Canada and Japan block climate deal at Copenhagen – The United Kingdom’s chief scientific advisor told a gathering of scientists that the two countries have picked up the Bush Administration’s torch, fighting international pressure to cut CO2 emissions. Canada has its oil industry at stake, while Japan has struggled to meet even modest reduction targets. [Source: Times Online]

Back to petroleum for BP — Briefly lauded for its efforts to get into solar and wind power, BP now appears to be backing out. The oil company has shut down its London alt-energy headquarters and is imposing budget cuts on the division, as well as getting rid of its chief, Vivienne Cox. [Source: The Guardian]

Flywheel energy storage wins government loan — Utility-scale energy storage startup Beacon Power has been granted a $43 million loan guarantee by the Department of Energy. Its flywheel storage systems are designed to help keep electricity flowing continuously, especially as unpredictable sources like wind come online. [Source: Earth2Tech]

Colorado oil and gas rules spread to Federal lands — Strict rules on land use in Colorado, disliked by the oil and gas industry, have spread from affecting just private and state land to include Federal property. The Colorado Oil and Gas Association is fighting the rules in court. [Source: Summit Daily News]

CNPC may offer to buy up to 75 percent of YPF — Repsol’s Argentine company – while China National Offshore Oil Companyor CNOOC is interested in acquiring a 25 percent stake, Hong Kong’s South China Morning post reported Thursday.

Repsol, a Spanish oil company, has confirmed it has received offers to buy a stake in YPF, but stopped short of providing details and said none of the proposals are firm, according to the FT.  Petersen Energia, part of Agrentina’s Grupo Petersen, bought a 14.9 percent stake in YPFin February 2008. Grupo Petersen has an option to buy another 10 percent by 2012.

YPF is the albatross hanging around Repsol’s neck. Ridding itself of the Argentine company would allow it to put money in far more promising ventures such as exploration and production in North Africa, Brazil and the Gulf of Mexico.

Short of the obvious desire of China to scoop up overseas energy assets and its reported interest in South America, I don’t know why YPF is on the CNPC’s — aka China’s — radar.

China’s latest acquisitions have made sense. China Petrochemical Corp., known as Sinopec, acquired last month Addax Petroleum for $7.2 billion, a purchase that gives it access to the Kurdistan Region of Iraq and West Africa. More recently, CNPC was part of a BP-led consortium that produced the only successful contract to develop an Iraq oil field.

The company along with Kazakhstan’s KazMunaiGas purchased Kazakh oil producer MangistauMunaiGas for $3.3 billion. And CNPC purchased Verenex Energy, which owns oil fields in Libya, for $499 million in February, although the deal has been held up accusations of improper bidding maneuvers.

CNOOC is interested in buying a stake in Kosmos Energy, a U.S.-based company focused on developing oil and gas in Africa. Kosmos closed bidding for the sale of its two blocks in the Jubilee oil field in Ghana, which has resources of about 1.2 billion barrels of oil.

And then there are all of those fuel-for-loans deals China has worked out with Venezuela, Russia and China.

YPF, however, exists in a highly regulated environment and one that doesn’t coalesce with the Repsol’s bottom line.

Since Repsol purchased the stake in YPF in 1999, Argentina has become increasingly nationalized. For the past two years, YPF earnings have suffered from caps placed on oil prices, as noted by Bloomberg. There also is an earnings cap of $42 per barrel of oil exported, with any revenue above that amount collected as taxes.

In its annual report filed with the U.S. Securities and Exchange Commission, YPF provides a litany of economic, political and regulatory issues in the country. The list is a long one and includes a government-mandated priority placed on domestic demand, higher taxes on exports, limitations on its ability to pass increases in crude prices through to domestic prices and work disruption or stoppage. The list goes on.

CNPC may be motivated to scoop up overseas assets while the global recession is still working its credit crisis magic. But YPF seems to provide nothing but regulatory and economic hurdles.

Other BNET coverage of China and its recent acquisitions:

• Iraq Oil Auction: China’s Public Display of Aggression, BP-led Bid Scores Deal
• China Targets Addax, Kosmos in Overseas Asset Grab

The big winner was vehicles themselves, by dollars if not number of companies. Just four startups split $236 million. V-Vehicle, a secretive car startup in Louisiana, took $100 million in a single swoop from venture capital firm Kleiner Perkins Caufield & Byers and oilman T. Boone Pickens. Kleiner Perkins also had its fingers in Fisker Automotive’s $89 million round.

With another $371 million split between biofuel and batteries, which are at base competing technologies for cleaner driving, what was left for other ideas? Solar slipped in with $115 million, according to the report’s authors, the Cleantech Group and Deloitte. Compare that to the $330 million logged by Greentech Media in its most recent report, sent out a couple days ago. The difference is in the definition of “venture capital”.

The good news is that the Greentech’s larger number does suggest that there’s more money flowing into solar manufacturing plants and deployments, besides the deals scored by Deloitte, which include solar thermal plant builder Ausra.

The bad news, at least if you’re a new solar startup, is that the recent wave of investments into a hundred variations on standard and thin-film solar panels appears to be well and truly dead. Now, not even supporting technologies (like micro-inverters or improved manufacturing techniques) appear to be attracting much money.

Even worse for the startup crowd is the near dearth of investments in wind and geothermal, as well as some typically ignored sectors like water, both the kind you drink and the kind that generates energy.

Still, there’s not much unusual to the numbers. With General Motors and Chrysler teetering near collapse, venture investors were bound to herd into transportation, and areas like the smart grid did get attention, if less money. The important thing is that some money is finally flowing back toward innovation. If cap-and-trade passes into law in the United States, the number of new deals will only rise.

The auction, which offered up six oil and two gas fields, promised to inject some much-needed cash into Iraq’s coffers, resurrect damaged oil fields, give international oil companies access to a long-restricted country and maybe even preserve Oil Minister Hussain al-Shahristani’s career.

In the end and out of the 22 companies that placed bids in the auction, one contract was secured by BP and its consortium partner China National Petroleum Co., to develop the Rumaila field in southern Iraq. The auction also provided insight into just how serious China is about Iraq’s oil and gas resources. If Chinese firm Sinopec’s takeover of Addax Petroleum for $7.2 billion didn’t signal China’s interest in Iraq, this week’s auction certainly did.

Iraq’s cabinet approved Wednesday the fee-based contract with BP and its minority partner CNPC. The cabinet rejected bids resubmitted for six other fields. No companies bid on the Mansuriya gas field.

BP was the only firm willing to lower its per barrel fee to $2, the maximum amount Iraq’s oil ministry said it would pay. The remaining 20 companies including ExxonMobil, Royal Dutch Shell and ConocoPhillips failed to reach an agreement with the government, with many complaining terms of the contracts were too narrow. The government rejected new offers Wednesday because the firms did not agree to the per-barrel fees Iraq would have paid to develop the oil and gas fields.

I was struck by how aggressive China was in the auction. Four Chinese firms participated in the bidding including CNPC, China National Offshore Oil Corp. or CNOOC, Sinopec and Sinochem.

CNPC bid on five of the eight fields in Iraq. The Chinese company secured the Rumaila contract with its majority partner BP. Rumaila, with 17.7 billion in known oil reserves, was the largest oil field offered in the auction. CNPC and BP bid together — this time with CNPC as the majority partner — for the Zubair field. Ruba Husari, editor of the Iraq Oil Forum provides information on the entire process of the auction including the final bids.

In some cases, the Chinese firms would partner up, such as CNOOC and Sinochem’s bid on the Missan field. Other times, they placed competing bids for access to the same field.

Let’s not forget, China is already operating in Iraq. CNPC signed a 23-year service agreement last yearto develop the Al-Ahdaboil field south of Baghdad. The deal is worth $3 billion.

For BP, securing the contract allows access to vast amounts of easy-to-reach oil. But this access doesn’t come without plenty of risks. The $2 per-barrel fee is hardly ideal. And once BP pays the 25 percent in taxes and 25 percent of after-tax income to their associated Iraqi company, it will walk with 95 cents per barrel.  

Plus, the company will have to invest considerable money into the infrastructure if it hopes to boost output from 985,000 barrels to 2.85 million barrels a day.

The country still does not have a hydrocarbon law on the books, perhaps one of the bigger uncertainties facing BP and any other foreign oil company that manages to gain access in the future.  If more companies had secured contracts, the Iraq government may have been a bit more demanding. But with only BP on board, I expect they’ll be more accommodating.

Other BNET coverage of China and its recent acquisitions:

• China Targets Addax, Kosmos in Overseas Asset Grab

Google

In its blog post about the partnership, Google describes the meeting with Yello Strom’s CEO and the demo of its Sparzähler meter as “fate.” And in a cursory glance at the Sparzähler, it certainly looks like a good match for Google PowerMeter.

For one, it opens Google to the European market. Yello Strom, a subsidiary of Energie Baden-Wurtternberg, one of Germany’s largest energy companies, has more than 1.4 million customers and offers commercial smart meters. It’s Sparzähler meter — meaning savings counter or meter — has broadband connectivity that allows Google PowerMeter users to see 15-minute interval data in nearly real time, according to the Google.org post.

Yello Strom also has a relationship with Google rival Microsoft, as Greentech Media noted. Yello Strom partnered up with Microsoft back in March 2008 at the CeBIT computer trade fair in an effort to design software for its Sparzähler based on Microsoft technologies. A communications module based on Microsoft operating system Windows CE is integrated into the Sparzähler meter to help manage the consumption data. The information is eventually delivered to customers’ PCs.

Microsoft launched its own home-energy monitoring software Hohm earlier this month. And while Hohm and PowerMeter have their differences, as I pointed out in an earlier BNET post, they are competing for the same increasingly-crowded home-energy management market.

This is the first utility where both Microsoft and Google have some sort of partnership. They also are both working with smart meter maker Itron. I’d expect that has both companies scramble to sign on more utilities they’ll continue to bump into each other.

Hohm and PowerMeter have one essential difference: one relies on a smart meter and the other does not, at least not yet.

PowerMeter works by taking information from a smart meter installed in your home, tracking energy consumption and then sending the data to a customer’s iGoogle homepage.

Microsoft uses advanced algorithms licensed from the Lawrence Berkeley National Laboratory and the Department of Energy. The algorithms help turn the data into easy-to-understand information for the user. Microsoft is working with four utilities to be able to track and analyze energy consumption data directly from your energy provider.

There is all sorts of speculation as to which product is superior or has greater potential for success. With so much competition in the industry, it’s nearly impossible to predict.

As I’ve said before, the battle will heat up as the two companies — and the others out there in the home-energy management mix — vie for a finite number of utilities.

Other BNET posts on home-energy management and smart grid:

• Microsoft’s Hohm Enters Crowded Home-Energy Monitoring Market
• Cisco Securing the Smart Grid
• Trilliant Looks Toward a Year of the Smart Grid
• Google Jumps on the Smart Grid Bandwagon

Image from Google.org/powermeter

BG Group buys into U.S. shale natural gas field — The U.K.’s BG Group has agreed to pay $1.06 billion for a stake in EXCO Resource’sshale-rock natural gas holdings, the latest in a string of international shale gas acquisitions in the U.S. The deal gives BG a 50 percent interest in 120,000 acres in Texas and Louisiana, which includes the resource-rich Haynesville shale project. [Source: WSJ]

Top 10 green cities list includes Boston and San Francisco – Mother Nature Network’s editorial team looked at air and water quality, recycling and waste management programs, percentage of LEED-certified buildings, acres of greenspace, use of renewable energy and access to green products to come up with the top 10 green cities. Who made the list? The top five includes Eugene, Ore.; Oakland, Calif.; Boston; San Francisco and coming in at No. 1, Portland, Ore. [Source: MNN]

Dow Chemical’s algae biorefinery to produce cheap fuel — Dow Chemical will build and operate a biorefinery that uses algae to turn carbon dioxide into ethanol. The company, which is partnering with Algenol Biofuels, says it will produce the fuel for as little as $1 per gallon. The ethanol could be used to replace natural gas as the ingredient in plastic products. [Source: Detroit News]

Wind turbine prices fall worldwide – Wind turbine prices have plummeted 18 percent for contracts signed in late 2008 and 2009, according to a new price indexed launched by New Energy Finance. An easing of turbine demand, which opened up supply bottlenecks experienced in early 2008, has helped push turbine prices down. [Source: Renewable Energy World]

Enterprise Products buys TEPPCO in $3.3 billion deal — Enterprise Products, a pipeline operator controlled by a general partnership company owned by Houston billionaire Dan Duncan, snapped up TEPPCO Partners in a $3.3 billion all-stock deal that will create the largest publicly traded U.S. pipeline company. [Source: NYT]

The effort is just a start; the 13 projects will represent less than 10 percent of the 158 applications the BLM has on file. There are reports that some applications were placed by speculators who simply wanted to secure an early place in line for a process that could take years.

But quite a few valid companies are also likely to benefit from the go-ahead. Their ranks will include companies with new technology and plans for, collectively, several gigawatts of solar power: BrightSource Energy, First Solar (through its acquisition of Optisolar), Stirling Energy Systems and others seem likely to make it into the first round of approvals.

For the BLM, it’s an expected move. The agency has had to adapt to the new demands of the renewable industry in a short time — never an easy task for a bureaucracy. As more companies pile into solar power, the pressure will only increase on the BLM to unlock the millions of acres of public land under its control as quickly as possible without angering environmentalists or damaging marginal lands.

It’s also interesting to speculate, though, that this might just be the first step of a government becoming interested in energy for the first time in decades. The cap-and-trade legislation that just passed in Congress also includes measures that would speed construction of coal plants, and quite a few Republican lawmakers seem interested in revitalizing nuclear power.

Doing all of the above requires both the consent and active participation of the government. For once, we may be about to have both.

The International Energy Agency, which released Monday its natural gas review in conjunction with its Medium-Term Oil Market report, outlines a gloomy picture for natural gas. 

In the first half of 2008, the outlook was rosy. There was tight supply and demand balance with rising energy prices, according to the IEA report. Weakening demand, falling spot prices and a global recession capped off 2008. The theme has continued — and has even darkened — in 2009.

OECD gas demand fell by 4 percent in the first quarter of 2009 and is expected to drop even further through the year, according to IEA projections. At the same time, 60 billion cubic meters of LNG capacity is expected to come online. [OECD or Organization for Economic Co-Cooperation and Development has 30 member countries, which includes the U.S., Mexico, Australia and European nations.]  

What does this mean? Well, the IEA anticipates unconventional gas production in the United States will likely bear the brunt of falling demand, increased LNG capacity and low spot prices. In IEA’s report, it’s not a matter of if, but when and how fast. 

“The question for 2009 is how rapidly U.S. unconventional gas production — which is generally higher cost and therefore less competitive — will decline,” the IEA said in a press release about the report.

A report earlier this month from the Potential Gas Committee, showed natural gas reserves are about 39 percent more than originally estimated two years ago. The increase was due in large part to companies accessing harder-to-reach shale gas such as the Marcellus play, which stretches from New York to Ohio.

Natural gas producers, reeling from weak demand and lower prices, may pull back on future investments. This of course, sets consumers up for a price spike as recovering demand is met by stagnating capacity due to delayed investments in production and supply infrastructure.

This impending tightening of the market will largely depend on whether new LNG projects are approved, IEA said. LNG capacity will grow an unprecedented 50 percent between 2009 and 2013, according to the report. But, the Paris-based agency expects a scarcity of new capacity after 2013 unless projects are approved in 2009-10.

ExxonMobil is among those adding to the global LNG capacity. The company has three LNG projects in Qatar, slated to start up this year. The projects would produce more than three billion cubic feet a day of natural gas, according to the WSJ.

Exxon also is leading a $12.5 billion Papua New Guinea LNG project, expected to produce 6 million metric tons a year of LNG for shipment to international markets.

Companies heavily vested in unconventional gas production, such as shale, could experience further pressure if LNG supplies intended for Asia and Europe, end up coming to an already oversupplied U.S. market.

Venter announced his discovery of the coal-eating bacteria this weekend, and the Times of London, along with other sources, promptly reported it as something entirely new. Like most things under the sun, it’s not. A startup called Luca Technologies, for instance, was funded with $76 million last year for the same idea, though the specific bacteria Luca uses are probably different.

The 1,201-page bill is considered the broadest piece of legislation ever considered by Congress aimed at capping greenhouse gas emissions and placing a price on carbon. Under the bill, emissions would be cut 17 percent from 2005 levels by 2020 and 83 percent by 2050. The massive bill tries to do it all and through a lengthy negotiating process to ensure its passage, it’s also loaded with compromises. But even with those concessions, the bill barely stayed alive, with more than 40 Democrats breaking ranks to vote against it.

Here are some highlights and a few of the compromises.

• Farm states. House Agriculture Committee Chairman Collin Peterson held the bill hostage until certain compromises were made. What resulted is a 50-page amendment that among others things shifts control from the Environmental Protection Agency to the Department of Agriculture to determine rules for carbon offsets, a program that would pay farmers for practices that reduce greenhouse gas emissions. Grist delves into the amendment and includes all the nitty gritty details.
• Biofuels. Peterson’s amendment also requires a lengthy review, with final results published within five years, of biofuel regulations. During this five-year review, biofuels emissions from international indirect land use are exempt.
• Clean energy technology. The bill provides $90 billion by 2025 for clean energy technology and energy efficiency, $60 billion for carbon capture and sequestration and $20 billion for electric and other advanced technology vehicles.
• Solar, wind. A renewable energy standard has been established that will require 20 percent of all U.S. electricity to come from alternative sources by 2020. This mandate opens up opportunities for growth within the renewable energy industry including solar and wind power.

With such a hyper-focus on Waxman-Markey it’s easy to forget what lies ahead. The passage of Waxman-Markey is the first in a number of hurdles facing energy and climate change legislation.

From here, the battle moves onto the Senate, where its Energy and Natural Resources committee has already marked up its own energy legislation called American Clean Energy Leadership Act or ACELA. Any legislation dealing with climate change would fall to the Senate Committee on Environment and Public Works. According to Grist, Barbara Boxer, who leads the Environment and Public Works committee, will produce a climate bill by the end of August.

Senate Majority Leader Harry Reid has already indicated, in a statement sent out Friday, the Senate and the appropriate committees will take up the energy and climate change legislation. But the fight promises be even more contentious in the Senate, where it must receive 60 votes to pass. That means every Democrat will have to be on board, plus a few Independents and Republicans.

Let the lobbying begin.