was readmitted into the cartel and the output ceiling was adjusted to 31.5 million b/d reflecting the realities of the addition of Indonesia and of actual current production. While the cartel will reconsider the issue in June, the final decision led to considerable pessimism among traders. Global over-production is now running some 1.8 million to 2 million b/d and there is a good possibility that Iran will add at least another 500,000 b/d to the glut in the first six months of 2016. OPEC is hoping that stronger demand for oil will erase at least some of the over-production next year, but many see overproduction continuing into 2017.
In the meantime, some observers believe that an oil storage space shortage is developing both in onshore storage facilities and aboard tankers. The most pessimistic of these can foresee oil prices falling into the $20s in the next few months causing still more havoc in the industry as production will have to be cut.
Although the oil markets had anticipated the OPEC meeting’s outcome for many days, the actual decision resulted in another drop in oil prices with New York settling at $39.97 and London at $43, both down another 4 percent for the week. A strong dollar contributed to the weakness.
An interesting analysis by an unnamed but “reputable” oil and gas forecaster for the next 10 years was posted to the “Peak Oil Barrel” website last week. This forecast has global crude and NGLs peaking this year and then falling steadily until 2021; by 2022 production is forecast to increase slightly for two years as higher prices bring more oil back into production; finally production is to fall away between 2023 and 2025 as there is no longer enough affordable crude to allow production to increase. The analysis shows prices falling further in 2016, then rising to about $80-85 a barrel in 2018 where they hold for four or five years. After this, prices climb steadily to around $135 per barrel in 2025 as US shale oil production along with the rest of the world’s oil output goes into decline. The bottom line is that world crude and NGLs production will decline from about 86 million b/d in 2015 to about 78 million ten years from now.
While this analysis/forecast is likely to be wrong on some points and numbers, the general thesis that there will be decline for the next few years followed by a temporary rebound which in turn is followed by a terminal decline for the fossil fuel industry seems to fit many of the realities we are observing today.
Fears that low oil prices could persist for several years are raising concerns about what will happen to the US oil industry. Industry stock prices are falling and there will many mergers and bankruptcies in the coming year. Talk is increasing about the end of the “Texas Miracle” that has kept employment in the state rising as much of the country sank into recession. The real pessimists are talking about the end of the fossil fuel industry as a combination of low prices, high costs of extraction, and draconian climate change mitigation policies pressure the fossil fuel industries. Some currently are talking about the oil and gas industries ganging up on the coal producers in an effort to take market share away from the dirtier fuel.
Of even more concern, however, is the societal unrest that is emerging in what are know as the “fragile five” oil exporting countries – Algeria, Iraq, Libya, Nigeria, and Venezuela. At least two of these are already in the midst of major civil wars and the others are approaching economic and possibly political collapse. If exports from any or some these countries decline precipitously in the next few years, global oil production could easily decline much faster than many anticipate.
2. The Middle East & North Africa
Iran: Things looked up for the Iranian government last week. The Obama administration says that the IAEA report on Tehran’s past efforts to develop nuclear weapons was satisfactory and that there are no longer any impediments to implementing the nuclear agreement. Iran is saying that it expects that the sanctions on its oil and gas sector will be lifted next month and is moving ahead aggressively to market its oil abroad and garner foreign investment for its oil and gas industries. The government said last week that it will not accept any curb on its crude production below pre-sanctions levels and that it soon expects to be producing 4 million b/d.
The Oil Ministry announced that it has some 50 oil and gas projects that now are open to foreign investors and has come up with a new model for oil development contracts that should make them more attractive to foreign investors. Some observers are skeptical that Tehran’s new scheme, which is far from the industry standard production sharing agreement, still leaves too much risk and not enough of the potential benefits on the foreign investor. While US investment in Iran is unlike to happen in the near future, European and Asian oil companies will have to weigh risks involved in investing in a country that is deeply involved in numerous civil wars and confrontations stemming from the Sunni-Shiite conflict. Any of these could morph into another round of sanctions or open warfare.
Over the longer term, it is important to note that Iran is still facing a very serious water shortage. In the last 30 years the country is reported to have built some 600 dams to support the rapid growth in urban population. This and climate change are combining to make an existential crisis for the country. Iran’s former agriculture minister and current head of a major water restoration program warns that the country’s rivers are drying out and unless this is reversed some 50 million Iranians will have to move in order to survive. Last summer the “feels like” index in parts of Iran along its Gulf coast hit 165o F.
Syria/Iraq: The good news of the week was that Iraqi exports for November of about 4 million b/d, when Kurdistan’s exports are included, broke records. While Baghdad’s official exports from Basra for November were 3.37 million b/d, up from 2.7 million in October, much of this increase was due to shipping problems in October that were overcome the next month. The export number will likely be lower in December and reductions in capital expenditures on the southern oil fields are likely to result in lower exports next year. Another piece of good news is that the new oil export grade of Basra Heavy seems to be making progress in the markets so that production of heavy oil that had previously been curtailed can now be increased.
There are mixed reports about oil from Kurdistan. Crude oil that currently is flowing through the Kurdish controlled pipeline to Turkey at about about 650,000-700,000 b/d is due to be increased to 1 million b/d next year. The local government in Kirkuk, Iraq is negotiating a revenue sharing agreement with the Kurds to market the oil from the Kirkuk fields through the Kurd’s pipeline thus further weakening Baghdad’s grip on the city. There have been clashes between the Shiite militia, which now is effectively Baghdad’s army, and the Kurdish Peshmerga around Kirkuk which could lead to still more trouble between Baghdad and Erbil.
In Syria, the situation continues to go down hill for for the civilian populace and raises the numbers headed for sanctuary elsewhere. Britain joined in on the bombing of ISIL last week with oil wells now seeming to be the favorite target. Moscow, however, is still busy bombing villages that stand in the way of the government/Hezbollah/Iranian offensive against the Syrian rebels. Keeping Assad or at least a friendly government in power at any cost is still the Moscow/Tehran prime objective in the area.
The increased bombing, however, is taking its toll on ISIL and its sources of income. The British are methodically striking oil fields under ISIL control, while the US is going after the tanker trucks that move the oil around the country. Even the Russians are joining in on more strikes against the real ISIL forces as opposed to the more moderate rebel groups that pose a threat to the Assad government. Although the refugee problem and civilian misery in the ISIL controlled areas will increase, the increased bombing will certainly weaken its offensive capability and eventually its ability to muster more forces to resist the Kurdish and Shiite forces that are moving against it.
While Riyadh is generally perceived as having had a good week in that it kept OPEC under control and obedient to Saudi policy, in the long run clouds are gathering that could spell trouble for the monarchy. The war between the Saudi coalition and the Houthis in Yemen has stalemated. Saudi airstrikes continue unabated, most recently blowing up a Doctors Without Borders hospital that was treating people in a Houthi-held city. Al Qaeda in the Arabian Peninsula is making gains in Yemen by assassinating local officials, bombings, and setting up road blocks. Before the Houthi advance began last year the US had a major drone campaign underway against Al Qaeda in the southern provinces.
The attacks in Paris have sensitized EU officials that it is Saudi Arabia that is financing much of radical Islam, not only in their own country but also in Europe. The German Vice Chancellor, in an unusual move, warned the Saudis on Sunday to stop supporting religious radicals after a report from the German intelligence service pointing out Saudi culpability. While the House of Saud is still a sentimental favorite in the US and much of Europe, its recent aggressiveness under the new king may lead to a change of heart.
While it may be many years or even decades before political changes comes to Saudi Arabia, there is so much movement in the Middle East ranging from oil prices and climate change to Arab Spring that change of some sort is clearly underway.
Beijing had a good and bad week. The good news was that the IMF finally awarded China the prized reserve currency asset status which gives the country enhanced status as a global economic power. To meet the IMF’s criteria, China had to undertake a series of financial reforms including better access for foreigners to Chinese currency markets, more frequent debt issuance, and expanded yuan trading hours so that the other side of the globe could participate more easily.
The bad news was a forecast that still more polluted air is coming to northern China. Last week air pollution in Beijing got so bad, with measurements hitting an astonishing 900 ppm on Monday, that authorities ordered 2100 highly polluting factories to shut down in an effort the ease the situation. By week’s end a cold front cleared the air for four days, but on Sunday forecasters warned that a second bout of dangerous pollution is coming on Tuesday and Wednesday of this week. Officials are coming under increasing criticism for their failure to issue a “red alert” which closes schools and cuts motor vehicle traffic in half. The lower “orange alert” only triggers the shutdown of certain factories and construction activity.
All this is obviously having an impact on China’s positon at the Paris climate talks. Just before the conference opened, Beijing released a 900-page assessment of how climate change is affecting the country. The report does not deal with government policy towards climate change but rather with latest scientific and policy options available. The report underscores the need for action – the waters off China’s coast are rising faster than the global average and the report notes that the coastal sea level could be as much as two feet higher by the end of the century threatening many major cities including Shanghai. Glaciers are melting and rainfall is becoming erratic indicating that agricultural problems are ahead.
The government has always held the position that, despite it prodigious emissions, it is still a developing country with a relatively low GDP per capita and should not be subjected to the onerous mandatory restrictions on emissions that the richer countries must endure if the climate problem is to be solved. Whether this position is changing will be seen in the next two weeks of discussions.
A Reuters poll of analysts says that China is expected to double its purchases of oil for its strategic reserve next year to some 70-90 million barrels. Given that the country uses about 7 million b/d this is not a major amount, but should it occur it would help keep prices under control. Analysts watching China believe the country still has another 88 million barrels’ worth of spare storage capacity.
Moscow did not have a good week despite the announcement that its oil production hit a post-Soviet high of 10.78 million b/d. Most of the increase in production came from more drilling which, when measured in meters, was up 10 percent in the first six months as compared with last year. The low value of the ruble means that repatriated profits from oil exports are sufficient to pay the costs of more drilling. Most Russian oil comes from conventional onshore wells which still have low drilling and production costs in comparison to offshore and shale oil wells. Russian oil may no longer be that much of a cash cow, but it is still profitable even when selling at prices in the $30s.
The ruble took another hit on Friday after the OPEC decision so that by late Friday the ruble was down 1 percent to 68.09 against the dollar. Should oil prices continue to fall further, the Russian economy could be in serious trouble as 50 percent of its budget revenue is derived from oil and natural gas exports. Unrest is already growing in Russia as the state seeks other sources of revenue to offset the loss of oil revenue. Last week there were major demonstrations around Moscow by truck drivers protesting heavy new taxes on motor transport.
Falling natural gas prices have also forced Gazprom to change its approach towards its customers in Europe. With a near monopoly on gas sales to much of Europe, Moscow was in a position to call the shots concerning sales. Now with LNG prices falling rapidly and most European nations anxious to get out from under Russian energy dominance, the market is changing. Gazprom seems willing to settle antitrust charges of price fixing against EU members even though it would cost the company billions of dollars. With pipelines under construction that could move Middle Eastern gas to Europe and more LNG coming on the market, more opportunities are emerging to dispense with Russian gas. The prospects that China would someday replace the EU as the major consumer of Russian gas are also fading.
With the outlook for oil and gas rather dim in the immediate future, Moscow needs to start changing its economy according to Economic Development Minister Ulyakayev. This is going to be a tall order for, outside of military hardware, Moscow produces little besides minerals and forestry products that are of much interest to foreign customers. The various trade sanctions and retaliatory embargoes that have emerged from the Ukrainian situation and the confrontation with Turkey have not helped the situation.
Problems related to Moscow’s seizure of Crimea continue to fester. The province is still largely without electric power after Ukrainian nationalists blew up power lines coming onto the peninsula. Moscow has started to build an underwater power line to the province, but this will take months and winter is coming. Even the ethnic Russians living in the Ukraine are starting to say that life under Kyiv’s rule was not that bad as corruption grows in the region.
The situation in Ukraine is not so good either as the 2016 wheat crop is in bad condition. Drought conditions last summer left the plant emergence considerably behind normal for the world’s sixth-largest wheat exporter.
A casualty of the confrontation between Turkey and Russia is that the natural gas pipeline through Turkey to the EU which would bypass Ukraine is on hold. Some $2 billion worth of gas pipeline have been left stranded on the shores of the Black Sea.
To top off the bad news for Russians, President Putin’s new decree banning his citizens from traveling to Turkey this winter raises fears that the country is being returned to Soviet-type isolationism as a result of the the government’s military adventurism in Ukraine and Syria. Some see the iron curtain coming back.
5. Climate Conference
On Saturday negotiators from 195 nations approved a blueprint to stave off some of the major consequences of climate change. The 48-page draft leaves nearly all the fundamental issues, such as how far and how fast to cut greenhouse gas emissions; who carries most of the burden; and most importantly, who should pay. In addition to the draft outline, the meeting seems to have agreed on a five-year review on carbon cuts. Most observers say that whatever emerges from the conference is likely to fall short of the goal of capping temperatures at 2oC above pre-industrial temperatures.
The US and China favor the 2o goal, but the smaller nations which are closer to be seriously harmed by the changing climate favor a 1.5o goal. The smaller nations of course want the richer to pay for the needed changes which could involve transferring $100s of billion to smaller countries. There is still a long way to go to sort this one out – unless, of course somebody comes up with sources of non-polluting energy that are considerable cheaper and easier to manage than fossil fuel.
Despite the recent poll showing that two-thirds of Americans back a climate deal, most Republican Presidential candidates and members of Congress maintain that there is no such thing as global warming caused by fossil fuel emissions. Whether they actually believe this or not, most fear being outflanked by climate change deniers in party primaries and will hold to their position until the sentiments of their perceived base-voters changes.
6. The Briefs
OGEC? Some of the world’s biggest natural-gas producers are trying to seize on changes in how the fuel is bought and sold to create an OPEC-style group to influence prices. Leaders of Nigeria and Algeria, at a recent forum in Tehran, said gas producers should come together and intervene in prices. (12/5) (NOTE: this concept has reared its head periodically in the past, with no impact to date)
LNG prices plunged 45 percent last year. 2015 wasn’t much better. LNG to northeast Asia, home to the world’s biggest consumers, dropped another 27 percent this year, outpacing Brent’s 23 percent slump as of Wednesday. (12/2)
Oil tanker rates soared to the highest in seven years amid an acceleration in the number of bookings and signs that the ships are being delayed when unloading due to a lack of space in on-land storage tanks. (12/4)
Schlumberger Ltd. said Tuesday that it will cut its workforce by an unspecific amount as the oil-field service giant pares its activity in 2016. (12/2)
Italian energy company Snam said it bought for $220 million Statoil’s 20% stake in the planned Trans Adriatic gas pipeline, billed as a near-panacea for European diversification. TAP is slated to transport natural gas from the second phase of the Shah Deniz natural gas field off the coast of Azerbaijan as early as 2019. (12/2)
Russia vs. Turkey: Gas pipes worth 1.8 billion euros ($1.95 billion) are to be left stranded on the shores of the Black Sea after Russia’s decision to suspend work on the Turkish Stream pipeline, a potent symbol of Moscow’s falling out with Ankara. (12/4)
Russia is finding that one weapon in its arsenal — massive gas exports — is losing its punch. Facing unprecedented competition in its main market and slow progress in cracking into new ones in China, Gazprom PJSC has dropped the bluster and threats it brandished with clients in Europe amid the Ukrainian crisis last year. Instead, the Russian gas giant is showing new flexibility with customers. (12/4)
Japan’s two biggest oil refiners, JX Holdings Inc. and TonenGeneral Sekiyu K.K., said they are in talks to merge after the Nikkei newspaper reported the two companies reached a broad agreement on a deal. They report taking the action “due to the severe business environment surrounding the oil industry.” (12/2)
Indonesia, Southeast Asia’s largest economy, is rejoining OPEC while it warns the collapse in crude prices has worsened an “increasingly unappealing” energy investment climate and dependence on foreign oil grows. With the IEA predicting Indonesia will import 40 percent of its oil needs by 2018, the world’s biggest producers are getting a consumer in their midst. (12/4)
India’s government, desperate to reverse a noticeable and embarrassing deterioration of the air quality in its capital, said on Friday it plans to restrict the number of cars allowed on the road on any given day (with an odd/even license plate number plan) and to close some coal-fired power plants. (12/5)
In Nigeria, the embarrassment of fuel scarcity in an oil-exporting country continued for the 5th week across the country, with petrol selling for as high as N400 per liter in some states. More often than not, inability to pay subsidy claims to importers creates supply problems. (11/30)
Venezuelan desperation: All across the Americas, drilling rigs are being idled as oil prices hover near six-year lows. In Colombia, more than 57 percent have been pulled; in Mexico, 42 percent. Then there’s Venezuela. Starved for hard currency needed to ease a crushing recession and struggling to shore up slumping output, the state oil giant known as PDVSA has been adding rigs at a furious pace to search for new sources of crude. The number has climbed 19 percent this year, even as it asks OPEC to reduce production to raise prices. Venezuelan production is down 0.6 percent from its 2014 average, compared with an increase of 4.7 percent across OPEC nations. (12/3)
Brazil’s gross domestic product fell by a record 4.5 per cent year-on-year in the third quarter, confirming fears that Latin America’s largest country is on track for its worst recession since the Great Depression. Lower commodity prices, fiscal contraction and the fading of a consumer credit boom have battered what was once one of the world’s fastest-growing economies. (12/2)
In Mexico, Italian energy company Eni said it was cleared by authorities to start development of three oil fields in territorial waters in the Gulf of Mexico. The first step will be to drill four wells. The Italian company said the combined reserves for the three fields are approximately 800 million barrels of oil and 480 billion cubic feet of associated gas. (12/2)
Canadian Oil Sands, a target of a takeover bid, said that even with oil priced below $50 per barrel it will be able to stay in the black under a 2016 budget plan. The company said it aims to produce at least 35 million barrels of oil next year, about 10 percent higher than the full-year estimate for 2015, at an estimated cost of $45 a barrel. (12/3)
The total US drilling rig count dropped 7 units to 737 during the week ended Dec. 4, marking its lowest point in 15 years, according to Baker Hughes. The count has fallen in 14 of the last 15 weeks since a short-lived summer rebound, giving up 148 units over that time. Oil-directed rigs lost 10 units to settle at 545, down 66% from the peak of 1,609 rigs in October 2014. Gas-directed rigs increased by 3 rigs to 192. (12/5)
US crude oil inventories in Cushing, Oklahoma and the Gulf Coast totaled a record-high 309.4 million barrels as of November 27. EIA estimates 70.2% utilization of working crude oil storage capacity in those two locations, only slightly below the record level of 71.2% set on April 24, 2015. The U.S. Gulf Coast region contains 55% of the nation’s crude oil storage capacity, and Cushing contains another 13%. (12/4)
How low can oil go? Investors targeting struggling energy companies are learning a painful lesson: Bankruptcy isn’t always the bottom. The strategy of picking through bonds and loans to find ones that trade at too deep a discount and could rebound has turned in bad results this year, showing how hard it has been for investors to time the bottom of the energy bust. (12/3)
A US House leader said a bill passed in favor of oil exports symbolically rejects a global landscape favoring North America, but support (249 yeas, 174 nays) wasn’t enough to override a veto. (12/5)
Natural gas surpassed coal in September as the leading U.S. power source for the fourth time in history, according to federal energy data – with all four milestones being hit this year. (12/2)
In the Marcellus region, the drilling boom of the past seven years is over, even though thousands of existing wells in the area still produce a fifth of U.S. natural gas supply. Permits are down nearly 75% from the peak demand for permits in 2010. While the EIA forecasts overall U.S. gas output to hit a record in 2016 for the sixth year in a row, a drop in Marcellus production could snap that streak and help prop up prices that have fallen by two thirds since 2010. (12/3)
In Southern California, a steady stream of natural gas seeping out of a leaking well may spew as much greenhouse gas into the air as a half-million cars do in a year. Pipeline operator Sempra Energy says it may take three to four months to plug. The San Diego-based utility owner is boring a well that will intercept the damaged one to stop the seepage. Meanwhile, it’s relocating hundreds of people into temporary housing as health officials say the gas is making some sick. (12/5)
New York wants federal transportation regulators to impose new safety rules governing the combustibility of crude oil shipped by rail. Attorney General Schneiderman wants energy companies to treat crude oil using a process that removes volatile gases before the fuel can be loaded onto trains. (12/2)
BP engineers: A U.S. court dismissed manslaughter charges against BP engineers on the Deepwater Horizon rig at the time of the 2010 accident. (12/4)
Big energy companies are bracing for the next round in their fight to stop US regulators from making them reveal what they pay foreign governments for rights to extract oil, gas and minerals. The Securities and Exchange Commission plans to vote Dec. 11th on a revised proposal for addressing a related Dodd-Frank Act requirement. (12/5)
SPR sale: The U.S. transportation bill will be partially funded by selling off during 2023-2025 some of the US emergency oil reserve (66 million barrels), but less will be sold from the Strategic Petroleum Reserve than originally planned (100 million barrels) after negotiators in the Senate and House of Representatives reached a deal on Tuesday. (12/2)
Earthquakes: The ground is shaking near Cushing, Okla., home to the largest commercial crude oil storage center in North America. Oklahoma is on track to have a record year of earthquakes — more than 5,000 have already been recorded. (12/1)
The “Texas Economic Miracle” could become more like a mirage. For years, politicians in the second-largest US state bragged that low taxes and loose regulations kept employment high while the rest of the country was mired in economic doldrums following the 2008 crash. Turns out it was just its deep pockets of oil and gas doing the heavy lifting. Unemployment may surpass the national rate in the next year for the first time since 2006. (12/5)
Cheap gasoline! For 25 days in a row, US drivers have seen the retail price for gasoline fall and that should be the prevailing trend through year’s end, AAA reports. The motor club reports a national average retail price for a gallon of regular unleaded gasoline at $2.04, down 15 cents from one month ago. (12/2)
US auto sales were on a path to posting their strongest November ever, helped by marketing promotions and strength in sport utility vehicles. General Motors said the US auto industry will sell 18.2 million vehicles for the month at an annualized rate. Most analysts say 2015 sales will top the record of 17.35 million vehicles in 2000. (12/2)
The average fuel economy of new cars sold in the US in November dropped by 0.1 mile per gallon, continuing a trend that began in August of last year when pump prices began to fall. New cars sold in November got an average of 25 miles per gallon (mpg), down 0.8 from the peak reached in August of 2014, but still up from 4.9 mpg since October of 2007. It appears that recent consumers have cared less about fuel efficiency and began purchasing more “gas-guzzling” SUVs and pickup trucks. (12/5)
Biofuels: US oil companies will likely pay close to $1 billion this year to put more ethanol and renewables in gasoline and diesel and face even higher compliance costs in 2016 after the US government set targets for alternative fuel use above industry expectations. On Monday, the EPA said fuel companies will have to use 18.1 billion gallons of renewables next year, up from a May proposal, though not as high as Congress mandated in a 2007 law. (12/4)
Biofiuels regs: The US EPA Monday issued final regulations that ease the annual requirements for ethanol in gasoline, a response to market restraints and other conditions that are preventing the Obama administration from meeting goals laid out in a 2007 law. Fuel companies will have to blend 18.11 billion gallons of corn-based ethanol and other biofuels into gasoline next year, up from the 17.4 billion it proposed in May but lower than required in the 2007 law. (12/1)
Utilities are burning less coal than they previously expected, 71 percent of surveyed utilities said their coal-fired generation was below forecasted totals. Another 29 percent of utilities said coal-fired generation was similar to forecasts, while none said their coal-fired generation was above forecasts. (12/2)
At Columbia University in New York, the dean at the journalism school defended the integrity of reporters investigating what Exxon Mobil scientists knew about climate change. Journalism graduate students at Columbia started their investigation into Exxon records in early 2014 and then coordinated with the Los Angeles Times. (12/3)
Carbon buddies? Several big oil companies have fallen into unlikely alignment with environmental groups calling for new taxes on air polluters like coal-burning power plants. One key reason: Those taxes are probably good for their natural-gas businesses. The alliance has urged negotiators meeting at a U.N. climate-change summit in Paris to consider potential carbon pricing policies as a tool to curb emissions. (12/1)
In Alberta, Canada, the provincial government said it aims to phase out coal by 2030 by adding more renewable energy resources to its grid. (12/2)
A European regulator said the benefits of moving a British power plant from coal to biomass outweigh any concerns about competition stemming from state support. (12/2)
Norwegian oil company Statoil’s decision to build the first floating wind farm represents a carbon risk hedge in an area in which it can deploy its considerable offshore expertise. If costs can be reduced, floating wind farms would greatly expand the exploitable wind resource. (12/1)
Pumped storage: High-tech batteries may be garnering the headlines. But utilities from Spain to China are increasingly relying on pumped storage hydroelectricity – first used in the 1890s – to overcome the intermittent nature of wind and solar power. (12/1)
Fukushima detritus: Scientists monitoring the spread of radiation in the ocean from the Fukushima nuclear accident report finding an increased number of sites off the US West Coast showing signs of contamination from Fukushima. (12/4)
California’s ongoing drought has been one for the record books. Southern California has not met yearly average rainfall since 2010, and the central and northern parts have not achieved this since 2012. Unfortunately, this year’s El Niño may not deliver drought-busting rains to California as is popularly believed. (12/5)
The Indian state of Tamil Nadu has seen its heaviest rainfall in over a century, driving thousands from their homes, shutting auto factories and paralyzing the airport in the state capital Chennai. Weather experts say the seasonal northeast monsoon was responsible for the flooding in the city of six million, but was amplified this year by El Nino. (12/3)