Wednesday, 15 July 2009

In Strategy Shift, Exxon Plans $600 Million Biofuels Venture

After years of snubbing alternative fuels as a bad investment, global energy giant Exxon Mobil Corp. said Tuesday it will sink $600 million into researching how to turn algae into a biofuel that would also help fight global warming.
Exxon's partner in the biofuels effort will be groundbreaking genomics scientist J. Craig Venter and his company Synthetic Genomics Inc. The companies will attempt to develop algae strains that excel at both sucking up greenhouse gases and secreting oil that can be fed into refineries alongside conventional crude oil.

Shares in the world's biggest oil and gas companies head higher, boosted by the August crude-futures contract's move back above $60 a barrel. Jim Jelter reports.
Environmental Capital: Biofuels Bonanza
If the companies are successful in developing cost-competitive barrels of algae-based oil on a large scale, the Texas energy company said it could invest billions of additional dollars to build production facilities in the future.
Exxon's embrace of biofuels represents a strategic turnaround for one of the world's biggest refiners of transportation fuel. Exxon grew into the world's largest publicly traded company by extracting fossil fuels from the earth and converting them into gasoline, diesel and chemicals. But as global supplies of oil become harder to find and growing concerns about greenhouse-gas emissions inspire new attempts at government regulation, the concept of domestically produced oil derived from algae has become an alluring enough prospect to catch Exxon's interest.
Mr. Venter, a well-known biologist who led an effort to map the human genome, said the leap into algae-based fuels wasn't going to be easy: "The challenges are not minor for any of us, but I think we have the combined teams, scientific and engineering talents, to give this the best chance of success."
The two companies said they would like to use genetic engineering to develop algae strains that consume significant amounts of carbon dioxide, a gas produced by fossil-fuel use that is contributing to climate change.
Exxon's head of research, Emil Jacobs, said it was possible the algae farms would be located near power plants and other industrial complexes to use the carbon dioxide generated in those places as feedstocks for the algae.
Algae farms could produce two streams of income for the venture: one from selling barrels of algae oil to refineries and the other from capturing and reusing carbon dioxide. "It is reasonable to say you have to look at all commercial elements," said Exxon spokesman Rob Young.
Greg Singleton, a senior analyst with Point Carbon, an energy and environment market-analysis firm, cited industry findings that 40% of carbon-dioxide emissions from a coal-fired power plant could be reused, but it would require an enormous 13.1-square-mile algae farm. "On paper it looks attractive," he said, but cautioned, "I haven't seen it done on a large scale."
The U.S. Senate is set to soon take up the Waxman-Markey energy bill, which would cap greenhouse-gas emissions and allow companies to sell credits for any emissions savings they produce. Though it isn't clear how the proposed law would treat a carbon-munching algae farm, said Mr. Singleton, "In a carbon-constrained environment, it is something that could be very profitable for Exxon in the long run."
Executives stressed that the partnership will be focused on research, and it could take up to a decade to produce commercial quantities of fuel from algae.
Exxon's investment follows years of criticism from environmentalists and some shareholders for the company's reluctance to invest significantly in

Gene scientist to create algae biofuel with Exxon Mobil

• New biofuel requires no car or plane engine modification• Carbon Trust says production will take 'many years'
Alok Jha, Tuesday 14 July 2009 17.44 BST

Gene scientist Craig Venter has announced plans to develop next-generation biofuels from algae in a $600m (£370m) partnership with oil giant Exxon Mobil.
His company, Synthetic Genomics Incorporated (SGI), will develop fuels that can be used by cars or aeroplanes without the need for any modification of their engines. Exxon Mobil will provide $600m over five years with half going to SGI.
"Meeting the world's growing energy demands will require a multitude of technologies and energy sources," said Emil Jacobs, vice president of research and development at ExxonMobil. "We believe that biofuel produced by algae could be a meaningful part of the solution in the future if our efforts result in an economically viable, low-net carbon emission transportation fuel."
Transport accounts for one-quarter of the UK's carbon emissions and is the fastest growing sector. Finding carbon-neutral fuels will be crucial to the government meeting its target to reduce overall emissions by 80% by 2050.
Algae are an attractive way to harvest solar energy because they reproduce themselves, they can live in areas not useful for producing food and they do not need clean or even fresh water. In addition, they use far less space to grow than traditional biofuel crops such as corn or palm oil.
"Algae consumes carbon dioxide and sunlight in the presence of water, to make a kind of oil that has similar molecular structures to petroleum products we produce today," said Jacobs. "That means it could be possible to convert it into gasoline and diesel in existing refineries, transport it through existing pipelines, and sell it to consumers from existing service stations."
The Carbon Trust, a government-backed agency that promotes low-carbon technologies, has forecast that algae-based biofuels could replace more than 70bn litres of fossil fuels used every year around the world in road transport and aviation by 2030, equivalent to 12% of annual global jet fuel consumption or 6% of road transport diesel. In carbon terms, this equates to an annual saving of more than 160m tonnes of CO2 globally with a market value of more than £15bn.
Ben Graziano, research and development manager at the Carbon Trust, said that alge-based biofuels offered the potential for "major carbon savings". "Exxon Mobil is estimating that algae could yield just over 20,000
litres of fuel per hectare each year, which is in line with our own forecasts. However, producing biofuel from algae on such a massive commercial scale is a major challenge, which will require many years of research and development."
Venter, who is best known for his role in sequencing the human genome, said the new partnership was the largest single investment in trying to produce biofuels from algae but said the challenge to creating a viable next-generation fuel was the ability to produce it in large volumes. "This would not happen without the oil industry stepping up and taking part," he said. "The challenges are not minor for any of us but we have the combined teams and scientific and engineering talents to give this the best chance of success."
The research programme will begin with the construction of a new test facility in San Diego, where Venter says different techniques to grow and optimise algae will be tested. These will include open ponds as well as bioreactors, where the algae are grown in sealed tubes. "We will be trying out these different approaches … using newly-discovered natural algae to test the best approaches we can come up with to go into a scale-up mode."
Venter has spent several years trawling the world's oceans in search of environmentally-friendly microbes that could be used, in one way or another, to bring down the world's carbon emissions. The organisms he has found include those that can turn CO2 into methane, which could be used to make fuels from the exhaust gases of power stations, and another that turns coal into natural gas, speeding up a natural process and reducing both the energy needed to extract the fossil fuel and the amount of pollution caused when it is burned.

Toyota considers building hybrid in UK

The car industry has received a boost after Toyota said it is considering building a hybrid model of its Auris car in the UK.

By Graham RuddickPublished: 7:33PM BST 14 Jul 2009

The Toyota Auris
The Japanese car maker has a car plant in Burnaston, Derbyshire, which employs roughly 4,000 people, and gaining production of the new model would go a long way to securing the site's long-term future.
Reports in Japanese newspaper Nikkan Jidosha Shinbun said the company would start making the Auris hybrid, a hatchback, in 2012.

A spokesman in the UK for Toyota said it was "investigating" options but could not confirm the location of manufacturing at this stage.
At present, Toyota manufactures the model in Japan and the US. However, at a press conference in June, the new Toyota president, Akio Toyoda, the grandson of the company's founder, said the car maker would look to increase production of the hybrid in Europe. He said: "As stricter environmental regulations come into place, we are gradually shifting our focus to the hybrid segment. We are confident that this will create a stronger position for Toyota in Europe."
Toyota has established itself as the world's largest car maker following the turmoil suffered by General Motors because of the sharp downturn in global sales. The Japanese company produces the world's best-selling hybrid, the Prius. However, it has cut staff, pay, and implemented production shutdowns because of the financial crisis.

The dawn of carbon budgeting: now every tonne counts

The government's new climate change strategy should mean greater emphasis on emissions savings rather than trading and shared responsibility

Bryony Worthington, Tuesday 14 July 2009 16.22 BST

The publication of the government's climate change strategy tomorrow should herald the beginning of a new era in the fight against climate change. While the public-facing, energy-saving policies may catch the headlines, what is going on behind the scenes is in reality more important.
In order to meet the requirement of the Climate Change Act, and the carbon budgets it created, the government has had to adopt a new approach to managing carbon. In this new regime every tonne counts and all government departments with an influence over policies affecting emissions will need to play their part in keeping reductions on track. The mechanics of how this will work are not yet clear but it is certain that climate change is now a shared responsibility across the entire government. Departments falling behind will need to take corrective action or face the consequences, which could mean finding money to pay for emissions reductions in other parts of the world. This should serve to focus the minds of ministers and permanent secretaries.
When Friends of the Earth wrote the first report advocating carbon budgets in 2005, which I co-authored, we were seeking to cause exactly this kind of change in the government's attitude to climate change policy. We wanted them to adopt a more holistic approach that took into account the effect of all policies, not just the limited climate-specific policies it had introduced, and also, importantly, the trends that were causing emissions to rise, where often there were no policies in place to counter them.
The principle behind carbon budgeting is simply that emissions must stay within a pre-determined limit or compensating actions, such as payment for emission reductions elsewhere, must be taken. This was meant to engender the feeling that every tonne counts, since allowing an emission to take place creates a liability against the budget, whereas, investing in emissions savings effectively creates an asset. This was intended to force the government to think long term and to break the deadlock that the Treasury then had on climate policy, by expressing the problem in a language they understood. In other areas of public life the principle of borrowing to invest in long-term projects was accepted but, when it came to climate, the mantra was keep it cheap, which led to an over-reliance on emissions trading to deliver the cheapest possible short-term solutions anywhere in the world.
With a clear framework dictating that emissions must, one way or another, go down, the smart minds in the Treasury can now apply themselves to working out how to uncover emissions savings in Britain for less than it would cost to keep buying them overseas. This shouldn't be difficult as we've really only just got started and there is still plenty of low-hanging fruit. They will also quickly work out that it is far more sensible to invest at home rather than allowing cash continually to flow overseas, at a time when we need all the inward investment we can get.
Increasing the efficiency with which we use energy and reduce wastage are both obvious candidates when it comes to low-cost solutions. Improving our building stock can also help to counteract rises in energy costs so it should be no surprise that these policies take centre stage in the government's strategy. Looking longer term it is clear that to get to a zero carbon Britain we will have to start by creating a zero carbon electricity system. Clean electricity, as opposed to the high-coal variety we currently use, can then be used to replace the fossil fuels we use to heat our homes and power our vehicles.
These are not radical new ideas – these aren't needed just yet – but they're not necessarily straightforward to achieve either. The government still needs to create a clear plan and to harness the power of the private sector to deliver its vision cost effectively. It also needs the buy-in of the public to do their part in embracing the changes we need to go through.
Tomorrow's publications should give us the first iteration of that plan – policies will not be written in stone and will no doubt flex and change as departments work out what works, and what doesn't, when it comes to staying within budget. But this could be the dawn of the first comprehensive, concerted attempt to tackle the problem of climate change – let's hope it works.

Miliband promises more green jobs but Vestas wind turbine plant is closing

Ben Webster, Environment Editor
The Government aims to install 7,000 wind turbines in ten years, but they will be made abroad
One of Britain’s biggest employers in the green energy industry is to cease production within hours of a government announcement today pledging as many as 400,000 green jobs by 2015.
Ed Miliband, the Energy and Climate Change Secretary, will claim that Britain will become a world leader in low-carbon technology and manufacturing. He will argue that raising household energy bills to pay for investment in wind, solar and tidal power is justified not only by the dangers of global warming but also the opportunity to build a new “green economy”.
However, tomorrow morning the Vestas factory in Newport, Isle of Wight, Britain’s only significant manufacturer of wind turbines, will produce its last batch of seven-tonne blades. More than 600 people employed at the plant, and a related facility in Southampton, will be made redundant at the end of the month. All 7,000 turbines that the Government will commit today to installing over the next decade will be manufactured overseas, mainly in Germany, Denmark and China.
Vestas managers and union leaders held meetings with Mr Miliband and officials to discuss the possibility of converting the factory — which supplies the US market — to produce a different type of blade suitable for British wind farms. The Government did not, however, offer any financial aid and was unable to give any assurances that it would break the planning logjam that has paralysed the British market for wind turbines.

In April, the Scottish government gave £10 million in grants to save 100 jobs and possibly create 200 more at a much smaller turbine factory in Argyll.
Wind power will be at the centre of today’s Renewable Energy Strategy and Low Carbon White Paper, which will set out how each sector of the economy will help to meet the overall target of a 34 per cent cut in CO2 emissions by 2020.
Mr Miliband will say that more than £100 billion will be invested in raising the proportion of energy from renewable sources from 2 per cent at present to 15 per cent by 2020.
Workers at the Vestas plant, however, questioned whether the Government’s pledges could be taken seriously when ministers had done nothing to save their jobs. Peter Hunt, a safety administrator at the factory, said: “If the Government was as committed to wind power as it claims, why is it acting so slowly to improve the planning process? We need a central planning body to overcome the not-in-my-back-yard groups who are blocking British wind farms. But if it comes, it will be too late for us.”
Local groups opposing wind farms on the ground of visual intrusion have blocked almost half of the 93 applications made in the past three years and delayed the remainder for as long as two years. Several sites have been identified on the Isle of Wight but it has no turbines, partly because of a hate-mail campaign targeting landowners involved in applications.
Reg Barry, a Liberal Democrat councillor, said: “Why are we subsidising foreign car factories with the scrappage scheme but doing nothing to protect jobs in our greenest industry? The factory closure will be devastating for the island. These are 600 well-paid jobs on which you could raise a family and pay a mortgage, not temporary tourism jobs.”
A spokesman for the Department of Energy and Climate Change said: “Ultimately it was a commercial decision for Vestas. But the Renewable Energy Strategy is going to be a massive opportunity for manufacturers generally.”
Jack Dromey, deputy general-secretary of the union Unite, said: “It would be a bitter irony if there was a boom in British wind farms but the wind turbines were made on the Continent and in China.”

Renewable energy 'can provide all of Scotland's electricity'

Published Date: 15 July 2009
By Joe Quinn

SCOTLAND can meet all of its electricity needs from green energy alone by 2030, a report claimed yesterday.
The country's energy security will not be seriously harmed by the scheduled decommissioning of the Cockenzie and Longannet coal power stations or the Hunterston B nuclear station, said the report.Renewable energy can meet between 60 per cent and 143 per cent of electricity demand by 2030, said the energy analysts' report commissioned by environmental groups, including Friends of the Earth Scotland and WWF Scotland.If Scotland also met official targets for energy saving, ending all fossil fuel generation by 2030 is "feasible", it said. And even a "business as usual" Scotland will not need any new fossil or nuclear capacity.Instead, security of supply can be maintained by investment in grid upgrades and infrastructure such as storage capacity and "interconnectors" for importing and exporting power.Dr Richard Dixon, director of WWF Scotland, said: "Scotland has the best renewable energy potential of any country in Europe and we should be aiming high. This report provides us with a clear description of how to set ourselves on the path to 100 per cent renewable power."The message is clear: Scotland's renewable potential has to be fully realised and that means harnessing the considerable wave and tidal power of our seas and continuing the expansion of both onshore and offshore wind."A Scottish Government spokeswoman said the report vindicated the administration's drive to make Scotland the "green energy powerhouse" of Europe