AT&T to Make Major Investment in Compressed Natural Gas Vehicles
AT&T announced on Wednesday that it would be deploying around 15,000 alternative fuel vehicles over the next 10 years. AT&T plans to spend $565 million total, with $350 million of it devoted to purchasing about 8,000 compressed natural gas (CNG) vehicles. This will make AT&T the single largest corporate user of CNG vehicles in the world.
T. Boone Pickens, who has been advocating a transformative shift from oil to natural gas for commercial cars and trucks, and also owns Clean Energy Fuels Corp., which is the largest provider of CNG for transportation in the North America, exclaimed, “I believe this is going to be a big momentum play. When other fleet operators put their transportation teams on this, you’re going to see a major shift away from imported diesel and onto domestic natural gas.”
The Tides Are Turning: Obama to Increase Taxes on Offshore Drilling
Offshore drilling would become more expensive under President Obama’s proposed budget. The proposal would levy “a new excise tax on offshore oil and gas production in the Gulf of Mexico to close loopholes that have given oil companies excessive royalty relief.”
Additionally, new revenues, along with funds from the stimulus bill, would be directed towards clean energy research and development. The proposed budget calls for “significant increases” in spending for renewable energy, carbon sequestration, and power transmission projects. The stated goal of these measures is to position “the United States as the world leader in climate change technology.”
Bush’s Last Minute Oil and Gas Leases in Utah to be Canceled
Interior Department Secretary Ken Salazar, in canceling oil and gas leases in Utah this week, took a big step towards reversing some of the Bush administration’s more controversial eleventh hour environmental decisions. The leases at issue, which were rushed through towards the end of Bush’s term, were criticized for being too close to sensitive national parks and not nearly valuable enough to justify the damage to these areas.
The 77 parcels represent 130,225 acres near Arches and Canyonlands national parks, Dinosaur National Monument and Nine Mile Canyon. The canceled bids are worth around $6 million and those bidders will have their money returned.
Although these leases could be re-granted after a more thorough review, this seems unlikely. Salazar also emphasized that there needs to be a smarter balance between the environment and commercial use. READ MORE
Recovery Plan’s Renewable Energy Tax Credits and Incentives Debated in Senate Committee
The Senate Finance Committee began debating on Tuesday the alternative energy portion of the recovery plan. The House version of the package cleared the Ways and Means Committee last week. This portion of the plan is expected to have around $30 billion in tax credits and incentives to increase energy efficiency and renewable energy production.
Both versions of the bill would extend wind energy credits through 2012, and extend similar credits for biomass, geothermal, small irrigation, hydropower, landfill gas and tidal energy power would be extended through 2013. READ MORE
Delays Continue for Pickens’ Texas Panhandle Wind Farm
Apparently the delays for T. Boone’s massive wind farm project in the Texas panhandle are not going to end anytime soon. Earth2Tech reports that at the Clean Tech Investor Summit on Wednesday, Pickens said that his wind farm would likely be delayed at least to 2011. But that even then, Pickens warned, “We’ll see what happens in 2-3 years.”
Earth2Tech notes that although the credit crisis has put a damper on Pickens’ own wind farm project, he is still pushing hard for the country to adopt the Pickens Plan, reiterating his argument that with a $28 billion investment, the U.S. could convert 350,000 diesel trucks to natural gas, which would reduce oil imports by 5% and create nearly half a million jobs.
Fearing Energy Dependency, Bulgarians Demand Re-opening of Nuclear Reactors
Highlighting the complex and widespread impacts of the Russian-Ukrainian natural gas dispute, protesters in Bulgaria demanded on Sunday the reopening of two nuclear reactors in that country. The reactors, which are left-over from the Soviet-era, have been shut-down since 2006 as a requisite for gaining entry into the EU.
Now, with natural gas supplies being sharply reduced as a result of the Russia-Ukraine dispute, Bulgarians are demanding more energy independence.
Reuters reports that “About 2,500 protesters with placards reading ‘Speed up Bulgarian energy’ and ‘Restart’ marched through [Bulgaria's capital] Sofia,” and that “Prime Minister Sergei Stanishev said the government would study all the arguments about possibly restarting the units after meeting the organizers.”
Russian-Ukrainian Deal Reached (Again)
The natural gas stand-off between Russia and Ukraine appears to finally have reached a resolution on Sunday. Despite previous reports of settlements, this international dispute has continued for days, including a 12 day shut-off of Russian natural gas deliveries for Europe via Ukraine.
The agreement reached on Sunday was between the Russian and Ukrainian prime ministers, Valdimir Putin and Yulia Tymoshenko. This was of geopolitical significance for Russia, which has been trying to marginalize Ukraine’s pro-western president, Viktor Yushchenko, in favor of Tymoshenko, who is seen as more friendly to Russia.
The deal sets the price of Ukrainian natural gas at around 20% of market prices paid by European customers. This will likely result in a price of between $208 and $240 per 1,000 cubic meters.
Bush Administration: Open California Coast to Offshore Drilling
In a parting gift to the oil industry, the Bush administration has officially proposed opening up 130 million acres of the California coast to oil and natural gas drilling. The proposal was made by the Interior Department, and also includes areas of Alaska’s Bristol Bay.
Offshore drilling in the U.S. has been back on the table ever since Congress foolishly allowed the moratorium to expire last year amid high gas prices and election-season pressures. READ MORE
Ireland Could Implement Carbon Tax This Year
Irish Minister for Energy Eamon Ryan stated last week that his country should be prepared to implement a carbon tax later this year.
“The market, Irish householders and customers need a clear signal that we need to reduce our dependence on [fossil fuels] because ultimately they are finite and they are not going to be as easily available in 5 or 10 years time,” he said, adding, ”I think the mechanism whether it’s through a carbon tax or through such a thing as a floor price, that’s the detail that can be agreed”
Ryan also noted that in light of the Russia-Ukraine natural gas dispute, Ireland needs to develop its own access to natural gas rather than simply relying on the UK for its supplies.
Presidential Directive Lays Out U.S. Policy Towards Rapidly Changing Arctic Region
The White House on Monday released a Presidential Directive laying out U.S. policy towards the rapidly changing Arctic region. With the melting of the arctic ice, a whole slew of new issues, ranging from access to new shipping lanes to extraction of natural resources such as oil and natural gas, are being created.
With the list of nations bordering the arctic including the United States, Canada, Denmark (Greenland), Finland, Iceland, Norway, the Russian Federation, and Sweden, there is a wide range of disputes that are likely to arise in the future. The Directive lays out some general policies to guide the U.S. approach towards these issues:
1. Meet national security and homeland security needs relevant to the Arctic region;
2. Protect the Arctic environment and conserve its biological resources; READ MORE
Russia-Ukraine Gas Dispute Cools Off… For Now
Although Russia and Ukraine have apparently reached an agreement to accept international monitors in order to reestablish natural gas flows to Europe, this is unlikely to be the end of this geopolitical saga. Both countries are still far apart on a final solution, with Moscow insisting that Ukraine pay “market prices” (or higher) and Ukraine insisting it should receive cheaper gas, in part due to its importance as a conduit for Russian gas to Europe.
Illustrating the gamesmanship and hostility involved in this recent stalemate, Russia actually raised its price demands every time Ukraine rejected a prior offer. (Starting at $250 and eventually reaching $450 per 1,000 cubic meters.) READ MORE
T. Boone vs. FedEx vs. Exxon Mobile (LNG vs Batteries vs Oil)
Environmental Capital reports that a mini-feud between Boone Pickens and FedEx has broken out recently. FedEx CEO Fred Smith fundamentally disagrees with Pickens that shifting long-haul trucks from diesel to natural gas is the right move. Instead, Smith argues that hybrids are a better solution, and has backed up this belief by leading FedEx’s transformation to the largest commercial fleet of hybrid trucks in North America.
EC notes that:
“[FedEx's] director of sustainability, Mitch Jackson, upped the ante on Sunday with a blog item blasting natural gas as transport fuel of the future. After citing a list of reasons against using natural gas instead of diesel, Mr. Jackson concludes that “substituting one fossil fuel for another may mean we’re shifting our energy supply, but it doesn’t necessarily mean we’re going anywhere.” READ MORE
T. Boone is Back!
Our friend Boone Pickens (“the man with the plan”) has released a new commercial and message. His message echoes many of our recently expressed concerns about rising gas prices and the lessons to be taken from the current Russia-Ukraine natural gas dispute. The entirety of his message is printed below:
Russian Flow of Natural Gas via Ukraine Shut Off Completely
The Russia-Ukraine natural gas dispute has escalated significantly with Russia cutting off basically the entire flow of natural gas on that pipeline on Wednesday. As a result, Europe, which depends on Russia for 25% of its natural gas supplies may see serious shortages as soon as next week. The countries particularly dependent on these supplies include Bulgaria, Romania, Greece, and Turkey. However, western countries, including France and Germany may also face shortages.
Although Russian energy monopoly Gazprom says that it is increasing its deliveries to the EU via other routes, traditionally 80% of the gas is delivered through Ukraine. Consequently, there may not be enough alternative pipeline capacity to make up for the massive shortfall. Currently, Russian gas supplies to Europe are half of normal.
Unfortunately for the EU, it doesn’t have a whole lot of leverage in this situation. They are truly dependent on Russia (and Ukraine) for a large portion of their natural gas supplies, and are stuck in the dead of winter with greatly diminished gas. They have few alternatives and Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, seems unlikely to convince Russia to change its ways.
Europe Being Dragged Into Russia-Ukraine Natural Gas Dispute
Despite claims this week that Ukraine would permit natural gas intended for the EU from Russia to be delivered, there are reports from Poland and Hungary that deliveries from the pipeline have begun to fall. Poland is reporting a 6% decrease in deliveries and Hungary a 25% decrease.
Russia claims that Ukraine is illegally siphoning off gas intended for these countries, while Ukraine asserts that it is Russia that has decreased the output. Leaders of both nations are currently trying to make their case to EU leaders.
Russian natural gas monopoly, Gazprom says that Ukraine can no longer be trusted and that it will have to find an alternative route to get gas to Europe. Whether this is practicable remains to be seen. Fortunately, the EU nations have substantial natural gas reserves, having experienced a similar situation in 2006, the last time these two neighbors reached an impasse.
Via AFP (link may expire)
