Habitues of Random Thoughts will know that I have slightly more than a passing interest in CCS. Well, now I note that the Advanced Power Generation Technology Forum has recently launched what it claims to be a new strategy for CCS development in the UK. I won't claim to have read all 104 pages - I'm not that much of a geek - but I think it's worth pointing any interested reader to the list of some 150 (yes, 150) RD&D recommendations contained within the document.
The major thrust, as one might expect, is to remove uncertanties to make CCS an economically viable process. With this in sight the strategy has as one of its 3 time-specific goals to have 30 C-capture projects across a wide variety of industryial sectors by 2020. This seems to me to be fantastically ambitious considering that we are only just at the FEED stage of the two government-sponsored projects at White Rose and Peterhead. But I guess ambition is a good thing. At least this goal is specific. The other 2 talk in terms of CCS being "routinely used" to different degrees in 2030 and 2050. Hogwash.
To my mind the big issue with CCS is managing the expectations and interfaces between different industrial players across what is always going to be a complicated process chain. This becomes even more complicated if the chain is extended (as I think is very likely) to routinely incorporate EOR. Different players have different appetites for risk, and varying understanding of the risks inherent in other parts of the chain. Apportioning the cross-chain risks will always be one major headache.
Wednesday, 26 February 2014
Tuesday, 11 February 2014
Fracking and Planning
I've chuntered on about fracking in this blog a number of times. I thought it might be helpful to put down a few pointers about the planning regime.
First of all - the fracking 'revolution' has been sparked by the development of horizontal drilling. On shore this means that multiple landholdings are likely to be involved in any one fracking site. Drilling without the landowner's consent amounts to trespass so any fracking operation will involve multiple agreements. It is this aspect of the law that has triggered all the noise about purchase of ransom strips etc. Taking such action will ultimately be just a delaying tactic, however - developers have compulsory purchase rights.
Secondly, a developer will require a petroleum exploration licence.
Thirdly, planning permission is required from the Mineral Planning Authority. The MPA is usually the County Council.
Forthly, Environment Agency (yes, them again) permits are required.
Fifthly, the Health and Safety Executive has to be satisfied with the well design and operation plan.
Only when this lot is in place will a developer be granted the consent to drill. Complicated, isn't it?
First of all - the fracking 'revolution' has been sparked by the development of horizontal drilling. On shore this means that multiple landholdings are likely to be involved in any one fracking site. Drilling without the landowner's consent amounts to trespass so any fracking operation will involve multiple agreements. It is this aspect of the law that has triggered all the noise about purchase of ransom strips etc. Taking such action will ultimately be just a delaying tactic, however - developers have compulsory purchase rights.
Secondly, a developer will require a petroleum exploration licence.
Thirdly, planning permission is required from the Mineral Planning Authority. The MPA is usually the County Council.
Forthly, Environment Agency (yes, them again) permits are required.
Fifthly, the Health and Safety Executive has to be satisfied with the well design and operation plan.
Only when this lot is in place will a developer be granted the consent to drill. Complicated, isn't it?
More Hydro
When I were a lad (or when in my younger days I was employed by the CEGB) the received wisdom was that there was little prospect of any new large hydro scheme in the UK. If not turned on its head that view is at least being challenged. Scottish Power is at the early stages of assessing an expansion of its Cruachan site; SSE is looking at a scheme at Coire Glas and has identified another potential site a Balmacaan; and there are plans for an, admittedly, small scheme in Gwynedd.
Does this shoot down my argument about spooking investor sentiment in may previous post? I don't think so - there's no serious money on the table as yet - but it does point up that the generation business remains and "interesting" one.
Does this shoot down my argument about spooking investor sentiment in may previous post? I don't think so - there's no serious money on the table as yet - but it does point up that the generation business remains and "interesting" one.
Another Minister Sniffing the Populist Weed
First it was Miliband, then it was Major, and now Ed Davey has jumped on the populist band wagon. Is there something in the Westminster water that addles the political brain?
Granted, the utilities have done themselves no favours by failing to be completely transparent on costs and prices but politicians, ministers especially, must realise that a secure energy supply is predicated upon a delicate balance between public policy making and the deployment of private capital. Davey's flat-footed intervention caused a fall in utility share prices - particularly that of Centrica - and not surprisingly because all he has done is add further uncertainty to the climate in which these companies operate.
Now, the more uncertain any market is, the less are investors likely to pile in (or at the very least they'll be asking for higher rates of return). The country is in an energy bind and is in need of new and sustained investment. Davey's loose words are no way to encourage that investment.
Granted, the utilities have done themselves no favours by failing to be completely transparent on costs and prices but politicians, ministers especially, must realise that a secure energy supply is predicated upon a delicate balance between public policy making and the deployment of private capital. Davey's flat-footed intervention caused a fall in utility share prices - particularly that of Centrica - and not surprisingly because all he has done is add further uncertainty to the climate in which these companies operate.
Now, the more uncertain any market is, the less are investors likely to pile in (or at the very least they'll be asking for higher rates of return). The country is in an energy bind and is in need of new and sustained investment. Davey's loose words are no way to encourage that investment.
Wednesday, 5 February 2014
The Pietersen thing
I can no longer resist temptation - I have to wade in. What on Earth is the ECB up to? Kevin Pietersen may be infuriating at times but he has been a match and series winner for England and the method of his removal appears to be shambolic at best and utterly incompetent at worst.
Just think about a few of his achievements:
> his century secured England's first Ashes serie win in something like 25 years;
> he was Man of the Tournament when England secured their first global limited overs trophy;
> his average in the 4-0 series win over India that took England to World no 1 position was 106.6;
> his innings in Mumbai started the turnaround from a 1-0 deficit to a series win in India.
He is England's leading run scorer. And he is 33 - a mere stripling.
His performance this time around in Australia was not awe inspiring, granted. But, then again, nor was that of any other player. It was the whole team that misfired - not just KP.
There have been rumblings about dressing-room discord, even rows. What is the captain for; what are the managers for; if not to manage? Now, I like Alastair Cook as a cricketer and opening bat but his captaincy hasn't been of top drawer quality. Somehow, between him and Andy Flower, the England management ball has been dropped.
What really gets up my nose is the manner of the announcement. I have spent a lot of good money in the past heading to Test games (fortunately not to Aus this year - I'm still smarting from 2006/7); I feel let down that no explanation has been given - just a bland press statement.
As an Aussie friend would say - the ECB appears to be "up themselves".
And, finally, isn't this a decision, if it was to be taken at all, one that should have come from the new team director and his assistants?
I fear that the national team is heading for a long bout of mediocrity.
Just think about a few of his achievements:
> his century secured England's first Ashes serie win in something like 25 years;
> he was Man of the Tournament when England secured their first global limited overs trophy;
> his average in the 4-0 series win over India that took England to World no 1 position was 106.6;
> his innings in Mumbai started the turnaround from a 1-0 deficit to a series win in India.
He is England's leading run scorer. And he is 33 - a mere stripling.
His performance this time around in Australia was not awe inspiring, granted. But, then again, nor was that of any other player. It was the whole team that misfired - not just KP.
There have been rumblings about dressing-room discord, even rows. What is the captain for; what are the managers for; if not to manage? Now, I like Alastair Cook as a cricketer and opening bat but his captaincy hasn't been of top drawer quality. Somehow, between him and Andy Flower, the England management ball has been dropped.
What really gets up my nose is the manner of the announcement. I have spent a lot of good money in the past heading to Test games (fortunately not to Aus this year - I'm still smarting from 2006/7); I feel let down that no explanation has been given - just a bland press statement.
As an Aussie friend would say - the ECB appears to be "up themselves".
And, finally, isn't this a decision, if it was to be taken at all, one that should have come from the new team director and his assistants?
I fear that the national team is heading for a long bout of mediocrity.
A CO2 Blip or Start of a Worrying Trend?
DECC has published its final GHG statistics for 2012. The headline is that emissions in that year were 581.2 MtCO2e, up from 563.2 the previous year. Now, we're looking at a potentially very noisy set of data here so extrapolations are dangerous, but looking behind the headline there are a few things to make one pause for thought.
The first is that the UK economy was not growing in 2012 (Business-sourced emission were up less than 1MtCO2e). Now it is. What is all that extra activity going to do to emissions?
Secondly, emissions from the residential sector rose by over 12%, driven largely by an increase in use of gas for heating. Again, this is something which will fluctuate but with the drive for more houses to be built (and they will not be zero-C) the prognosis does not look good to me.
The energy supply sector was up by nearly 6%, due to increased use of coal over gas for electricity generation. This trend will reverse as the old coalers are closed but with each new gas station that is developed there is an inbuilt plateau of long-term emissions pretty much guaranteed. So, it's possibly good news in the short term but not such a jolly story in the medium and long term.
DECC have indulged in a certain amount of back-patting as the above figures confirm that the UK came in under the first C-budget cap. I just worry that the low-hanging fruit have been picked and that emissions control is going to become increasingly difficult.
The first is that the UK economy was not growing in 2012 (Business-sourced emission were up less than 1MtCO2e). Now it is. What is all that extra activity going to do to emissions?
Secondly, emissions from the residential sector rose by over 12%, driven largely by an increase in use of gas for heating. Again, this is something which will fluctuate but with the drive for more houses to be built (and they will not be zero-C) the prognosis does not look good to me.
The energy supply sector was up by nearly 6%, due to increased use of coal over gas for electricity generation. This trend will reverse as the old coalers are closed but with each new gas station that is developed there is an inbuilt plateau of long-term emissions pretty much guaranteed. So, it's possibly good news in the short term but not such a jolly story in the medium and long term.
DECC have indulged in a certain amount of back-patting as the above figures confirm that the UK came in under the first C-budget cap. I just worry that the low-hanging fruit have been picked and that emissions control is going to become increasingly difficult.
Tuesday, 4 February 2014
US Has Competitive Edge
Rod Janssen recently spotted an article by the FT's Pilita Clark picking up on an IEA report suggesting that energy cost differentials will see Europe lose out big time to the US over the next couple of decades. It is undeniable that the differential exists now and is a major headache for EU energy intensive companies, but will it last 20+ years? One of the major factors causing this effect is the fact that the US is decoupled from the international gas market. Hence indigenous shale gas has nowhere to go but the US, so depressing prices. But how long will it be before there are sufficient LNG export terminals to drag US gas prices closer to those in the EU?
I suspect that a lot of the political enthusiasm for UK shale gas is driven by a concentration on production costs not on market price. I can't see a US-style boom happening over here.
I suspect that a lot of the political enthusiasm for UK shale gas is driven by a concentration on production costs not on market price. I can't see a US-style boom happening over here.
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