In today’s edition, we feature more in-depth analyses of yesterday’s gas deal between Russia and China. What impact on market prices will this deal have? Which companies – PetroChina, Rosneft, utilities – will benefit from it. And the rationale behind the deal for Russia and China.
Quote of the day
“The deal is an economic game changer as PetroChina lands an attractive gas deal at a price that carries a 10 percent discount to what EU countries are currently paying, and a 40 percent discount to current LNG prices.”
Gordon Kwan, head of oil and gas research at Nomura International Hong Kong Ltd., in the Bloomberg’s story PetroChina, Utilities Stand to Gain From Russia Gas Deal
FACTBOX-Details of Russia-China gas deal
China and Russia signed a $400 billion gas supply deal on Wednesday, securing the world’s top energy user a major source of fuel and opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.
Gas deal more important to Russia than China
Tom Mitchell and Kathrin Hille, The Financial Times
Chinese President Xi Jinping finally granted his Russian counterpart a long-awaited gas supply contract on Wednesday, ending a decade of negotiations during which China’s economic growth tilted the bilateral balance of power in Beijing’s favour.
Russia-China Deal Seen Damping LNG Prices as Output Rises
Robert Tuttle, Anna Shiryaevskaya and Isis Almeida, Bloomberg
China’s deal to buy natural gas from Russia after a decade of talks risks making tanker shipments of the fuel less competitive as new projects target Asian markets.
Russia’s Rosneft gearing up for gas exports to Asia
Alexei Anishchuk, Reuters
Russia could significantly boost its natural gas sales to Asia if companies other than Kremlin-controlled Gazprom secured exporting rights, documents from Russia’s top oil producer Rosneft showed.
PetroChina, Utilities Stand to Gain From Russia Gas Deal
Aibing Guo, Bloomberg
PetroChina Co., the country’s biggest oil and gas producer, stands to win from Russia’s $400 billion deal to supply natural gas to China as it will provide gas at a price lower than had been expected.
Russia may exempt China gas from mineral extraction tax – Ifax
Russia will consider exempting gas sent to China from mineral extraction tax, Russian Finance Minister Anton Siluanov said on Thursday in comments cited by the Interfax news agency.
China’s Global Search for Energy
Clifford Krauss and Keith Bradsher, The New York Times
Whether by diplomacy, investment or in extreme cases, force, China is going to great lengths to satisfy its growing hunger for energy to fuel its expanding car fleet and electrify its swelling cities.
Newly-elected Modi aims to bring solar to every Indian home by 2019
India plans to produce enough solar energy to power a lightbulb in every home in the country by 2019, a party official has said.
In Japan power shake-up, Tepco plans push into rivals’ turf
Tokyo Electric Power Co said on Thursday it plans to sell electricity outside its traditional service area, the latest sign that a shake-up in Japan’s power industry following the Fukushima nuclear disaster may be taking hold.
***LB: Also in this story “Japan’s regional monopolies, set up in 1951 during the American occupation after World War II, followed the U.S. model at the time, with utilities controlling all aspects of power generation and transmission with legally sanctioned profitability in designated areas.”
Investment houses demand switch to more responsible finance
There is a “moral, financial and economic” case for investors to support economic activity that enhances rather than damages the environment, a group of leading investment institutions with over $5tr assets under management will say today.
***LB: Also in this story “The 11-strong group, brought together by the Cambridge Institute for Sustainability Leadership (CISL), includes high profile names such as Ariva, Zurich, and PensionDenmark.”
Greenpeace warns PepsiCo’s palm oil policies will fail to halt deforestation
Jessica Shankleman, BusinessGreen
PepsiCo has unveiled a major new palm oil policy that aims to eliminate deforestation from its supply chain.
BP mounts last ditch effort to limit Gulf of Mexico oil spill settlement
Terry Macalister, theguardian.com
BP last night mounted a last ditch attempt to limit the costs of its settlement for the victims of the 2010 Gulf of Mexico oil spill by lodging an appeal to the US supreme court to make a final ruling.
***LB: Also in this story “BP originally anticipated that it would have to pay $7.8bn under a court settlement only to find the financial awards vastly exceeding this figure, partly as a result of what it believes are inappropriate claims.”
53 Million Gallons Of Nuclear Waste May Soon Be Stored Right Next To The Great Lakes
Kate Abbey-Lambertz, The Huffington Post
A proposed Canadian nuclear waste site near the shores of Lake Huron is facing mounting criticism from Michigan lawmakers who say it’s dangerous and called on the federal government to intervene.
***LB: Also in this story “Ontario Power Generation (OPG), which supplies electricity in the Canadian province, has long had plans to construct and operate a deep geologic repository (DGR) for nuclear waste at the Bruce Nuclear Power Plant near Kincardine.”
The Politics of Climate Change This Summer Will Be Worse Than Obamacare’s
Jonathan Chait, The National Interest
On May 6, a team of more than 300 climate scientists and experts released the third U.S. National Climate Assessment, which reported, “Climate change, once considered an issue for a distant future, has moved firmly into the present.”
Steyer brings ‘moneyball’ to climate change politics
Laura Barron-Lopez, The Hill
Billionaire climate activist Tom Steyer is launching a data-driven campaign across seven states for the 2014 midterms to prove he’s not all talk when it comes to hurting “climate deniers” at the polls.
Politically powerful renewable energy faces a threat in Kansas
Brad Cooper, Kansas City Star
Green energy just might be the country’s new political tough guy.
EMA’s 18th Annual Meeting
Join the Environmental Markets Association and environmental industry professional for two days of dynamic sessions, two nights of networking receptions, and countless opportunities to increase your business contacts.
October 22 – 24, 2014
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Will carbon capture and storage ever make fossil fuels safe?
Karl Mathiesen, theguardian.com
MPs have urged the UK government to fast track the development of carbon capture and storage (CCS) technology, saying its success is fundamental to avoiding dangerous climate change.
A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues
C2ES (Center for Climate and Energy Solutions)
Economists generally agree that a price on carbon would be the most efficient means of reducing the emissions that are the major cause of global climate change.
Energy tax break permissible, rules Brussels
Calum Fuller, Financial Director
The (UK) government’s proposal to provide energy-intensive industries with a tax break to compensate for their higher energy costs have been approved by the European Commission.
Carbon Market Monitor Releases Report
No evidence of anti-competitive conduct has been found in the market for Regional Greenhouse Gas Initiative (RGGI) CO2 allowances, according to the independent market monitor’s 2013 report.
Groups Pool Funds to Protect More of Amazon Rain Forest
Michael Wines, The New York Times
Brazil and a host of governmental and private partners agreed to create a $215 million fund to expand protected areas of the Amazon rain forest by more than 34,000 square miles and to help pay for its management for the next 25 years, the partners announced Wednesday.
The BioCarbon Group: Playing Both Sides
Gloria Gonzalez, Ecosystem Marketplace
The BioCarbon Group is playing both sides: that is, developing projects for both the voluntary and regulated carbon markets in Europe and North America.
Dell advances green packaging, closed-loop recycling
Heather Clancy, GreenBiz.com
Dell continues to raise the bar for the high-tech industry when it comes to innovative packaging choices and groundbreaking recycling initiatives.
Natural Gas / Coal
Coal India shares hit near-3-year high as Modi explores breakup
Shares of Coal India Ltd , the world’s biggest coal miner, hit their highest level in nearly three years on Thursday after Reuters reported that Narendra Modi, who will become prime minister on Monday, was exploring breaking up the company and opening up the sector.
Senate Dems to Obama: Reconsider coal rules
Laura Barron-Lopez, The Hill
A collection of seven Senate Democrats are pressuring President Obama to scale-back the proposed carbon limits on new coal-fired power plants.
Clock ticks on coal rule
Laura Barron-Lopez and Timothy Cama, The Hill
There are only two weeks left before the Obama administration reaches its self-imposed deadline to unveil the proposed carbon emissions rule for existing coal-fired power plants.
***LB: Also in this story “The rule for existing coal plants is expected to cut greenhouse gas emissions from the utility sector by 25 percent, and will allow states to use existing carbon-cutting systems to reach the mandated goals”
Glencore to shut Australian Newlands underground coal mine in 2015
Glencore Plc will close its Newlands underground coal mine in Australia in late 2015, opting not to extend the life of the mine amid a slump in coal prices, the Swiss-based mining and commodities group said on Thursday.
Woodside to Hunt for Acquisitions After Leviathan Talks Fail
James Paton, Bloomberg
Woodside Petroleum Ltd. (WPL), Australia’s second-biggest energy producer, may step up its hunt for acquisitions after scrapping a deal to buy a stake in Israel’s Leviathan natural gas project for as much as $2.6 billion.
Synthetic Gas: False Friend For China’s Clean Air Drive?
Ky Krauthamer, Oilprice.com
Beijing’s city hall recently ordered 300 industrial polluters to relocate outside the city by October as part of a campaign to clean up its notoriously bad air.
***LB: Also in this story “The coal-to-gas technology, in use since the 1980s, produces synthetic natural gas, a much cleaner burning fuel than raw coal”
Senate passes aiding transport of home heating fuels
Ramsey Cox, The Hill
The Senate passed a bill Wednesday that would help states with home heating fuel shortages by relaxing transportation regulations.
Obama Divides Power Players With Rule Utilities Accept
Mark Drajem and Mark Chediak, Bloomberg
The Obama administration’s upcoming greenhouse gas rules are gaining acceptance from an unlikely quarter — power companies — and splitting the energy industry’s normally unified opposition to new limits.
How Apparent aims to catalyze a cleaner, smarter grid
Elaine Hsieh and Joel Makower, GreenBiz.com
Given the growing interest in a low-carbon economy and renewable energy, it would follow that when it comes to adding solar and wind power to the electrical grid, more is better.
***LB: Also in this story “It turns out that not all electricity is equal, at least from the grid’s point of view”
Electric Grid, You Have Software Updates Available
Martin LaMonica, Scientific American
The electric grid was designed as a one-way highway, with power cascading out from big power plants to cities and towns at the end of the line.
Montreal lags behind in implementing greener taxi fleet
René Bruemmer, The Montréal Gazette
In San Francisco, 90 per cent of taxis are hybrid vehicles or run on compressed gas.
California takes first step toward curtailing water rights
Sharon Bernstein, Reuters
Some farmers and community water districts in drought-hit California could soon face limits on their ability to use water from strained streams that flow into the Sacramento River.
Infographic: Recent Droughts in California (2000-2014)
The U.S. Drought Monitor is a weekly scorecard that charts rainfall deficits across the nation. In the monitor’s 15-year history, California has never received such abysmal marks as today.
Water goes ‘missing’ with snow loss
Jonathan Amos, BBC News
It is a surprising observation. One might expect the timing of water flow to change but not the overall volume.
United Utilities Sales Rise 4 Percent on Regulated Price Rise
Louise Downing, Bloomberg Businessweek
United Utilities Plc, the U.K.’s largest publicly traded water company, said fiscal full-year sales rose 4 percent as regulated prices increased.
Levelized cost of energy: A limited metric
Peter Bronski, GreenBiz.com
Once upon a time I was infatuated with levelized cost of energy (LCOE).
Mining projects abandoned after community protests – in pictures
Charlotte Seager, The Guardian
Deforestation: Carving up the Amazon
Barbara Fraser, nature
Next to a newly paved highway in the Peruvian Amazon, a discreet white-on-green sign urges travellers to protect the surrounding ecosystem.