The Oil and the Glory
The Weekly Wrap: Oct. 7, 2011
More where that came from: When it comes to oil, people generally cluster in glass-half-full, and glass-half-empty groupings. The former are led by techno-optimists such as industry consultant Daniel Yergin who believe that, given a higher price, oilmen will always manage to extract more barrels from a given field. The latter fall somewhere under the ...
More where that came from: When it comes to oil, people generally cluster in glass-half-full, and glass-half-empty groupings. The former are led by techno-optimists such as industry consultant Daniel Yergin who believe that, given a higher price, oilmen will always manage to extract more barrels from a given field. The latter fall somewhere under the rubric of peak-oilers, who believe that supply is already stretched thin, and that unless alternative fuels scale up fast, the world must prepare for a hand-to-hand struggle for resources. The Financial Times’ Sheila McNulty dives into the debate as part of a special section of the paper this week entitled "Modern Energy". McNulty profiles Chevron’s work in Texas’ Permian Basin (pictured above: boom days at another Texas oil region — Spindletop), where since the 1920s the company has produced a whopping 30 billion barrels of oil, and reckons that it will extract an equal volume in the coming years. Chevron and the rest of the industry are moving into the age of the "intelligent oilfield," in which they are using visual technology "to see thousands of feet underground to where the oil remains stuck, so as to pinpoint and target a specific zone for further recovery," she writes. The piece tilts toward the glass-half-full folks. As punctuation, she quotes Dallas Parker, a partner at the law firm Mayer Brown: "Every time the oil price goes up, people find a way to get more oil out," he tells her. "It’s all a function of the price of oil and the technology."
Annals of China’s clean battery movement: Authorities in Shanghai have shuttered a battery manufacturing plant run by the U.S. company Johnson Controls through the end of the year. The reason is lead — a wave of alarm has spread through Shanghai and other Chinese cities regarding the use of lead in manufacturing, and the health risks to children, writes James Areddy in the Wall Street Journal. For instance, just last month a court imprisoned the president of electric-bicycle-maker Suqi Battery for 15 months because of the suspected lead poisoning of some 100 villages near Hangzhou. Milwaukee-based Johnson Controls categorically disputes that it’s responsible for any lead poisoning in Shanghai. In fact, writes Areddy, the company’s lead standards are far tougher "than Chinese law requires, permitting one-seventh the amount released into the air as allowed in China, and one-tenth what China’s water standards allow." Rather, it appears that Johnson is being shut over a quota issue — by last month, it had already exceeded its annual manufacturing limit. As this blog has reported numerous times, the Chinese are surprisingly intolerant of pollution, and are pushing back against the hell-bent pace of economic growth, what is locally called "blood-soaked GDP."
Read on to the jump.
Investing in the company in which Putin owns no shares: France’s Total has sealed a 20 percent share in a $30-billion natural gas development in west Siberia’s Yamal Peninsula. Total signed the deal with Novatek, Russia’s second-largest natural gas company, writes Isabel Gorst at the Financial Times. Novatek’s largest shareholder is Gennady Timchenko, a Russian billionaire. Timchenko is best known for the speed with which his flagship company, Gunvor, has become the world’s third-largest oil trader. Most recently, his name has arisen on the lips of Russian Prime Minister Vladimir Putin, who asserts that, contrary to popular wisdom, he provided no assistance to Timchenko’s rise. Therefore, we report: With the deal, Total partners in one of Russia’s largest energy deals in recent years with a no-name executive having no known contacts at high levels in Russia’s government.
Climate change mitigation: Game, set, match? Have U.S. politics definitively beaten what had seemed to some an inexorable movement to cap the emission of heat-trapping gases? If anyone required convincing that they have, writer Robert Bryce weighs in with a typically brash screed on the editorial pages of the Wall Street Journal. Bryce’s main points: Even while the world was laying wreathes at the feet of former Vice President Al Gore in the 2000s, CO2 emissions were rising by 28.5 percent in line with a 36 percent increase in global demand for electricity. Where did all that CO2 come from? A 47 percent rise in the burning of coal, among other things, much of it from China and the rest of the developing world, Bryce writes. Worse, the use of energy — and the burning of coal — is going to rise significantly higher in the coming decades so that humans can "remain productive and comfortable." Bryce is on solid ground through much of the piece, which is what makes it worth reading, but at the tail end he veers into his trademark excesses. Those who persist in seeking to restrict CO2 emissions are guilty of a "dogmatic view," since they insist that "carbon dioxide is evil," he asserts. Such individuals should concede that they have been eclipsed, and move "toward a world view that accepts the need for energy that is cheap, abundant and reliable." Bryce is right that economic prosperity correlates with the availability and consumption of energy. But he ends up looking like an ideologue himself by gleefully celebrating the crushing of the idealists he scorns.