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Triple Crunch Log                                                                                                            

since the bail out: it was lead arranger on six loans worth $499 million in 2009 having extended at least $2 billion in the previous three years. Platform meanwhile says the bank has underwritten $7.5 billion of loans to tar sands related companies.234

25.3.10. US Department of Energy official admits that peak oil may come as early as 2011. “A chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 “if the investment is not there.” So says Glen Sweetnam, main official expert on oil market in the Obama administration, in an interview with Le Monde. Sweetnam is director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the DoE says the investments needed ar as yet “unidentified.” The DoE predicts decline of identified sources of supply at 2 percent a year, from 87 million barrels per day in 2011 to just 80 mbpd in 2015. But by then global demand is expected to be 90 Mbpd, meaning “unidentified” additional liquid fuels projects would have to fill in a 10 mbpd gap within less than 5 years.235

ConocoPhillips CEO Jim Mulva admits that pursuing new oil reserves no longer pays. Chris Nelder of Energy & Capital: “The remaining resources have become too marginal and too expensive, and the competition for them has become too intense. Rather than keep slugging it out with bigger and better-funded players in pursuit of growth, Conoco has decided to sell $10 billion worth of its assets over the next two years, all of them in the marginal category, and concentrate on producing its core assets. The proceeds will be used to buy back its stock, reduce its debt, and raise dividends — just as rival ExxonMobil has been doing for the last five years or so. When I inferred in Profit from the Peak that the oil majors were spending vastly more money on buying back stock than investing in new exploration because reserves were getting too expensive and risky, veterans of the Street greeted the idea with extreme skepticism. Now it's a plain fact. A Rice University study released in July 2008 found that the five largest international oil companies spent about 55% of their profits on stock buybacks and dividends in 2007, but only about 6% on new exploration and production. “Could we spend $20 billion or $25 billion [on exploration]? Absolutely,” Conoco spokesman Gary Russell said at the time. “Could we do it effectively, in a way that provides ultimate value to our shareholders? Probably not.”236

FTSE sees growing re-allocation of capital to low carbon sectors. FTSE Global All Cap is valued at $28.9 trn. Carbon Intensive Sectors are $8.9 trn of that. Environmental Opportunities All Share (companies need 20% or more revenue from EO to qualify) $1.8 trn, and growing. There are six sectors in EO, of which Renewable and Alternative Energy is one. There are 18 EO indices, and all of them out perform the FTSE All Share.237

26.3.10. Editor of Money Week compares UK feed-in tariffs to Mao’s Chinese steel production crusade. The government’s “backyard bribes” are akin to the failed “backyard furnaces of Mao’s China. Merryn Wed quotes Monbiot.com as evidence.238

28.3.10. Cleantech IPOs set for a comeback, Jefferies tells the FT. New Energy Finance reported $14bn (£9.3bn, €10.3bn) worth of clean energy IPOs in 2007, $4.3bn in 2008 and $3.4bn in 2009, with none in the first quarter of this year. But there are now 78 IPO prospects in the US alone, looking to raise $13.7bn. Rooftop solar is particularly attractive, Bruce Huber of Jefferies says.239

Tesco joins the “stampede” to supply DIY electricity, as solar panels go on sale this week. Lucy Neville-Rolfe, executive director at Tesco, said: “Tesco has always led the way by bringing affordable green products to the mass market. With low-energy lightbulbs, we cut the price and demand went through the roof. Now we are making solar power mainstream by giving customers a simple, high-quality product at the right price.” But “Tom Murley of HG Capital warns that if the scheme is too successful — in encouraging a flood of small-scale generators — it could depress prices and have a detrimental effect on the wholesale electricity market, making life hard for big nuclear and wind suppliers.”240

Power crunch looms for Britain, warns new RWE Npower CEO Volker Beckers¸and his company may not invest if conditions are not to their liking. “The country has to build two large plants or more every single year.” He infers RWE might invest in plants overseas: “The UK needs to make sure it has the highest level of attraction for investors.” And “Why discriminate against nuclear in favour of renewables? Why give offshore wind ROCs and make nuclear stand on its own feet?” Ofgem predicts a £200 billion bill for pipes, plants and turbines predicted by Ofgem, the regulator, translates to a cost of £8,000 for each of Britain’s 25m households. Times: “Npower’s German parent company could ultimately choose to put its money elsewhere. For example, 53 new nuclear plants are under construction round the world, with another 469 planned or proposed. In Britain, eight are on the drawing board. Half are planned by Horizon, the joint venture formed by Npower and its rival Eon last year. EDF Energy, the French giant, and its partner Centrica want to build the rest.”241

29.3.10. Siemens becomes the fourth wind turbine manufacturer to announce it will manufacture in the UK, with an £80m investment in a plant to build offshore wind turbines. The others are Mitsubishi, GE and Clipper.

These plans have been greeted as a vote of confidence in the offshore wind business, which currently accounts.242

30.3.10. UK to rule out national gas storage to secure supply. DT: “A spokesman for the Department of Energy and Climate Change declined to comment, but added that it had been reluctant to sanction national storage in the past for fear of discouraging commercial investment.”243

Further delays at Okiluoto fuel talk of Areva chief's sacking. The new nuclear plant is already three years behind schedule and more than €2bn ($2.6bn) over its €3bn budget, and now the ongoing dispute between Areva and the Finnish regulator – on top of the defeat in Abu Dhabi  - is causing talk in the French media of “Atomic Anne”’s departure.244

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