Oil Hovers at $70 Despite Iran

• JUNE 17, 2009

By RUSSELL GOLD and CAROLYN CUI

Oil prices are reacting little to the violence in Iran, a sign that market sentiment may be reversing its recent course.

While unrest in a massive oil-producing nation would typically send oil prices surging, crude-oil futures fell for a third day, declining 15 cents on Tuesday to $70.47 a barrel at the New York Mercantile Exchange.

Instead of worrying about a reduction in supply, traders were focused much more intently on the perceived glut in energy markets that has appeared in recent months. That is a switch from the past few weeks, when attention focused on expectations that the economy would regain its footing and Chinese demand would rebound, causing oil prices to more than double from their February lows.

Thanks to continuous production cuts, spare capacity at the Organization of the Petroleum Exporting Countries is estimated to reach 4.65 million barrels a day in 2009, tripling the level of 2008 and providing an adequate buffer in times of a supply shock, according to the Energy Information Administration. Recession has weakened fuel demand, leaving more barrels sitting in oil tanks or floating at sea.

Even a catastrophic loss of all of Iran's current oil exports>>>

U.S. Foresees a Thinner Cushion of Coal

• JUNE 8, 2009

By REBECCA SMITH

Every year, federal employee George Warholic calculates America's vast coal reserves the same way his predecessors have for decades: He looks up the prior year's coal-reserve estimate, subtracts the year's nationwide production and arrives at a new official tally.

Coal provides nearly one-quarter of the total energy consumed in the U.S., and by Mr. Warholic's estimate, the country has enough in the ground to last about 240 years. A belief in this nearly boundless supply has led officials to dub the U.S. the "Saudi Arabia of Coal."

But the estimate, recent findings show, may be wildly overconfident.

While there is almost certainly as much coal in the ground as Mr. Warholic's Energy Information Administration believes, relatively little of it can be profitably extracted. Last year, the U.S. Geological Survey completed an extensive analysis of Wyoming's Gillette coal field, the nation's largest and most productive, and determined that less than 6% of the coal in its biggest beds could be mined profitably, even at prices higher than today's.

"We really can't say we're the Saudi Arabia of coal anymore," says Brenda Pierce, head of the USGS team that conducted the study.

No one says the U.S. is facing a coal shortage. But the emerging ranks of "peak coal" theorists argue that current production levels may be unsustainable and, if anything, create a false sense of security. David Rutledge, an electrical-engineering professor at the California Institute of Technology who has studied global coal production, figures the U.S. has about half as much recoverable reserves as the government says, which would work out to about 120 years' worth.

The Energy Information Administration, part of the Department>>>

Climate Change: Garbage Gets Fresh Look as Source of Energy

• MAY 15, 2009

By JEFFREY BALL

HEMPSTEAD, N.Y. -- Times change, and yesterday's environmental problem starts to look like today's solution. That is what is happening with trash.

Over the past two decades, the U.S. has shut down hundreds of pollution-spewing waste incinerators on the belief that burning detritus was a bigger environmental sin than burying it. Today, most American garbage is sent to landfills, some spanning hundreds of acres miles from the cities that generate the refuse. New York City, which tosses about eight million tons of nonindustrial trash each year, trucks much of it to big landfills in states such as Virginia and Pennsylvania.

Jeffrey Ball/The Wall Street Journal.

Covanta's Hempstead, N.Y., plant burns nearly a million tons of trash a year.

Landfills have been convenient. But they are falling out of favor as improved technology and changing environmental priorities start to upend the old thinking about garbage.

Past orthodoxy held that burning trash was bad because it spewed toxic substances into the air. In an era when the big environmental threat was localized pollution like smog and cancer-causing plumes, landfills seemed the lesser evil.

Dirty air is still a concern, but now it has been eclipsed by fears of global climate change. In that calculus of environmental harm, recent research suggests, burning trash is better than burying it.

The appeal of most modern incinerators is that they don't only torch trash. They also use the heat from the incineration to boil water, which creates steam, which in turn generates electricity. Yet trash incineration produces just 0.4% of the country's electricity. Even if all U.S. garbage were burned, it wouldn't produce anywhere near enough power to meet the country's energy needs. But as concern about climate change grows, any renewable source of energy -- even a pile of garbage -- seems appealing.

Landfills, too, produce potential fuel -- in the form of methane,>>>

Power potential off Maine's coast whips up interest

Wind energy developers see assets that could help launch an industry

By TUX TURKEL, Staff Writer May 17, 2009

enlarge Courtesy Principle Power Inc.

A deep-water wind farm like the one illustrated here might be built off the coast if Maine attracts a successful demonstration project.

enlarge Courtesy Blue H USA

A prototype platform that supports a wind turbine floats in the harbor of Brindisi, Italy. Blue H USA tested the platform in the Adriatic Sea and is now building the first unit for a planned floating wind farm to supply the power needs of 75,000 Italian homes.

MORE ONLINE

FOR INFORMATION about Maine's Ocean Energy Task Force, go online to www.maine.gov

International energy companies are looking at Maine to test new designs for massive wind turbines and support structures that would float in deep water, out of sight of the coast and in line with the strongest breezes.

Two of the businesses have been attending monthly meetings of Maine's Ocean Energy Task Force, which must identify up to five offshore demonstration sites before year's end.

The task force is considering a large amount of information, everything from water depths and wind speed to whale and bird migration routes. The goal is to locate areas that have robust wind but where turbines wouldn't bother fishermen, boaters, coastal residents and wildlife.

Successful test sites could make Maine a global contender for billions of dollars in energy investment over the next decade or so. They also would be a proving ground for the vision that offshore wind can someday heat Maine homes and power automobiles, freeing the state from dependence on petroleum.

Wind farms in Europe's shallow coastal waters have become common and are expanding. The United States is way behind in rolling out this technology, but shallow-water wind farms are pending along the East Coast in Massachusetts, Rhode Island, New Jersey and Delaware.

Meanwhile, engineers have grander visions. They have begun testing platforms that weigh hundreds of tons, float in more than 100 feet of water and support towers that stand nearly the length of a football field.

On a commercial scale, a floating, deep-water wind farm could have more than 100 turbines and generate the electricity equivalent of a large gas or nuclear power plant.

Prototypes have been placed off Norway and Italy, and are planned for Portugal and the United Kingdom. In the United States, demonstrations are proposed in Massachusetts and Oregon.

Maine has so far been left on the sidelines,>>>

Lower Costs Give Oil Firms Breathing Room

• MAY 20, 2009

By BEN CASSELMAN

A long-awaited drop in the cost of drilling and maintaining wells has finally materialized, easing the pressure on oil and natural-gas producers whose profits are being squeezed by lower prices.

Executives at the companies that own and develop fields complained for months that as tumbling energy prices ate into revenue, margins were being hurt by the stubbornly high cost of materials, labor and drilling services needed to get oil and gas out of the ground. In recent weeks, that has finally begun to change.

Lower costs, along with a modest rebound in oil prices to more than $55 a barrel, helped several companies deliver better-than-expected earnings in the first quarter.

"We've certainly seen a cost response almost everywhere now," said John Richels, president of oil and gas producer Devon Energy Corp.

The Oklahoma City company said its costs have dropped 10% to 15% from the beginning of 2009 and predicted they will come down another 10% to 20% before the year is out. The decline helped mitigate Devon's $4 billion loss in the first quarter driven by the diminishing value of its oil reserves.

Costs began falling in the first quarter, and the trend has accelerated in recent weeks. XTO Energy Inc., another producer, reported earlier this month that drilling costs fell 15% to 20% in April alone.

"Almost overnight, the costs have dropped like a rock," said Dan McSpirit, an analyst with BMO Capital Markets in Denver.

and much more here>>>