Archive for the ‘Energy’ Category

US shale oil boom visible from space

October 21, 2014

The drop in oil prices continues though somewhat slowed down by Chinese import demand:

WSJU.S. and global crude benchmarks ended lower Monday amid choppy trading and concerns that member nations of the Organization of the Petroleum Exporting Countries will maintain high production levels in a bid to compete for market share despite growing global crude supplies.

The current drop in oil prices is put down to a glut on the market caused by the boom in shale oil production in the US and the slow-down in the global economy.

The boom in shale oil production is even visible from space.

Satellite Images Reveal How the U.S. Oil Boom Is Creating New Cities

bakken shale field shows up from space Image NASA/io9

io9This image from NASA reveals a massive cluster of lights in what was — until recently — desolate prairie. This is the Bakken Shale, an oil-rich rock formation stretching across parts of North Dakota, Montana and Canada. The lights are from the illuminated derricks, local boomtowns and gas flares of the oil fields.

Misguided alarmists who have demonised fossil fuels don’t like this. But I find the picture and the visibility of the shale production greatly encouraging. Carbon dioxide has no significant deleterious impact on climate and the availability of fossil energy is what will ensure continued human development.

The Bakken Shale field is a vast resource across Montana, North Dakota, Sasketchewan and Manitoba and a significant contributor to the game changing advent of shale oil and shale gas.

The Bakken Shale ranks as one of the largest oil developments in the U.S. in the past 40 years. The play has single-handedly driven North Dakota’s oil production to levels four times higher than previous peaks in the 1980s. As of 2012, ND is second to Texas in terms of oil production and boasts the lowest unemployment rate in the country at ~3%.

The Bakken Shale Play is located in Eastern Montana and Western North Dakota, as well as parts of Saskatchewan and Manitoba in the Williston Basin. Oil was initially discovered in the Bakken play in 1951, but was not commercial on a large scale until the past ten years.

… The Bakken is estimated to hold as much as 400 billion barrels of oil equivalent in place.

US shale fields map EIA


Can consumer countries fuel global growth with sharply reduced oil prices?

October 20, 2014

Oil prices have “crashed”.

Currently prices are at less than $80 per barrel compared to over $110 in June and the peak of $147 just before the financial bubble burst in 2008. It seems that it is due to the oil glut brought about by the shale oil revolution in the US together with a downturn in global growth. The $147 peak was, I think, more of a trial balloon by the oil producers to test where the resistance lay and the producers concluded that a level of a little over $100 would maximise profits and was sustainable. But I suspect that this $100 level itself has contributed to delaying and prolonging the recovery. Not only because of the increased direct costs to the oil consumer but also due to its knock-on effects which have unnecessarily raised the cost to all electricity consumers. The prolongation of the path to recovery in Europe is certainly – if only partly – due to the very high energy prices that prevail. But right now it is the abundance of shale oil and gas which seems dominant.

BloombergBut the bigger factor appears to be surging global oil production, which outpaced demand last year and is shaping up to do so again in 2014. To try to keep prices high, Saudi Arabia, the world’s biggest petroleum exporter, has reduced its oil production from 10 million barrels a day—a record high—in September 2013 to 9.6 million as of Sept. 30. That hasn’t done much to raise prices, mostly because other OPEC countries are pumping more crude as the Saudis try to slow down. Sharply higher production increases from Libya and Angola, along with surprisingly steady flows out of war-torn Iraq, have pushed OPEC’s total output to almost 31 million barrels a day, its highest level this year and 352,000 barrels a day higher than last September. Combined with the continued increase in U.S. oil production, the world has more than enough oil to satisfy current demand.

crude oil price history 2000-2014

crude oil price history 2000-2014

But this crash in oil prices is probably a “good thing”.

The additional revenues from increasing oil price to the few in the oil producing countries have not been sufficient to counter the hit to the many in the consuming countries. Much of the additional revenue has gone not to fuelling growth but in blowing up new real-estate bubbles.

The additional spending power in consumer countries with reducing oil price is spread among the many (at the lower end of the wealth scale) whereas the reduction in producer oil revenues is generally spread among an affluent few. My contention is that the additional revenues with high oil price in – for example –  the Middle East does not need to be spent on real things which could fuel growth. Revenues in Saudi Arabia and Qatar and other countries have fuelled bubbles and jihad instead of just growth. A great deal went instead into very high margin, weapons systems and to the imaginary values of real estate. In Russia the oil revenue did contribute to some growth but there was still a large proportion spent on imaginary values of various bubbles (which by definition cannot contribute to growth). My simple calculation tells me that 1000 people buying washing machines in China contribute more to global growth than one person spending the same amount on an apartment (his second or third home) in London. A $10 drop in oil price is said to shift 0.5% GDP growth from producer countries to consumer countries. But the pattern of consumption where the “few” fuel the bubbles of imaginary value while the “many” consume mundane goods and services means that the real effect on growth is greater than a net zero. It is shifting an ineffective 0.5% to a more efficient consumption for growth. The net effect is probably a growth in global GDP of 0.2 – 0.3%. Similarly the purchase of large-volume, low-margin goods and services provides more growth and jobs than spending the same amount on low-volume, high margin goods and services. Spending $1000 on an 80% margin Gucci handbag provides less direct growth and fewer direct jobs than buying ten $100, 10% margin travel bags.

Historically – though it is a relatively crude generalisation – low oil price has usually given – or coincided with – consumer-led growth and stability.

crude oil price history 1970-2014

crude oil price history 1970-2014

Some oil producers are more vulnerable than others to the fall in expected revenues. Russia’s budget needs an oil price of over $100 to be balanced. Venezuela spends nearly all of its revenues as it is generated and has nothing put by. The war-torn areas of the Middle East also have nothing put by. Saudi Arabia and the Gulf States have put by vast reserves though some of it is in “bubble” values. A pricking of some of the bubbles they have inflated is probably no bad thing. It is also no bad thing if they have to fall back on reserves and have less excess cash to fund jihadists from Afghanistan to Libya.

Most Asian countries are oil importers and gain from a low oil price.

Clarion Ledger: The picture is reversed in Asia, where most countries are major importers and some subsidize the price of fuels.

China is the second-largest oil consumer and on track to become the largest net importer of oil. Falling prices will provide China’s economy some relief, according to Huang Bingjie, professor from the School of Economics and Management at China University of Petroleum. But lower oil prices won’t fully offset the far wider effects of a slowing economy.

India imports three-quarters of its oil and analysts say falling oil prices will ease the country’s chronic current account deficit. Samiran Chakraborty, head of research in India for Standard Chartered Bank, also says the cost of India’s fuel subsidies would fall by $2.5 billion during its current fiscal year if oil prices stay low.

Japan imports nearly all of the oil it uses. Following the accident at the Fukushima Dai-Ichi nuclear power plant in 2011, Japan has turned more to oil and natural gas, which is priced based on oil, to generate electric power.

The picture is a little more mixed in the Americas and Europe:

Low prices could eventually threaten the boom in oil production in such countries as the U.S., Canada, and Brazil because that oil is expensive to produce. Investors have dumped shares of energy companies in recent weeks, helping to drag global stock markets lower.

For now, lower crude oil and fuel prices are a boon for consumers. In the U.S., still the world’s biggest oil user, consumer spending accounts for two-thirds of the U.S. economy, and lower energy prices give consumers more money to spend on things other than fuel.

The same is true in Europe. Christian Schulz, senior economist at Berenberg Bank, says that a 10 percent fall in oil prices would lead to a 0.1 percent increase in economic output. That’s meaningful because the 18-country currency union didn’t grow at all in the second quarter.

There could be another market crash coming though it is not likely to be as deep as the 2008 crash. But to get back onto a solid, sustainable growth path again it does need the oil consumer countries to grow. And that probably needs a steady oil price at less than $70 per barrel. The oil producer countries will have to revamp their economies to live with the loss of their monopoly as the production of oil from shale spreads.

Gas from methane hydrates within a decade?

October 3, 2014

Gas production from the hydraulic fracturing (fracking) of shale is already well established (even booming) in the US. Huge amounts of gas and oil bearing shale (as much as all known reserves of natural gas) around the rest of the world are yet to be exploited. But the methane hydrates on the sea beds dwarf all the known fossil fuel reserves put together.

The sheer abundance of methane hydrates around the globe and the thought that much of this gas could soon be economically extractable is almost intoxicating for those involved.

“The worldwide amounts of carbon bound in gas hydrates is conservatively estimated to total twice the amount of carbon to be found in all known fossil fuels on Earth”.


Methane Hydrate Resources per Der-Spiegel

Methane Hydrate Resources per Der-Spiegel

Methane hydrate deposits are so widespread around the world’s coastlines that cartel formation will be almost impossible. The technology for extraction however could become a very hot property. The Japanese – who don’t have any shale but do have access to methane hydrate deposits – have been leading the charge for extraction of gas from methane hydrates and tests have been promising. The US and India and China are also active but the Japanese are probably closest to commercial production. Now 11 Japanese companies have formed a consortium to exploit the resource and conduct larger production tests following the successful extraction test carried out by the Japanese government in 2012. Japan could have commercial quantities of methane hydrate gas flowing within a decade.

Natural Gas Daily:

A group of 11 Japanese companies have formed a joint venture to conduct production tests of offshore methane hydrates – an unconventional resource seen as a potential game changer for the world’s largest LNG importer. 

Led by Japan Petroleum Exploration (Japex) and starting with a capital contribution of ¥300 million ($2.8 million), Japan Methane Hydrate Operating Co. (JMH) will provide contractor services and carry out field operations during the medium- and long-term production tests sponsored by the government. 

The JV partners will each share their expertise and technology to support the exploration and testing, JMH said in its first press release on Wednesday. 

“A substantial quantity of methane hydrate is estimated to be in the offshore areas around Japan. Serving as a new domestic energy source, with the potential to make a major contribution to a stable national energy supply for Japan, technological development is necessary for its commercialisation, including the establishment of production technologies,” the company said.

The Japanese government successfully produced the world’s first methane hydrates in March 2012, after drilling an experimental well in the offshore Nankai Trough and carrying out a production test that exceeded expectations (see Japan flows hydrates in landmark offshore test, 12 March 2013). 

That was followed two months later by a steady flow of gas from methane hydrates in Alaska’s North Slope, which a partnership between the United States Department of Energy (DOE), ConocoPhillips and Japan’s state-run JOGMEC called a “successful, unprecedented test of technology”.  ……. 

The government has said it expects to develop the technology needed to produce gas from methane hydrates by about 2018, although it remains to be proven whether the resource will be commercial (see Methane hydrates seen as the next big unconventional gas, 22 April 2013). 

Methane hydrates appear in Arctic sediments and below continental shelves as far apart as India and New Zealand. Worldwide deposits are estimated at up to 20,000 trillion cubic metres of gas – compared with 185.7 tcm of proven gas reserves in the world at the end of 2013, according to BP statistics. …… 

The JMH JV includes Japex (operator, 33%), Japan Drilling Co. (18%), Inpex (13%), Idemitsu Oil & Gas (5%), JX Nippon Oil & Gas Exploration (5%), Nippon Steel & Sumikin Engineering Co. (5%), Chiyoda Corp. (5%), Toyo Engineering Corp. (5%), JGC Corp. (5%), Mitsui Oil Exploration (5%) and Mitsubishi Gas Chemical Co. (1%). 

With new natural gas reserves being found in the Arctic and with all the shale gas yet to be extracted and, now, with the vast amount of methane hydrates available, “peak gas” is at least 1,000 years away.

Oil reserves to rival Saudi Arabia’s found in the Russian Arctic

September 28, 2014
Kara Sea - Arctic  Google maps

Kara Sea – Arctic Google maps

So much for peak oil!

And that’s even without taking shale oil and shale gasand methane hydrates into account.

World BulletinA joint venture between Rosneft and ExxonMobil has discovered a huge amount of oil under the Arctic. The state-run Russian oil company announced on Saturday that the University-1 well struck oil in the Kara Sea.

Igor Sechin, the head of Rosneft, said the “oil trap” has 338 billion cubic meters of gas and more than 100 million tonnes (733 million barrels) of oil. The total resources in the area are estimated at 13 billion tonnes (87 billion barrels) of oil equivalent, according to the Rosneft statement. According to experts, the amount of oil and gas is comparable to the resource base of Saudi Arabia.

Rosneft and ExxonMobil started drilling the University-1 well, the world’s northernmost well, in August. The field will be named Pobeda, which means “victory” in Russian

Sanctions against Russia could deprive ExxonMobil of some of the benefits due to them. Even if sanctions are relatively short-lived the Russians will surely extract their pound of flesh while they can.

ExxonMobil announced last Friday that the U.S. Treasury Department has granted it a licence to “wind down” operations at the well, in response to U.S. and EU sanctions imposed on Russia over the unrest in Ukraine.

However the Russians are still dependent on technology from the large oil companies for drilling and exploitation in these frigid conditions. They also have vast quantities of oil and gas shale in Siberia the value of which needs to be protected. The timing for the development of Arctic reserves then becomes a geopolitical and economic strategy call. It makes most sense for Russia not to flood the market and to keep gas prices to Europe high and growing. But the potential availability of this Arctic reserve – even if production is at least a decade away – adds another arrow in the Russian quiver.

But the doomsday scenarios of “peak oil” or catastrophic depletion of gas and oil reserves have vanished over the horizon – at least for the foreseeable future,


Swedish investment in wind power collapses while waiting for new subsidies

September 22, 2014

The simple fact is that wind power investment depends upon subsidies. The greater the subsidy offered the greater the investment. The higher the electricity price the greater the value of any subsidies and the greater the investment.

Subsidies just don’t work.

And in the meantime the world has begun to cool.

From Swedish Radio:

During the second quarter of this year, decisions were made to invest in future wind power totaling 37 megawatts, down 83 percent compared with the same period last year according to statistics from the Swedish Federation of Wind Energy.

One reason for the decline is the low price of electricity, another is that the industry is waiting for next year’s so-called checkpoint in parliament on changes to the certificate system, a decision which, according to Annika Helker Lundström, CEO of Swedish Wind Energy, will be of great importance for Swedish wind power company.


The certificate system was introduced in 2003 and means that the government supp…orts producers of renewable electricity by handing out certificates worth one megawatt per piece which can then be sold to electricity suppliers. Electricity suppliers are in turn obliged to buy a certain amount of renewable electricity.

The current system is certified to award equivalent to 25 terawatt-hours by 2020, and already has a certificate for over 20 terra watt hours distributed. The Agency has proposed to the government that more certificates to be awarded and the dividend period is extended to 2030.

This should increase the willingness to invest in the electricity generators.

Drinking water contamination caused by weak water wells and not by fracking

September 16, 2014

It is fashionable for environmentalists to blame fracking for all manner of evils as a matter of faith. They have proclaimed that fracking causes earthquakes, water table contamination, emission of dangerous gases, damage to house price levels and even damage to crops. Such claims are usually based on no evidence whatsoever but presented as gospel.

A new paper published in PNAS reports on real experimental measurements (not just a computer model) using noble gases to trace methane leakage into drinking water in 130 water wells in Pennsylvania and Texas. They find that drinking water contamination was caused by weak walls and well construction faults and not by fracking.

TH Darrah et al, Noble gases identify the mechanisms of fugitive gas contamination in drinking-water wells overlying the Marcellus and Barnett Shales, 


Hydrocarbon production from unconventional sources is growing rapidly, accompanied by concerns about drinking-water contamination and other environmental risks. Using noble gas and hydrocarbon tracers, we distinguish natural sources of methane from anthropogenic contamination and evaluate the mechanisms that cause elevated hydrocarbon concentrations in drinking water near natural-gas wells. We document fugitive gases in eight clusters of domestic water wells overlying the Marcellus and Barnett Shales, including declining water quality through time over the Barnett. Gas geochemistry data implicate leaks through annulus cement (four cases), production casings (three cases), and underground well failure (one case) rather than gas migration induced by hydraulic fracturing deep underground. Determining the mechanisms of contamination will improve the safety and economics of shale-gas extraction.

A key source of groundwater contamination (labeled 5, center right) caused by faulty well casings. Credit: Image courtesy of Thomas Darrah, The Ohio State University

Press Release:

….  neither horizontal drilling nor hydraulic fracturing of shale deposits seems to have caused any of the natural gas contamination.

“There is no question that in many instances elevated levels of natural gas are naturally occurring, but in a subset of cases, there is also clear evidence that there were human causes for the contamination,” said study leader Thomas Darrah, assistant professor of earth sciences at Ohio State. “However our data suggests that where contamination occurs, it was caused by poor casing and cementing in the wells,” Darrah said.

In hydraulic fracturing, water is pumped underground to break up shale at a depth far below the water table, he explained. The long vertical pipes that carry the resulting gas upward are encircled in cement to keep the natural gas from leaking out along the well. The study suggests that natural gas that has leaked into aquifers is the result of failures in the cement used in the well.

It’s coming, but don’t invest just yet in mining Helium-3 on the moon

August 16, 2014

Helium (4He) is the second most abundant element in the known Universe (after hydrogen) but only makes up 5.2 parts per million (ppm) of the Earth’s atmosphere. Helium-3 (3He) is an isotope of helium with two protons and one neutron. It is not radioactive and very rare on Earth (7 parts per trillion) but exists in recoverable concentrations in the lunar topsoil (in the top 2 -3 m of lunar regolith). It is even more abundant on the gas giants Jupiter, Saturn, Uranus and Neptune.

Lunar soil sample #75501 brought back by Apollo 17 in 1972 revealed the presence of He-3 and since then every country planning moon missions has the vision of mining for 3He on the moon and of vast quantities of energy production by means of a aneutronic fusion process on earth. (For old fogies like me, 1972 was the year of Watergate!)

In fusion reactions neutrons are “nasty”. They are very hard to contain and make other materials radioactive on collision. The first generation fuels of Deuterium and Tritium (reactions 1 and 2 below) produce many neutrons. A second generation with Deuterium and 3He only produces a few. A 3He – 3He reaction would produce none.

Kulcinski: Fusion Energy could provide that new energy source in the middle of the 21st Century. ….. However, ……  the DT Tokamak does not appear to be the ultimate answer. The problem lies in both the DT fuel cycle, which emits 80% of its energy in highly damaging and radioisotope producing neutrons, and in the complex design of the Tokamak.

fusion reactions after Kulcinski

fusion reactions after Kulcinski

But the promise of having 3He available to produce power is immense.


Adapting to climate change requires the further development and use of fossil fuels

July 31, 2014

The single thing that differentiates the human species from every other known species on earth has been the control and use of fire.The step change then from primitive to modern humans has been due not least to the control and development of the combustion process and the utilisation of fossil fuels. This in turn has multiplied many times the intensity of energy available to be harnessed by man. I would suggest that the human capability of handling change is largely a function of the power intensity available.

power intensity

power intensity

Fossil fuels have been demonised (by association with carbon dioxide emissions) for the last 30 years. In spite of that most  of the growth in the developing world has been – and continues to be – powered by fossil fuels. Fortunately the lack of evidence of any significant linkage between man-made carbon dioxide and global warming  (which is still the politically correct ideology) is beginning to be realised. The unnecessary, misplaced and ineffective increase of electricity prices in countries which have curtailed their use of fossil fuels has prolonged the recession and has cost many millions of jobs.

We have now had almost 20 years with the highest level ever of fossil fuel utilisation but “global temperature” has remained stubbornly static. In the last decade global temperatures have declined slightly. The hypothesised link between man-made carbon dioxide (which constitutes only about 3% of carbon dioxide emissions) and global temperature is well and truly broken. All the various climate computer models – which build on this link being amplified – have failed miserably.

The indicators of a global cooling cycle having started are piling up.

  1. There is more ice in the antarctic than has ever been measured
  2. There is more ice in the arctic than about a decade ago
  3. Total ice cover is higher now than has ever been measured
  4. Ice cover on the Great Lakes reached levels not seen for over 50 years and has persisted into the spring (even summer) later than has been observed for at least 40 years.
  5. The expected super El Nino forecast for this year has been dampened by a cooling Pacific and only a mild El Nino event – if at all – is now to be expected
  6. Sea level rises are no different to the long term average for sea level recovery since the last glacial minimum and may even have slowed.
  7. The deep oceans are cooling and are no repository of “hidden heat”
  8. The net cooling effect of clouds has been underestimated in nearly all models and cloud cover over the world is increasing (slightly).
  9. Man made water vapour is of greater significance than man made carbon dioxide for climate effects. But man made water vapour is almost insignificant compared to the water vapour flux due to evaporation and respiration.
  10. Solar effects are virtually ignored by all climate models but the sun does not much care for models and is reaching a low level of activity comparable to the Dalton or Maunder Minima.

Crying wolf about global warming has been the politically correct thing to do for 3 decades. Before that it was politically correct to be alarmist about the coming ice age. No doubt all the old fears about an ice age can be dusted off and recycled.

Climate change has been the most powerful force which has shaped human evolution and expansion. Sea level changes and patterns of precipitation and desertification have driven both evolution and migrations. Sea level during an ice age is about 120 m lower than it is today. More land is exposed in equatorial and tropical regions during a glacial period while land is rendered uninhabitable by the ice sheets of the north. But even primitive humanity survived during the glacials.

It is the global cooling cycles and not global warming cycles which will place the greatest demands on farming and energy. The greatest sea level change that humanity has had to – and will have to – adapt to  is the 120 m difference between glacial and interglacial conditions. During an ice age precipitation will drop sharply and river water flows will decline. Hydro power will all but dry up. It is the inevitable coming of the next ice age that will pose the real challenge – not the 1 m sea level rise that may come with another warming cycle. And when the ice age comes again it will be fossil fuels which will keep the home fires burning. It is the further exploitation of nuclear energy and fossil fuels in all its forms – coal, oil, natural gas, shale gas, gas from methane hydrates – that will be needed. It is the availability of power at the intensities provided by nuclear power and fossil fuel combustion which is what will provide humans with the wherewithal to cope with climate change, whether warming or cooling, but especially when the next ice age begins.

Whatever the alarmists would have us do in the short term, reality will eventually bite. The use of fossil fuels will – thankfully – continue as will the exploration for new sources of gas. The next generation of nuclear power plant will be developed – even though nuclear alarmism has led to a dearth of nuclear engineers. No doubt some market niches will be filled by wind and solar power but that will not be very significant in the large picture.


The end of the road for the large Alstom gas turbines?

July 7, 2014

The large (>50MW) Alstom gas turbines (GT11N2, GT13E2, GT24 and GT26) represent a line of technology which derives mainly from the BBC range of products (developed further as ABB) and acquired by Alstom in 1999. At that time Alstom’s licence with GE came to an end. But as GEC-Alsthom, Alstom had also inherited the gas turbine technology which came out of GEC in the UK. In the current Alstom range not much remains of the GEC tradition. At the smaller end Alstom also once had the gas turbine technology of the Ruston engines from Lincoln and acquired the ABB range of small machines (which themselves carried forward the developments as ASEA and some of the Sulzer range). But the entire range of industrial (<50MW) gas turbines was divested to Siemens in 2003 (and they are doing very well there).

Now as GE takes over Alstom’s power business (which has still to get final regulatory approval but looks to be a done deal), the days of the Alstom range of large gas turbines are strictly numbered. GE (and Siemens) have their own machines competing directly with the GT24 (60Hz) and GT26 (50Hz) and I do not expect that any more of these machines will ever be sold again. The sequential combustion design concept that these machines employ is so far from the GE approach that it seems impossible for any versions of these machines to continue. Alstom (as ABB) had adopted sequential combustion in the late 1990’s firstly to differentiate themselves from GE and Siemens and to get over their lack of access to advanced, high-temperature materials coming out of military jet engine programmes. Sequential combustion was first used/tested by BBC in the 1960’s 1948* though at much lower temperatures and ABB was trying to create a virtue out of a disadvantage – which the GT24 and GT26 did eventually do, but not without great problems and great cost.

GE may well have some benefit from some of the component solutions that Alstom has been forced to develop – at great expense – to get over the challenges posed by sequential combustion. Similarly some of the low-NOx solutions developed by Alstom could possibly be of use for GE. There may be some tricks for GE to pick-up regarding compressors. Certainly GE will continue with the very lucrative service market in maintaining the Alstom fleet and this will continue for perhaps 10 or 12 years at most. So while GE will benefit from the service revenue and by the reach of Alstom’s global sales organisation, the GT24 and GT26 – as products – have very little benefit to offer. It will not be possible for GE to absorb all the manpower currently employed with Alstom’s gas turbines. Not all those currently involved with the design and manufacture of the GT24 and GT26 will be needed for – or be able to switch over to – the design and manufacture of the GE range. GE’s global procurement network and its qualification of sub-suppliers is probably much more advanced than Alstom’s. I don’t expect that GE’s global sourcing will be much enhanced by the acquisition of Alstom’s Power business. Some job losses at Alstom locations are inevitable and I suspect these will be mainly in Switzerland while jobs in France will be somewhat protected by GE’s promises to the French government. At Belfort, Alstom produced GE machines under licence till 1999 and no doubt this will become GE’s centre for large gas turbines in Europe.

The GT11N2 gas turbine will probably die a natural death. It has not been a really competitive machine for over a decade and even though it has gone through many upgrades and cost reduction exercises, I do not think it offers GE any great advantages and they already have competing machines. The GT11N2 may have survived a little longer within the more restricted Siemens stable but even here it would have eventually withered.

The GT13E2 is possibly the only machine that may survive for a while under GE. It has some unique advantages with low-Btu fuels and could have a geographical market niche in Russia and the former CIS countries. But if it does survive it will do so only as a niche product. Again it would probably have had a longer life under Siemens but my guess is that it will not be sold for more than another 2 or 3 years.

The next market boom for large gas turbines – by my analysis – will come in the second half of 2015. This will be due partly to the 7-8 year “normal” business cycle and partly due to, and reinforced by, the advent of shale gas. And when that boom comes, the Alstom machines will be absent and there will be one less gas turbine technology available in the world. GE, Siemens and MHI will be the only three technologies left and they will be the main beneficiaries. But just three technologies are not enough. A growing market together with a dearth of technology suppliers will probably ensure the entry of another player into the field of large gas turbines.

(Actually Siemens and MHI get the best return at the lowest cost. They gain increased market space as Alstom’s machines disappear at no cost to themselves. GE gains no new products, gets the same increased market space and gets increased service revenue for Alstom machines. But GE has a large cost of acquisition and a great deal of hassle – and cost – to come as they restructure and integrate the Alstom business).

I would guess that this fourth player could well be Shanghai Electric with their newly acquired 40% stake in Ansaldo Energia. This has been something of a coup for Shanghai Electric. Doosan were also eyeing Ansaldo as a way of entering the gas turbine playing field (the entry barriers are too high for a scratch player). Both Doosan and Siemens had made bids for Ansaldo Energia but Siemens’ bid was essentially a defensive and a spoiling bid and they eventually withdrew. Doosan were the sole remaining bidder but it seems that Shanghai have pipped them at the post for this strategic acquisition.

* Correction – Sequential combustion was first used by BBC at Beznau in 1948, operating on distillate and with a TIT of 575ºC.

Fossil fuel combustion at an all time high (but global warming is absent)

June 18, 2014

The BP Statistical Review of World Energy 2014 is now out and the consumption of all fossil fuels has never been higher. Coal and gas consumption are particularly strong. And – even though many are in a state of denial about it – global warming has come to a stop over the last 18 years. In the last 10 years global temperatures show a slight downward trend.

There seems to be no purpose to the demonisation of fossil fuels other than for pandering to the religion of global warming. Consider the last 25 years. (I use 1988 as a reference point not only because 25 years should be enough to see some trends but also because the BP data is readily available from that date). During this 25 year period gas consumption has increased by over 80%, coal consumption by 0ver 70% and oil consumption by over 30%. The increased global coal burn since about 1999 is particularly striking. In the same 25 year period the carbon dioxide concentration in the atmosphere has increased from about 355 ppm(v/v) to about 395 ppm(v/v) – a rise of about 11%. And global temperatures have not increased at all for almost 2 decades.

Climate policy is policy without any objectives and without any means of checking any achievements. What exactly could we achieve by not using fossil fuels?

There is not a single climate policy proposed by the IPCC or by any government in the world  which has a definable and measurable climate benefit.

25 years of fossil fuel consumption

25 years of fossil fuel consumption

The global warming hiatus now extends to at least 18 years.

Global warming has gone missing

  • The RSS satellite dataset shows no global warming at all for 213 months from August 1996 to April 2014. That is more than half the entire 423-month satellite record.
  • The fastest centennial warming rate was in Central England from 1663-1762, at 0.9 Cº per century – before the industrial revolution began. It cannot have been our fault.
  • The global warming trend since 1900 is equivalent to 0.8 Cº per century. This is well within natural variability and may not have much to do with us.


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