An article in the Wall Street Journal talks about the faulty Mine and Safety Health Administration.
According the the Labor Department's inspector general, the administration has failed to toughen up regulations for mines. There hasn't been an a single mine that has been added to the list of "having patters or violation," despite the numerous mines that have clearly violated safety regulations.
This could be due to the competing interest of the company, therefore influencing the agenda of this agency. "The report noted that it took the agency 13 years to finalize pattern-of- violation regulations. The agency then failed to set reliable standards for determining when violations at a particular mine should trigger tougher enforcement," but it didn't. After this report, the Mine and Safety Administration are making a lot changes.
I find this particularly disturbing. Mining is a dangerous industry, so regulators should feel obligated to tighten up their policies; the safety of the miners should be their main concern, and if a company fails to do that, they should be penalized. In class, we were talking about ethics and to hear that the regulators are actually the ones who aren't doing what they are suppose to do. They are setting a bad example, so maybe that's why the there's so much corruption in the energy industry?
Thursday, September 30, 2010
Wednesday, September 29, 2010
One industry, countless possible careers
This week, I decided to examine some of the different positions available to those within the industry. The best way to do this, I concluded, was to simply browse the available jobs on the internet. I found that there is a vast variety in the positions available to those wishing to enter the industry, which is unsurprising. From an entry level drilling job where which is advertised as “outdoors, noisy, at heights, dangerous” to an engineering job where one is required to “provide process engineering support for capital projects and process safety improvements”. People with all variety of skills and experience are needed to fill the vast amount of labor and knowledge needed to keep the energy market going. As I do not wish to be an engineer or a driller, I began looking in the executive jobs.
On the first website that I searched there were over 1400 executive jobs available in the United States. They range from Project Manager, who is in charge of creating budgets and managing teams of engineers, to Sales Associates, who are in charge of ensuring that the companies get the highest amount of money for their product. There seems to be pretty much every conceivable job available for those that wish to work within the industry. I am curious how the nature of careers in the energy industry are being affected by the increasing demand for renewable energy.
http://careers.infooil.com
http://careers.infooil.com/fx/jobs/listings/1.346856/optimization.process.engineer.aspx
40 Years of Energy Panic
-Rianna Das
According the an article published in the Wall Street Journal entitled "40 Years of Energy Panic," the United States imports about 60% of its oil. Last November, before the infamous BP oil spill, a Shell executive, Marvin Odum, stood before Congress and deemed this large importation of oil. He stated that "We should not be satisfied with having other nations produce their energy for our use..." However, in this article, Holman Jenkins, an author of the Wall Street Journal, argues that relying on imports for oil is not necessarily a bad situation. He says that countries that rely more heavily on oil imports than the United States, such as India, China, and much of western Europe are experiencing tremendous growth and built high standards of living (online.wsj.com). He also claims that oil is a political problem maker and demonstrates this with the recent BP oil spill. He blames the Oil Pollution act of 1990 for this disaster. This act capped oil spill liability because of fears of putting the nation's energy in danger (online.wsj.com).
Personally, I found this article very interesting. Due to globalization and its effects, such as outsourcing, many Americans believe that we are losing our jobs to workers overseas. However, Jenkins makes the point that before the recent oil shortages, the United States was in a time of economic boom and we were importing just as much oil then (online.wsj.com). I also found the part about the Oil Pollution Act of 1990 very interesting. First, because it shows that government has a lot of influence over the energy industry and shows how regulation or, in this case, lack of regulation can determine decisions made by companies in the industry. I don't really understand why this act is still in affect, especially since it almost encourages companies to take risks that might hurt the environment because they will only be held responsible to a certain point.
This article discusses two companies that are leaders in the industry, especially in the American economy, BP and Shell. While this article does not mention specific jobs in the industry, in my opinion, the energy industry impacts every other industry. Without energy, it would be impossible to transport goods, work on computers, or produce products. Therefore, if the energy industry energy is not running efficiently, then it is hard for other industries to be successful.
Sources:
Oil-Sands Production
Oil-sands Production is a method in which you extract oil from sand,mud, and clay found in pond beds. This process was interesting to me because first I have never heard of this method, and second learning that "oil-sands production is on the verge of becoming the single biggest source of oil imports to the US." The environmental hazard that results from this process is runoff, when the blasting of sediment with high-powered water and chemicals seeps into streams and rivers. They do not dispose waste water properly.
Heated argument from environmental activists and concerned citizens has caused the energy firm to rethink its stance on occupational/enviromental-hazard. AlbertaSuncor Energy has turned its first oil-sand production field back to its original environment. They have taken steps to rehabilitate the environments they produce in, but the movement has been tough. they are making a proactive and necessary change to help the environment.
After reading this article I thought about the documentary "Gasland", a process known as hydro-fracturing for natural gas has caused some of the same environmental consequences. Hydro-fracturing is the process of blasting rock, once again, with chemicals to extract natural gas reserves. The water that is produced from this is contaminated, and not properly disposed usually ending up either in the regions water supply or worse actual well-water systems for actual human consumption. During the documentary deposits of gas expel through the pumps in people's houses, in effect creating flammable gas coming through clean water pipes. Watching and reading both of these sources helped me to understand why the 'green movement' has made so much headway in the past years.
These methods are harmful and dangerous, but the fact is there is a cost for every benefit. The old cliche, "There is no such thing as a free lunch." We want affordable energy. It has to rain to see a rainbow.
- Timothy D. Vallario
Source: Wednesday, September 29, 2010 - Vol. CCLVI No. 76, B7A "Suncor Turns Oil Waste to Wetland" By Edward Welsch.
Wednesday, September 22, 2010
New Energy Corporation Inc.
One of the new and emerging energy companies in the energy industry is the New Energy Corporation. It was founded in December 2003 and based in Calgary, Alberta. The company produces in-stream power generation products. "New Energy Corporation Inc. is a leading developer and manufacturer of in-stream power generation products." The company offers small generators and large generators.
Like many new energy companies, they are looking for alternative fuels; however, there's one distinction that makes them stand out from many other renewable fuel companies. This company uses energy within the water. Although many may argue that there has been many companies who do that, but they were one of the very few that has been successful. This is a result of the drive for alternative fuels. Additionally, their success has made other companies want to excel too.
http://www.newenergycorp.ca/About/NewEnergyCorporation/tabid/58/Default.aspx
Like many new energy companies, they are looking for alternative fuels; however, there's one distinction that makes them stand out from many other renewable fuel companies. This company uses energy within the water. Although many may argue that there has been many companies who do that, but they were one of the very few that has been successful. This is a result of the drive for alternative fuels. Additionally, their success has made other companies want to excel too.
http://www.newenergycorp.ca/About/NewEnergyCorporation/tabid/58/Default.aspx
Can Citizenre Transform the Energy Industry?
As I have previously stated in this blog, the Energy Industry is in for a big change in the very near future. The current giants are too entrenched in their ways to be the leaders in the shift that is coming. It will be the new companies, the innovators, who lead the way into the future of energy. Citizenre plans to be that change. They are “Aware of the energy landscape’s imminent change, and its remarkable opportunity, Citizenrē is positioning itself to be the world’s leader in the development of renewable energy infrastructure.” They plan to develop a framework for renewable energy. They have a goal of 25% net electricity produced renewably by 2025. This seems to be a difficult, yet somewhat plausible goal.
Citizenre believes they have the plan that can get the country to this goal. This plan involves removing the traditional barrier to home-owned solar panel-the high price of entry. A setup of solar panels can cost up to $25,000, making this an extremely steep price for all but the most avid renewable energy enthusiasts. With $650 million dollars in funding, Citizenre believes that it has the solution to this problem. They “will loan you a complete rooftop solar power system, install it for free and sell you back the power it generates at a fixed rate below what your utility charges” (Graham). This sounds amazing, perhaps too good to be true. Currently Citizenre is still in the planning stages and has missed several stated deadlines for beginning operation. They have an amazing concept, but I am skeptical of whether their plans will actually plan out. Citizenre is definitely a company to follow in the future, and if it begins to look as though they will truly come through with their promises then it will undoubtedly shake the energy industry to its core.
http://www.citizenre.com
http://www.wired.com/science/discoveries/news/2007/02/72752
Citizenre believes they have the plan that can get the country to this goal. This plan involves removing the traditional barrier to home-owned solar panel-the high price of entry. A setup of solar panels can cost up to $25,000, making this an extremely steep price for all but the most avid renewable energy enthusiasts. With $650 million dollars in funding, Citizenre believes that it has the solution to this problem. They “will loan you a complete rooftop solar power system, install it for free and sell you back the power it generates at a fixed rate below what your utility charges” (Graham). This sounds amazing, perhaps too good to be true. Currently Citizenre is still in the planning stages and has missed several stated deadlines for beginning operation. They have an amazing concept, but I am skeptical of whether their plans will actually plan out. Citizenre is definitely a company to follow in the future, and if it begins to look as though they will truly come through with their promises then it will undoubtedly shake the energy industry to its core.
http://www.citizenre.com
http://www.wired.com/science/discoveries/news/2007/02/72752
Ascent Solar Technology/Alternative Energy and its Impacts
by: Rianna Das
Ascent Solar is an example of a company that is, not only abiding by the limits of carbon dioxide, but also providing other companies with products that will help them to lower their emissions of carbon dioxide. Ascent solar is an example of the trend of alternative energy. With issues, such as the worry of peak oil production, alternative energy is a must for the world. This trend has encouraged companies to develop sustainable energy, such as solar powered energy, illustrated by the company, Ascent Solar, or other types of alternative energy, such as wind powered energy or hydropower. Sustainable energy means energy that does not negatively impact our environment. With the worries of global warming, companies must search for renewable energy that can eventually completely replace coal and oil before coal and oil run out.
This development of alternative energy has also encouraged companies that produce non-renewable types of energy to go "green." In other words, these companies must reduce their impact on the environment in order for their product to compete with alternative energy products. For example, BP has invested eight billion dollars in renewable energy research and Chevron has spend over 3 billion dollars in this same type of research (frost.com). This trend has also increased government regulation on oil and coal companies. For instance, mountain removal is a very common method of coal mining, which involves removing the entire mountain above a coal mine and then mining the coal. While this method is very effective (providing about 10% of the United States' coal), it is very detrimental to the environment. The Obama administration passed legislation in April of 2010 that will sharply curtail mountain mining and its effects (washingtonpost.com). While this will greatly help the environment affected by mountaintop removal, it will have a very negative impact on the economy nears the mountains, specifically in the Appalachian Mountains in Virginia, as it will destroy many jobs and removal the main industry for many towns (washingtonpost.com).
This development of alternative energy has also encouraged companies that produce non-renewable types of energy to go "green." In other words, these companies must reduce their impact on the environment in order for their product to compete with alternative energy products. For example, BP has invested eight billion dollars in renewable energy research and Chevron has spend over 3 billion dollars in this same type of research (frost.com). This trend has also increased government regulation on oil and coal companies. For instance, mountain removal is a very common method of coal mining, which involves removing the entire mountain above a coal mine and then mining the coal. While this method is very effective (providing about 10% of the United States' coal), it is very detrimental to the environment. The Obama administration passed legislation in April of 2010 that will sharply curtail mountain mining and its effects (washingtonpost.com). While this will greatly help the environment affected by mountaintop removal, it will have a very negative impact on the economy nears the mountains, specifically in the Appalachian Mountains in Virginia, as it will destroy many jobs and removal the main industry for many towns (washingtonpost.com).
American Pellet Supply
American Pellet Supply, LLC is a rapidly growing company which specializes in the innovative renewable resource of fuel pellets. Fuel pellets, which are mostly seen as fuel in Europe, are beginning to take hold in the energy-conscious United States. In Europe alone 50% of homes are heated by these fuel pellets or briquettes, and the United States has seen an increase for pellet production double over the past few years. American Pellet Supply, LLC (APS) is only two years old founded in 2008 based in Carlisle, Indiana. Their function is to produce "coal and cellulose waste into easily transported briquettes and pellets" driving the alternative fuel industry. Only after two years they have expanded to several other states including, Kentucky and Illinois. They produce weekly twenty tons of fuel brick/pellet and ship nationally, but expect after completion of more refined production facilities 100 tons per day, expanding the production exponentially.
The alternative fuel industry has seen its landscape changed dramatically in the past ten to twenty years. With the advent of nuclear,wind, and solar power other forms have been moved to the back of the shelf. This company's ingenuity is one reason why this alternative fuel market is taking off and growing. Things such as, waste from coal production can now realistically be manufactured to create more energy. This company took a negative and created a useful tangible product. Fuel experts conceive that the energy pellet/briquette market could become a multi-billion dollar industry. This industry would become one of the key players in the new fight for more fuel-efficient and cost-effective energy services.
With the emergence of a company such as APS the question comes to mind what effect will this market have on the trend for the energy industry and its many components? We have already seen its use in Europe, and can ascertain the popularity and affordability. If this new market were to take off in the United States then it would drastically change the energy industry by creating a new cost-effective and energy-efficient resource. Moving all the commotion from nuclear,wind, and solar power to something more appealing such as fuel pellets/briquettes.
- Timothy D. Vallario
Source:
Article: http://www.insideindiannabusiness.com/newsitem.asp?ID=43362
Supporting Site: http://www.aaaamericanpellet.com/about/index.php
The alternative fuel industry has seen its landscape changed dramatically in the past ten to twenty years. With the advent of nuclear,wind, and solar power other forms have been moved to the back of the shelf. This company's ingenuity is one reason why this alternative fuel market is taking off and growing. Things such as, waste from coal production can now realistically be manufactured to create more energy. This company took a negative and created a useful tangible product. Fuel experts conceive that the energy pellet/briquette market could become a multi-billion dollar industry. This industry would become one of the key players in the new fight for more fuel-efficient and cost-effective energy services.
With the emergence of a company such as APS the question comes to mind what effect will this market have on the trend for the energy industry and its many components? We have already seen its use in Europe, and can ascertain the popularity and affordability. If this new market were to take off in the United States then it would drastically change the energy industry by creating a new cost-effective and energy-efficient resource. Moving all the commotion from nuclear,wind, and solar power to something more appealing such as fuel pellets/briquettes.
- Timothy D. Vallario
Source:
Article: http://www.insideindiannabusiness.com/newsitem.asp?ID=43362
Supporting Site: http://www.aaaamericanpellet.com/about/index.php
Wednesday, September 15, 2010
Is there an ethical oil company?
It is impossible to deny that the oil industry as a whole has an extremely negative image in public consciousness. The picture of greedy oil executives seems burned into the American psyche. Are oil companies truly evil, megalomaniacal corporations bent on the destruction of the environment for their own personal profit? Of course not, yet the fact remains that the energy industry has wreaked havoc on the world. Obviously, the BP spill is the most pressing and recent example that comes to mind, but oil spills, and the general devastation of the natural world by these companies seems to be an expected part of obtaining our energy sources. Yet the public continues to demand affordable gas and electricity. Is there anything that a company can do to remain true to both morality and economic sensibility?
I decided to examine which particular oil companies are known to be the most ethical. I found two reports, one from 2008 published by Managements and Excellence, a company which purports to be a “leader in auditing, rating, consulting, return calculation and research services in connection with sustainability, governance, ethics, social and environmental responsibility, and transparency.” They placed Petrobas as the most ethical oil company, with Shell at number 3 and Exxonmobil at 11. What struck me, however, was British Petroleum taking the third most ethically responsible spot on this list. BP is, in my personal opinion, the antithesis of an ethical company. While that is a matter for a different discussion, I decided to do some further research to see if I could find any reports which corroborated this. I found a blog which discusses the ethicality of several oil companies. While I am not 100% confident in this source, it also lists BP and Shell among the most ethical oil companies. All of this leads back to the original question of whether an oil company can truly be principled.
The process of removing oil from the ground is, by its very nature, messy. We are in no position currently, to relinquish our need for oil. Thus oil companies must continue to exist regardless of their morality, and it is impossible for an oil company to have zero effect on the world around it. All that can be expected, in this case, is that the companies try their hardest to limit the damage that they do, and are open and honest about their policies.
http://www.management-rating.com/index.php?lng=en&cmd=100
http://makewealthhistory.org/2008/03/10/which-is-the-most-ethical-oil-company/
I decided to examine which particular oil companies are known to be the most ethical. I found two reports, one from 2008 published by Managements and Excellence, a company which purports to be a “leader in auditing, rating, consulting, return calculation and research services in connection with sustainability, governance, ethics, social and environmental responsibility, and transparency.” They placed Petrobas as the most ethical oil company, with Shell at number 3 and Exxonmobil at 11. What struck me, however, was British Petroleum taking the third most ethically responsible spot on this list. BP is, in my personal opinion, the antithesis of an ethical company. While that is a matter for a different discussion, I decided to do some further research to see if I could find any reports which corroborated this. I found a blog which discusses the ethicality of several oil companies. While I am not 100% confident in this source, it also lists BP and Shell among the most ethical oil companies. All of this leads back to the original question of whether an oil company can truly be principled.
The process of removing oil from the ground is, by its very nature, messy. We are in no position currently, to relinquish our need for oil. Thus oil companies must continue to exist regardless of their morality, and it is impossible for an oil company to have zero effect on the world around it. All that can be expected, in this case, is that the companies try their hardest to limit the damage that they do, and are open and honest about their policies.
http://www.management-rating.com/index.php?lng=en&cmd=100
http://makewealthhistory.org/2008/03/10/which-is-the-most-ethical-oil-company/
Chevron Misconducts.
Since I'm from California and cars are our main form of transportation, I decided to look up one of our main gas companies' corporate values: Chevron.
Chevron's mission statement: "We seek to develop a culture in which everyone believes that all incidents are preventable and that 'zero incidents' is possible."
When you look at Chevron's business ethics they seem to be a really respectable company. The website shows that they seem to be a responsible company. In 2007, they took the initiative to identify all their problems; they found 307 problems. In 2009, they fixed 299 of those problems. Sounds good? Of course.
However, when I googgled "Chevron misconducts," an article appeared indicating, that Chevron is not as responsible as they appear. In 2009, Texaco, which was bought by Chevron, dumped billions of toxic into the Amazon waterways in Ecuador. The company would face a $27 million liability charge. Although they did say the would try their best to clean up the waterways, the company participated in some unethical pre-trial behavior. Apparently, Chevron’s lawyers in Ecuador have tried to intimidate and harass the court-appointed expert and took water and soil samples at
higher elevations than the sources of contamination for testing. Additionally, the employees of the company interfered with evidence gathering by fabricating a security threats.
Reading this article makes me a little upset, since I believed Chevron was a trusted company; my parents fill up their cars at Chevron on a weekly basis. I think Chevron should not have done all those things. When I read that the assumed responsibility for the contamination, I was relieved, but when I read that they tried to hide the truth, I felt like I lost a lot of trust. Now, I want to look into all my local gas companies.
Chevron's mission statement: "We seek to develop a culture in which everyone believes that all incidents are preventable and that 'zero incidents' is possible."
When you look at Chevron's business ethics they seem to be a really respectable company. The website shows that they seem to be a responsible company. In 2007, they took the initiative to identify all their problems; they found 307 problems. In 2009, they fixed 299 of those problems. Sounds good? Of course.
However, when I googgled "Chevron misconducts," an article appeared indicating, that Chevron is not as responsible as they appear. In 2009, Texaco, which was bought by Chevron, dumped billions of toxic into the Amazon waterways in Ecuador. The company would face a $27 million liability charge. Although they did say the would try their best to clean up the waterways, the company participated in some unethical pre-trial behavior. Apparently, Chevron’s lawyers in Ecuador have tried to intimidate and harass the court-appointed expert and took water and soil samples at
higher elevations than the sources of contamination for testing. Additionally, the employees of the company interfered with evidence gathering by fabricating a security threats.
Reading this article makes me a little upset, since I believed Chevron was a trusted company; my parents fill up their cars at Chevron on a weekly basis. I think Chevron should not have done all those things. When I read that the assumed responsibility for the contamination, I was relieved, but when I read that they tried to hide the truth, I felt like I lost a lot of trust. Now, I want to look into all my local gas companies.
Offshore-Drilling Regulations Snagged by Climate Fight
This article explains the a new dilemma in the energy industry. Offshore drilling can cause much damage to the environment because it can cause displacement for aquatic life and can damage ecosystems. The government, specifically the Obama administration, wants to regulate offshore drilling because of these negative effects. However, the energy industry, along with some Democrats, feel that with stricter regulations on offshore drilling, many jobs would be lost. They argue that this would hurt the already damaged economy.
Out of this debate, rises the issue of what to do. Should the government push their stricter regulations on offshore drilling companies risking a possible hit to the economy? Or, should offshore drilling be left lightly regulated and be allowed to continue to damage the environment? Companies have responded in different ways. A company known as Minerals Management Service plans to give in to the new regulations and implement them by the end of October. Other companies, such as BP, have not responded so positively. With their recent involvement in the oil spill in the Gulf of Mexico, economically, BP cannot afford to be hit with tighter regulations. This ethical dilemma has not yet affected consumers because the regulations have not been pushed. However, if these stricter regulations do go into affect, they will push the prices of oil up. This means that consumers will be able to see the effects in an increase in gas prices. They will also see effects if these regulations are not pushed. They will see ecosystems crumble. While this is detrimental to the organisms that live in these environments, it will also impact the seafood industry. For example, the recent BP oil spill had a huge negative impact on the oyster industry.
Minerals Management Service is an example of a company who has taken corporate social responsibility to heart. They are not just worrying over losing profit over these stricter regulations. They are working to not harm the environment, even if that means spending more money on these new regulations. They have shown their commit to protecting the environment with their actions in implementing these new regulations.
Exxon Mobil is a key player in the industry. Their CSR involves education, environment, public health, human rights, and public policy. On their website, they state that they believe in creating a positive and lasing social impact by developing successful partnerships built on mutual trust and respect. Their mission statement says that Exxon Mobil is committed to being the world's premier petroleum and petrochemical company. They must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards. This mission statement shows that Exxon Mobil is committed to high ethical standards while achieving their goals.
The BP Debacle
This article titled "BP Reports Most of Blame on Others" from a September 8th posting, how BP shifted the majority of the blame of the spill on various contractors instead of BP itself.BP filed a report that basically showed every step of the production of the rig, and explained where mistakes were made. BP did admit to some blame in regards to management oversight, but argued cut corners were not their fault but rather contractors.BP blamed various companies including Halliburton for faulty work. Many accuse BP of trying to take "the smallest piece of the blame pie" and refer to BP as the orchestrator of the lynch mob who defends himself by saying "I did not bring the rope!".
The ethical conundrum here is was it paramount for BP to cast blame, or was it more important to take the blame and reconcile the fact they had a major influence on factors that led up to the oil spill? It was BP's moral obligation to not only help the families of those who died, but to the millions who will be affected and the ecosystems that may also be affected. Immediate consumer backlash was seen against BP when stocks began to plummet at record rates. BP has assets to stay marginally above water, but will BP ever truly regain customer trust again?
It can be argued though that BP ,regardless of shoveling the blame all over the grid, has made a concerted effort to help relieve the Gulf Coast region both financially and environmentally. BP were the first responders to the explosion, and have acquired numerous oil cleaning supplements such as, ships,boons,dispersants etc. 'they have run add campaigns promising as long as the oil is there they will be there to clean it up. One other fact is that BP has already began to pay out damages to local businesses and relief foundations.
BP promises their values are by "to display some unchanging,fundamental qualities- integrity, honest dealing, treating everyone with respect and integrity, striving for mutual advantage and contributing to human progress". To an objective observer it may seem that BP has tried to make as good an effort as possible in this accident, but subjectively you can easily argue that they caused this very problem leading to a need to take action. The fact is only time will tell if BP remains true to their word, and remains in the Gulf Coast region until the disaster is mended.
-Timothy D. Vallario
Source: online.wsj.com/article/SB10001424052748703453804575479273612869274.html
By. Ben Casselman and Spencer Swartz
The ethical conundrum here is was it paramount for BP to cast blame, or was it more important to take the blame and reconcile the fact they had a major influence on factors that led up to the oil spill? It was BP's moral obligation to not only help the families of those who died, but to the millions who will be affected and the ecosystems that may also be affected. Immediate consumer backlash was seen against BP when stocks began to plummet at record rates. BP has assets to stay marginally above water, but will BP ever truly regain customer trust again?
It can be argued though that BP ,regardless of shoveling the blame all over the grid, has made a concerted effort to help relieve the Gulf Coast region both financially and environmentally. BP were the first responders to the explosion, and have acquired numerous oil cleaning supplements such as, ships,boons,dispersants etc. 'they have run add campaigns promising as long as the oil is there they will be there to clean it up. One other fact is that BP has already began to pay out damages to local businesses and relief foundations.
BP promises their values are by "to display some unchanging,fundamental qualities- integrity, honest dealing, treating everyone with respect and integrity, striving for mutual advantage and contributing to human progress". To an objective observer it may seem that BP has tried to make as good an effort as possible in this accident, but subjectively you can easily argue that they caused this very problem leading to a need to take action. The fact is only time will tell if BP remains true to their word, and remains in the Gulf Coast region until the disaster is mended.
-Timothy D. Vallario
Source: online.wsj.com/article/SB10001424052748703453804575479273612869274.html
By. Ben Casselman and Spencer Swartz
Wednesday, September 8, 2010
Large Gasoline Inventory Leads to Lower Prices
Consumers should be in for a relatively cheap stretch when buying gasoline futures are continuing to remain low. This is due to the gas inventories rising by 5% during the summer, when they are normally expected to fall. This increase in inventories is due to higher production of oil within the United States as well as greater imports.
There has also been an increased stockpiling of oil due to the worry of hurricanes disrupting gulf oil production. As there were no serious storms this year, however there was little disruption in the oil supply. Coupled with the increased production at refineries and imports, gas inventories have risen to a twenty three year high. The excess could mean lower prices at the pump in the near future.
Oil Futures have not risen over $80 yet, despite predictions that they would rise that high over the summer. Now they are not expected to rise to that height until late fall. Gas prices should continue to fall slightly into the winter. The extra supply will also keep prices in a reasonable range. This leads me to wonder what the effect this will have on the energy companies. Will the lowered prices hurt their revenue, and could this situation hurt investors? It is compounded by an even lower demand than usual. Only time will tell what the outcome of this record-breaking height in inventories will bring, but it will certainly be an interesting situation to follow.
http://online.wsj.com/article/SB10001424052748704362404575480122525999544.html?mod=WSJ_Energy_leftHeadlines
Jason Ganz
There has also been an increased stockpiling of oil due to the worry of hurricanes disrupting gulf oil production. As there were no serious storms this year, however there was little disruption in the oil supply. Coupled with the increased production at refineries and imports, gas inventories have risen to a twenty three year high. The excess could mean lower prices at the pump in the near future.
Oil Futures have not risen over $80 yet, despite predictions that they would rise that high over the summer. Now they are not expected to rise to that height until late fall. Gas prices should continue to fall slightly into the winter. The extra supply will also keep prices in a reasonable range. This leads me to wonder what the effect this will have on the energy companies. Will the lowered prices hurt their revenue, and could this situation hurt investors? It is compounded by an even lower demand than usual. Only time will tell what the outcome of this record-breaking height in inventories will bring, but it will certainly be an interesting situation to follow.
http://online.wsj.com/article/SB10001424052748704362404575480122525999544.html?mod=WSJ_Energy_leftHeadlines
Jason Ganz
Chevron to Explore for Oil off Liberia
Things are beginning to look positive for the struggling country of Liberia. With a population of 3.4 million, its major exports are rubber and timber. Liberia is also still recovering from a civil war that ended only a few years ago. Advances are surely being made though, Delta Airlines last weekend made its first direct flight to the small country in decades.
More promising though, Chevron believes they can find oil in the deep waters off of the country. The Californian company just set up three deep water blocks covering 3,700 square miles which is bigger than what Chevron holds off the oil rich shores of Angola. Chevron holds 70% of the concessions and will have an exploration going on for three years in search of the oil.
I believe that if they do in fact find a significant amount of oil, it could be revolutionary for Liberia and make major business for Chevron. Liberia needs something of this magnitude to boost its recovery and take it from one of the poorest countries in the world to an up and coming African oil power.
Investors would be smart to take a good look at this situation and to consider getting involved. This exploration will create many jobs and the possible revenue if oil is found will give Liberia's economy a major boost. I'm interested to see what comes out of this, Chevron seems positive looking into the situation and hopefully it works out well.
http://online.wsj.com/article/SB10001424052748703453804575479981224884048.html?mod=WSJ_Energy_leftHeadlines
More promising though, Chevron believes they can find oil in the deep waters off of the country. The Californian company just set up three deep water blocks covering 3,700 square miles which is bigger than what Chevron holds off the oil rich shores of Angola. Chevron holds 70% of the concessions and will have an exploration going on for three years in search of the oil.
I believe that if they do in fact find a significant amount of oil, it could be revolutionary for Liberia and make major business for Chevron. Liberia needs something of this magnitude to boost its recovery and take it from one of the poorest countries in the world to an up and coming African oil power.
Investors would be smart to take a good look at this situation and to consider getting involved. This exploration will create many jobs and the possible revenue if oil is found will give Liberia's economy a major boost. I'm interested to see what comes out of this, Chevron seems positive looking into the situation and hopefully it works out well.
http://online.wsj.com/article/SB10001424052748703453804575479981224884048.html?mod=WSJ_Energy_leftHeadlines
How Many Accidents Will it Take?
Like Tim, I will be blogging about an explosion, but the one I read about actually happened in the Golf Coast.
Just when you think the oil accident is cleared in the Golf Coast, another accidents happens. On Friday, September 3rd, the Wall Street Journal published an article, detailing a recent fire that broke out on a Golf Coast platform. The explosions sent "13 workers tumbling into the ocean." Luckily, no casualties were killed. The platform is still under investigation, since the reason as to why it exploded still remains unknown, but the platform does have a history of maintenance and repair issues.
This incident has attracted the attention of many environmental groups and politicians. "Politicians in Washington [are] already skeptical of offshore drilling." No one wants a repeat, so some are asking for stricter rules. In opposition, some believe that this has nothing to do with the BP oil spill, so the energy industry should not be punished for it. I believe that, generally, that more precautions should be taken when drilling oil. I know that the sea life wasn't damaged nor was anybody killed, but I feel like we shouldn't wait for it to happen again. All preventative measures should be taken.
This has a direct effect on our industry. The price of oil is already expensive. Nonetheless, it is used to fuel many things. If companies are forced into following tougher regulations, that means the price of it might go up as well. I hope that Congress will enforce tougher regulations, causing companies to want to search for cheaper alternative fuels. I'm a strong supporter of alternative fuels.
Both Tim and I found articles that clearly shows a large flaw in drilling oil; maybe its a sign?
Just when you think the oil accident is cleared in the Golf Coast, another accidents happens. On Friday, September 3rd, the Wall Street Journal published an article, detailing a recent fire that broke out on a Golf Coast platform. The explosions sent "13 workers tumbling into the ocean." Luckily, no casualties were killed. The platform is still under investigation, since the reason as to why it exploded still remains unknown, but the platform does have a history of maintenance and repair issues.
This incident has attracted the attention of many environmental groups and politicians. "Politicians in Washington [are] already skeptical of offshore drilling." No one wants a repeat, so some are asking for stricter rules. In opposition, some believe that this has nothing to do with the BP oil spill, so the energy industry should not be punished for it. I believe that, generally, that more precautions should be taken when drilling oil. I know that the sea life wasn't damaged nor was anybody killed, but I feel like we shouldn't wait for it to happen again. All preventative measures should be taken.
This has a direct effect on our industry. The price of oil is already expensive. Nonetheless, it is used to fuel many things. If companies are forced into following tougher regulations, that means the price of it might go up as well. I hope that Congress will enforce tougher regulations, causing companies to want to search for cheaper alternative fuels. I'm a strong supporter of alternative fuels.
Both Tim and I found articles that clearly shows a large flaw in drilling oil; maybe its a sign?
Oil Distress
In today's Wall Street Journal 09/08/10 it was almost impossible to find anything relating to our industry except Palm Oil and Potash, but there was a glimmer of hope on page.A14 World News about an oil platform that was damaged during a drilling accident. The article itself was a short excerpt explaining the situation when a Chinese oil platform malfunctioned over pressure, 34 workers were trapped and two workers fell into the water. All individuals were saved. It came to my mind that trying to acquire fuel resources has seemed to get only more dangerous with time.
The Energy Industry is being affected greatly by these recent events from Exxon-Valdiz to the most recent BP oil spill. The question I ask is how long are we willing to make the tradeoff of human life and labor for cheap resources? This is a global situation not only American or China's predicament. I am not here to debate worker's rights or government control, but just trying to bring to light that there is truly a human cost to our want of fossil fuels. Thousands die every year across the globe from mining or drilling accidents, sadly it comes with the atmosphere of their line of work.
This issue is so pertinent to our industry because increased dissent in the public to these finite resources causes outrage that ends up costing marketing dollars and damage control dollars. There is a real economic/financial need to improve on these accidents. The incentives are there for alternative resources. The Energy Industry needs to embrace these while the incentives are still so strong. I do not support the 'green movement' due to political reasons concerning government, but even as a freshmen Business 101 student I can see the gracious incentives being awarded. To me it seems like a solid investment in the future of the Energy Industry regardless of your political affiliation.
Source:(WSJ Paper) Wed. September 8, 2010 Page. A14 'World News'-World Watch- China:"Oil Platform is Damaged In Drilling Accident", David Winning and Aaron Back
- Timothy D. Vallario
The Energy Industry is being affected greatly by these recent events from Exxon-Valdiz to the most recent BP oil spill. The question I ask is how long are we willing to make the tradeoff of human life and labor for cheap resources? This is a global situation not only American or China's predicament. I am not here to debate worker's rights or government control, but just trying to bring to light that there is truly a human cost to our want of fossil fuels. Thousands die every year across the globe from mining or drilling accidents, sadly it comes with the atmosphere of their line of work.
This issue is so pertinent to our industry because increased dissent in the public to these finite resources causes outrage that ends up costing marketing dollars and damage control dollars. There is a real economic/financial need to improve on these accidents. The incentives are there for alternative resources. The Energy Industry needs to embrace these while the incentives are still so strong. I do not support the 'green movement' due to political reasons concerning government, but even as a freshmen Business 101 student I can see the gracious incentives being awarded. To me it seems like a solid investment in the future of the Energy Industry regardless of your political affiliation.
Source:(WSJ Paper) Wed. September 8, 2010 Page. A14 'World News'-World Watch- China:"Oil Platform is Damaged In Drilling Accident", David Winning and Aaron Back
- Timothy D. Vallario
China Hints at Tighter Regulation on Gas Sector -Rianna Das
by: Rianna Das
http://online.wsj.com/article/SB10001424052748703713504575476740661162412.html
While the United States is known for being the country with the largest amount of energy consumed for you, the International Energy Association has declared that, last year, China has passed the United States, taking the position of the world's biggest consumer of energy. With this dramatic increase in energy use, the Chinese government is having a hard time meeting its goals of efficiency and reducing pollution. In the natural gas sector, natural gas used in power plants has always been regulated. However,the use of natural gas in homes, used mostly for cooking, has been mostly unregulated. This is could very well likely change in the next few months as more consumers change from the air polluting energy of coal to natural gas. The country's capital wants natural gas to increase from 4% to the country's energy to 10% by 2020.
China's want to increase their use of natural gas will affect the coal industry. It will make the coal industry lose business as the government is pushing natural gas instead of coal to reduce pollution. It will also increase the success of natural gas as a energy source because many countries, not just China, are substituting natural gas for other polluting energy sources, such as coal. Hopefully, if China's efforts in reducing their pollution and improving their energy efficiency are successful, than this will serve as an example to other countries who still use coal as their primary source for energy. This will further natural gas's success as an energy source.
Globalization is displayed in this article by China surpassing the United States as the world's biggest consumer of energy. As China becomes more "globalized" the country is using more energy. This is opening the market for cleaner fuels, such as natural gas in China. This is example is true for any country who previously was not interested in less polluting fuels, such as natural gas, but with newer technology, etc, they have developed an interest in finding energy sources that do pollute the environment and also are energy efficient. Globalization has helped to grow industries, such as natural gas or other cleaner fuels, but it has led to a decrease in consumer use of air polluting fuels, such as coal.
-Rianna Das
http://online.wsj.com/article/SB10001424052748703713504575476740661162412.html
While the United States is known for being the country with the largest amount of energy consumed for you, the International Energy Association has declared that, last year, China has passed the United States, taking the position of the world's biggest consumer of energy. With this dramatic increase in energy use, the Chinese government is having a hard time meeting its goals of efficiency and reducing pollution. In the natural gas sector, natural gas used in power plants has always been regulated. However,the use of natural gas in homes, used mostly for cooking, has been mostly unregulated. This is could very well likely change in the next few months as more consumers change from the air polluting energy of coal to natural gas. The country's capital wants natural gas to increase from 4% to the country's energy to 10% by 2020.
China's want to increase their use of natural gas will affect the coal industry. It will make the coal industry lose business as the government is pushing natural gas instead of coal to reduce pollution. It will also increase the success of natural gas as a energy source because many countries, not just China, are substituting natural gas for other polluting energy sources, such as coal. Hopefully, if China's efforts in reducing their pollution and improving their energy efficiency are successful, than this will serve as an example to other countries who still use coal as their primary source for energy. This will further natural gas's success as an energy source.
Globalization is displayed in this article by China surpassing the United States as the world's biggest consumer of energy. As China becomes more "globalized" the country is using more energy. This is opening the market for cleaner fuels, such as natural gas in China. This is example is true for any country who previously was not interested in less polluting fuels, such as natural gas, but with newer technology, etc, they have developed an interest in finding energy sources that do pollute the environment and also are energy efficient. Globalization has helped to grow industries, such as natural gas or other cleaner fuels, but it has led to a decrease in consumer use of air polluting fuels, such as coal.
-Rianna Das
Thursday, September 2, 2010
Troubling Trends in Crude Oil Prices Create New Oppurtunities
Americans today have almost unrestricted access to cheap oil and energy, but the steadily increasing price of crude oil puts this access and the American way of life under stress. The average American today enjoys a standard of living that is higher than that in any country in the world or at any other time in history. One can wake up in the morning to a warm house even during the harshest depths of winter, drive an hour to work every day and fly to visit a relative halfway across the country, all with little thought about how these feats are accomplished. They are able to live in this blissful unawareness thanks to the vast infrastructure which supports their unceasing and ever growing hunger for more energy. Cheap energy is at the center of the modern American lifestyle, and when it is threatened, society shakes and fortunes can be made or lost. For my first investigation into the energy industry, I decided to investigate crude oil, its pricing history and projected future, and its impact on the national economy.
Upon examination of the graph of crude oil prices since the 1980’s provided by the U.S. Energy Information Administration, I noticed several trends. After a spike in prices in the early eighties, the price per barrel of crude oil remained relatively constant between twenty and thirty inflation adjusted dollars for much of the next decade. After hitting a low in Q1 1999, however, prices have been rising more steadily and steeply than for any time except during the price spike in the eighties. Even ignoring the massive price hike in the summer of 2008, the cost per barrel has been climbing dramatically for a decade. The price is projected to continue its increase, albeit at a slower pace, through 2011. Obviously, this trend cannot continue indefinitely. Already the higher price of everything from filling up at the gas station to the price of bread has placed increased pressure on every level of American society. What then, does the future hold?
For American society to continue to function at its current level, it must be assumed that there is some form of cheap and readily available energy. Thus there are only really two conceivable possibilities for the semi-short term (ten-thirty years) that I can see. The price of crude oil will have to either stabilize or drop, or alternative methods of energy production will need to be brought from the periphery to the forefront. Any company that manages to place themselves on the forefront of whichever movement proves successful stands to reap massive rewards. The American Petroleum Institute (API) states that energy production accounts for 7.5% of the American economy. With what looks to be an inevitable shift on the horizon, one way or another, my focus over the next few weeks on this blog will be to discover the business opportunities and challenges created by this shifting market, identify the most likely scenarios and how an investor might capitalize on them.
Jason Ganz
Upon examination of the graph of crude oil prices since the 1980’s provided by the U.S. Energy Information Administration, I noticed several trends. After a spike in prices in the early eighties, the price per barrel of crude oil remained relatively constant between twenty and thirty inflation adjusted dollars for much of the next decade. After hitting a low in Q1 1999, however, prices have been rising more steadily and steeply than for any time except during the price spike in the eighties. Even ignoring the massive price hike in the summer of 2008, the cost per barrel has been climbing dramatically for a decade. The price is projected to continue its increase, albeit at a slower pace, through 2011. Obviously, this trend cannot continue indefinitely. Already the higher price of everything from filling up at the gas station to the price of bread has placed increased pressure on every level of American society. What then, does the future hold?
For American society to continue to function at its current level, it must be assumed that there is some form of cheap and readily available energy. Thus there are only really two conceivable possibilities for the semi-short term (ten-thirty years) that I can see. The price of crude oil will have to either stabilize or drop, or alternative methods of energy production will need to be brought from the periphery to the forefront. Any company that manages to place themselves on the forefront of whichever movement proves successful stands to reap massive rewards. The American Petroleum Institute (API) states that energy production accounts for 7.5% of the American economy. With what looks to be an inevitable shift on the horizon, one way or another, my focus over the next few weeks on this blog will be to discover the business opportunities and challenges created by this shifting market, identify the most likely scenarios and how an investor might capitalize on them.
Jason Ganz
Gazprom's Profit Triples (The Wall Street Journal)
by: Rianna Das
http://online.wsj.com/article/SB10001424052748704206804575466892075923202.html
This article discusses how Russia's Gazprom, the world's largest producer of natural gas, has tripled its profit after three months of decline. This decline is partially due to the movement to create alternative energy sources. Gazprom supplies about a quarter of Europe's energy needs and as the weather begins to grow colder, the need for natural gas will begin to increase even more.
Gazprom's recent tripling of its profit will affect the energy industry in several ways. Firstly, it will put a damper on the movement to find alternative energy sources, as people will have no incentive to use these alternative sources if natural gas is readily available through Gazprom. Secondly, it will reduce the coal imports into Europe, as it supplies not only the world's largest amount of natural gas, but a quarter of Europe's energy. Thirdly, this will impact the growth of the industry, by allowing natural gas to become one of the dominant energy sources for, not only, Russia, but Europe, as well. Also, this has impacted natural gas by demonstrating its success as an energy source.
Globalization has affected the natural gas industry by allowing Gazprom, a Russian producer of natural gas, to supply a quarter of Europe's energy. Also, it has opened up the market for other non-Russian producers of natural gas to compete with Gazprom. For example, it has given other European alternative energy producers a chance to compete with Gazprom, which successfully took profit away from Gazprom in the first three months of the year.
-Rianna Das
http://online.wsj.com/article/SB10001424052748704206804575466892075923202.html
This article discusses how Russia's Gazprom, the world's largest producer of natural gas, has tripled its profit after three months of decline. This decline is partially due to the movement to create alternative energy sources. Gazprom supplies about a quarter of Europe's energy needs and as the weather begins to grow colder, the need for natural gas will begin to increase even more.
Gazprom's recent tripling of its profit will affect the energy industry in several ways. Firstly, it will put a damper on the movement to find alternative energy sources, as people will have no incentive to use these alternative sources if natural gas is readily available through Gazprom. Secondly, it will reduce the coal imports into Europe, as it supplies not only the world's largest amount of natural gas, but a quarter of Europe's energy. Thirdly, this will impact the growth of the industry, by allowing natural gas to become one of the dominant energy sources for, not only, Russia, but Europe, as well. Also, this has impacted natural gas by demonstrating its success as an energy source.
Globalization has affected the natural gas industry by allowing Gazprom, a Russian producer of natural gas, to supply a quarter of Europe's energy. Also, it has opened up the market for other non-Russian producers of natural gas to compete with Gazprom. For example, it has given other European alternative energy producers a chance to compete with Gazprom, which successfully took profit away from Gazprom in the first three months of the year.
-Rianna Das
No More Pollution from China?
The Wall Street Journal has posted/published several articles about Wind Energy in the past few week; my favorite was the one discussing Mongolia's hope of importing wind energy to China.
The article states that Mongolia is one of the largest exporters of coal to China. I find this really fascinating because China is always said to be a big contributor of global warming. This leads me to think...shouldn't we be blaming the producers and suppliers of goals for the pollution? Luckily, that's about to change: Mongolia is considering exporting a larger amount of renewable fuels to china. The amount of fuel they are planning to export is equivalent to 40 million ton of coals.
The Mongolian Government seems really committed to this project since they are investing large amount of money to subsidize alternative projects. I think this is a good initiative. If other coal dependent find out that a country so large is switching alternative fuels, it might encourage other countries to switch too. Environmental protection is definitely a business trend that is soaring. The investors of alternative energy in Mongolia are becoming more aware of that fact that "the production of coal will be subjected[ed] to carbon penalties" in the future. This is an example of the cost and benefits that people in the energy industry have to think about.
Globalization definitely has a big impact on the energy industry. Oil produced in the Middle-East is traded with countries from all over the world. Many countries are forced to trade with many countries in the Middle-East, since those countries have a comparative advantage in producing oil. Because the demand and price of oil is so high and it is not a renewable source, many countries, like Mongolia, are beginning to look for alternative sources. It has caused many investors to allocate funds to those countries who are producing green energy; investments on different types of energy is coming from all over the world.
Amy Yu
Summer's End: Chilly for Gasoline
Over the summer in 2009 gas futures fell just 3.6%; in 2010 over the same period of time gas futures have fallen an alarming 14%. As a result of this, retail prices at the pump may be even lower over the U.S. labor day holiday when usually prices would go up given the vast amount of travel done over this weekend.
Concerns about the European debt crisis and worries about a double dip recession in our own country have already taken a toll on the retail prices of gas. Drivers already received breaks over Memorial Day and Independence Day therefore making it a relatively lucky summer.
Investor's are restoring hope for our economy by backing the idea that strong demand is leading us into recovery rather than falling into another recession. The high unemployment rate teamed with an uncertain economic future isn't helping though. Consumers are worried about those two factors which is causing them to ease on spending any more than needed.
In conclusion, this has been bad for business and good for consumers. Consumers need to take advantage of these low gas prices which will help the economy get back on it's feet.
http://online.wsj.com/article/SB10001424052748704340504575447970839088214.html
A Nuclear Horizon in India
In the next two to three years India is expected to pass the Civil Liability for Nuclear Damage Bill which in effect, will open the nuclear energy market to foreign nations. The Indian government has already promised to deliver $100 billion in contracts to prospective companies for projects. Essentially this means that foreign businesses will be allowed to vie for contracts from the government, and invest in construction and utilization of energy facilities.
Once this bill is passed, which is almost inevitable, will completely change the nuclear energy industry. The unfettered market will be up for grabs to the highest bidders, and most appealing businesses. India's $100 billion investment is just a sign of how fast this market is expected to grow. European companies and some USA energy giants such as, GE are already beginning to mobilize to get into this market with investment strategies and company emissaries to India. If this market truly takes off the energy industry may begin to sway toward more alternative resources. India will be the staging ground for the beginning of a new energy market.
The energy industry will see rapid changes in the next 20 to 30 years. The 'green movement' has caused consumers to rethink the impact of energy resources on the environment. None will argue that the consumer conscience is moving toward a more clean and sustaining resource. The fact is nuclear energy could be that very resource. Globalization is arguably one of the reasons pollution has spiked in the past century. If nuclear energy were to be embraced and proven efficient then maybe one of the detriments of globalization could be put to rest, saving ecosystems.
- Timothy D. Vallario
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