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Triple Crunch Log                                                                                                            

23.2.10. UK public scepticism about climate change threat drops rapidly. Only 31% now think it is “definitely” a reality, down from 44% in the last year, according to the latest Ipsos Mori poll. Only one in five believe it is caused by people, down from one in three last year. 9 in 10 still think some kind of warming is happening. A recent BBC poll showed 31% thinking the extent of climate science has been exaggerated.193

24.2.10. Oil & Gas UK survey shows fewer North Sea projects are being developed. There are 11bn barrels of oil and gas in existing projects, up 15pc from the previous year – enough to meet half the UK's demand in 2020. But companies will need to raise £60bn to extract this oil, but this is not likely under the current incentives.194

First British company begins wildcat drilling off the Falklands. Four small independent oil companies, all single asset plays, have raised considered sums for their punts. Argentina express outrage and other Latin American and Caribbean governments issue a statement agreeing with them.195

Putin threatens Russian oligarchs with fines and bans if they don’t invest in electricity generation like they promised to do at the time of liberalisation. Record demand during a severe winter is putting capacity under strain. Oligarchs could face huge fines or even be barred from markets.196

25.2.10. Chinese government refuses to let Chinese company buy the Hummer brand from GM. Fuel consumption is at least part of the reason. GM will now wind the brand down.197

Blame OPEC, not China, for high oil consumption, says CIBC’s Jeff Rubin. “Last year OPEC, Mexico, and Russia consumed 14 million barrels a day of oil -- two Chinas!” Rubin railed in a recent speech. “Have you ever filled your tank up in Caracas or Riyadh? If you did, you'll soon know. It's 25 cents in Caracas, it's about 50 cents in Saudi Arabia, but the point is it's 50 cents whether oil is $20 a barrel or whether oil is $200 a barrel, because that's just the way things are over there. OPEC is a very disparate place separated by history, religion, geography, but there's one common denominator: everybody has a God-given right to consume as much cheap fuel as they bloody well feel like.”198

World Bank has raised over $1 billion with Green Bonds. A day after launching a 600m Swedish Kroner Green Bond, the World Bank has launched another 10 new Green Bonds denominated in different currencies. The 10 bonds are primarily for the new, open-ended, Nikko World Bank Green Bond fund.199

Vermont Senate votes to close a nuclear power plant when its licence expires in 2012, on the grounds of aging problems: 3 radioactive leaks, a burst pipe and a collapsed cooling tower. California took such action in 1989, but no state has in the 20 years since. With its original 40-year operating licence expired in two years, Entergy’s Yankee plant in Vermont had applied for a 20-year extension to keep it open once, as many of the US’s 103 nuclcear plants will have to do.200

Bloom Energy Corp. unveils its fuel-cell “power plant in a box” server unit. Bloom, a fuel cell company with $400m of venture capital to its name, has been one of Silicon Valley's most secretive startups. The size of a pickup truck, the 100 kW unit’s solid oxide cells are made mostly of sand, with no platinum or other precious metals thrown in as catalysts. K.R. Sridhar, Bloom's co-founder and chief executive officer, says the server will change the energy industry in much the same way that cell phones changed communications. The servers cost $700,000 to $800,000 apiece, but some have been solar already to companies including Coca-Cola, FedEx Corp. and Google Inc. e-Bay, who have bought five, hosted the launch event. Critics doubt that energy production can be maintained, but Sridhar says the servers can provide electricity at 9 to 10 cents per kilowatt hour, compared with 14 cents for power from the grid, with payback in three to five years, including 50% financial incentives from the federal and California governments. Former Secretary of State Colin Powell, who sits on Bloom's board of directors, says: “We want to move this product forward to the point where we can put it in an African village ... and they can have power, they can have light. Think of the potential."201

26.2.10. Centrica boss says “vast cost” could cause scrappage of UK offshore wind plans. Sam Laidlaw syas it is unclear whether the scheme to build an estimated 10,000 wind turbines will ever go ahead. Cenrica, owner of BG, would proceed only “if the economic conditions are right.” The problems are high costs for turbines and other equipment as well as limited government financial support. BWEA estimates the wind farms would cost an estimated £100 billion and create 70,000 jobs in the UK. The total generating capacity of all the projects in the latest, Round Three, would be 40 gigawatts. But Citigroup estimates the cost of installing one megawatt of offshore wind is about £3.5 million — roughly five times the cost of the same gas-fired capacity.202

27.2.10. Al Gore editorial in the NYT: “We can’t wish climate change away.” And if we did, we’d still have to tackle dependency on foreign oil and China’s lead in cleantech.203

28.2.10. Bank of America and Barclays Capital tell clients to brace for crude above $100 (£64) a barrel by next year, then relentlessly higher prices over the decade. “Oil has the potential to flirt with $100 this year. We forecast an average price of $137 by 2015,” says Amrita Sen of BarCap. “The groundwork for the next sustained step up in oil prices is now almost complete. Global spare capacity is likely to be reduced to low levels within a relatively short time. The global economic crisis has postponed, but not cancelled, a crunch which would otherwise be starting to bite now.” Francisco Blanch of Bank of America Merrill Lynch says crude may touch $105 next year, with $150 in sight by 2014. “Approximately 1.7bn consumers in emerging markets with a per capita income of $5,000 to $20,000 are eagerly waiting to buy cars, air-conditioning units, or white goods.” He expects demand to rise by a further 2.8m barrels per day (bpd) in China and 2.5m bpd in India by 2015. Global use will increase by 8.8m bpd to 95m bpd.204

1.3.10. Competitive gas may be as bad for BP as Gazprom, Ed Crooks reasons in the FT: the more nonconventional gas there is in the market, and more the shift to spot-price selling – the two big trends in the gas market - the smaller the size of the long-term oil-linked lgas market.205

Oil companies not investing enough on exploration, Bernstein Research says. They have been overly optimistic about production from the discoveries made in the late 1990s.206

George Monbiot labels the UK solar feed-in tariff scheme a scam. The Guardian columnist writes: Those who hate environmentalism have spent years looking for the definitive example of a great green rip-off. Finally it arrives, and nobody notices. The government is about to shift £8.6bn from the poor to the middle classes. It expects a loss on this scheme of £8.2bn, or 95%. Yet the media is silent. The opposition urges only that the scam should be expanded.”207  

2.3.10. US consumers are dipping into their savings to pay for gasoline. There is a “supertrend” since 2000 of personal consumption expenditure (including gasoline) rising 0.14% per month. Within that, spending on food is rising only slowly, but spending on gasoline faster. How sustainable is that? Stephen Schtork of the Schtork

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