Everything in life has a cost. We are constantly weighing the cost vs the benefit in everything we do… whether we think about it that way or not.

Is it worth the risk of getting a speeding ticket to get there five minutes faster?  What are the chances there is a police oficer on this stretch of road at this time of day?

Is it worth the extra $5 to get the steak instead of the hamburger?   Is it worth spending long nights at the office in order to get that promotion? Is it worth the the additional cost to get more memory (or hard drive) or should I get the cheaper model? All of life is weighing the cost vs. the benefit.

So when people (or countries) consider going green they need to take into consideration how much it will cost. Yes, it would be nice to get all of our energy from green sources but how much will it cost? Are we willing to pay the price in higher electric bills? Brown-outs? Manditory usage restrictions? Reduced productivity? Grid problems?

In todays article John Daly looks at the issues facing Germany as a result of its ban on nuclear energy in the wake of the Japanese nuclear disaster.  Tim McMahon, editor

Germany – It’s Not Easy Being Green

Forty-one years ago on Sesame Street, Kermit the frog sang a plaintive song, “It’s not easy being green.” In a gesture of solidarity, perhaps he should fax the lyrics to German Chancellor Angela Merkel, whose government is suddenly discovering the costs of weaning itself off nuclear energy.

In the wake of Fukushima, German Chancellor Angela Merkel announced on 30 May that Germany, the world’s fourth-largest economy and Europe’s biggest, would become the first industrialized nation to shut down all of its 17 nuclear power plants (NPPs) between 2015 and 2022, an extraordinary commitment, given that Germany’s 17 NPPS Germany produce about 28 percent of the country’s electricity and that the country’s first NPP came online in 1969.

The seven nuclear power plants immediately shut down after Fukushima include Biblis A and B, Neckarwestheim 1, Brunsbuettel, Isar 1, Unterweser and Philippsburg 1 and the offline reactor in Kruemmel. The remaining nine to be shut down by 2022 are Grafenrheinfeld in 2015, Gundremmingen B in 2017, Philippsburg II in 2019, Grohnde, Brokdorf, and Gundremmingen C in 2021, Isar II, Neckarwestheim II and Emsland in 2022.

Truly the end of an era.

Merkel added that her government’s goal was to draw 35 percent of production from renewable energy sources by 2022. While Fukushima proved the final impetus for the decision, Germany has long had one of the most anti-nuclear green movements in Europe. The Japanese meltdown was the final straw in convincing the electorate that Three Mile Island, Chernobyl and Fukushima, as well as hundreds of smaller incidents that the risks inherent in NPPs were in fact real and lethal, that nuclear-waste storage was a problem yet to be resolved and that renewable-alternative energy was the way of the future.

Not that the decision was unanimous. The German nuclear industry insisted that its shutdown would cause major damage to the country’s industrial base and E.ON AG and Vattenfall Europe AG announced their intention to sue for billions of euros in compensation, with RWE AG and EnBW Energie Baden-Wuerttemberg AG expected to follow suit. As an immediate indication of their displeasure, two months ago Germany’s four nuclear operators announced that they would stop paying into a government renewables fund, which was set up in September 2010 as compensation for the government agreeing to license nuclear plants for a longer period.

Adding to awakening consumer anxiety about “quality of life” issues, last month Germany’s Federal Network Agency announced that it decided not to keep any NPPs as back-up in case of electricity shortfalls for the upcoming winter.

So, what to do?

Why, use Germany’s massive euro reserves to buy in electricity from neighboring countries to ease shortfalls during the bumpy transitional period. Neighbors only too glad to export electricity to der Vaterland include Austria, the Czech Republic and France. And here’s where it gets interesting, as the latter two nation’s electrical exports are generated by… nuclear power.

Quite aside from the ideological contradictions inherent in the policy, it won’t come cheap. In a report last July Deutsche Bank noted that because of the nuclear prohibition Germany will become a net importer of about 4 terawatt hours of power by the end of the year after exporting 14 terawatt hours in 2010.

In another sobering statistic from the Dena Energy Agency, a research institute partly owned by the German government, Germany will have to spend nearly $14.3 billion over the next decade to upgrade its electrical grid if the country is to stop using neighboring networks.

Speaking of neighboring networks, importing electricity from former communist Eastern European states presents an additional range of problems, as their elderly grids were built over 30 years ago solely to handle domestic demand, years before the countries joined the European power-trading system.

Not that the government hasn’t been warned – in May national electricity-grid regulator Bundesnetzagentur said that Germany’s unilateral decommissioning of its NPPs risked straining utility networks in at least seven neighboring countries.

According to the European Nuclear Society, as of January 2011 there were 195 nuclear plants in operation and under construction in Europe. No doubt all the operators of these NPPs will be watching the German experience weaning itself off its nuclear addition with great attention.

It’s not easy being green.

By. John C.K. Daly of Oil Price

Source: http://oilprice.com/Alternative-Energy/Renewable-Energy/Germany-Its-Not-Easy-Being-Green.html

On September 22, 2011, Karen Roche and JT Long of The Energy Report interviewed renowned speculator and financial author Doug Casey on his views about uranium. Read here why Doug thinks despite the recent bad press, “yellowcake” has a bright future.

The Western world’s skittishness, skepticism and staunch opposition when in comes to nuclear energy won’t stand in the way of its production elsewhere in the world. It will be full steam ahead in China, India and other developing nations, says Casey Research Chairman Doug Casey, and the Western world is tiny in comparison. In fact, “I’d say uranium is a great place to be for at least the next generation,” he tells us in this Energy Report exclusive. With ever-advancing technology enabling economic recovery in places where it previously wasn’t possible, he’s also optimistic about natural gas and oil. 

The Energy Report: Next month, at the sold-out Casey Research/Sprott Inc. “When Money Dies” summit in Phoenix, you’re on tap for a presentation entitled “The Greater Depression Is Now.” Your colleague, Marin Katusa, is on the roster too, talking about “Making Money in Energy.” Marin recently told us there’s a buying opportunity for uranium companies. Given Fukushima’s repercussions in terms of the nuclear energy industry, are you bullish on uranium?

Doug Casey: Absolutely. It’s unquestionably the safest, cheapest and cleanest form of mass power generation. That’s not to say that there aren’t problems, as the Fukushima incident made clear. As much of a disaster as that was—a combination of earthquake, tsunami and radiation leakage—so far it’s just been a big industrial disaster. I daresay that if government hadn’t been so involved in nuclear power these last 50 or 60 years, the technology would have been much further along. Nuclear power would be much safer, cheaper and cleaner than it is today. We might, for instance, be using thorium, which appears to be better than uranium in many ways. We would almost certainly have much smaller, cheaper, and robust reactors.

So, yes, I’m a huge uranium bull. If you want mass power, you need nuclear power. And today that means uranium. I’d say uranium is a great place to be for at least the next generation.

TER: But considering the fact that governments remain involved and people are even more squeamish about nuclear power post-Fukushima, won’t we see a stall in nuclear power and development?

DC: That’s possible. But, the hysteria is mainly going to affect the Western world. China and India recognize they have no alternative to nuclear power. As you know, the growth is in China, India and other emerging economies; it’s where the most of the world’s people live. The Western world is small by comparison, and getting smaller. These other places will continue full steam ahead with nuclear.

TER: Porter Stansberry, whom you know well, recently told us to expect the U.S. to become a net exporter of natural gas in the not-too-distant future. Do you see that as well?

DC: Quite likely. Let’s talk about peak oil first, though. I think that the Hubbert peak theory is accurate, and for good geological reasons—but understand that peak oil doesn’t mean we’re running out of oil. Rather, it means that we’re running out of easily available, cheap light sweet oil. And we are.

However, technology is always improving, enabling economic recovery of oil and natural gas in places where it previously wasn’t possible. Horizontal drilling and the fracking process have opened up gigantic reserves of gas, scores of trillion of cubic feet in some basins in the U.S. So, yes the U.S. could become a huge exporter of natural gas. It’s entirely possible. It could happen in other regions of the world as well, but probably not with gas at its current prices.

The gas is available, but because it’s very underpriced relative to other forms of energy, it probably won’t be produced until the price doubles or even triples from where it is now. That would bring it more into historical alignment with oil prices, which I expect will themselves go higher as well.

TER: How is it that the oil prices have remained relatively high and gas is still so low? Given the differential of the two price points, why aren’t we seeing a conversion from oil-dependent cars, for instance, to natural gas?

DC: Oil has much a greater density of energy than natural gas, and a much more convenient energy-based fuel, so of course we’ve all gravitated toward it. It’s not really feasible for aircraft, for instance, to be able to run on natural gas, so they’ll continue to use oil-based derivatives. In addition, gas is much harder to transport than oil. So it’s tended to be a local market, whereas oil is international.

But since most all the easy, cheap oil’s been found—mostly in the 60s and 70s—and those old oilfields are going into decline, gas is probably the next thing. Gas has some advantages as well. For one thing, it burns cleaner. Remember that these fuels, these petrochemicals, basically contain just hydrogen, oxygen and carbon. As technology advances, we should be able to manipulate these very simple and well-understood molecules and put them into a form we want. We’ll be able to do it ourselves in various ways as nanotechnology, for instance, develops further in the future. Then maybe we won’t have to rely on nature doing it for us over billions of years.

TER: Despite criticism of the effects of government involvement—stifling nuclear energy advancement over the years, as you mentioned earlier, or printing money to paper over enormous amounts of debt, as you’ve pointed out in other interviews—you’ve indicated that improving technology is a countervailing trend that actually will increase the standard of living.

DC: Exactly. There are more scientists and engineers alive today than have lived in all previous history put together; that’s a huge cause for optimism. Technology is very likely to solve many, many problems—as long as the scientists and the free market are allowed to develop these things, and as long as there’s capital available to manufacture the tools they need to do so.

TER: What are you hoping attendees come away with from next month’s summit?

DC: People come to these conferences is to get ideas about intelligent places to put their capital. Today those places are harder to find than has ever been the case before in my lifetime. With the dollar’s imminent demise, staying in cash is also very dangerous. There are very few bargains to be found in the world of investment today. Stocks today are quite overpriced by almost any parameter. Bonds will implode; that’s especially serious because they’re a much bigger market than shares. Property prices are still headed down. So people are looking for answers, and I think we have some.

Beyond answers along those lines, we also host these summits to discuss some investment principles so that our attendees don’t have to rely on us for answers. They’ll be equipped to deal with these things on their own.

TER: What are some things that investors can do to protect themselves? 

By Elizabeth Manning, Casey Energy Opportunities

Nuclear energy has taken a beating since the Fukushima crisis began in March, but we believe the arguments are strong that it’s not down for the count.

There are a couple of factors that the Casey Energy Team considers bullish for the nuclear industry and market. Let’s take a closer look and back them up.

Factor #1: The pre-Fukushima price of uranium reflected not just market perception but a very real shortage of uranium that’s looming in the face of growing global demand.

The Japanese earthquake struck just as the nuclear renaissance was gaining momentum. After a decade, efforts by the industry to promote nuclear power as a safe, clean and reliable alternative to fossil fuels were finally taking hold. So was the message that nuclear power offers the “always on” type of electricity that other, more glamorous low-carbon technologies like solar and wind power could only supplement, not replace.

China ordered a swath of new reactors, Russia embarked on a nuclear construction boom, India made nuclear power a key component of its energy plans, and the U.S. Congress issued loan guarantees for new plants.

The price of uranium responded, climbing slowly but surely out from its late-2000 all-time low of US$7.10 per pound, then spiking rapidly from the low US$70s in 2006 to a record US$136 in 2007. That unsustainable drive was fueled by speculators and hedge fund investments that disappeared with the 2008 recession. The spot price dropped back into the US$40s per pound.

While most other commodities recovered, uranium spent 2009 and the first half of 2010 dormant. The market woke up in mid-2010, starting a remarkable eight-month ascent from US$42 to US$72.65 per pound in February. Uranium outperformed every other commodity in that period, including gold, gaining 73%.

The 2007 frenzy aside, uranium’s bullish drive is justified by industry conditions. We already mentioned the construction trend; now here are some numbers to back it up.

Global uranium demand is set to increase some 33% from 2010 to 2020, according to the World Nuclear Association (WNA). China is the most important player in that prediction: the Asian giant plans to increase nuclear capacity to 80 GWe by 2020, 200 GWe by 2030, and 400 GWe by 2050. A gigawatt electrical (GWe) is one billion watts, which provides enough power for roughly one million households in a developed country.

China may lead the world in number of nuclear reactors under construction, at 27, but Russia is building 11 and India has five in the works, while countries like Bulgaria, the Slovak Republic, and Ukraine each have two under construction. Demand for uranium is absolutely on the up-and-up.

Supply is another story. To reach just its 2030 target, China alone will need some 95 million pounds of uranium each year. In 2010, the world as a whole produced just over 118 million pounds.

This WNA graph compares projected uranium demand and supplies. It’s important to note that the solid line, indicating mid-range projected demand, will only be met if mines under development make it into production and, starting in six years, if mines now just in the planning stages start also operating. Those are two big “ifs,” given that building uranium mines is an expensive, time-consuming business, and a venture with many opponents.

Most analysts do not expect supplies to meet growing global demand unless prices increase enough to make it economic to build these new mines. There’s the key bit – unless prices increase enough to make new mines economic. Commodity prices are arguably the most important factor in whether a proposed mine will be economic, and therefore production rates track prices pretty closely.

In that context, the major gains in the price of uranium during late 2010 and early 2011 were justified. A uranium price above US$70 per pound was a real reflection of restricted supplies in the face of growing demand, and most industry observers expected the price to only climb, if slowly, from there.

Then came the earthquake.

Factor #2: Fukushima will not have any significant impact on global uranium demand in the long run.

Initially, the world reacted to the Fukushima crisis with dramatic calls to reconsider the use of nuclear power. Several governments put their nuclear power programs on hold, including China. For a moment, there was a real chance that Fukushima would derail the nuclear renaissance.

But is has not. Nuclear power growth in the developed world has been impacted, but the developed world isn’t the make-or-break player for growth in the nuclear industry. The developing world is where the action will be, where governments are struggling to provide power to millions of impoverished people while still keeping some control of greenhouse gas emissions.

As expensive as a nuclear power plant is, they’re relatively economical to keep running, and these countries have little luxury of choice. Coal may be the quick fix, but it’s becoming increasingly expensive as well as laden with carbon-emissions baggage.

With that in mind, events that have garnered a lot of attention in the popular press, such as Germany’s announcement to phase out its nuclear reactors by 2022, shrink into perspective. It’s no real surprise, for one thing: the decision simply reverses one made last year to keep them open (yes, that would be reversing the reversal).

For another, Germany’s 17 reactors accounted for 5% of uranium demand in 2010. By comparison, there are 104 reactors in the United States, 58 in France and dozens being built in China, India, and Russia. Finally, Germany relies on nuclear reactors for 23% of its power, and 2022 is awfully optimistic to ramp up alternative (i.e., other clean) energy technology to fill the gap. So let’s just say we’re skeptical.

On the other side of the equation are pro-nuclear movements in several places around the globe, such as in the Czech Republic. Prague is working to approve a plan to extend the life of the country’s only uranium mine and wants to build three new reactors. It’s labeled uranium a “super strategic” commodity and uranium mining a “strategic advantage for the Czech Republic.”

Where Nuclear Energy Is Headed

Sixty of the 65 reactors currently under construction around the world are in developing countries. China has 27 reactors under construction, 50 planned and another 110 proposed. India has 5 under construction, 18 planned and 40 proposed. Russia has 10 under construction, 14 planned and 30 proposed. These countries need power, and they want to diversify their power sources as they build capacity so that they don’t end up reliant on a single commodity.

In addition, the nuclear industry’s safety record is actually pretty good. Fukushima is only the third serious accident in more than 65 years of nuclear power. No one died at Three Mile Island, and no one has died from radiation effects at Fukushima, though five people died in the hydrogen explosions and in a crane accident. Chernobyl was certainly deadly, but it was human error, not a fault in the system, that was to blame there.

By contrast, thousands of people lose their lives every year in the fossil fuel industry, in coal mine accidents, oil rig explosions, drilling mishaps, pipeline blasts, refinery fires and tanker accidents, not to mention from the raft of illnesses caused by smog and soot.

Power generation is about balancing needs with impacts. Every major power source has drawbacks, but the developing world in particular needs more electricity. In that context, nuclear power is still a necessity – nuclear plants can provide low-emission, reliable, baseload power, precisely the kind that the world needs.

Uranium was a solidly bullish market on March 10, for good reasons that haven’t changed. Even though Fukushima was scary and has illuminated the need for better nuclear power regulations, ultimately it won’t derail an industry that is poised for major growth.

We’re running out of oil, fast – and a “triple threat” makes dealing with that fact more of a challenge than many Americans know. There are many ways savvy investors can profit from this situation, however. Learn how to be among them.

In a wierd twist of fate, Uzbekistan is sitting on a “Gold Mine” of scientific information about solar energy which because of cheap Siberian Oil has been totally worthless… Up until now.  With the world’s interest turning to Solar once again this might be an opportunity for a forward looking company to snap up years of government funded research for a “song”.  In this article John Daly tells us how this anomally came about. Tim McMahon~editor

Uzbekistan’s Untapped Solar Energy Riches

By: John C.K. Daly of OilPrice.com

The 17th century English philosopher, Francis Bacon, once observed that, “knowledge is power.

So, here’s some power knowledge that the West has overlooked, but may well contain critical information for jumpstarting Western interest in solar power.

It’s based upon more than five decade’s worth of solar research by the sole 20th century competitor to the U.S. for global influence, the USSR.

In 1965 the Uzbek Academy of Sciences began publishing the “Geliotekhnika” (“Applied Solar Energy”) quarterly journal the former Soviet Union’s sole scientific publication devoted to solar power. Topics covered ranged from solar radiation, photovoltaics and solar materials to direct conversion of solar energy into electrical power.

Accordingly, 46 years of a highly advanced nation’s research on solar energy is available to some company smart enough to cut a deal with Tashkent.

A few caveats here, as well as dreary history.

The USSR in pursuing its intended goal of progressing from a socialist state to a period of developed “Communion” placed a high emphasis on scientific education and research.

Scientific progress would prove the superiority of the socialist system in the ongoing struggle with Western capitalism for “Third World” hearts and minds. Secondly, advances in science progress would advance the development of the socialist state itself, which, when reaching a level of superiority over the capitalist system, would not only better the lives of its citizens but win that old “‘hearts and minds” struggle with the West.

While it may seem quaint now to refer to the Soviet Union’s focus on science, in the week that America is preparing to cheer the return of the space shuttle “Atlantis” crew, one might recall that the first man in space, Yuri Gagarin, was a Soviet citizen and that, for the immediate future, any Americans dispatched to the international Space station will do so aboard a Russian rocket.

But I digress.

The Soviet Union’s fund of scientific research was second only to, and in some cases superior, to that of its dreaded enemy, the U.S.

Given the priorities of the Soviet economy versus the “free market” principles of the West, scientific discoveries were directed to benefit the state, without commercial pressures. Given that the USSR was awash in cheap Siberian oil from the early 1970s, solar energy was not even an also ran.

Which is not now.

Anyone willing to deal with the Uzbek government for untrammeled access to 46 years of “Geliotekhnika” will acquire access the former Soviet Union’s top research on solar energy.

Who know what those materials contain? What is certain is that the world’s second-best (and I use the term advisedly) best scientific establishment spent decades researching solar issues and contained a research establishment that on occasion bested the best of the West. Given the peculiarities of the Soviet system, only research that was quickly applicable and advanced the socialist cause was developed.

Which, with cheap Siberian oil, left out solar.

The journals are certainly worth more than a passing glance, and someone with a modestly open checkbook towards Tashkent, as opposed to the costs of replicating the research, could acquire bargain basement unique insights into nearly fifty years of solar energy research from the first nation to launch a man into space. After all, how do you put a price on five decades of research by some of the world’s most brilliant scientists?

Just remember, you read it here first.

Source: http://oilprice.com/Alternative-Energy/Solar-Energy/Uzbekistan-s-Untapped-Solar-Energy-Riches.html

Over the last few years it seems that China couldn’t get enough resources. All those U.S. Dollars were burning a hole in their pocket. Almost everywhere you turned China was buying up natural resources. An oil company here, natural resources there they appeared insatiable. They wanted to buy something tangible almost anything tangible. Well it looks like their appetite may be waning as according to Casey Research’s Marin Katusa say China is getting a bit more picky about what it buys. Tim McMahon~editor.

 China Gets Picky

By Marin Katusa, Casey Research Energy Team

It turns out that China is not willing to pay whatever it has to for energy and metal resources.

Several resource deals have faltered in recent months, indicating an increasingly choosy Chinese perspective on energy and metal acquisitions. Add to that the growing concern that the global economy is once again stumbling and that commodity prices may be near a top, and you have a Chinese deal-making market that has gone from 60 to zero in no time.

On the metals side, observers are seeing a “buyer’s strike,” where companies are watching commodity prices from the sidelines rather than making deals. China’s Minmetals Resources, for example, stepped back from its bid to acquire copper producer Equinox Minerals after Barrick Gold (NYSE.ABX, T.ABX) topped Minmetals’ $6.3 billion offer with a $6.7 billion bid.

Equinox was lucky to get the higher Barrick offer; other companies, like Lundin Mining (T.LUN), have given up trying to find suitors willing to pay a fair price. In May, the company announced it couldn’t find an acceptable buyer for all or part of its copper, nickel, and zinc mines that are spread across Europe and Africa, citing a gulf between its project valuations and what buyers were willing to pay.

Both stories signal that there is a limit to how much even the deep-pocketed Chinese will pay for resources, even though securing resource assets is a stated national goal.

Pricing may be at the heart of the problem. Prices for oil assets in Alberta – home to the massive oil sands and a raft of light oil and natural gas plays – have soared: The average price per acre has climbed from C$2,185 in mid-2010 to C$3,111 today, according to government statistics. The price increased on the back of a series of international deals: France’s Total S.A. signed a C$1.75 billion deal with Suncor Energy to develop oil sands reserves; Malaysia’s Petronas inked a C$1.07 billion deal for ownership stakes in some Albertan natural gas fields; and China’s Sinopec spent C$4.6 billion for a 9% stake in Syncrude Canada.

But price isn’t the impediment to new deals – the biggest Chinese investment in Canada’s oil patch to date just fell apart because the potential partners couldn’t agree on how to work together. China’s largest oil and gas company, PetroChina International Investment, and Canada’s Encana (T.ECA) announced on June 21 that their C$5.4 billion deal to jointly develop Encana’s Cutbank Ridge gas project had fallen apart. The companies couldn’t agree on how to structure the joint operating agreement, though they did not elaborate on the specific issues.

Encana will now launch a fresh search for a new Cutbank partner… or perhaps partners. The PetroChina deal included stakes in gas production, reserves, acreages, pipelines, and processing facilities, but Encana now says it wants to split things up, offering a variety of joint-venture opportunities for portions of the undeveloped resources and infrastructure requirements while keeping the producing acres for itself.

The PetroChina-Encana deal was a bit of a sweetheart in the industry, often cited to support arguments about China’s growing interest in Canadian oil and gas. Its failure now supports the opposite stance: that China is getting pickier about what projects it supports and how that support plays out.

In the first five and a half months of 2011, Canadian energy companies sold a total of 231 million barrels of oil and gas reserves, less than half the 482 million barrels sold in the same period in 2010. The value of those Canadian oil and gas deals came in at $11 billion, down 35% from a year earlier (excluding the failed PetroChina deal). So there are fewer deals being made.

That may not last for long, especially given that a 34-day market slide has left valuations on the cheap side of average. According to Bloomberg, companies on the S&P 500 Index will earn 18% more this year than in 2010, but the index has fallen 6.8% since the end of April. The combination means valuations are the cheapest they’ve been in 26 years. The index is valued at 8.7 times cash flow, cheaper than in 81% of occasions since 1998; and it is priced at 2.1 times book value, which is lower than it has traded 90% of the time since 1995.

The challenge for a buyer right now is to actually ink a deal at current prices, because most potential targets are still valuing themselves using parameters pulled from the rich deals of 2010.

How will it all pan out? Only time will tell. If commodity prices continue to slide because of U.S. economic uncertainty, Greek default concerns, and slowing Chinese demand, deal-making will remain quiet for a while – until the floor is visible – as no one wants to buy a company today that will be cheaper tomorrow. If commodity prices rebound, deals will be back on the table, as no one wants to chase a rising price.

We expect the M&A world to remain fairly quiet for the next few months, as the global economic situation figures itself out. Greece has enough bailout funding to get through August without defaulting, but there are no guarantees beyond that. The U.S. Federal Reserve just lowered its growth forecast for the next two years but still remains confident that the American economy is simply going through a rough patch. As for China, there are as many analysts predicting continued double-digit growth as there are anticipating a significant, inflation-fueled slowdown.

Regardless, it seems that the age of huge, blind Chinese investments is waning. The Asian giant has become pickier in its choices and more demanding in its deals, and why shouldn’t it? After all, we are all relying on China’s massive population to support global economic growth. It seems reasonable that such growth should be on China’s terms.

[Marin and his energy team supply the most in-depth information on the energy markets – be it oil and gas, nuclear, coal, solar or geothermal. Read on to find out more about oil’s future… and the amazing profit opportunities arising from it. Free report here.]

It seems that everywhere we look these days- from U.S.  shale to massive Turkmenistan reserves- natural gas seems to be the energy source of the future.

Back in 2006 Turkmenistan claimed to have found a field of up to 24 Trillion Cubic Meters of natural gas.  At the time BP was saying that the reserves were probably less than 1/10th the amount. Since then the Chinese have been nailing down reserves left and right and it appears that these reserves may be twice as large as originally thought.  Unfortunately, the U.S. has been woefully slow to catch on to the Chinese game.

But recently Hillary Clinton got around to sending an envoy to Turkmenistan trying to catch up with the Chinese.  See the full report by Dr. Daly from OilPrice.com.

 

 

Turkmenistan Gas Finally Gets Washington’s Attention – A Little too Late

One of Washington’s key policy tenets since the 1991 collapse of Communism has been to pry out from under Moscow’s control as much of the energy assets of the post-Soviet space as possible.

Nowhere has this policy been more evident than in the Caspian basin and the energy riches of the new post-Soviet states of Azerbaijan, Kazakhstan and Turkmenistan. To the north lies Russia, with whom Washington jostles for these assets while Iran rings the Caspian’s southern shore, a rogue “axis of evil” member state that Washington has been punishing with sanctions on its energy sector since well before the Evil Empire collapsed.

Now, in a stunning example of naïve hope over geopolitical and economic reality Washington is wooing Turkmenistan, hoping to get a slice of the pie of the world’s fourth or fifth-largest natural gas deposits.

What caused the drooling in Beltwayistan was the release in May of a report by the respected British audit firm Gaffney, Cline and Associates on Turkmenistan’s gas reserves. The report concluded that the South Yolotan natural gas superfield, discovered in 2006, contains reserves of more than 20 trillion cubic meters of natural gas, enough to satisfy European demand for more than 50 years and making it the second largest gas field ever found. It should be noted here that when in 2006, following the field’s discovery, Turkmenistan’s megalomania cal ruler, Saparmurat “Turkmenbashi” Niyazov claimed that the discovery boosted the country’s reserves up to 24 trillion cubic meters of natural gas, his claims were taken as mere braggadocio, with BP calculating them at slightly more than 1/10th that amount. A similar thing happened two years later, when Gaffney, Cline and Associates first audited South Yolotan, and their findings were initially ridiculed as overstated.

Who’s laughing now?

Secretary of State Hillary Clinton’s special envoy on Eurasian Energy, Ambassador Richard L. Morningstar was hurriedly dispatched to Ashgabat, where on 14 June he met with Turkmen President Gurbangeldy Berdymukhammedov after which he gurgled, “The U.S. praises the energy policy of Turkmenistan and its positive initiatives relating to global energy security and the development of broad international cooperation.”

Perhaps Morningstar’s staffers forgot to remind him that early last year Turkmenistan inaugurated two new pipelines to China and Iran that have given Turkmenistan additional export routes for its gas. If the special envoy felt that he had maneuvering room with Berdymukhammedov, it was because the Turkmen ruler is reportedly still annoyed with Gazprom, which unilaterally drastically cut its imports of Turkmen gas on 9 April 2009, causing an explosion at the 302nd-mile segment of the Soviet-era Truboprovodnaiia sistema Sredniaia Aziia-Tsentr (the Central Asia-Center, or SATS, pipeline system) SATS-4 Davletbat-Daryalik pipeline between the Ilyaly and Deryalyk compressor stations near the Turkmen-Uzbek border, halting Turkmen natural gas exports to Russia, which had been running at 42-45 billion cubic meters (bcm) per annum. Gazprom only resumed imports in January 2010, but at a much reduced level. While the new Chinese and Iranian lines have picked up some slack, the Turkmen government still remains angry with Gazprom for the reduced revenue stream.

Even assuming that Morningstar’s diplomatic charms are sufficient to woo Berdymukhammedov to consider gas exports westwards, there remains the small issue of dividing the Caspian’s offshore wasters and seabed, a niggling legacy of the collapse of the USSR two decades ago. Briefly put, Russia favors a solution whereby the five Caspian states receive allotments proportional to their coastline, while Iran is holding out for an equitable 20 percent division for all.

Despite their diplomatic distance however, there is little doubt that both Russia and Iran would oppose the construction of any such undersea Caspian pipeline linking Turkmenistan and Azerbaijan, and the military and diplomatic pressure they could bring on their neighbors would and could be formidable.

Oh, and did I mention that on 30 June that China announced its second pipeline with Turkmenistan, a $22 billion, 5,370 mile pipeline with an annual capacity of 30 bcm had begun operations and that Beijing is on target to replace Russia as Turkmenistan’s leading export market within a few years?

It would seem that Morningstar landed in Ashgabat more than a few days late and a few rubles – err, yuan, short.

Source: http://oilprice.com/Energy/Natural-Gas/Turkmen-Gas-Finally-Gets-Washington-s-Attention-A-Little-too-Late.html

By. Dr. John C.K. Daly for OilPrice.com. For more information on oil prices and other commodity related topics please visit www.oilprice.com

By Marin Katusa, Casey Energy Report

In the midst of roller-coaster oil prices and a global reassessment of nuclear power, in early April a key development in the natural gas arena slipped by mostly unnoticed: a report from the U.S. Energy Information Administration (EIA) about global shale gas potential.

We all know that shale gas discoveries in America have altered the country’s gas picture dramatically – a twelvefold increase in production over the last decade has transformed the U.S. from an importer to a self-sufficient, natural-gas-loving nation, while also pushing natural gas prices way down. U.S. shale gas production increased by an average of 48% a year from 2006 to 2010, and output is expected to rise almost threefold between 2009 and 2035, according to the EIA’s latest Annual Energy Outlook.

In the face of such impressive shale success in America, many began to wonder about shale gas potential in other parts of the world. In response, the EIA commissioned a report estimating the global volume of shale gas outside of the United States, and the results are, well, a bit mind-boggling.

The report marks the first attempt to estimate the volume of technically recoverable shale gas on a global scale, and did so by assessing 48 shale basins in 32 countries outside of the U.S. (where the resources were already known). While U.S. resources stand at an impressive 862 trillion cubic feet (Tcf), those 48 global basins contain an estimated 5,760 Tcf of technically recoverable shale gas. That gives a global shale gas total of 6,622 Tcf.

To put that into perspective, most current estimates of the world’s technically recoverable natural gas resources (not including shale gas) come in at 16,000 Tcf, which means shale resources add more than 40% to the world’s gas volume.

And that’s not all. The study excluded several major types of potential shale resources, based primarily on data limitations. Importantly, the study only covered 32 nations and excluded several gas-rich countries, including Russia and nations in the Middle East. Large, conventional gas resources in these places mean there has been little reason to look for shale gas, so we still have little clue as to how much is there, though most expect sizable amounts. The study also excluded offshore basins. As such, the world’s shale gas resources are certainly larger than this initial count.

Here’s a shortened table, summarizing some of the study’s findings

	Natural Gas Production (2009)	Natural Gas Consumption (2009)	Natural Gas Net Imports (Exports) as % of Consumption	Proved Natural Gas Reserves	Technically Recoverable Shale Gas Resource
	trillion cubic feet		percent	trillion cubic feet
China	2.93	3.08	5%	107.0	1,275
United States	20.6	22.8	10%	272.5	862
Argentina	1.46	1.52	4%	13.4	774
Mexico	1.77	2.15	18%	12.0	681
South Africa	0.07	0.19	63%		485
Australia	1.67	1.09	(52%)	110.0	396
Canada	5.63	3.01	(87%)	62.0	388
Algeria	2.88	1.02	(183%)	159.0	231
Brazil	0.36	0.66	45%	12.9	226
Poland	0.21	0.58	64%	5.8	187
France	0.03	1.73	98%	0.2	180
India	1.43	1.87	24%	37.9	63
United Kingdom	2.09	3.11	33%	9.0	20

We can pull two groups of countries that might find shale gas development pretty attractive out of this table. The first is those countries that currently depend heavily on natural gas imports but also have significant shale resources: France, Poland, Turkey, Ukraine, South Africa, Morocco, and Chile. The second group is those countries that already produce substantial amounts of natural gas and also have large shale resources. In addition to the United States, this group includes Canada, Mexico, China, Australia, Libya, Algeria, Argentina, and Brazil.

There are major differences within these groups, however, on whether to utilize shale resources. France, for example, is thought to have comparable shale resources to Poland. Poland has traditionally relied heavily on Russian natural gas imports, so the country has been keenly issuing shale exploration licenses. Polish Prime Minister Donald Tusk recently said that, while shale gas development has to be environmentally sound, “Our determination is clear: Every cubic meter of gas in Poland must be used if possible.” By contrast, the French government has placed a moratorium on shale gas exploration in response to widespread concerns about the environmental impacts of horizontal drilling and fracturing.

Perhaps the biggest surprise from the above list is China. The shale gas estimate for China came in so high that the country’s National Energy Administration commissioned a shale gas development plan. The China National Petroleum Company completed its first horizontal shale gas test well in late March and is moving quickly to explore China’s shale reserves in partnership with experienced gas producers like Royal Dutch Shell and Chevron.

Energy-hungry China is unlikely to let environmental concerns impede development of what seems to be a truly staggering domestic, unconventional gas resource. In other parts of the world, such as Europe and increasingly North America, residents are becoming more vocal in their concerns about shale gas.

Environmental backlash could in fact pose the biggest obstacle to shale gas production. There are widespread concerns around the use and disposal of fracking fluids, which are proprietary mixtures of water, sand, and chemical lubricants. Many believe that fracking fluids can – and in places already have – contaminate groundwater aquifers; there is also a major debate about how to dispose of the huge volumes of fracking fluids created in drilling a single well. In addition, a set of recent studies countered the common claim that natural gas is a ”green” fuel, which is based on gas producing less carbon dioxide per unit of energy than “dirtier” fuels like coal. While that may be true, the studies investigated the total carbon emissions created in drilling and fracking a well and collecting, processing, and burning the gas. They found that natural gas is actually worse for the environment than coal.

The debate over fracking will undoubtedly continue for years. The EIA report has added fuel to that fire, as it will be hard for the world to ignore a fuel resource of this size. However, finding shale gas is just one small step toward actually producing it. The report suggests that any shale gas development outside of the United States is likely five to ten years away, primarily because many of the countries that could benefit from shale production do not have the specialized equipment needed to drill and frack horizontal wells.

In fact, one nonprofit think tank – the Post Carbon Institute – is challenging the idea that shale gas production can continue apace even in the U.S. The Institute investigated what would be required to maintain the production increases and determined that the infrastructure requirements are unrealistic.

Study author David Hughes estimates there is actually only a 12-year supply of easily accessible, domestic natural gas, in part because well productivity is declining. To maintain the current rate of production would require the drilling of 30,000 wells annually – a slight increase from the current rate of 25,000 and a level that Hughes believes will incite a major environmental backlash.

While not everyone will agree with Hughes’ conclusions, it is true that ”technically recoverable resources” often stay in the ground for a very long time because they are not realistically or economically recoverable.

And here’s yet another reason why it may take a long time for the shale gas phenomenon to grow outside of the United States: As long as natural gas prices remain depressed, it will be cheaper for countries to buy gas rather than to develop their own resources. Mexico, for example, is building six new natural gas power plants this year but is planning to increase imports to fuel those plants, even though state-owned Petroleos Mexicanos (Pemex) recently discovered as much as one trillion cubic feet of gas reserves. Instead of developing those fields in the northern state of Coahuila, Pemex will instead focus on oil output, and the Mexican state power utility will import more gas.

We all like to imagine renewable resources powering our future, but the truth is that coal, oil, and natural gas currently provide more than 80% of the world’s primary energy needs. Nuclear power adds only 6% and renewables contribute just 2% of global energy – a figure that will at best rise to 7% by 2035. So it seems very likely that shale gas will play an increasingly important role in the years to come. How much of this massive resource will actually see development remains to be seen. But now we have a start on understanding just how much shale gas the world has to offer, and from here economic and environmental concerns will have to fight it out.

Marin Katusa and his team are on the cutting edge of the energy sector – combining a network of industry connections with meticulous due diligence to find the best energy plays for subscribers. For only 7 days, you can now get the Casey Energy Report for 40% off the regular price. Try it for 3 months – if you’re not completely satisfied, cancel for a full refund. More here.

By Marin Katusa, Casey Energy Opportunities

In a dramatic about-face, Chancellor Angela Merkel announced last Monday that Germany will phase out nuclear power completely by 2022, shutting down its nine operational reactors and never restarting the seven reactors that were suspended in the wake of the nuclear disaster at Japan’s Fukushima Daiichi plant.

Germany has struggled with a conflicted yet essential relationship with nuclear power from the start. West Germany built its first nuclear power plant in 1960; since then, the country has come to rely on nuclear reactors for more than 20% of its power needs. But the industry’s growth has not come without opposition. A 1975 fire at the Lubmin plant on the Baltic Coast almost caused a core meltdown. A few years later, the Green Party formed and quickly became a nationwide political force based on their “Atomkraft? Nein, Danke” (Nuclear Power? No Thanks) slogan.

For the next 20 years, the country battled with nuclear waste, first transporting it to medium-term storage facilities because of protests against building a national waste processing facility, then shipping it to facilities in France and Britain. In the early 2000s, protestors regularly blocked waste transports, creating a tension-filled period that culminated in the death of an anti-nuclear activist.

In this context, the coalition government committed to phasing out nuclear power by the mid-2020s. But six years later, in 2006, Chancellor Merkel said it would be a mistake for Germany to turn off its nuclear power plants. Four years later, she strengthened that stance with a plan to run the country’s nuclear plants for an additional 12 years, until 2033. That law passed in the country’s lower house in October 2010.

Five months later, the massive earthquake and tsunami in Japan crippled the Fukushima Daiichi nuclear plant. The world held its breath for weeks as TEPCO struggled to contain the radiation, restore electricity to the site, and repair cooling systems to prevent major core meltdowns. Anti-nuclear protestors in Germany seized on the catastrophe to push the chancellor to reverse her stance. Within days, Merkel suspended the decision to extend the lifespans of the country’s nuclear plants; she also halted operations at the seven oldest plants, which all started up before 1980, for three months.

Now, after a weekend that saw tens of thousands of Germans demonstrate against nuclear power across the country, Chancellor Merkel has cemented both of those decisions. All of Germany’s nuclear reactors will be permanently mothballed by 2022, a stunning policy reversal. The decision makes Germany the first major industrialized power to turn its back on nuclear power since the Fukushima disaster. Germany has 17 reactors, of which nine are currently operational. The seven non-operational plants are the old reactors taken offline in the wake of Fukushima, and one is the Kruemmel plant in northern Germany, which has been mothballed for years due to technical problems. None of the reactors that are currently offline will be reactivated, and the newer, operational plants will be shut down in 2021 and 2022.

Now Germany will have to find new sources to supply 23% of its power needs, which is the load its nuclear reactors carried in 2010. The Merkel-led coalition government says it plans to push the country to cut power usage by 10% by 2020. It will also promote doubling the use of wind and solar power, so that renewables will provide 35% of the country’s power by the time nuclear goes offline.

Merkel’s change of heart follows from a string of disastrous election results for her Christian Democrats (CDU) and their Free Democrat allies, which have been largely blamed on her unpopular pro-nuclear policy. In March, the Greens won control of a CDU stronghold – the populous state of Baden-Wuerttemberg – in a major blow to Merkel’s credibility as a coalition leader. Last year, her party lost its majority in the Upper House after failing to hold on to another highly populated region, North Rhine-Westphalia.

Germany’s power providers were not pleased with the nuclear decision. “The end (of nuclear power) by 2022 is not the date we had hoped for,” said a spokesman from RWE, Germany’s largest power provider. The company also said it will keep “all legal options open,” in reference to the government’s decision to maintain the newly imposed nuclear fuel tax despite enforcing plant shutdowns. The tax was linked to the extension of reactor lives. RWE and Germany’s other main power provider, E.ON, had been threatening to sue the government over the levy even before the nuclear power shutdown plan was announced. And in a separate case, RWE has already filed litigation challenging Germany’s temporary (now permanent) suspension of the seven old power plants following Fukushima.

The German industry association, BDI, said the exit of nuclear power would push energy prices up and make it more difficult to reach emissions targets, as “the shortfall of nuclear power will have to be compensated by coal and gas power stations.” Merkel, however, says Germany’s goal of reducing greenhouse gas emissions by 40% by 2020 also remains in place.

According to Platts, there are some 13GW of thermal energy capacity, comprising mainly hard coal but some lignite and gas, already under construction in Germany. But four out of nine coal power stations and a lignite unit currently under construction are unlikely to be commissioned as originally scheduled in 2011 and 2012, due to a problem with boiler construction. This fact, along with the planned nuclear shutdowns, is prompting talk that the nuclear plan is untenable because it will leave Germany with insufficient power capacity.

The German decision prompted losses for several major uranium producers on Monday. Cameco (T.CCO), the world’s largest pure uranium producer, lost 3.3% while Uranium One (T.UUU) fell 2.7%. However, we do not expect Germany’s decision to impact the uranium story in the long run.

Germany’s 17 reactors account for just 5% of global demand. By comparison, there are 104 nuclear reactors in the United States and 58 in France. And developed economies are not expected to contribute significantly to uranium demand growth – the developing world will play that role. China has 27 reactors under construction, 50 planned, and another 110 proposed. India has 5 under construction, 18 planned, and 40 proposed. Russia has 10 under construction, 14 planned, and 30 proposed. And so on.

We have said it before and will say it again – the long-term fundamentals for uranium are very strong. Demand growth with outstrip increases in supply in the medium term, as the developing world works frantically to provide its billions of citizens with electricity. The Fukushima disaster, and Germany’s reaction to it, will do little to derail this trajectory.

What Germany’s decision will do, however, is further promote renewable energies. On Monday, solar cell makers Q-Cells SE and Solar World gained 8.5% and 8.8%, while wind turbine maker Nordex advanced 13.3%. Those reactionary gains aren’t sustainable, but in turning its back on nuclear power, Germany has given a lift to solar and wind that will last.

[Learn how stupid politicians, Japan’s nuclear disaster, and the turmoil in the Middle East are devastating the global economy… and how savvy energy investors can take advantage of the select profit opportunities that are opening up. Free report here.]

By Marin Katusa, Casey Research Energy Team

Coal prices are surging ahead even as most other commodities pull back, spurred on by expectations that metallurgical and thermal coal production will again fail to meet rising global demand this year. The result? Record profits for major coal producers like Xstrata, a surge in acquisitions from coal-hungry India, Chinese electricity shortages, and a raging carbon tax debate in Australia amid record investments in that country’s coal-heavy mining sector.

The price spikes in the second half of 2008, which were completely unsustainable and disappeared rapidly in the recession, distort the picture. So instead, imagine the above graph without those peaks. What you get is an almost sustained ascent in the spot prices of thermal and metallurgical coal over the last four years. Metallurgical coal, which is used to make steel and is also known as coking coal, has almost doubled in price, climbing from just above US$80 per ton in mid-2007 to more than US$160 per ton today. Thermal coal, which is burned to generate electricity, has risen from the US$45 per ton range to almost US$80 per ton.

There are a couple of countries that really take notice when coal prices start to rock. Australia is the world’s biggest coal exporter and relies on thermal coal for 80% of its electricity. China mines more coal than any other country in the world but still imports more to support its power and steel-making needs – the country mines and burns more than three billion tons of the black stuff annually. And India – where the economy is growing at 8% annually – is facing multimillion ton coal shortages even as it works to halve a 14% peak power deficit within two years.

Let’s start with Australia, a country embroiled in a debate over newly introduced carbon taxes. Those taxes are set to come online in mid-2012, ahead of a cap-and-trade system that could begin as early as 2015. Proponents say the tax is necessary to force a coal-reliant country to move toward cleaner energies. However, the tax has drawn widespread criticism from the nation’s huge coal industry. Australia supplies 19% of the world’s thermal coal and 59% of its coking coal; these industries are worth A$18 million and A$40 million, respectively (2009 numbers). With coal prices expected to keep rising for the next few years at least, Australian coal miners had big expansion plans. Instead, if the carbon tax goes ahead, the industry says it will have to close mines, meaning major tax and job losses for the nation. Opponents of the tax also say it will make Australia’s own energy more expensive and less reliable.

Another argument against the tax is that reducing Australia’s coal output could in fact increase global carbon emissions, because power stations in China and India would simply use dirtier coal to fill the gap. Australia’s thermal coal is perhaps the best in the world, with high energy content and few impurities. Thermal coal from Indonesia has only 70% of the energy value of Australian thermal coal, which means that much more coal would have to be mined, processed, and shipped.

In the context of this very current, heated debate – the Australian coalition government is set to meet this weekend to hammer out the details of the tax – a new report from the Australian Bureau of Agricultural and Resource Economics and Sciences shows that planned investments in the country’s mining sector have soared to a record A$173.5 billion. The figure represents development plans for 94 projects, including 35 mineral projects, 35 energy projects, 20 infrastructure projects, and four processing projects. The Bureau estimates A$55.5 billion in mining-industry expenditures in the current year alone.

A fair chunk of these investments will come from coal companies, which have money to spend because the current coal prices are providing record profits. Xstrata, the world’s largest exporter of thermal coal, is expected to report an 83% gain in net income this year, according to a Bloomberg compilation of analysts’ expectations. Another good example comes from Arch Coal (N.ACI), which recently tendered a $3.4 billion offer for International Coal Group (N.ICO) aimed at creating Australia’s second largest metallurgical coal producer.

China is another major coal producer, but there the issue is coal shortages. The country’s economy is steaming ahead at a 10% growth rate, and that kind of development requires a lot of steel. This year alone, China is facing a shortfall of 56 million tonnes of metallurgical coal – the country is expected to produce 513 million tonnes, but consumption will reach 569 million tonnes. The Asian giant imported 47 million tonnes in 2010, helped by a 278% increase in imports from Mongolia. And even though domestic coking coal production is expected to increase by 80 million tonnes per year by 2015, China’s latest estimates predict a 100-million-tonne annual shortfall in coking coal by 2015.

It is not just coking coal that China needs. Shortfalls in thermal coal supplies are the main culprit in an expected 30-million kW summer power deficit. And the problem is exacerbated by the fact that the country’s electricity pricing system has not kept up with coal price increases. Plants sell electricity to the State Grid Corp. of China (SGCC) at a set price, and SGCC then resells to consumers. But the set price has not kept pace with coal prices. As such, coal-fired generators lose money for every ton of coal they burn, which is not exactly an incentive to produce more power. Over the past three years, China’s top five state-owned power generating plants have lost some 60 billion yuan, while SGCC posted a 40-billion-yuan profit last year alone.

China is expecting to face its worst power shortage in years this summer. Widespread droughts, which have decimated the country’s hydropower capacities, are not helping. As many as 20 provinces and territories have already been put on power rationing, including the country’s industrial heartland. Some 44 major industries in Zhejiang (a manufacturing hub near Shanghai) have been told to limit consumption or face prohibitive tariffs. The story is much the same in Guangdong, south China’s manufacturing hub. And producing more coal is not an option – the government has acknowledged that China is near its peak coal production capacity.

To continue on a familiar theme, India is also facing an acute coal shortage. In April, for example, the nation imported 32 million tonnes of thermal coal against a total requirement of 36.9 million tonnes. At the end of March, 26 of India’s thermal power stations reported having only critical stocks of coal, including ten stations with fewer than four days’ worth of fuel. On Monday, the prime minister convened an emergency meeting to discuss the coal shortages, which are expected to total 112 million tonnes over the next 12 months.

India has been working to address the coal void for some time now. Indian firms have been scouring the globe for coal assets, and the effort has secured several major deals: Indian conglomerate Adani is set to buy the 25-million-tonne-per-year coal export terminal as Abbot Point in Queensland, only a year after buying the Galilee coal project in Australia for $2.7 billion; Indian trader Knowledge Infrastructure signed a joint venture deal with Indonesian miner PT OSO International to develop thermal coal mines in Kalimantan; and three Indian firms are among those shortlisted to buy Australian coal explorer Bandanna Energy, a deal expected to top $1 billion.

Coal India, which produces 80% of the country’s coal, is not going to be left out of the shopping spree. A few months ago, the company set aside $1.2 billion for overseas buys, specifically in Australia, Indonesia, and the U.S. And it has the money – net income for the first quarter totaled $931 million and full-year profits were up 13%. Shares in Coal India started trading Nov. 4 after the government raised $3.2 billion by selling a 10% stake, in the country’s largest public offering to date.

The story could go on, discussing other coal-needy countries like Japan, South Korea, Germany, and so on, but perhaps the point has been made. Global production is maxed out with respect to existing infrastructure, so increases from here can only occur as quickly as new mines, rail lines, and ports can be built. Coal prices have been climbing steadily, based on real supply constraints, and most industry watchers agree that they will hold their ground or continue to climb for the next few years.

Those countries with coal should count their blessings.

[Whether the subject is coal, oil and gas, nuclear, or alternative energy resources, Marin Katusa and the rest of the Casey Research energy team dig deep to find the best power plays to invest in. Test-drive Casey Energy Opportunities for just $39/yr. today and find the best energy investments for prudent investors. Learn more here.]

Trends in Energy–

In the wake of the massive nuclear tragedy in Japan the unthinkable has happened in a nation known for their efficiency of design. This is causing the entire nation and possibly the world to re-evaluate their energy choices. Is this a mega-shift in trends? Could this usher in a period of turning to safer alternatives?

Just this past week General Electric’s (GE) GE Energy division debuted its Electric Vehicle Solar Carport. This carport has solar panels built into its roof and can feed the electricity it produces into GE’s new Smart EV Charging Stations opening the door for Solar powered cars. Each EV Solar Carport Project produces enough energy to power nearly 20 homes per year. And is targeted toward parking lots so cars can be parked in the shade and get charged up as well. There are millions of acres of parking lots around the country just ripe for producing solar energy (and shading cars). I would think many people would pay for the priviledge of parking in the shade even if they didn’t want to charge up their car. The excess energy could be fed back into the grid supplying energy during peak usage times (daytime) or used to charge the cars parked in them.

Perhaps as Dr. Daly suggests in this article the key components of alternative energy are coming together not only with G.E. but throughout the world.

Tim McMahon, editor

The Fukushima debacle has finally bared the industry’s darkest secret, its inability to manage its nuclear waste. The six reactor TEPCO Daichi Fukushima stored all its waste onsite, and the spent fuel rods and their lack of cooling have been a major contributor to the high radiation levels observed around the facility. Worse for nuclear power proponents has been the reluctant admission by TECPO that three of the complex’s six reactors apparently did in fact suffer a meltdown. So, what’s next?

Why Japan Will Turn to Solar Energy Following Fukushima

By. Dr. John C.K. Daly

As the dire news continues to leach out of Fukishima, the silver lining in its nuclear cloud is that renewable energy technologies, despite their daunting start-up costs, are receiving renewed scrutiny.
Make no mistake – given the trillions of dollars invested over the last five decades in nuclear energy, the industry and its lobbyists will not go down without a fight, promoting new, “safe” reactor designs, etc. etc. etc.

But the Fukushima debacle has finally bared the industry’s darkest secret, its inability to manage its nuclear waste. The six reactor TEPCO Daichi Fukushima stored all its waste onsite, and the spent fuel rods and their lack of cooling have been a major contributor to the high radiation levels observed around the facility. Worse for nuclear power proponents has been the reluctant admission by TECPO that three of the complex’s six reactors apparently did in fact suffer a meltdown.

So, what’s next?

Hydroelectric facilities are a proven technology, but expensive and take years to construct.

Wind power also has substantial start-up costs, is erratic, and faces environmental opposition.

With the notable exception of bioethanol, little real money has gone into biofuel renewable, particularly in the U.S., where bioethanol produced from corn has a hammerlock on both subsidies and crop insurance, despite rising concerns about shifting land from food to energy production is driving up costs of foodstuffs. The leading contenders for bio-renewables, camelina, algae and jatropha, all are starved for investment as a result.

Which leaves solar energy, whose major drawback up to now has been its high cost to generate kilowatts.

That however is changing, as research finds ways to lower costs.

DuPont’s (NYSE-DD) colorless polyimide film, a revolutionary new material currently in development for use as a flexible superstrate for cadmium telluride (CdTe) thin film photovoltaic modules, has established a new world record for solar cell conversion efficiency reaching 13.8 percent using the new Kapton colorless film, leapfrogging their previous world record of 12.6 percent and nearing that of glass. Robert G. Schmidt, new business development manager, Photovoltaics – DuPont Circuit & Packaging Materials commented, “Rather than transporting heavy, fragile glass modules on large trucks and lifting them by crane onto rooftop PV installations, one could imagine lightweight, flexible film-based modules that could simply be rolled up for transport, and easily carried up stairs.”

On the other side of the world, according to Huang Xinming, head of a research institute at JA Solar, a large Chinese solar power company, JA Solar has just developed a new technology that could cut the cost of producing silicon, an important material in manufacturing solar panels, by 60 percent.

Cutting raw material costs, raising efficiency and reducing weight and transportation costs – t’would seem the future is lighting up, no pun intended.

And once again, China is apparently out-thinking its Wall Street competition, obsessed with maximizing profits and quarterly balance sheets. In any industrial process, increased production lowers in turn production costs. Rather than wait for entrepreneurs to line up in Beijing, china is apparently moving to make solar energy a component of its foreign policy in Africa as it moves to secure access to the Dark Continent’s mineral riches.

According to Sun Guangbin, the secretary-general of photovoltaic products at the China Chamber of Commerce for Import & Export of Machinery and Electronic Products, speaking in a recent interview, China intends to build solar power projects in 40 African nations in a boot-strap effort that will both reduce the continent’s reliance on fossil fuels and open a new market for Chinese manufacturers, the biggest producers of solar panels. Sun noted, “China needs new emerging markets to consume their solar products besides Europe, and Africa could be one of them. We’ll begin investigating this month in Africa to determine a suitable project in each country, such as installing solar panels on the rooftops of schools and hospitals.”

Compare this with today’s pronouncement from London that the Conservative government of David Cameron intends “Drastic cuts for large-scale solar power subsidies,” according to a headline in the Guardian.

London and Washington are both still wedded to Big Oil and nuclear power. But if the 21st century is going to be about the struggle by Western economies to have access to Third World raw materials, it would seem that Africans, their schools, hospitals and home lighted by solar panels, may well look eastwards.

Source: http://oilprice.com/Alternative-Energy/Solar-Energy/Why-Japan-Will-Turn-to-Solar-Energy-Following-Fukushima.html

By. Dr. John C.K. Daly for OilPrice.com. For more information on oil prices and other commodity related topics please visit www.oilprice.com