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Business of Energy
July 9, 2008 •
This week, billionaire oilman (and now wind energy investor) T. Boone Pickens has debuted his new energy policy to wean the U.S. off oil. Pickens says he is prepared to use his own money to advance this plan. At the center of his plan is another fossil fuel — natural gas — and renewable energy like wind power.
What’s the renewable fossil fuel equation? According to CNBC’s recounting of Pickens’s appearance on that network on Tuesday morning:
Developing wind and solar power could lower the use of natural gas in some instances, he said. Some of that natural gas could be redirected to uses normally reserved for oil, like transportation. That, in turn, could lead to a 38 percent reduction in the use of foreign energy supplies, he concluded.
According to the Dallas Morning News, Mr. Pickens plans a long media campaign “to promote his energy policy ideas — which align perfectly with his business investments. He’ll spend tens of millions of dollars on television and Web advertising and will make talk show appearances along the way”:
Mr. Pickens agreed that the shift to natural gas and renewable power will take time. He isn’t trying to address current prices at the pump; Americans will have to find ways to live with expensive gasoline, he said.
And he acknowledges that building natural gas pipelines to every service station, erecting more wind turbines, and stringing the transmission lines to service them, would cost billions of dollars.
But with the U.S. spending $700 billion a year on foreign oil, investing several billion in wind turbines and new transmission lines would be an attractive trade-off, he says.
The businessman also announced Tuesday that he was investing $10 billion on a 4,000 megawatt wind power deal in Pampa, Texas. He referenced an “unbelievable wind corridor from Sweetwater, Texas to the Canadian border” as a possible site for 150,000 megawatts. Pickens toured wind turbines in Sweetwater last week with national media outlets. An Abilene Reporter News story last week quoted Pickens as saying “we’ve already bought the turbines for the first 1,000 megawatts, and we’ll start construction in the summer of 2010.”
Pickens has also launched Clean Energy Fuels, a company that runs natural-gas filling stations for fleet vehicles, according to a MarketWatch story.
Pickens doesn’t plan to discuss energy policy in a bubble; he plans to push the presidential candidates to address the issue. According to the Dallas News, “He aims to make energy a central issue in the presidential election. He’ll challenge the candidates to go beyond pandering on gasoline prices to create real energy plans.”
Actual text of the energy policy is not yet available but the “Pickens Plan” is outlined here. This morning in the Wall Street Journal, Pickens argues that “can be accomplished within 10 years if this country takes decisive and bold steps immediately. This plan dramatically reduces our dependence on foreign oil and lowers the cost of transportation. It invests in the heartland, creating thousands of new jobs. It substantially reduces America's carbon footprint and uses existing, proven technology. It will be accomplished solely through private investment with no new consumer or corporate taxes or government regulation. It will build a bridge to the future, giving us the time to develop new technologies.”
July 9, 2008 •
The Chicago Sun-Times blog reports on the business leaders that have met with Democratic presidential nominee Barack Obama. Businessmen from the energy and auto industry incude: Vinod Khosla (Founder and Partner of Khosla Ventures), G. Richard Wagoner, Jr. (Chairman and CEO of General Motors), Alan Mulally (CEO of Ford Motor Co.), and Jim Rogers (CEO of Duke Energy).
July 9, 2008 •
The DTN Ethanol blog has a post about Sequesco, a start-up company that is “using synthetic biology to produce advanced biofuels.” The company’s plan is to take carbon dioxide from coal plants and biorefineries and feed it into the firm’s bioreactors, where “large colonies of bacteria would use the greenhouse gas and a nutrient broth to produce ethanol, biodiesel and other valuable byproducts.” Interesting stuff:
Sequesco joins a list of startup companies using synthetic biology to produce advanced biofuels, the Industry Standard said. “But unlike competitors SunEthanol and Amyris, which are engineering microbes to make cellulosic ethanol from various plant biomass sources, it uses waste carbon dioxide as its primary feedstock. The idea is to pump CO2 from large emitters like coal plants or biorefineries into the firm’s bioreactors, in which large colonies of bacteria would use the greenhouse gas and a nutrient broth to produce ethanol, biodiesel and other valuable byproducts. The protein-rich byproduct could be sold as animal feed or fertilizer, while the lipid-rich byproduct could be converted into bioplastics,” the Industry Standard said. “This is similar to what GreenFuel Technologies, a Cambridge, Mass.-based algal biodiesel maker, has been doing. It pipes in CO2 from power plants or industrial processes through large ponds filled with algae to make them grow and then harvests them. Sequesco’s business model can best be described as a hybrid between what GreenFuel and Amyris are doing. Sequesco’s bacteria grow 10 times faster than most algae raised for biodiesel, and because they are non-photosynthetic, they can be grown 24 hours a day, rain or shine. Area isn’t a constraint for the bugs (only volume is), so they can be cultured in conventional, low-cost bioreactors. Since space isn’t an issue, there’s great potential for scalability and the bioreactors can be installed almost anywhere.”
For the basics of synthetic biology, check out this New Atlantis article: “The Promise and Perils of Synthetic Biology.”
June 24, 2008 • The Michigan Department of Environmental Quality announced last week that it has approved a permit for Marathon Oil Corp. to begin a $1.9 billion expansion of a Detroit refinery. Marathon agreed to install, operate, and maintain at least four air monitoring stations located in and around the refinery to chart emissions. Marathon plans to install equipment that will enable the refinery to process a new source of crude oil -- “heavy oil” from Canadian tar sands -- and increase capacity by about 15 percent.
June 17, 2008 •
McMoRan Exploration, which describes itself as having been “among the most active drillers in the Gulf of Mexico” in the 1980s, is now planning to drill the world’s deepest oil well there—some 6.6 miles down. As the New Orleans Times Picayune reported last week:
McMoRan Exploration said Thursday that it plans to seek permission from the Minerals Management Service to drill a Gulf of Mexico well as deep as 35,000 feet, a depth that would break a record [of 34,189 feet] currently held by Chevron.
The South Timbalier Block 168 No. 1 well, formerly known as Blackbeard, is currently permitted to a depth of 33,000 feet and has already been drilled to 31,943 feet. But the New Orleans energy company wants to go even deeper.
Drilling at South Timbalier began in August 2006 under the jurisdiction of Exxon Mobil Corp. Exxon had hoped to drill the world's deepest well at the site, but the company encountered higher-than-expected pressure and suspended the operation. The high temperatures and pressure that builds up at the bottoms of wells is a significant challenge to energy companies as they seek to drill deeper beneath the ocean floor.
June 13, 2008 •
With the price at the pump around $4 per gallon, why is Exxon getting out of the business of selling gas? The company says it’s just not profitable enough any more.
From the Associated Press:
Exxon Mobil Corp said on Thursday it is getting out of the retail gas business in the United States as sky-high crude oil prices squeeze margins.
Those branded service stations may be the most public aspect of Exxon’s business, but they account for a small part of the company’s profits.
Out of the roughly 12,000 Exxon Mobil branded stations in the United States, Exxon, the world’s largest publicly-traded oil company, owns about 2,220.