PetroScan May 2012

(Monthly e-newsletter) May 2012

CONTENTS FOREWORD OIL, GAS & ENERGY NEWS IndoScan • Turkmenistan signs gas pact with India, Pakistan • Jaipal Reddy in Turkmenistan today to seal GSPA • Petrol price up by over Rs 7.50, steepest hike ever • India: A Refiner to the Word • IndianOil Wind power projects commissioned in Andhra • ONGC abandons South China sea block • Plunging Rupee Wipes Out Gains from Falling Crude Oil Prices • Rupee fall, high crude prices bring cheer for ONGC • HPCL Q4 net zooms 312.5% on higher subsidy gains • Oil India fourth quarter net profit down 21 % • India has done well to resist US pressure and insist on its right to import Iranian Oil • NOC, IndianOil Seal new fuel supply • MRPL gets oil cargo insured with Iran, may do more • IndianOil Posts Rs. 3,955 Crore Profit for FY 2011-12 • India urges Japan to remove non-tariff barriers • India urges Japan to remove non-tariff barriers • Essar Oil – L&T sign MoU for bitument supply • Cut in oil imports will lead to supply shortages: oil firms • Always believed PNGRB had no control on LNG: Petronet • BCG to vet oil exploration agreements • India decides to cut crude oil import from Iran by over 11% • Pranab Mukherjee seeks support for oil subsidy cut, reforms • India's oil imports from Iran plunge 34% in April • OIL's KG basin drilling delayed over green nod • Oil Ministry says ‘immediate’ need to hike fuel prices

• Shell's India Chairman Vikram Singh Mehta to step down in October • IndianOil and BOC India ink LNG agreement • Duties to hurt ONGC FY13 profit by Rs 5,000 cr • Mittal says Bathinda refinery capacity may double • IndianOil signs agreement with Nepal Oil Corporation • Oil ministry seeks Rs 49,090 cr to stop OMCs from going red • India’s exports cross $300 bn, but trade • India's exports cross $300bn, but trade deficit balloons • Neyveli Lignite to set-up 1980MW power plant in UP • Neyveli Lignite to set-up 1980MW power plant in UP • BPCL, Videocon stocks rally on Mozambique gas find • Reliance Industries Limited to boost refining margins • Cairn offers to boost oil production to aid cut in imports • Jairam Ramesh urges government to cut fuel subsidies, allow FDI in retail GlobeScan • Bangladesh finds oil reserves worth $5.5b • Shell & PetroChina JV, Australia LNG faces big cost overrun • Oil rises from 7-month low on China growth assurance • Conoco Phillips looking to exit Nigeria • French oil-services company Technip acquires Shaw Group assets for $300 million • Will graphite go the way of rare earth?

• China adjusts fee for foreign JV energy projects • How Advances in Drilling Technology Are Creating a Revolution and Turnaround for • U.S. Oil Output • From Engineering Marvels, a Turnaround in U.S. Oil Output • Petrodollar profusion • Focusing on Oil was a good decision for Chevron, experts say • India's exports cross $300bn, but trade deficit balloons • Study: Bingaman's clean energy standard would fall short of goal, lead to price spikes

•

North America to reach energy independence by 2030: BP economist

ALTERNATIVE & RENEWABLE ENERGY GAS HYDRATES • US claims ‘unprecedented’ success in test for new fuel source SHALE GAS • Reliance Industries not so bullish on its Shale Gas Business • Gas Drillers in Pennsylvania Trim Rists of Harm, Study Finds • American Shale Oil to launch new oil-extraction technique • Frack Water Market to Reach $9bn in 2020, Lux Says WIND ENERGY • Michigan Scientists install wind measuring Buoy • UK & US to reach agreement on floating wind turbines • US Wind on the brink?

• Wind Energy – O&M Under Control?

BIOFUEL • Shell, logen scrap plans for biofuel plant in Manitoba • IOC to review biofuelbusiness strategy • Big Oil's Big in Biofuels • Researchers Look at Using Food Waste for Hydrogen • Advanced-biofuel developers are finding it tought to scale up SOLAR ENERGY • Wind power costs less than solar in 6 developing countries • India’s solar sunrise • Solar energy inspiration from butterfly wings • Is CSP Still on track?

• DAE chief: India can make world's cheapest N-reactors • Desalination: new frontier for renewable energy?

HSE, CLIMATE CHANGE & SUSTAINABILITY CLIMATE CHANGE • EU shifts climate change targest again • Emotions and climate change • Himalayan forests a greater risk from climate change • Sea, sand and survival • Is Arctic rush worth it?

• Greening the white water • EPA teams up with NASCAR to promote green initiatives • Finnish tax on low-CO2 energy could undermine ETS • European Commission loses appeal over Polish carbon allowance cap HSE • Pollution: the great leveler • Poison in India’s groundwater posing national health crisis • Life Cycle Analysis for optimizing packaging • Poison in India’s groundwater posing national health crisis SUSTAINABILITY • Sell the oilsands better, Daniel Yergin tells Alberta • Reduced Emissions from Deforestation and degradation :REDD

Forest

INNOVATION • IndianOil conferred the SCOPE award for R&D, Technology Development & Innovation • Brian Greene: Welcome to the Multiverse • Let’s Debunk 4 Myths About How Great Companies Innovate • Tata-funded Artificial Leaf Project Hits Hurdle • New Test to Help Detect Signs of Disease Early • New Materials Identified to Cut Carbon Emissions • Technology can unlock new fields, curb fears of peak oil • JNU develops antibodies to fight anthrax infection

MANAGEMENT AND LEADERSHIP • Women are more ethical than men……… and we all become more ethical as we get older • The business case for gender-balanced leadership • Game changers in recruiting and workforce management • How To Lead In A Crisis: Robert Caro's Lessons From Lyndon B. Johnson • Cos Walk the Extra Mile for Top Talent • Employees opt for stability to high pay: Report RAPID READING • PM in Myanmar, promises new relationship, stronger links • Chart Of The day | Oil slicks on rupee • Engineering courses change gears for bigger paycheck and more job security • How to get mutual fund units transmitted • Maya calendar workshop documents time beyond 2012 • Falling rupee bleeds OMCs of Rs. 9,200 cr every year • Why Sri Lanka can be a Breakout Nation • The good, and bad, in fuel price hike • ‘Making changes to Google search is like mid-flight jet engine maintenance' • Montek says current growth rate can finance 3% CAD • Elderly expected to survive on Rs. 10 a day • Birla Institute of Technology & Science entrance more competitive than IIT • Zero-sum game • Why foreign companies are ‘scared’ of investing in India • You can reduce your fuel bill, the sensible way • Tax sops for non-profit bodies my go • Airtel, ICICI among ‘top 100 global brands’ • India mobile services market to reach USD 30 billion in 2016 • Abundant oil doesn’t mean energy independence, SAFE report warns • 10 things Kochhar had to say about ICICI Bank

• Decision making is slow in India, says Lakshmi Mittal • European scientists discover new subatomic particle • The Many Wonders Of The Neem Tree INTERVIEW • Dr. A.K. Balyan, MD & CEO, Petronet LNG Ltd BOOK SCAN • The new sustainability advantage • Street smart sustainability • The greater goal

Foreword

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Dear Patron of Petrotech, The team Petrotech is please to mail the web link to PetroScan May’12: Since the beginning of this year, each month has been, locally and globally, more eventful and more turbulent than its previous month, and uncertainty rules the future. However, as the old saying goes, only certainty is Change, and Change we are undergoing globally and locally with each passing day.

One of the changes which, which occurred towards the far end of the month, is signing of MOU between India and Turkmenistan, for the TAPI - a pipeline for Prosperity, of India and its neighbors Afghanistan and Pakistan., which promises to supply abundant gas by 2016.

Time flies, and 2016 is not too. Besides, the Gas from Iran is another door of prosperity which, also, has possibility of opening sometime in future, though uncertain, yet full of hope and promise.

In this issue of PetroScan we have introduced a section titled “Banyan Tree”, under which we shall explore the softer aspects and SQ (Spiritual Quotient) which is the enabler of balancing every other quotient in our work and life. You may also like to mail to us (info@petrotechsociety.org / anandk@petrotechsociety.org) your contribution to this section of PetroScan, besides, to other sections, particularly the news about your company, performance, achievements, innovation, awards, recognition (individual, group & company) or anything which your company would like to share with a larger section of people from O&G Industry and Academia from India and abroad.

Another new section introduced in this issue is “BookScan”. You may like to send us your suggestion with review of nay book you would like other members of industry o read.

WORLD ENVIONMENT DAY (WED)

The month of June is very important fro one reason that the WORLD ENVIRONMENT DAY, fall in this month, and since 1972, it is observed every year on 5th June.

As with each passing year, we come closer to 2050, this day is gaining more importance and calls for more intense action to conserve and save our environment from further degradation, lest the Earth becomes inhabitable by end of this millennium. Every day has, therefore, is to be observed as Environment day.

This year’s theme for the WED is “Green economy: does it include You”.

It is for the first time the question of greening the economy id directly posed to us. What our business and we are doing for greening the business we are in – manufacturing, trading, logistics, teaching, farming or whatever our business of business may be? What are we doing to reduce the carbon and water footprints of our business and that of our own personal activities?

What are we doing to eliminate the menace of plastic carry bags we carry and throw indiscriminately, and clogging drains in our neighborhood, and land, ponds, lakes, streams, and all our rivers, choking our own lifelines to their imminent death…. Can we survive once our lifelines.. our forests and revisers are dead? Let us introspect over it, and take the first right step t becoming a part of Green Economy.. Greener Environment.. Better Erath.

I had always considered my first duty is not to use and not to encourage use of PLASTIC CARRY BAGS. A campaign which I started on WED 1995 at Barauni Refinery and made its township free of plastic carry bags, which I understand, still continues to be free from the menace of Plastic Carry bags.

My other action includes reducing use of oil, water and electricity for my daily chores. Its my firm belief that everything begins from each one of us. Therefore, our personal values and actions must align with the values and actions, which are required for greening of our business and saving our planet from the adverse effects of uncontrolled climate change.

The Climate change is result of the cumulative carbon and water footprint of each of 7 billion people residing on the Earth. It is therefore, extremely essential to know what I, is my footprint, what am I doing to reduce it, and whether I am part of the Greening of Our Business and Economy?

Let us start reducing our own carbon and water footprints right from now, for waiting till tomorrow may be too late in saving our self and our future generations from the onslaught of uncontrolled changes in our environment and climate. Can we say “YES I AM PART OF GEEN ECONOMY” ?.

Petrotech Industry Education Program-2012 You know that Alberta is the energy bowel of Canada. The future of energy is unconventional , and Alberta has a reserve which is larger than that of Saudi Arabia. The future of oil is linked to this part of the world, where tremendous technological breakthrough has occurred in last two decades, and shall continue with great pace in future for exploiting the unconventional sources of energy in more eco-friendly way. This is Mecca for heavy oil recovery and processing, which must be seen by every oil executive and future leaders of industry, and must go there with an eye of explorer. Our oil executives Petrotech, with is in mind, entered in a MOU with the University of Alberta (UA), for providing a platform for our senior oil executives to see and understand the business of heavy oil, tar sand, and gas.

Next batch under this Petrotech-UA Industry Educational Program, shall leave for Alberta, Canada on 8th July, 2012, for a week of interaction with the Academia of University of Alberta, and also from the leading O&G Industry companies and their experts, at Calgary and Edmonton.

The participants shall also spend a day Fort McMurray – the capital of Oil Sands and its upgrader refineries. This one very intense and highly useful program conducted by Petrotech, which repapers our senior executives with heavy oil prospecting and understand the challenges associated with its recovery, up-gradation, processing, storage, transportation, environmental issues and future technologies in use, and under development , scale-up, commercialization etc. It provides ample scope for networking with best of minds in the fields and identifying partners and topics for collaborative work, besides learning about state of art tools, equipments and software available and in Canadian O&G industry.

The JoP: Jan-March2012 Issue Hope, you could see and read the Jan-March issue of the Journal of Petrotech (JoP) on its web-link: http://issuu.com/shijo/docs/petrotechjournal-january_march2012 I am waiting for your comments on its content and suggestions for improving its quality, and for your article and contributions for publication in its next issue, which may reach us latest by 15th June, 2012.

Wishing you a happy and satisfying reading, Sincerely Anand Kumar Director Petrotech

OIL, GAS & ENERGY NEWS IndoScan Turkmenistan signs gas pact with India, Pakistan

Pipeline route faces significant security problems with planned Nato shift by the middle of next year Marat Gurt/Reuters Avaza, Turkmenistan: Turkmenistan agreed on Wednesday to supply natural gas to Pakistan and India in deals that offer major economic benefits but depend on building and defending a US-backed pipeline across chronically unstable Afghanistan.

Joint investment: Turkmengaz chief Sahatmurad Mamedov (left) and Gail India chairman B.C.Tripathi in Avaza on Wednesday. By AP The route, particularly the 735-km leg through the Afghan provinces of Herat and Kandahar, will need billions of dollars in funding. It faces significant security problems as the Western Nato alliance plans to hand control of Afghanistan to Kabul’s own security forces by the middle of next year.

Turkmenistan’s state gas firm Turkmengaz signed gas sale and purchase agreements with Pakistan’s Inter State Gas Systems and Indian state-run utility GAIL India Ltd.

“The implementation of this project will give a powerful impetus to the social and economic development of all participant countries,” Turkmen deputy prime minister Baimurad Hojamukhamedov said before the signing ceremony.

India and Pakistan are both hungry for gas supplies and Turkmenistan, formerly part of the Soviet Union, is keen to free itself from reliance on gas exports to Russia.

Lilit Gevorgyan, analyst at IHS Global Insight, said that while the pipeline could be a lucrative commercial project, it would run through more than one high security risk country, “which puts the actual construction under a big question mark”.

The idea of Tapi pipeline, an acronym formed from the initials of the four countries through which it would pass, was first raised in the mid-1990s. Turkmen officials said the proposed

1,735-km pipeline could carry 1 trillion cu. m of gas over a 30-year period, or 33 billion cu. m a year.

Turkmenistan, a desert country of 5.5 million, is viewed by human rights bodies as one of the world’s most secretive and repressive countries. But Turkmen President Kurbanguly Berdymukhamedov has moved in recent years to warm ties with the West, whose political support and investment he needs to lay alternative gas export routes.

A major obstacle to the project is the stretch of pipeline that will run through Afghanistan.

Nato set an “irreversible” course out of Afghanistan on Monday but US President Barack Obama admitted its plan to end the war in 2014 was fraught with dangers.

“Ultimately we believe all challenges, including security that the project faces, can be managed or overcome,” Daniel Stein, senior adviser to US state department’s special envoy for Eurasian energy, said in Avaza. He did not elaborate.

But IHS Global Insight’s Gevorgyan wrote “the project had a slim fighting chance in the past decade as Nato was still in Afghanistan”. “With the Western troops’ pullout by 2014...building an expensive pipeline with very weak central government seems almost unattainable.”

Asian Development Bank said the pipeline would cost at least $7.6 billion in 2008. Analysts now say it could cost between $10 billion and $12 billion. livemint.com A pipeline for prosperity The government’s resistance to eliminating GUP is born of its attempt to keep the fertilizer and power subsidy bills in check The Turkmenistan-Afghanistan-Pakistan-India, or TAPI, gas pipeline deal that holds the promise of supplying natural gas to India in 2016 can potentially help eliminate the flaws in the domestic gas pricing policy. If only for that reason, it is a goal worth pursuing. Currently, there are two “flavours” of gas supplies in the country; not only are their origins different, but also their pricing regimes. Domestically produced gas, which accounts for around 72% of total supplies, is sold, for the most part, through two government-controlled price regimes while the imported variety through the liquefied natural gas (LNG) route is free of any such shackles. As a result, LNG is priced at $11-14 per mmBtu of gas while domestic gas hardly reflects the global pattern, selling on an average between half and one-third of it.

A closer look at the domestic production reveals that close to 60% of it is sold at government-administered rates forced down the throat of state-owned producers ONGC Ltd and Oil India Ltd. Another 17% is sold through contracts that were arrived at through price negotiations in the 1990s. The remaining 23% is sold through a recent exploration policy.

It is this 23% basket that needs to grow and is key to the future. For it nets domestic exploration efforts that can enhance energy security both in terms of price and availability.

However, the gas utilization policy (GUP) is a retardant that needs to be done away with.

After all, imported LNG is not subject to this restriction. Private investors need to be assured that they can earn market prices for their efforts in scouring the earth’s surface to find oil and gas.

So, how can TAPI supplies make a difference?

The government’s resistance to eliminating GUP is born of its attempt to keep the fertilizer and power subsidy bills in check. With domestic production estimates pared, the proportion of “cheap gas” in the supply pool will sharply reduce in the coming years. The TAPI supply is expected to be priced at $10-11 per mmBtu. This will significantly augment the gas supply available to India. This serves two purposes. First, it acts as a check against LNG deals that are struck at runaway prices. Second, by diluting the cheap gas pool, it makes it “easier” for the government to usher in open market price discovery for gas that is domestically discovered. livemint.com

Jaipal Reddy in Turkmenistan today to seal GSPA

21 May, 2012, 05.59PM IST, The writer has posted comments on this article Rajeev Jayaswal,ET Bureau NEW DELHI: India is expected to sign an agreement with Turkmenistan this week that will secure 38 million standard cubic meters per day gas supply from the Central Asian country at around $11.5/unit, government officials said.

Oil minister Jaipal Reddy is visiting Turkmenistan on Tuesday to sign the gas sale purchase agreement (GSPA) this week, officials said.

The GSPA would pave way for construction of $7.5 billion trans-national pipeline, which would also supply gas to Afghanistan and Pakistan.

Turkmen gas would be significantly cheaper than liquefied natural gas (LNG) sold in spot market, government and industry officials said.

Gas-starved India pays a spot price of about $16 a unit for LNG. Petronet LNG has recently contracted LNG import from Australia's Gorgon project at $15.8 per unit while Gail's 20year contract with US' Sabine Pass works out to be around $10-11 per unit.

The cabinet approved the 1,680-km gas pipeline project last week. EThad first reported on Mar 29 that the cabinet's approval would pave way for India signing a GSPA with Turkmenistan.

"At the current market price, the landed price of gas would be little more than $11/unit. But price will fluctuate as it expected to be linked with international fuel oil rates," one official said requesting anonymity.

India, which was at the end of the 1,680 km-long pipeline, was worried about landed cost of gas and wanted to invest in the project only if the Turkmen gas was comparable with longterm LNG deals.

India plans to import 38 mmscmd gas from the central Asian country, which will be more than the current output of the country's biggest gas fields in the D6 block.

India has also finalized transit fee and other related matters with Afghanistan and Pakistan, as the pipeline would cross their borders. Pakistan has already assured that it would charge a uniform transit fee, government officials said.

The GSPA will be executed by state-run gas utility Gail, which is India's nominee for the $7.5-billion pipeline project. The project is also known as TAPI pipeline, representing initials of four partner countries.

After GSPA is signed, four partners would constitute a consortium by 2013 that would build and operate the pipeline. TAPI project would be completed by 2016, officials said.

Officials said it was already decided among partners that security of the pipeline would be ensured by the countries on the way.

Turkmenistan has agreed to supply 90 mmscmd gas to the three consumers. India and Pakistan will get about 38 mmscmd gas each while balance will go to Afghanistan. The proposed pipeline will start from the Dauletabad gas field in southeast Turkmenistan and after 145 km stretch in the country enter Afghanistan. After traversing 735 km in Afghanistan and 800 km in Pakistan, it will cross into India.

Petrol price up by over Rs 7.50, steepest hike ever

Times of India, May 24, 2012 NEW DELHI: By the time you read this, petrol price would have gone up by more than Rs 7.50 a litre across the country. This is the steepest-ever increase and came a day after Parliament's budget session ended and PM Manmohan Singh talked about the need for "difficult decisions". After adding state taxes, petrol will cost Rs 73.18 a litre in Delhi, Rs 78.57 in Mumbai, Rs 77.88 in Kolkata and Rs 77.53 a litre in Chennai. This marks an increase of around 10% and puts a squeeze of roughly Rs 6,000 a year on a family that spends an average of Rs 5,000 per month on petrol.

This is the first upward revision in petrol price since November 4, 2011. The highest increase so far has been by Rs 5 per litre. State-run oilmarketers twice raised prices by this amount -- on May 15, 2011 and May 24, 2008 when petrol price crossed the Rs 50 a litre mark for the first time. The decision immediately drew a howl of protest and demand for rollback from parties across the political spectrum, including UPA allies such as Trinamool Congress chief Mamata Banerjee. But the West Bengal chief minister also made it clear that she will not rock the UPA boat.

Consumers too voiced their anguish even as they thronged petrol pumps for a "cheaper" tank-up one last time. Police had to be called in to control the spiraling queues in many pumps in Delhi and elsewhere. The announcement of price revision came when oil minister S Jaipal Reddy is away in Turkmenistan to attend a ceremony for signing a four-nation gas pipeline deal. Finance minister Pranab Mukherjee laid the onus of the raise on the oil marketers. "The decision has been taken. Petrol is a deregulated commodity," he said.

The government had freed petrol price in June 2010 when crude came down to around $40 a barrel from a historic high of $147 per barrel in July 2008. But in practice, oil companies do not move without a signal from the parent oil ministry which officially continues to deny any control. Sources said the increase was stage-managed. Oil companies usually review prices on the 15th and last day of each month. But Wednesday's increase was announced mid-week to take advantage of Reddy's absence after the Parliament session. Reddy reportedly gave his go-ahead for raising petrol price before leaving for Turkmenistan. His absence gave an opportunity for the government to distance itself from the raise and reinforce the impression that it did not control its price as it was a deregulated fuel.

But oil companies described the hike as a "do-or-die" measure. R S Butola, chairman of market leader IndianOil Corporation, argued that the price had to be increased steeply since they had not revised it for the last seven months even though global prices of crude went up 3.5% and petrol in bulk markets rose 14.5%, even as the rupee continued its slide against the dollar. "We did not raise petrol price for so long due to the prevailing conditions in the market. As a result, all three retailers together piled up a loss of Rs 2,321 crore between the last price hike in November and March 31. Since March alone, we have taken a hit of Rs 2,330 crore. The rupee too has fallen some 3-4%. The government would not have compensated these losses as petrol is a deregulated product."

Butola did not comment when asked whether he had secured the ministry's nod earlier to raise petrol price once the Parliament session was over. "We had told the government in writing that either it takes back control over petrol or we would have no option but to raise the price steeply. We did what we had to do. There was no choice left for us."

India : A Refiner to the world

India should build on its early bird advantage of having emerged as a major petro-products exporter, and become an even bigger refining hub. That oil is India's No. 1 import item by value is a well-known fact. That it is also today the country's largest export item, which however, is something not as well-known. In the fiscal year just gone by, petroleum product exports fetched India over $58 billion, helping to offset a portion of its hefty crude oil import bill of $141 billion for the year. This has become possible as a result of many developments.

The first is, of course, the sheer growth in domestic crude refining capacities – from hardly one million tones (mt) at the time of Independence to nearly 215 mt now. Two, much of these capacities have come up after the 1990s. Indian refineries are, hence, modern and can process even the most inferior quality, high-sulphur, ‘sour' crude. The ability to convert relatively cheaper oils into high-value products also translates into higher gross refining margins. That, in turn, makes it possible, especially for coastal refineries, to import discounted heavy crude all the way from Venezuela, turn it into petrol or diesel, and export these to the US or Europe.

The third factor responsible for petroleum products emerging as the biggest export earner – ahead of gems and jewellery, which also involves importing rough diamonds and polishing for sale in overseas markets — is somewhat ironic. It has to do with restrictions on pricing of petro-products sold domestically. Public sector oil companies are not only obliged to cater to domestic demand, but also to sell petrol, diesel, kerosene and domestic LPG at controlled prices. No such regulations exist for exports, where refiners can freely adjust product prices in tandem with global price movements. The ones to have taken advantage of this freedom are largely private players — Reliance and Essar — which have established global-scale coastal refineries to exploit differentials in both light/heavy crude as well as product/crude prices. Their efforts have helped turn India into a global refining hub a la Singapore or Rotterdam.

India's refining capacity now far exceeds the domestic demand. The surplus would widen in the years ahead. The fact that many refineries in North America and Europe are small and old — and environmental concerns rule out addition of new capacities — throws open huge opportunities for Indian oil firms to sell their surplus produce in these markets. India's tendency to hop on to the bus long after others have boarded it has, ironically, helped it leapfrog to the latest technologies on offer. This happened in the case of telecom, which saw India sidestep the more expensive landline-based connectivity approach in favour of mobiles, achieving a huge expansion in tele density in the process. The same story seems to be playing itself out in refining, where larger capacities (more than the global norm), with a higher degree of complexity in production processes, are beigest up almost on a routine basis. There is no harm in the Government promoting petro-product exports as an activity in itself and helping India become a much bigger refining hub than it already is. It should do so before the competition arrives — in this case, not from China, but from Thailand and Indonesia.(Source: Hindu, May1, 2012)

IndianOil Wind power projects commissioned in Andhra

IndianOil has commissioned a 16.8 MW wind project capacity at Vajrakarur in Andhra Pradesh. This is the second part of the 48.3 MW wind project that is being implemented through M/s Suzlon. The plant is expected to generate approx. 3.5 crore units of electricity per annum. The power generated from this capacity would be sold to the State Power Distribution Utility through long term PPA at tariff of Rs.3.50/ kwh. The remaining capacity of the project would be commissioned during 2012-13 based on State Government and MoEF clearances.

ONGC abandons South China sea block

New Delhi: Oil & Natural Gas Corp Ltd, India’s biggest explorer, abandoned a block off the Vietnam coast in the South China Sea, where China started a drilling project to assert its sovereignty over the disputed waters.

ONGC Videsh Ltd, the overseas unit of the staterun company, will relinquish Block 128 after being unable to drill a well and anchor the rig on the seabed, junior oil minister R.P.N. Singh said in a statement in parliament in New Delhi on Tuesday. The company earlier abandoned Block 127 after failing to find oil or gas in a well drilled in 2009, the minister said.

Plunging Rupee Wipes Out Gains from Falling Crude Oil Prices

The Economic Times Crude oil prices have come down to $109 a barrel, falling more than $15 since April, but oil companies still have to raise prices as the rupee’s depreciation has wiped out the gains of cheaper oil, and petrol prices have not been revised since December, industry officials said. Oil prices have fallen with investors dumping risky assets on concerns of falling demand in parts of crisis-hit Europe. Worries about the crisis in Greece have also depressed international prices of gold and palm oil, which are imported in large quantities in India, but the fall in the rupee’s value against the dollar has diminished the gains for Indian consumers. Indian rupee fell to a record low against the dollar this week. It had fallen to .

54.5 against the dollar on Wednesday and touched . 54.6 on Thursday. It has fallen from a level close to . 44 in the middle of last year.

Executives at state-run oil companies have estimated that if the Indian currency depreciates by one rupee against the dollar, the industry takes a hit of . 8,000 crore a year because of higher cost of crude oil in rupee terms.

State-run oil companies have suffered a revenue loss of . 1,38,541 crore in 2011-12, according to government estimates. The biggest component of this is diesel, which accounted for a revenue loss of over . 81,000 crore. In the first half of May, the average revenue loss on sale of diesel amounted to . 13.64 per litre. Oil companies do not formally reveal the revenue loss on petrol sales because the fuel has been technically freed from government control. But the oil ministry informally directs state firms such as IOC, BPCL and HPCL to hold prices depending on political convenience. As reported by ET, oil industry executives say that companies need to align pump prices of petrol with market rates by immediately raising fuel prices by . 7 per litre. They are seeking a higher increase to recover past losses.

Rupee fall, high crude prices bring cheer for ONGC

The Hindu Mr Sudhir Vasudeva, ONGC Chairman, with Mr D.K. Sarraf, Managing Director, ONGC Videsh Ltd, at a press conference in the Capital on Tuesday. — Kamal Narang Rupee depreciation and high crude oil prices help ONGC more than double its net profit for the fourth quarter of 2011-12. ONGC has reported Rs 5,644 crore net profit for the quarter, up from Rs 2,791 crore a year ago. ONGC earns in dollar for both crude oil and natural gas it produces.

Speaking to newspersons after the Board meeting, the ONGC Chairman and Managing Director, Mr Sudhir Vasudeva, said, “ONGC paid Rs 14,170 crore for subsidising diesel, domestic LPG and kerosene against Rs 12,136 crore during the fourth quarter of last fiscal.”

“The steep subsidy outgo pulled the profit of the company down by Rs 8,208 crore,” he said. However, rupee depreciation came to the rescue of the public sector exploration major. It reported a gain of $6 a barrel against the same quarter last fiscal — from Rs 45.26 to a dollar in 2010-11 for fourth quarter to Rs 50.29 to a dollar in 2011-12 fiscal.

“Every rupee depreciation against the dollar increases our top line by about Rs 1,600 crore,” said the ONGC Director (Finance), Mr A.K. Banerjee.

During the quarter ONGC got $44.32 on sale of every barrel of crude oil. This was after subsidy discount of $77.3 a barrel to the public sector oil marketing companies.

Besides, the company's cost of production after the recent increase in oil cess to Rs 4,500 a tonne is $44 a barrel.

Mr Vasudeva said for the company to succeed there is a need to have a clear subsidy mechanism in place, end regulatory overlaps, remunerative price for oil and gas, and favourable policy environment.

ONGC Videsh Ltd Production in 2011-12 from assets of ONGC Videsh Ltd (OVL), the overseas investment arm of ONGC, was 7.4 per cent lower mainly due to problems in Sudan and Syria assets.

Post secession of South Sudan from Sudan with effect from July 9, 2011, Blocks 1,2 and 4 straddle between the two countries and Block 5A is now entirely in South Sudan.

OVL's operations in South Sudan are temporarily under shutdown from January 23 this year, said Mr D.K. Sarraf, Managing Director, OVL. This was because of lack of agreement between the Governments of South Sudan and Sudan for use of processing, transportation and port facilities in Sudan for crude oil produced in South Sudan.

HPCL Q4 net zooms 312.5% on higher subsidy gains

The Hindu Hindustan Petroleum Corporation Ltd (HPCL) net profit jumped 312.5 per cent in the fourth quarter for 2011-12 on higher subsidy gains.

The cash compensation from Government and upstream companies such as ONGC, GAIL and Oil India helped HPCL report profit after tax of Rs 4,630.99 crore during January-March 2012 against Rs 1,122.66 crore in the same period previous year.

The company received Rs 8,486 crore from Government and another Rs 4,000 crore from upstream companies in the fourth quarter towards compensating losses incurred on selling diesel, domestic LPG and PDS kerosene below market cost.

HPCL reported Gross Refining Margin (GRM) of $3.68 a barrel in fourth quarter down from $8.55 a barrel in the corresponding quarter last year.

In fourth quarter of 2010-11, there was inventory pile up of crude oil that resulted in higher GRM. But, in 2011-12, crude prices shot up, whereas product prices remained stagnant leading to lower GRMs. However, in the complete financial year of 2011-12, HPCL net profit dipped to Rs 911.43 crore against Rs 1,539.01 crore in the previous year. This is due to increase in interest costs of Rs 2,139 crore because of increase in gross under-recoveries and delay in receipt of compensation.

HPCL has proposed a dividend of Rs 8.50 a share for 2011-12.

Oil India fourth quarter net profit down 21 %

Oil India Ltd (OIL), on Monday, reported a 21 per cent drop in net profit at Rs.444.81 crore for the fourth quarter ended March 31, 2012, against Rs.1,013.98 crore in the year-ago period. The net profit dipped after the government asked upstream firms Oil and Natural Gas Corporation (ONGC) and OIL to make good 39.7 per cent of the Rs.1,38,541 crore revenue that fuel retailers lost on selling diesel, domestic LPG and kerosene at government controlled rates in 2011-12. Their share was 36.75 per cent in the previous year.

Sales dipped to Rs.1,802.12 crore from Rs.2008.28 crore.

The company said it is in talks to buy 51 per cent in billionaire Mukesh Ambani's privately owned firm Reliance Gas Transportation Infrastructure Ltd (RGTIL).

“We have expressed interest for buying 51 per cent stake in RGTIL,” OIL Director (Finance) T. K. Ananth Kumar told reporters here. OIL is one of the 11 firms — five Indian and six foreign — that have expressed interest to buy stake in RGTIL. GAIL (India) and NYSElisted energy major Enbridge are among the firms interested in buying stake. “We have submitted a separate EoI,” he said.

Stake buy Oil India is looking to buy stakes in U.S. gas driller Chesapeake Energy Corp.'s Mississippi Lime basin and ConocoPhillips' oil sand assets in Canada, Mr. Kumar said. The cash-rich explorer, whose assets in India's north-east account for its entire crude oil production and the bulk of gas production, has been aggressively scouting to bolster its overseas assets portfolio.

Oil India has earmarked Rs.6,000-7,000 crore ($1.3 billion) for overseas acquisition, Mr. Kumar told reporters after announcing the company's quarterly results. He said the company had identified U.S., Canada, Australia and parts of Africa for acquisitions and hoped to seal a deal in the current year. — PTI, Reuters

India has done well to resist US pressure and insist on its right to import Iranian oil.

India has done well to gently rebuke US attempts to force it to reduce oil imports from Iran.

While it is in India's interest to prevent the Islamic Republic from acquiring nuclear weapons capability, which can potentially set off an arms race in an already sensitive West Asian region, this is something that must be done as part of multilateral efforts. The United Nations' (UN) sanctions against Iran's refusal to halt its uranium enrichment programme now do not cover oil. While the US and the European Union (EU) may have imposed embargoes targeting Iranian oil sales, these surely cannot pass-off as international law binding on a third country. India bought almost 17.5million tonnes of crude from Iran in 2011-12, which represents over a tenth ofits total imports. Although Iran may have ceded its No. 2 supplier slot (after Saudi Arabia) to Iraq and Kuwait in the last one year, the absolute quantum of purchases by India from it is still quite large. There are obviously limits to reducing these imports or further diversifying the sources of crude supplies, notwithstanding the visiting US Secretary of State, Ms Hillary Clinton's, exhortations to India to “do more”.

It is in this context that one must appreciate the firm and balanced position of India, forcefully articulated by the External Affairs Minister, Mr S.M. Krishna. At a joint media interaction in the presence of Ms Clinton, the Minister maintained that while India is committed to “rigorously implement” UN Security Council resolutions with regardto Iran, any decision on cutting crude imports is for the individual refineries to make “based on commercial, financial and technical considerations”. In other words, without a clear UN mandate, there is nothing stopping India from doing oil business with Iran. It is another thing that the US sanctions curtailing Iran's access to global banking systems may impose practical difficulties in importing. But that should not force a change in stance rooted in principle. A two-pronged approach — wherein India would insist on its right to import

Iranian oil, while quietly working to augment supplies fromother countries — is the most sensible strategy. In this, the country isthankfully not alone: Unilateral US and EU sanctions against Iran have not found favour with China, Russia or Brazil either.

The above approach is also consistent with the need for more credible evidence of Iran pursuing a nuclear weapons programme or sponsoring international terrorism. The US claims about Iran's direct involvement in recent attacks on Israeli diplomats in India and Georgia are as nebulous as attributing the 2011 Mumbai blasts to some amorphous‘ nonstate actors' in Pakistan. The US cannot have two different standards for Iran and Pakistan, and expect India to still toe its line. Right now, it would seem that oil importers like India are paying a premium largelyfor western security concerns.

NOC, IndianOil seal new fuel supply

The Kathmandu Post, Nepal, April 30, 2012 The Nepal Oil Corporation (NOC) and IndianOil on Friday signed a new petroleum supply agreement. As per the new pact that will be effective until March 31, 2017, the IndianOil will be the sole exporter of refined petroleum products to Nepal for the next five years. NOC acting Managing Director Suresh Kumar Agrawal and IndianOil General Manager (commercial) R Karandikar signed the bi-lateral pact.

According to NOC, the agreement has scrapped the existing price adjustment factor (PAF), under which IndianOil had been charging 5 percent on LPG, diesel and petrol and 2.5 percent on other petroleum products. PAF includes refinery and transportation charges, among other technical losses, under IndianOil’s current price formula. Instead of PAF, IndianOil will now charge a flat marketing margin of 2.5 percent on all petroleum commodities. The corporation said the scrapping of PAF will save Rs 2 billion annually.

The new agreement has also allowed NOC to import petroleum from the Mumbai port, apart from Haldiya. The new point is expected to reduce fuel cost for the Mid- and FarWestern Region, NOC said. NOC has also been allowed to deal in IndianOil’s bitumen, lubricants and grease products. The two companies have agreed to negotiate on reducing the existing pricing of furnace oil and light diesel oil and initiate the process to allow import of LPG from refineries other than the existing Barauni, Haldiya and Mathura refineries.

NOC will also be able to procure finished products from the international market and import through IndianOil, according to the new agreement. Also, NOC can buy crude oil from the international market and sell it to IndianOil, and the latter will supply equivalent amount of petroleum to Nepal. The new agreement has revised the time for payments of oil imports.

NOC can make fortnightly payments instead of the present weekly. However, the pact on allowing NOC to pay IndianOil in either US dollars or Indian rupees has been dropped.

According to a NOC source, IndianOil has asked some time to work out on the mode of payment negotiated before the pact.

NOC Deputy Director Sushil Bhattarai said the new agreement is based on ‘mutually agreed’ principle unlike past pacts and that it is balanced. The agreement has given the

advantage to NOC to negotiate on any issue on every review that has not been foreseen in the Friday’s agreement. “Although, NOC and IndianOil have to call review meeting every six months, it was not implemented earlier. However, the new accord is specific on holding review for the improvement and amendments to the agreement every six months” Bhattarai said.

The agreement has talked about construction of the Amlekhgunj-Raxaul pipeline and conducting feasibility study of the Nepal-India LPG pipeline.

MRPL gets oil cargo insured with Iran, may do more

21 May, 2012, 02.25PM IST, The writer has posted comments on this articleReuters NEW DELHI: India's MRPL has got a crude cargo insured by an Iranian firm, the first state refiner to do so, after local firms refused cover even before European Union sanctions barring such deals start in July, sources with knowledge of the matter said. Mangalore Refinery and Petrochemicals (MRPL) "recently got a cargo insured by an Iranian firm and other cargoes can also be insured from Iran. The company will do that on a case-by-case basis," said one of the sources.

The sources declined to be named due to the sensitivity of the subject. The United States and European Union are trying to squeeze the revenues Iran makes from its oil exports to force it to halt a nuclear programme they fear will be used to make weapons. Tehran says it needs the technology for power generation. China, Japan, South Korea and India are the main buyers of Iran's 2.2 million barrels per day (bpd) of exports. All have made steep cuts in imports this year against a backdrop of rising international pressure on Tehran.

MRPL is one of the major Indian clients of Iran's oil and its insurance policy with New India Assurance Co Ltd for cargoes lapsed earlier this month.

IndianOil Posts Rs. 3,955 Crore Profit for FY 2011-12

The audited financial results of the Corporation were taken on record at the meeting of the Board of Directors here today. The Turnover for the financial year 2011-12 rose by 24.7% to Rs 4,09,957 crore from Rs. 3,28,652 crore during 2010-11. The profit for the year 201112 is Rs. 3,955 crore as compared to the profit of Rs 7,445 crore during the previous financial year. Reduction of profit is mainly: a) due to higher interest cost of Rs 2,918 crore on account of delay in receipt of compensation from Govt. of India & higher interest rates; b) due to provisioning of UP Entry Tax of Rs 8,157 crore.

For the quarter January – March 2012, IndianOil turnover went up by 19.7% to Rs 1,12,267 crore as compared to the corresponding quarter of 2010-11. Profit for the last quarter of 2011-12 is Rs 12,670 crore as compared to Rs 3,905 crore in the corresponding quarter of 2010-11, mainly on account of Govt. Compensation received in current quarter for earlier quarters of 2011-12.

For the year 2011-12, IndianOil has accounted for Govt. assistance of Rs 45,486 crore. In addition, the company has been granted discount of Rs 29,961 crore from upstream oil companies/ refiners, as per the under recovery sharing mechanism.

The Board of Directors have recommended a dividend of 50% (Rs 5 per share).

Mr. RS Butola, Chairman, IndianOil, said, “IndianOil sold 75.661 million tonnes of products, including exports, during 2011-12. Our refining throughput for FY 2011-12 was 55.621 million tonnes and the throughput of the Corporation countrywide pipelines network was 75.549 million tonnes for the same period. The gross refining margins during the year 2011-12 were US$ 3.63 per bbl as compared to last year of US$ 5.72 per bbl.

Source: IndianOil Express

India urges Japan to remove non-tariff barriers

TNN | May 1, 2012, 05.00AM IST NEW DELHI: India on Monday urged Japan to remove all non-tariff barriers to enable the benefits under the comprehensive economic partnership agreement (CEPA) to kick in and said Indian drug companies are well positioned to meet the needs of the Japanese market.

Commerce, industry and textiles minister Anand Sharma told his Japanese counterpart that India's share is less than 1% of the total Japanese market and Tokyo may examine the need to expand the share of generic medicines, sources said. The minister also urged the Japanese delegation to start negotiations on nursing and healthcare professional services soon as the move would benefit both countries, the sources added.

Sharma also said the government had agreed to supply 2 million tonnes of iron ore per year to Japan under an existing long-term pact. The minister said CEPA, which came into force from August 1, 2011, is an important milestone in the trade and economic relations between the two countries and bilateral trade had increased by 38% during 2011-12 as compared to 2010-11. He said if the trend is sustained, bilateral trade will cross $24 billion

by March, 2013, and the target of $25 billion would be achieved next year.

Sharma and his Japanese counterpart Yukio Edano discussed bilateral trade issues during the second India-Japan Ministerial business-government policy dialogue. The two sides discussed on investments and sustainable development. The two ministers set up smart community working group under the Indo-Japan Task Force on Delhi Mumbai Industrial Corridor to accelerate the implementation of the smart community projects.

The two sides agreed on the importance of cooperating in infrastructure development in areas along the Chennai-Bengaluru Industrial Corridor including the preparation of a comprehensive integrated master plan of this region, which was decided between the two Prime Ministers in December, 2011. The two ministers also explored steps to further promote investments and support industries in the region through improving infrastructure such as ports, industrial parks and surrounding facilities in Ennore, Chennai, and the adjoining areas and stable power supply.

Essar Oil - L&T sign MoU for bitumen supply

21 May, 2012, 03.13PM IST, The writer has posted comments on this article Shuchi Srivastava,ET Bureau MUMBAI: Essar Oil, amongst India's top private sector refiners, and Larsen & Toubro (L&T), amongst India's top engineering and construction companies, have signed a Memorandum of Understanding (MoU) for supplies of high quality bitumen for key infrastructure projects in Gujarat undertaken by the engineering giant. The initial supply agreement is for a quantity of 15,000 metric tonnes over the course of the project and is likely to be extended to other projects in and around the state.

Essar Oil will provide supplies for the Kandla - Mundra Road Project (KMRP) and the Samakhaiyali - Gandhidham Road Project (SGRP), both in the state of Gujarat from its state-of-the-art refinery in Vadinar. This cooperation will soon be extended to projects like the Kishangarh - Udaipur - Ahmedabad Road Project, among others. Essar Oil has existing relationship with L&T under which it supplied about 60,000 metric tonnes of high quality bitumen over the last 18 months for L&T's various road projects.

The new MoA is over and above that quantity. Essar Oil will ensure availability of quality product for the projects and the relationship with L&T will open up avenues for sales of its refinery product. "We are happy to be associated with L&T and in essence be a part of the infrastructure development of the country. Essar Oil is fully geared to meet the supply for increased demand of high quality bitumen for road construction," said Mr. S. Thangapandian, CEO - Marketing, Essar Oil.

Cut in oil imports will lead to supply shortages: oil firms

Hindustan Times…New Delhi, May 20, 2012 Pay the right price for fuel or face supply disruptions. Finance minister Pranab Mukherjee’s statement on reducing oil imports in the wake of a sharp rise in global prices has got oil companies worried, who feel the move could lead to disruptions in the supply of petrol, diesel and cooking gas (LPG) in the domestic market.

“We are still awaiting a clarity on the extent of cut that will be imposed on crude oil imports,” said a chairman of a state-owned oil company on the condition of anonymity. “Whatever be the cut, it is bound to have an impact on the free supply of petroleum products in the country.”

Amidst rising global crude oil prices, Mukherjee had warned in Parliament last week of disastrous consequences if corrective steps were not taken to solve the problem. He has asked oil experts and chairman of the Prime Minister’s Economic Advisory Council (PMEAC) to find out if the country can reduce its oil import requirement.

The chairman of another leading state-owned oil company said that “restricting oil imports” is not the solution. “We need to regularly increase the price of petroleum products

whenever global oil prices go up. By reducing oil imports, we will only turn our refineries unviable, besides creating products shortage in the market.�

Always believed PNGRB had no control on LNG: Petronet

May 09, 2012 10:51 | Source: CNBC-TV18 Oil regulator PNGRB refused to fix the marketing margin that firms could charge on sale of natural gas, saying it does not have powers to regulate the fuel.

"We have always maintained that the present empowerment of the regulator does not give them the option to look into these aspects. We are happy that the things have moved ahead and the industry is welcoming the situation, "Dr A Balyan CEO & MD of Petronet LNG told CNBC-TV18.

It is learnt from souces that the petroleum and natural gas regulatory board (PNGRB) wrote to the Oil Ministry last week, saying it cannot decide on the marketing margins as natural gas as a product has not been formally notified by the government for adjudication by the Board. However, Balyan added that the company has hardly any exposure on marketing margins. "Our earnings are from regasification, which is back to back almost 100% of our volume, so we are not affected by any margin thing like Indraprastha Gas (IGL) which has compression, transportation and other charges on that," he elaborated.

Below is the edited transcript of Balyans interview with CNBC-TV18. Also watch the accompanying video. Q: The market like the fact that your marketing margins will not be capped at least as of now, do you take it as a victory or do you think there is still a possibility that the government will look at amending the Petroleum and Natural Gas Regulatory Board (PNGRB) act and try and come back and re-impose marketing margins on you?

A: We have always maintained that the present empowerment of the regulator does not give them the option to look into these aspects. We are happy that the things have moved ahead and the industry is welcoming the situation.

As far as Petronet LNG is concerned, we have again maintained that regasified liquefied natural gas (LNG) would not fall under the domain of the regulator. The only empowerment as far as LNG terminals are concerned is that the regulator can register the new LNG terminal not even the earlier ones.

We give most of the quantity of LNG back to back to our three major offtakers so we dont do any retailing. We have always maintained that this kind of controversy would have insignificant impact on Petronet as such, but as a situation the industry has welcome this.

They are back to normal and we see the impact in the share market.

Q: What about the issues of the PNGRB regulating LNG terminals and having some say over that 33% that you sell?

A: They are in the process of finding out what can be done in terms of LNG terminal and they are in the learning process as to what has been done worldwide. The criteria so far the empowerment clarifies, new terminals need to be registered with the regulator.

What should be the eligibility for registering what our requirements that aspect is being looked up into by regulator. They may come up with some kind of recommendation that the fresh LNG terminals maybe registered with the regulator.

Q: Do you think we have bought status quo for a few months or do you think its an active consideration of the government that gas be notified and this risk hangs over your company?

A: We maintain that we have hardly any exposure on the marketing margins. Our earnings are from regasification, which is back to back almost 100% of our volume, so we are not affected by any margin thing like Indraprastha Gas (IGL) which has compression, transportation and other charges on that.

As far as registration is concerned, it is one time kind of an activity which regulator would like to see what size of terminal should be registered. Registration is just one process, one time activity. I dont think there is anything more than that in this.

BCG to vet oilexploration agreements Hindustan Times, May 16, 2012 The petroleum ministry has roped in one of the world's leading management consultancy firms, The Boston Consulting Group (BCG), to review current commercial arrangements for exploration and production (E&P) blocks. The move was seen as necessary in view of the growing discord between the government and operating companies over contracts to develop oil and gas blocks in India, and the negative observations made by the Comptroller and Auditor General (CAG) on these contracts. “The ministry has mandated BCG to develop a clear understanding of the global context and practices associated with commercial agreements between the government and operators for the exploration of the country’s natural resources,” a senior petroleum ministry official told HT. BCG will study the current contracts in India and select international documents to draw insights, implications and best practices that suit the Indian context. When contacted, a spokesperson of BCG told HT that “As per the code of ethics and confidentiality clause, The Boston Consulting Group is unable to disclose or divulge any client and/or work details at this stage.” A petroleum ministry official said that over the next few days, a senior level team from BCG will meet petroleum minister Jaipal Reddy and officials including petroleum secretary, G C Chaturvedi, the chairmen of ONGC, OIL, OVL, the executive director of RIL, the directorate general of hydrocarbons (DGH), MD of GSPC and bureaucrats from Gujarat

India decides to cut crude oil import from Iran by over 11%

Press Trust Of India1:31 PM, MAY 15, 2012 Succumbing to US pressure, India has decided to cut crude oil import from Iran by over 11% this fiscal to 15.5 million tons. India, which imports 80% of its crude oil and relies on Tehran for 12% of those imports, shipped 18.50 million tons of oil from Iran in 2011-12, minister of state for Petroleum and Natural Gas RPN Singh said in a written reply in the Rajya Sabha on Tuesday. This decision comes against the backdrop of intense US pressure on India to cut oil import from Iran.

The government had earlier said that it was not possible for India to take any decision to reduce the imports from Iran drastically as that country was important in meeting India's growing energy needs. US secretary of state Hillary Clinton last week stated that India needed to further reduce imports from Iran to win waiver from US sanctions. The US has already granted waivers to the sanctions for Japan and 10 European countries but has left out China and India, Iran's biggest clients. India has not publicly said it was aiming to cut back oil imports from Iran but has unofficially asked its top imports to prune shipments from Tehran.

"Total crude oil imported from Iran by Indian companies during the period 2010-11 and 2011-12 is 18.50 million tons and 17.44 million tons respectively. The target fixed for import of crude oil from Iran for the year 2012-13 is approximately 15.5 million tons," Singh said.

He said the quantum of crude oil imported by Indian refineries from various sources is decided by them on the basis of technical, commercial and other considerations. "In order to reduce its dependence on any particular region of the world, India has been consciously trying to diversify its sources of crude oil imports to strengthen the country's energy security," he said. India imports crude oil from 30 countries.

Pranab Mukherjee seeks support for oil subsidy cut, reforms

The finance minister assured that there was no cause for panic over the economic situation and reiterated the government’s commitment to keep the fiscal deficit in check.

NEW DELHI: Finance minister Pranab Mukherjee on Tuesday called for a combined effort to bring down fuel subsidies and urged the opposition to back the government's move to get economic reforms back on track. Replying to the debate on the Finance Bill in Lok Sabha, Mukherjee assured that there was no cause for panic over the economic situation and reiterated the government's commitment to keep the fiscal deficit in check.

Mukherjee said the investment climate could be revived if the financial sector reforms and major tax reforms were approved. The rising subsidy bill has triggered demand for increasing fuel prices but the government has so far resisted any such move for fear of stoking inflation and inviting a political backlash. "What should we do? Under-recoveries of oil marketing companies would be Rs 1,39,000 crore," Mukherjee said. "Right now, underrecoveries in case of diesel is Rs 14.50 per litre; in case of kerosene, it is Rs 31.88 per litre and in case of LPG, it is Rs 412 per cylinder of 14 kg. Is it possible to maintain this level of

subsidy?" Mukherjee said, adding raising fuel prices would have an impact on consumers and impact the "already volatile inflationary situation".

He said the government will have to mobilize resources as without fiscal consolidation, it would be difficult to bring the economy back on the growth path. "I shall have to keep in mind current account deficit of 4%, fiscal deficit of 5.9% - can the economy bear it?" he said. "Should we then come back to the path of restoration, recovery, collection and for that, certain strong measures are required."

Mukherjee said the level of foreign exchange reserves was enough compared to 1991 to deal with the situation. "I do agree that the current account deficit is a matter of concern. If there is a crisis in food, it does not mean that we shall have to start eating lizards. Of course, it is a difficult situation, but we can overcome."

India's oil imports from Iran plunge 34% in April

Reuters, May 09 2012 New Delhi: India's crude oil imports from Iran declined by about 34 per cent in April compared with March, deeper than expected and the first evidence of New Delhi implementing cuts in supplies from the sanctions-hit nation under annual deals that began last month.

State-run buyers are at the forefront of reductions, leaving privately-owned Essar the biggest Indian client of Iran, tanker discharge data showed, just as the U.S. praised steps taken by India's refiners to back Washington's pressure on Tehran.

The US has already granted waivers to the sanctions for Japan and 10 European countries but has left out China and India, Iran's biggest clients. US Secretary of State Hillary Clinton said on Monday India needed to do more and said a decision on granting a waiver was around two months away.

India's total oil imports from Iran in April fell to about 269,000 barrels per day (bpd) from 409,000 bpd in March and from about 449,000 bpd in April 2011, the data made available to Reuters showed on Tuesday. Overall in the last contract year to March 31, 2012, India's purchases of crude from Iran were expected to be under 340,000 bpd, India's foreign secretary Ranjan Mathai said in March. Estimates compiled by Reuters based on company plans in July 2011 were for up to about 380,000 bpd.

Indian refiners are expected to cut volumes from Iran by over 20 per cent in this contract year on average, Reuters reported in March. The shortfall is being made up with extra barrels from the world's biggest exporter, Saudi Arabia, as well as Iraq, which has leapfrogged Iran to be India's No. 2 supplier, among others. Clinton said Washington was working with New Delhi to find replacements for Iranian oil when she was visiting India this week.

We commend India for the steps its refineries are taking to reduce imports from Iran and we have also been consulting with India and working with them in some areas on

alternative sources of supply, Clinton said on Tuesday, while keeping up the pressure for even more. Saudi Oil Minister Ali al-Naimi on Tuesday said the top oil exporter is pumping around 10 million bpd and is storing 80 million barrels to meet any sudden disruption in supplies.

The Kingdom stood ready to tap into its spare capacity of 2.5 million bpd if more crude was needed, he added. Imports from Iran in January-April surged by almost a quarter to 405,000 bpd compared with last year when lifting of Iranian oil slowed due to payment problems caused when a finance conduit was closed under U.S. pressure.

In the first four months of this year, Iraq has emerged as India's second biggest supplier of oil replacing Iran, followed by Kuwait, Nigeria and the United Arab Emirates. Saudi Arabia continued to be the biggest oil supplier to India. India's overall oil imports in January-April rose about 10 per cent from a year ago as the country expanded its refining capacity. Total oil imports in April declined 5.7 per cent from March and 2.2 per cent from April last year, the data showed, after stockbuilding in February and March.

India aims to raise its refining capacity from the current 4.3 million bpd to about 6.22 million bpd by 2016/17, while the local fuel demand is expected to rise to 152.94 million tonnes, Oil Minister S. Jaipal Reddy told lawmakers on Tuesday.

ESSAR REPLACING MRPL In the January to April period, Essar Oil replaced Mangalore Refinery and Petrochemicals as the biggest buyer of Iranian oil. In April, Essar shipped in 119,200 bpd -- about 24 per cent less than March. Indian refiners have been asked privately by the government to cut Iranian oil imports by at least 15 per cent even though publicly New Delhi maintains it does not support unilateral sanctions.

State-run MRPL imported about 19 per cent less oil in April from Iran compared with March at 90,200 bpd, the data showed, while Hindustan Petroleum Corp reduced its intake of Iranian oil by about 10 per cent to 60,000 bpd. Essar has renewed its annual deal of 100,000 bpd with Iran for this fiscal year starting April 1, while MRPL has reduced the size of its deal to 80,000-100,000 bpd compared with 142,000 bpd in 2011/12, industry sources have said. HPCL aims to buy 60,000 bpd oil from Iran compared with 70,000 bpd in 2011/12.

Indian Oil Corp, the country's biggest refiner, and Bharat Petroleum Corp. Ltd. did not buy any Iranian oil in April. IOC had bought about 75,000 bpd in March.

OIL's KG basin drilling delayed over green nod

May 21 2012 Oil India’s (OIL) planned exploratory drilling at the onshore Krishna Godavari (KG) basin has got delayed by atleast three to four months as the company is seeking environmental approval for five of its wells – three shallow and two deep wells.

A senior company official told Financial Chronicle that, “We are waiting for the

government's environmental approval after completing the seismic activities and mobilising the rigs. It may take at least 3-4 months for the civil work to start.” In November last year this paper quoted company officials saying that exploratory drilling on three onshore wells in the KG block of Andhra Pradesh and Yanam district of Pondicherry would begin in the first quarter of current financial year.

The oil and gas explorer has already completed the seismic survey of the block and has finalised some of the tenders that were issued for civil contracts and mobilization of rigs to undertake exploratory drilling, the official said. “We have also got the approval of the coastal regulatory authority. We are just waiting for the approval. Once that comes it would take 3-4 months to start the drilling activity.”

OIL and its partner GeoGlobal Resources from Barbados, which holds 10 per cent interest in the block, have a commitment to drill 12 exploratory wells in the 549 sq km block on the eastern coast of India. OIL won the block at the NELP VI auction and is the operator of the block with 90 per cent interest.

According to the tenders issued by OIL, operations were scheduled to start by February 2012. However, the official said, it would take at least two years from the date of drilling to reach the development or commercial phase. The drilling is expected to cost around $150$200 million or Rs 825 crore to Rs 1,100 crore on Monday’s exchange rate of Rs 55 to a dollar, that includes the cost of the seismic survey.

It has planned a capex of around Rs 3,180.30 crore for exploration and develo pment of existing acreages. Around 52 per cent of capex will be on exploration and appraisal activities while 27 per cent would be spent on project development.

Oil Ministry says ‘immediate’ need to hike fuel prices

May22: THE HINDU BUSINESS LINE With rupee depreciation leading to jump in oil import bill, Petroleum Minister S Jaipal Reddy today said there is an immediate need to raise fuel prices, but refused to say when the hike will actually take place. “It (price increase) is very essential but (before hiking rates) we have to talk to political parties,” he told reporters here on way to Ashgabat for signing of the agreement for the Turkmenistan—Afghanistan—Pakistan—India pipeline. The government had decontrolled petrol price in June 2010 but rates were last increased on November 4 last year. This despite oil price rising by 14 per cent and 7 per cent fall in value of rupee against the US dollar.

Price of diesel, kerosene and cooking gas were raised in June last year. “If rupee depreciates by one against the US dollar, our oil companies lose Rs 8,000 core(annually),” Reddy said. . “Rupee yesterday dipped (to anall—time low of) Rs 55 (to a US dollar). Last year it was Rs 46. This translates into a loss of Rs 72,000 crore (on account of rupee depreciation)this year.” “Seeing all this, something needs to be done, but when will it be done, how it will be done... I cannot make a forecast,” Reddy said. “There is no decision on raising price or not raising prices“. State—owned oil firms, who had in the fiscal ending

March31, 2012 lost Rs 4,860 crore on petrol sales, are currently losing Rs 6.28 per litre on petrol. After including 20 per cent VAT, the desired increase in petrol price in Delhi comes to Rs 7.53 a litre.

Shell's India Chairman Vikram Singh Mehta to step down in October

PTI Apr 11, 2012, 01.40PM IST NEW DELHI: Vikram Singh Mehta will step down as the Chairman of Shell Companies in India at the end of October, the company said today. Mehta, who has been the face of Shell in India for 24 years, will be replaced by Yasmine Hilton.

A Shell India statement did not however give the reasons for Mehta, 60, stepping down.

"Vikram Singh Mehta, Chairman, Shell Companies in India has chosen to step out of the company after 24 years of service, effective October 31, 2012," it said.

"Since 1993, Vikram has significantly enabled growth across diverse Shell businesses in India and has set a strong platform for future expansion," the statement added. Shell said Hilton, who succeeds Mehta, was born in Mumbai and joined the Shell Group in 1979. She holds a PhD in Genetics, and has worked in a number of leadership roles across the Shell Group. She is currently based in London and will be relocating to India in September.

Shell today is amongst the largest energy companies in India and is the only major international energy firm with a licence to retail fuels (petrol and diesel) and aviation fuel as well as marketing specialty products like lubricants and bitumen. It has one of the country's two LNG import terminals at Hazira (in a joint venture with Total of France) and has set up a world class technology centre in Bangalore

IndianOil and BOC India ink LNG agreement

April, 3, 2012, IndianOil Express

IndianOil’s BD-Gas Group has signed an agreement with BOC India Ltd. for the supply 1370 MT of LNG per annum for the next five years. The agreement was recently signed by Mr. A.K. Marchanda, ED (Gas), IndianOil and Mr. Srikumar Menon, Managing Director, BOC India Ltd. at New Delhi. Mr. V.K. Kaul, GM (Gas), Mr. V.P. Sinha, DGM (LNG) and Mr. Vinayak S. Kembhavi, Vice-President (Sales), BOC India Ltd and other senior officials of IndianOil and BOC were present.

BOC, a part of Linde Group, will procure LNG for their client M/s Sterlite Technologies Ltd. at Aurangabad. LNG will be used as feedstock to extract Hydrogen for use in processes of Sterlite Technologies Ltd and this will be the first plant of its kind in India using this technology. Currently, LPG is used for hydrogen extraction in processing plants which will now be replaced by LNG for better economics.

Duties to hurt ONGC FY13 profit by Rs 5,000 cr

Reuters / New Delhi March 23, 2012 Oil & Natural Gas Corp's profit before tax will take a hit of Rs 5,000 crore in 2012-13 due to budget proposals to raise duties on oil production, and an increase in service and other taxes, its chairman said. The budget for the fiscal year beginning in April proposed to raise cess on crude oil to Rs 4,500 per tonne from Rs 2,500 per tonne.

The state-run company has asked the government to adjust the extra burden from the budget against oil subsidies, Sudhir Vasudeva told reporters at an industry event. The government subsidizes prices of diesel, kerosene and cooking gas to protect the poor from the impact of inflation pressures. This means producers such as ONGC must share the shortfall by selling crude to refiners at a discount. Because of the subsidies, the total revenue losses of India's state-run oil companies are expected to rise to $28.5 billion in the fiscal year ending March, nearly double the amount in the previous year.

Mittal says Bathinda refinery capacity may double

Hindustan Mittal Energy Ltd in Bathinda may double capacity to 360,000 barrels per day, ArcelorMittal chairman Lakshmi Mittal said, at the opening of the plant that could help trade ties between the nuclear-armed India and Pakistan.

The oil refinery, a joint venture of state-run Hindustan Petroleum ) and billionaire Lakshmi Mittal’s Mittal Energy, opened the Bathinda plant on Saturday. The $4 billion plant is located 100 km (62 miles) from the border with Pakistan and 175 kilometres from the city of Lahore.

The refinery is the first investment in downstream oil sector by Mittal, Chairman of ArcelorMittal, the world’s biggest steelmaker. Mittal Energy has a venture with state-owned Oil & Natural Gas Corp (ONGC), which has offshore oil exploration blocks in Nigeria. Mittal said the refinery will feed fuel into deficit markets of northern India. HPCL Mittal Energy Ltd, a joint venture of Mittal’s Mittal Energy Investments and state-owned Hindustan Petroleum Corp Ltd (HPCL) was built in 42 months.

HPCL and Mittal Energy Investment Pte Ltd, Singapore – a Lakshmi Mittal Group company, hold 49 per cent stake each in HEML, while 2 per cent is held by financial institutions. The refinery has high Nelson Complexity Index which will enable maximising value-added products even from heavy/sour crudes. Crude oil to the refinery is to be ferried through a 1,014 km pipeline from Mundra in Gujarat where the oil is imported from abroad. The new unit has raised the total oil refining capacity in the country to 213 million tonne per annum, from 198.886 million tonne.

IndianOil signs agreement with Nepal Oil Corporation

IndianOil recently renewed its supply agreement with Nepal Oil Corporation Ltd. (NOCL) for another five years. In the presence of Mr. M. Nene Director (Marketing), and Mr. L.M.Joshi, Secretary, Commerce and Supplies, Govt. of Nepal and Chairman (NOCL), the agreement was signed by Mr. M.R.Karandikar, GM(Supplies), Mktg. HO, and Mr. S.K.Agrawal,

Managing Director, NOCL, in Nepal, Kathmandu. Ms. Anju Ranjan, First Secretary (Commerce), Indian Embassy, Kathmandu, and dignitaries of the level of Joint Secretary in the Ministries of Finance, Foreign Affairs and Commerce & Supplies of Nepal Government and were also present during the ceremony. A concurrent agreement was also signed with NOCL on sharing of technical expertise under which IndianOil will extend technical and developmental assistance to NOC in various fields. Both the agreements have come into effect from April 27th, 2012.

While expressing his happiness on continuation of mutually beneficial association of last four decades between the two companies Mr. Nene explained the benefits of the proposed Raxaul-Amlekhgnaj pipeline for Nepal and requested the help of Mr. Joshi to facilitate clearance of the project on a priority. Mr. Nene also discussed the possibility of a LPG pipeline from India to Nepal that will greatly ease out the availability of LPG in Nepal. Mr. Joshi wholeheartedly endorsed the views of Mr. Nene and informed that the pipeline project was a high priority for the Nepal Government as well, considering its immense benefits to the people of Nepal.

During his visit, Mr Nene also called on Mr. Lekh Raj Bhatta, Minister of Commerce & Supplies, Govt. of Nepal and Mr. Bishnu Prasad Chaudhary Minister of State Commerce & Supplies. IndianOil meets 100% requirement of major petroleum products of Nepal through M/s Nepal Oil Corporation, which is a wholly-owned company of Govt. of Nepal. Valued at Rs 5250 crore, the annual sale volume is about 1 MMT, which include major products like MS,HSD, SKO, ATF & LPG and small quantities of FO & LDO. All supplies are made on ex-MI basis against payment in Indian Rupees.

Oil ministry seeks Rs 49,090 cr to stop OMCs from going red

Indian Express, May 03 2012 New Delhi : The petroleum ministry has urged the finance ministry to pay Rs 49,090 crore to compensate the losses incurred by the state-run oil marketing companies (OMCs) due to the government’s move to not raise consumer price of transport and cooking fuels since June 2011.

If not compensated, the petroleum warned, the three OMCs — Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum would have to report losses of Rs 20,000 crore, Rs 10,000 crore and Rs 8,500 crore, respectively, for 2011-12. In several letters to Finance Ministry, including one to the Finance Minister, the oil ministry said that a gap of Rs 38,790 crore remained unpaid in 2011-12 due to non-revision of diesel, kerosene and LPG prices and Rs 10,300 crore due to petrol price freeze and interest compensation on deferred payments.

Mukherjee heads the Empowered Group of Ministers (EGoM) that decides the pricing of diesel, kerosene and LPG, which were last revised June 2011. Though petrol was deregulated in June 2010, an artificial government control still continues.

Of a total under-recovery of Rs 1,39,000 crore incurred by the OMCs in 2011-12, the finance ministry provided Rs 45,000 crore as cash assistance from the Budget and Rs 53,000 crore is to come through discounts from upstream companies. “Since the fiscal year got over without a price revision, the ministry has demanded that Rs 49,000 crore be compensated through budgetary support,” said an official. Incidentally, Budget 2012-13 provides for only 40,000 crore as cash support and if that money is provided, only IOC and BPCL stand to gain with net profits of Rs 900 crore and Rs 250 crore, respectively, while HPCL will have to report a loss of Rs 60 crore. But if the budgeted Rs 40,000 crore is used for non revision of prices in last year, the Rs 1,89,000 crore estimated as this fiscal’s underrecovery of OMCs will have to be paid by the tax payer.

Using $120 per barrel price of crude oil with an exchange rate of Rs 50 to a US dollar, the OMCs could lose Rs 1,13,000 crore on diesel, Rs 32,000 crore on kerosene and Rs 44,000 crore on LPG in 2012-13 if the EGoM fails to raise the retail price. And if the artificial price control on petrol continues, they would lose an additional Rs 5,000 crore each quarter, said the official.

India's exports cross $300bn, but trade deficit balloons

Braving slowdown in the US and Europe, India's exports crossed USD 300 billion in 201112, but rising import bill pushed by high crude oil prices and the country's obsession with bullion sent the trade deficit soaring to USD 185 billion. "I am happy to announce that India's exports have crossed USD 300 billion in the last financial year," commerce and industry minister Anand Sharma said here. However, he also shared his concern over ballooning trade gap as imports shot up by 38% to USD 485 billion for the last fiscal.

Sharma noted that target of USD 300 billion was achieved despite lower export demand from traditional markets and eurozone crisis as outbound shipments grew in new markets of Latin America and Africa. "We are on course, despite very difficult global scenario and the contraction of demand in some of the traditional destinations and the eurozone crisis," the minister said while releasing the provisional data. He said imports increased mainly due to high crude oil prices and huge demand for gold and silver. Consequently, the trade deficit is estimated to have widened to USD 185 billion from USD 104.4 billion in 2010-11.

"Our current account deficit and trade deficit are a challenge. Both are under stress. Trade deficit is primarily because of high crude oil prices," he said, adding that the country would devise a strategy in its upcoming foreign trade policy to regulate and address the growing trade gap. The maximum imports were of crude oil--USD 150 billion, while gold and silver contributed to USD 60 billion.India is world's largest gold importer.

Neyveli Lignite to set-up 1980MW power plant in UP

Apr 13, 2012 10:09 | Source: CNBC-TV18 The cabinet on Thursday approved Neyveli Lignites proposal for formation of a joint venture (JV) company with Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) to set up a thermal power project in Uttar Pradesh. AR Ansari, chairman and managing director, Neyveli Lignite told CNBC-TV18 that the company would be setting up supercritical coalbased thermal power unit of 3x660 megawatt (1,980MW) capacity at Ghatmapur in Kanpur.

"For this, we will be getting a linkage from the Coal India and in addition to this we will be looking at imported coal," he added. The company will ink an MoU with UPRVUNL for

setting up the plant with 50:50 equity participation. The Cabinet also cleared a proposal to switch from the current mixed structure to ad valorem royalty on coal and lignite. On coal, the ad valorem royalty is fixed at 14%, while for lignite it has been fixed at 6%. Thsi move is expected to boost revenues in coal-bearing states.

"The changes announced on royalty front will not have any impact on us," he added.

Q: What kind of timelines are you looking at for this thermal power plant? How do you see things progressing on that front from here?

A: The approval has been given for Ghatmapur, we will be setting up supercritical thermal station there of 3*660 MW capacity. It will be coal-based power station. For this coal, we will be getting a linkage from the Coal India and in addition to this we will be looking at imported coal.

Q: The government also approved some changes in terms of royalty for coal and lignite, can you just explain to us what exactly the impact could be for a company like yours because of those changes in rates?

A: Whatever changes have been announced by the government does not affect a generating company because it becomes a pass through item for us. Definitely, whenever there is a change on royalty, it is passed on to the main consumer. So there wont be any impact on us. As far as the coal based power stations are concerned, that will also be passed on to the consumer.

Q: What kind of timelines are we looking at for this thermal power plant, by when do you expect to tie-up the linkages and order equipment etc?

A: It has been approved just now and it is a joint venture (JV). The UP government and NLC is now going to sign JV agreement, which will be done in ten days time from now.

After that we shall be looking forward for other additional items. I have already prepared the pre-qualifications (PQ) for steam generators BTG. We will be floating a tender for 6 * 660 within six-eight months time.

The letter of intent (LOI) could be awarded within eight months time provided we get a zero debt approval. We are a JV and being a Navratna company, it is difficult for me to go ahead independently. We are going ahead for cabinet nod to get our expenditure for this JV approved.

Neyveli Lignite to set-up 1980MW power plant in UP

The cabinet on Thursday approved Neyveli Lignites proposal for formation of a joint venture (JV) company with Uttar Pradesh Rajya Vidyut Utpadan Nigam (UPRVUNL) to set up a thermal power project in Uttar Pradesh.

AR Ansari, chairman and managing director, Neyveli Lignite told CNBC-TV18 that the company would be setting up supercritical coal-based thermal power unit of 3x660 megawatt (1,980MW) capacity at Ghatmapur in Kanpur.

"For this, we will be getting a linkage from the Coal India and in addition to this we will be looking at imported coal," he added.

The company will ink an MoU with UPRVUNL for setting up the plant with 50:50 equity participation.

The Cabinet also cleared a proposal to switch from the current mixed structure to ad valorem royalty on coal and lignite. On coal, the ad valorem royalty is fixed at 14%, while for lignite it has been fixed at 6%. Thsi move is expected to boost revenues in coal-bearing states.

"The changes announced on royalty front will not have any impact on us," he added.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: What kind of timelines are you looking at for this thermal power plant? How do you see things progressing on that front from here?

A: The approval has been given for Ghatmapur, we will be setting up supercritical thermal station there of 3*660 MW capacity. It will be coal-based power station. For this coal, we will be getting a linkage from the Coal India and in addition to this we will be looking at imported coal.

Q: The government also approved some changes in terms of royalty for coal and lignite, can you just explain to us what exactly the impact could be for a company like yours because of those changes in rates?

A: Whatever changes have been announced by the government does not affect a generating company because it becomes a pass through item for us. Definitely, whenever there is a change on royalty, it is passed on to the main consumer. So there wont be any impact on us. As far as the coal based power stations are concerned, that will also be passed on to the consumer.

Q: What kind of timelines are we looking at for this thermal power plant, by when do you expect to tie-up the linkages and order equipment etc?

A: It has been approved just now and it is a joint venture (JV). The UP government and NLC is now going to sign JV agreement, which will be done in ten days time from now.

After that we shall be looking forward for other additional items. I have already prepared the pre-qualifications (PQ) for steam generators BTG. We will be floating a tender for 6 * 660 within six-eight months time.

The letter of intent (LOI) could be awarded within eight months time provided we get a zero debt approval. We are a JV and being a Navratna company, it is difficult for me to go ahead independently. We are going ahead for cabinet nod to get our expenditure for this JV approved.

BPCL, Videocon stocks rally on Mozambique gas find

Economic Times MUMBAI: Bharat Petroleum Corporation Ltd and Videocon Industries shares rallied in trade on Wednesday after Texas-based Anadarko Petroleum, the operator of the Rovuma Offshore Area 1 in Mozambique, said it has discovered a major new gas find in the area that could hold reserves of 7-20 trillion cubic feet.

This comes after Anadarko had recently declared that this basin, which is globally being seen as one of the largest gas discoveries of the century, could hold up to 30 tcf of gas.

Bharat PetroResources, a wholly-owned subsidiary of BPCL, and Videocon Hydrocarbon Holdings, a wholly-owned subsidiary of Videocon Industries, each hold 10% stake in six blocks in the deep water Rovuma Basin, off the Mozambique coast in southern Africa. On

the back of this news, BPCL was up 3.25% in trade on Wednesday, a 16-month high and closed at 751.80. While Videocon was up 0.62%, and closed at 171.25.

Anadarko said: "We have discovered a new, major natural gas accumulation, which is entirely contained within the Offshore Area 1 block of the Rovuma Basin and nearly 32 kilometres northwest of its Prosperidade complex. This adds an estimated 7 to 20-plus tcf recoverable resources, in addition to the earlier announced 17 to 30-plus tcf in the Prosperidade complex within the block."

"This is good news for India that is facing an acute gas crunch currently, as both BPCL and Videocon jointly own a 20% stake in the block, which could now hold gas reserves of up to 50 tcf and we plan to transport and market this gas in India," said RK Singh, CMD, BPCL. ET has earlier reported that Anadarko, the operator of the block, had held preliminary discussions with gas utilities GAIL and GSPC to understand the modalities of joint investments in setting up downstream infrastructure to transport and market the gas produced in the Rovuma basin to India.

"We are very keen to bring the gas from Mozambique to India as we see a huge potential and our research shows that in value terms we can sell around 1,53,000 crore of this gas in India. We have had regular interactions with our foreign partners who are also very keen to target the India market," Venugopal Dhoot, CMD, Videocon Industries, had told ET earlier.

"We at BPCL will take the lead in initiating all investment and downstream marketing activities in India and will also invest $1.9 billion in building downstream infrastructure in Mozambique for the liquefaction of the gas, building jetties and transporting the gas," Singh had told ET earlier.

Texas-based Anadarko is the operator of the blocks and holds 36.5% stake while Mitsui E&P Mozambique holds 20%. Empressa Nacional de Hidrocarbonetos EP, Mozambique's state-owned oil company, holds 15% stake.

Reliance Industries Limited to boost refining margins

The Economic Times MUMBAI: Reliance Industries Limited (RIL) will boost refining margins by $3 a barrel in three to four years from it $4-billion investment to build one of the world's largest gasification projects that will use make synthesis gas from petcoke, industry sources said.

The project would be completed in three to four years, and recover the investment in about three years, a source close to the company said.

"The gasification project will kick-start RIL's $12-billion investment in refining and petrochemical business. It will boost the gross refining margins of its refineries by $3 per barrel," the source said.

Refining margins, or the money earned from converting crude oil into oil products, such as petrol and diesel, is a key driver of Reliance Industries profit. Asian refiners have been hit by a downturn in global refining margins, which industry experts say would be range-bound for a few quarters because of weak global demand and turmoil in Europe.

Synthesis gas will replace costly LNG to cuts costs, and also be used as feedstock for other plants. It will also help raise output of high-value products from the refinery.

Jairam Ramesh urges government to cut fuel subsidies, allow FDI in retail

Economic Times NEW DELHI: Rural Development Minister Jairam Ramesh has urged the government to cut fuel subsidies and take a quick decision on opening the retail sector to foreign investment, saying the time for pussyfooting is over.

The IIT- and MIT-educated Ramesh said governance was about taking unpopular decisions and that there was never a good time for tough decisions. "We can't look at rahu-ketu and decide on petrol prices. I hope that a decision on FDI in retail will be taken soon.

Governments can't keep looking over the shoulder. Or at the constellation of stars," he said in an interview to ET on Saturday morning, before Oil Minister Jaipal Reddy's remarks ruling out an increase in the prices of diesel, kerosene and cooking gas.

Rejecting the contention that the Congress was unwilling to support unpopular decisions, Ramesh claimed the party would back the government. "The time for pussyfooting is over.

We still have two years left and it is time to take the bull by its horns... Leadership is about taking people on a trajectory where they were not going or didn't want to go. It is not about going where you were already going," said Ramesh, who is believed to be close to the Gandhi family. His remarks appear to be a tacit acknowledgment of some of the criticism heaped on the government.

Need to Rationalise Fuel Subsidies The government has faced much criticism about its tardy way of functioning and unwillingness to take hard decisions.

Last week, oil companies raised the price of petrol by Rs. 7.50 per litre, but despite ballooning fuel subsidies, the government has so far not mustered the courage to hike rates of diesel and kerosene. The petroleum minister on Monday said the government had no immediate plans to raise prices of these fuels.

Ramesh, however, described fuel subsidies as perverse and said they should be rationalised. "We finally had the courage to move on petrol, but it only accentuates the problem with kerosene or diesel," he said. The total fuel subsidy, which is about Rs. 1,90,000 crore, is double the government's budget for rural development, and higher than the country's defence budget, Ramesh added.

The minister said under the NDA government, the decision to sell petrol and diesel rates at market rates were implemented, but this policy was abandoned by the UPA government in 2004. "The smooth adjustment of prices was abandoned in favour of Cabinet approval for increasing prices. That is where we got boxed in. So, instead of frequent adjustment in paise, we have shock therapy in rupees," he said. Since 2010, oil companies have officially been given the freedom to revise petrol prices. But the power to revise diesel, kerosene and cooking gas prices vests with an empowered group of ministers.

Cairn offers to boost oil production to aid cut in imports

In the wake of alleged reports of US pressure on India to reduce its oil imports from Iran, Anil Agarwal, chairman, Vedanta has written to the Prime Minister stating that the company could accelerate production at its Rajasthan unit by a year and thus reduce India's dependence on oil imports, reports CNBC-TV18's Nayantara Rai, quoting sources.

Though the Prime Minister's reply is yet to be received, Vedanta is very keen that Cairn India's production is accelerated by a year to 2,35,000 barrels a day, a target that was supposed to be achieved in March 2014.

Agarwal is keen on achieving that target by 2013 as it would aid India's crude supply and boost Cairn India's topline by nearly Rs 6,000 crore. According to analysts' forecast, the PAT would rise to about Rs 1,1200 crore in FY14.

Agarwal's letter also mentions that Cairn India’s investments to increase production to 2,35,000 barrels a day would earn the government Rs 30,000 crore and India's oil dependency could go down by USD 8.5 billion.

Cairn India is already planning to achieving production levels of 500,000 barrels a day which has potential to reduce India's crude import bill by USD 18 billion and result in the government gaining about Rs 60,000 crore.

GlobeScan Bangladesh finds oil reserves worth $5.5b

DHAKA: Bangladesh has discovered oil in two old gas fields in the country's northeastern region with an extractable reserve worth $5.5 billion, the chairman of state-owned Petrobangla said Monday.

Hussain Monsur told AFP the two finds at Kailashtila and Sylhet contain proven reserves of 137 million barrels of low sulphur crude oil, of which 55 million barrels can be lifted commercially. Low sulphur, or "sweet", crude oil is highly sought after and is more easily processed into gasoline than high sulphur crude.

"In the current market price, the value of this extractable reserve of 55 million barrels is 450 billion taka ($5.5 billion). It's a very good news, coming at a time when are our oil import bill is growing fast," he said.

The impoverished nation spent about $5 billion to import crude and refined oil in 2011 -from about $4 billion in 2010 -- a large part of which was subsidised by the government, said state fuel importer Bangladesh Petroleum (Bapex), a subsidiary of Petrobangla. Bapex made the accidental finding last week while analysing 3D seismic surveys conducted last year in an effort to determine the size of remaining gas reserves in the two fields, which were discovered in 1962 and 1955.

Bapex would start drilling wells in the next 18 months, Monsur said, adding the firm would need foreign consultants as it has not made oil extractions on this scale before.

Bangladesh is one of the world's poorest countries, with a third of its 150 million people living below the poverty line.

Shell & PetroChina JV, Australia LNG faces big cost overrun

4 May, 2012, 12.35PM IST, The writer has posted comments on this articleReuters

HONG KONG/PERTH: The cost of Royal Dutch Shell and PetroChina's Australian joint venture LNG may rise as much as 50 per cent from initial estimates, which could force the companies to delay development, a source close to the project said today. Arrow LNG is one of four on Australia's east coast operations that aims to pump gas from coal seams to export facilities. The estimated investment for all the projects is rising rapidly from the initial price tag of around $70 billion.

The investment estimate for Arrow has already risen 30-40 per cent, the source said, due to the rising price of labour and the cost of meeting stringent environmental regulations.

Without some change in the regulations, developers would struggle to move ahead with the project, the source added. "So far the cost has risen 30-40 per cent. Now it is expected to rise by up to 50 per cent," said the source, who was not authorised to speak to the media and spoke on condition of anonymity.

"The project is facing delay. It has hit a deadlock," the source said. "It is really hard to move ahead with the project if the government keeps its policies unchanged." The source stated that Arrow Energy initially estimated in 2010 that the project would cost a total of $24-$26 billion, but that had now gone up to around $34-$36 billion. Shell had previously indicated costs for its most recent project, Prelude, would be around $3 billion to $3.5 billion per million tonnes of LNG per year. If costs for Arrow LNG are in that range, it would cost $24 to 28 billion.

The planned LNG export terminal would have the capacity to ship 8 million tonnes per year and is scheduled to start up in 2017. An Arrow spokesman said it would take a decision on whether to proceed with the project in late 2013. "Arrow has never shared or published project cost forecasts and hence does not recognise the figures reported," an Arrow spokesman said in an emailed statement. "It is recognised industry wide that there are cost pressures on all projects. Despite this, Arrow is on track to make a (final investment decision) in late 2013."

The company is expecting to issue a tender for the project's front-end engineering and design (FEED) phase and about to enter FEED for two major pipelines, the spokesman said. The source added that the cost of developing the gas production from the coal seams has almost doubled from an original estimate. Originally, the upstream development costs were estimated to account for half of the total cost of the overall project, which also includes gas liquefaction plants, but now the proportion was set to be much higher, the source said.

PUBLIC OPPOSITION IN AUSTRALIA A groundswell of public opposition to coal seam gas developments due to concerns about their impact on groundwater supplies has made it one of Australia's most closely regulated industries, and the costs of complying with environmental regulations are likely to drive up costs, industry experts say. The gas from the coal seams would be pumped to a facility that will chill it for export as liquefied natural gas (LNG).

The source said that sharing of LNG facilities was one way to cap costs, but the main cost pressure of the project was coming from coal seam gas production. Shell Chief Financial Officer Simon Henry said last week that it was in talks for sharing planned LNG facilities with rivals in Queensland, Australia.

The operator of another of the four projects announced over $5 billion of cost overruns on Thursday. BG Group said a 36 per cent rise in the estimated cost of its Queensland Curtis Island LNG project was in part due to the cost of regulatory compliance, bumping up the total to $20.4 billion from $15 billion.

Macquarie Research estimates that the other two projects, operated by Santos and Origin Energy, both face 15 per cent cost overruns.

PUBLIC OPPOSITION IN AUSTRALIA A groundswell of public opposition to coal seam gas developments due to concerns about their impact on groundwater supplies has made it one of Australia's most closely regulated industries, and the costs of complying with environmental regulations are likely to drive up costs, industry experts say. The gas from the coal seams would be pumped to a facility that will chill it for export as liquefied natural gas (LNG).

The source said that sharing of LNG facilities was one way to cap costs, but the main cost pressure of the project was coming from coal seam gas production. Shell Chief Financial Officer Simon Henry said last week that it was in talks for sharing planned LNG facilities with rivals in Queensland, Australia. The operator of another of the four projects announced over $5 billion of cost overruns on Thursday. BG Group said a 36 per cent rise in the estimated cost of its Queensland Curtis Island LNG project was in part due to the cost of regulatory compliance, bumping up the total to $20.4 billion from $15 billion. Macquarie Research estimates that the other two projects, operated by Santos and Origin Energy, both face 15 per cent cost overruns.

Oil rises from 7-month low on China growth assurance

Bloomberg May 25, 2012 LONDON: Oil rebounded after closing below $90 a barrel for the first time in seven months amid signs China will accelerate efforts to spur growth, while talks on Iran's nuclear program continued in Baghdad. Futures gained as much as 1.3% in New York. China, the world's second-biggest oil consumer, will intensify "fine- tuning" of policies, according to the government's second statement in four days signaling a commitment to growth as domestic demand slows. World powers and Iran are meeting for a second day in Baghdad to overcome disagreements over measures to ensure the Persian Gulf country's nuclear program is peaceful.

"China has been discussing ways of boosting growth in the last couple of weeks, focusing on building infrastructure which is a positive for commodities, especially oil," said Thina Margethe Saltvedt, an analyst at Nordea Bank in Oslo. "Most eyes will be on Iran on Thursday as the meetings will give an idea about how far the parties are willing to go in negotiations."

Crude for July delivery gained as much as $1.17 to $91.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.60 at 1:12 p.m. London time. The contract on Wednesday slid 2.1% to $89.90, the lowest close since October 21. Prices are 8.3% lower this year.

Brent oil for July settlement rose 41 cents, or 0.4%, to $105.97 a barrel on the Londonbased ICE Futures Europe exchange. The European benchmark contract's premium to West Texas Intermediate was at $15.37, compared with $15.66 on Wednesday.

Proactive China China "must proactively take policies and measures to expand demand and to create a favourable policy environment for stable and relatively fast economic growth," the government said on its website on Wednesday, summarising a meeting of the State Council, or cabinet.

The statement builds on Premier Wen Jiabao's comments published on May 20 showing a bigger focus on bolstering growth. Authorities this month cut banks' required reserves for the third time since November.

"Progress has been made," Michael Mann, the spokesman for European Union foreign policy chief Catherine Ashton, told reporters in Baghdad on Thursday. Ashton met with Iran's top nuclear negotiator, Saeed Jalili, to discuss where and when to hold the next round of talks, Mann said.

Western Reluctance The first day of talks recessed on Wednesday at almost midnight. While Iran denies it wants to make nuclear weapons, it has refused to cooperate with inspectors and is under multiple international sanctions.

The outcome of the discussions remains uncertain as long as proposals by the Islamic republic are rejected, Iran's Press TV reported on Thursday. The West is showing "reluctance" over the proposals and its position isn't clear, Iranian delegate Taleb Mahdi told reporters. Iran produced an average of 3.3 million barrels a day of crude in April.

Saudi Arabia, the biggest producer in the Organisation of Petroleum Exporting Countries, pumped 9.8 million a day. Futures erased gains earlier as a decline in German business confidence and disagreement among EU leaders on joint bond sales fanned concern that the region will fail to resolve its debt crisis.

The Munich-based Ifo institute said on Thursday its business climate index, based on a survey of 7,000 executives, dropped to 106.9 from 109.9 in April. That's the steepest decline since August, when the region's debt crisis spread to Italy and Spain, and below all 37 estimates in a Bloomberg News survey of economists.

ConocoPhillips looking to exit Nigeria

Tue, May 8 2012

By Sophie Sassard and Joe Brock LONDON/ABUJA, Nigeria (Reuters) - U.S. oil group ConocoPhillips (COP.N: Quote, Profile, Research) has hired BNP Paribas (BNPP.PA: Quote, Profile, Research) to help sell its Nigerian assets, including on-shore, off-shore oil and gas fields and a stake in its LNG Brass facility, sources familiar with the situation told Reuters. The assets were expected to attract interest from Nigerian companies such as Conoil (CONOIL.LG: Quote, Profile, Research) and Oando (OANDO.LG: Quote, Profile, Research) and Asian players including China's Sinopec 000554.SZ, Indian company ONGC (ONGC.NS: Quote, Profile, Research), and South Korean firm KNOC, the sources said on Tuesday.

They could help ConocoPhillips raise about $2.5 billion and possibly more if they were sold separately, which is the most likely route, according to the sources. ConocoPhillips could not be reached for immediate comment. The on-shore assets are already fully functional and are seen as the most valuable part of the operations, while the early-stage Brass project could prove more difficult to value, one of the sources said. A Nigerian local content act passed in 2010 is likely to complicate any transaction as foreign suitors need to team up with a local indigenous player. The government passed the law, intended to give local firms priority when assets are being sold and in tenders for new projects, and it is likely to push for local ownership of Conoco's assets.

The state-oil firm, the Nigerian National Petroleum Corporation, is the majority shareholder in Conoco's on-shore and LNG assets and is seen as less likely to be among the interested parties, the sources said. NNPC told Reuters on Tuesday it was not aware that Conoco was exiting the country. Nigeria is Africa's largest oil producer, pumping more than 2 million barrels per day. The OPEC member also holds the world's seventh largest gas reserves, which are largely untapped.

Shell's recent disposals of on-shore oil fields in Nigeria have attracted interest from local firms, often through partnerships with established foreign companies. ConocoPhillips

recently completed the spin-off of its refining activities into Phillips 66, a newly created independent U.S. company. (Additional reporting by Matt Daily and Anna Driver in Houston; editing by Jason Neely)

French oil-services company Technip acquires Shaw Group assets for $300 million

Posted on May 21, 2012 at 7:31 pm by Emily Pickrell in Deals, Drilling, Natural Gas, Oil field services French oil service company Technip plans to buy most of the Shaw Group’s energy and chemicals business for roughly $300 million, it said Monday. Technip will acquire Shaw’s Stone & Webster process technologies, giving it a stronger position as a technology provider for the refining and petrochemicals industries. Low natural gas prices have translated into low feedstock prices for the petrochemical industry, an area in which Technip has already established itself. “The acquisition of these world-class downstream technologies and high-quality engineering resources fits perfectly with Technip’s strategy to differentiate itself through technology,” Technip CEO Thierry Pilenko said in a statement.

Technip estimates the deal will double its current revenue for its unconventional services to about $500 million.

Under the deal, which is expected to close before Aug. 31, 1,200 workers will become employees of Technip, including roughly 500 in Houston.

The Shaw Group is an engineering and technology firm based in Baton Rouge, La.

Will graphite go the way of rare earth?

7 May, 2012, Reuters TORONTO: Louis James, a mining investment strategist at Casey Research's office outside Seattle, first started to hear the odd question about graphite a year ago. Today the buzz is deafening, he says, and shares of companies involved in graphite, a once-obscure segment of the mining industry, have soared, probably to unsustainable highs.

Natural graphite is expected to become the material of choice to make advanced lithium ion batteries that power smartphones and tablet computers, as well as hybrid and electric vehicles, among other products. Most of the world's supply of natural graphite currently comes from China. Sound familiar? Like rare earths two years ago, graphite is red hot, and the excitement has the shares of small Canadian miners exploring for the stuff doubling and even tripling almost overnight. "If that isn't the 'Flavor of the Day,' I don't know what is," James says.

Shares of Northern Graphite Corp have climbed to C$2.51 from C$0.95 on the TSX Venture Exchange since the beginning of the year. Zenyatta Ventures Ltd has climbed from 14 Canadian cents to 59 Canadian cents, while Focus Metals Inc has jumped 40 percent to 97 Canadian cents. While the attention is not entire unwarranted, natural flake graphite prices have nearly tripled in the last two years after more than 20 years of stagnation, many experts believe the sector is already headed for bubble territory.

"In a three-month period we had prices double, just that quickly," said Stephen Riddle, chief executive of Asbury Carbon, which makes natural and synthetic graphite products. "It's kind of like how the stock market works, it was on perceived future demand." Prices rose last year in part on concerns that China, which produces some 70 percent of global supply, will choke off exports much as it did with the rare earths. Meanwhile, demand for graphite is expected to surge. That's a tempting imbalance that many investors might find hard to resist.

But experts say concerns over China are overblown. In contrast to rare earths, there are plenty of alternative sources of graphite around the world. Indeed, only 51 percent of natural graphite imported into the United States from 2007 to 2010 came from China, with nearly 40 percent coming from Canada and Mexico, according to the US Geological Survey. Riddle said his company, which has been in business for four generations, has had no trouble finding graphite supplies, and prices are even softening.

SYNTHETIC WEIGHS The second big question mark hovering over the segment is synthetics. Battery makers actually prefer synthetics because quality is easier to control and they can be produced most anywhere. In fact, the battery industry accounted for less than 5 percent of natural graphite demand in 2011.

"The uptake in battery growth is a little over hyped, I think, given that most of the graphite demand today for lithium ion batteries is for synthetic graphite," said Jonathan Lee, a battery materials analyst with Byron Capital Markets. That may change, however.

Synthetic graphite can cost more than $20,000 a tonne, while unprocessed flake graphite costs $1,500 to $3,000 a tonne. Add in processing and coating, and the price is about $8,000 a tonne, meaning natural graphite represents major cost savings.

The price differential has analysts and would-be miners speculating that as demand for lithium ion batteries grows and battery makers need to buy more graphite, they will eventually choose cheaper natural flake over synthetic. "Do I think there's an inevitable switchover? Yes," said Lee. "However, I do think that will take time, and I don't think that it is imminent."

Graphite, which is highly conductive and can withstand intense heat, is now used primarily in refractories for steel making and in crucibles to hold molten metals. That means any companies that are successful in bringing a graphite mine into production in the near term will look to do business with those traditional customers. Even so, analysts believe there is space for more graphite production outside China in order to stabilize the market. Already companies in Brazil are expanding output, while two closely held Canadian miners are coming online soon.

"It comes down to people having to be very judicious on companies and projects," said Mackie Research analyst Matt Gowing. "There's only going to be room for a limited number of players." Northern Graphite, Focus Metals and Energizer Resources Inc are often mentioned by analysts as promising development-stage companies.

RARE WARNING Investors who are still eager to join the graphite rush should consider the rare earth boom and bust before jumping in, industry experts warn. Rare earths were pushed from obscurity into the mainstream in 2010 as China, which then produced more than 95 percent of global supply of the group of 17 metals, clamped down on exports. This sent prices sky-rocketing.

Almost overnight hundreds of companies popped up promoting plans to mine the obscure metals, which are essential for making everything from Apple Inc's iPhone and Toyota Motor Corp's Prius cars.

Shares of many rare-earth companies, most of whom held nothing more than early-stage exploration properties, tripled between April 2010 and April 2011. The bubble burst in mid2011 when rare earth prices started to tumble. By April 2012, most would-be rare earth miners were worth less than where they started two years earlier. Some see history repeating itself with graphite. "You want to be very skeptical of any graphite company that was a rare earth company last week and an uranium company last year," said James. "You could double your money on a company that has nothing. However, there's no way to tell when a 'Flavor of the Day' will become a 'Flavor of Yesterday.'"

China adjusts fee for foreign JV energy projects

Foreign joint ventures involved in oil and gas production in China will now be charged a compensation fee calculated on production value rather than volume. China first levied a fee on foreign joint ventures based on production volume in 1990. However, it suspended the fee in November 2011.

BEIJING -- Foreign joint ventures involved in oil and gas production in China will now be charged a compensation fee calculated on production value rather than volume, the Ministry of Land and Resources said. The fee will extend to unconventional oil and gas resources such as coal-bed methane gas, the ministry said Tuesday, adding that it will be retroactive from November 2011 and valid through March 2020. The announcement is a consolidation of two long-standing policies that used different formulas to charge domestic and foreign joint ventures involved in the extraction of crude oil, natural gas and coal.

China first levied a fee on foreign joint ventures based on production volume in 1990.

However, it suspended the fee in November 2011. The government began charging domestic companies a fee based on production value in 1994. Under that formula, local governments and autonomous regions kept between 50% and 60% of the proceeds and the central government took the rest. Going ahead, foreign joint ventures will also use the domestic formula, although with some modifications.

Local governments and autonomous regions can also apply on behalf of companies for an exemption. The announcement follows the national rollout last year of a new resource tax, which was also calculated on value rather than volume of domestic oil and gas production.

The adjustments coincided with a decline in China's special oil income levy and merely represented a shift in tax revenue from the central government to local provinces and autonomous regions.

How Advances in Drilling Technology Are Creating a Revolution and Turnaround for U.S. Oil Output

In the NY Times, "From Engineering Marvels, a Turnaround in U.S. Oil Output" "Just a decade ago, complete wells were fracked at the same time with millions of gallons of water, sand and chemical gels. Now the wells are fracked in stages, with various kinds of plugs and balls used to isolate the bursting of rock one section at a time, allowing for longer-reaching, more productive horizontal wells. A well that once took two days to drill can now be drilled in seven hours.

For instance, when the Apache Corporation began drilling in the 100,000-acre Deadwood field in the West Texas Permian basin in 2010, there had only been a trickle of production there. The deep shale, limestone and other hard rocks had potential, but for years they had not been considered economically viable. The rocks were so hard, they would have likely sheared off the usual diamond cutters on the blade of any drill bit attempting to cut through.

But new adhesives and harder alloys have made diamond cutters and drill bits tougher in recent years. Meanwhile, Apache experimented with powerful underground motors to rotate drilling bits at a faster rate. Now, a well that might have taken 30 days to drill can be drilled in just 10, for a savings of $500,000 a well.

“By saving that money, you can spend more on fracking, which translates into more sand and more stages and better productivity,” said John J. Christmann, the Apache vice president in charge of Permian basin operations.

Apache has already drilled 213 wells in the field, producing 9,000 barrels a day. With 13 rigs running, it hopes to eventually drill more than 1,000 wells, and produce 20,000 barrels a day there. “We’re having a revolution,” said Steve Farris, Apache’s chief executive.

“And we’re just scratching the surface.” HT: Dan Greller

From Engineering Marvels, a Turnaround in U.S. Oil Output

By CLIFFORD KRAUSS Jim Wilson/The New York TimesWorkers in Midland, Tex., with a pipe to be lowered into the drill string of an oil rig that was boring to a depth of nearly 11,000 feet.

As Eric Lipton and I write in The Times, oil production is increasing rapidly in the United States even as gasoline consumption is falling. The revolution in production in Texas and across the country is partly tied to the rising price of oil over much of the last decade, which propelled aggressive technological experimentation and development. (Government encouragement over the last several administrations helped as well.) Horizontal drilling and hydraulic fracturing have been around for years, but over the last five years, engineers have fine-tuned these and other techniques, even as many environmentalists worry about their impact on water and air. Computer programs have been developed to simulate wells before they are even drilled. Advanced fiber optics permit senior engineers at company headquarters to keep track of drillers on the well pad, telling them when necessary where to direct the drill bit and what pressure to use in injecting fracking fluids. Seismic work has become far more sophisticated, with drillers dropping microphones down adjacent wells to measure seismic events resulting from a fracking job so they can more accurately determine the porosity and permeability of rocks when they drill nearby in the future. Just a decade ago, complete wells were fracked at the same time with millions of gallons of water, sand and chemical gels. Now the wells are fracked in stages, with various kinds of plugs

and balls used to isolate the bursting of rock one section at a time, allowing for longerreaching, more productive horizontal wells. A well that once took two days to drill can now be drilled in seven hours.

“We’re having a revolution — and we’re just scratching the surface.”

— Steve Farris, Chief executive, Apache For instance, when the Apache Corporation began drilling in the 100,000-acre Deadwood field in the West Texas Permian basin in 2010, there had only been a trickle of production there. The deep shale, limestone and other hard rocks had potential, but for years they had not been considered economically viable. The rocks were so hard, they would have likely sheared off the usual diamond cutters on the blade of any drill bit attempting to cut through. But new adhesives and harder alloys have made diamond cutters and drill bits tougher in recent years. Meanwhile, Apache experimented with powerful underground motors to rotate drilling bits at a faster rate. Now, a well that might have taken 30 days to drill can be drilled in just 10, for a savings of $500,000 a well. “By saving that money, you can spend more on fracking, which translates into more sand and more stages and better productivity,” said John J. Christmann, the Apache vice president in charge of Permian basin operations. Apache has already drilled 213 wells in the field, producing 9,000 barrels a day. With 13 rigs running, it hopes to eventually drill more than 1,000 wells, and produce 20,000 barrels a day there. “We’re having a revolution,” said Steve Farris, Apache’s chief executive. “And we’re just scratching the surface.” The company is already producing so much oil, and associated natural gas and gas liquids like butane and ethane, that it has teamed with Crosstex Energy to build an $85 million natural gas processing plant to avoid flaring wasted gas. Crosstex in turn has bought and upgraded a nearby railroad terminal to transport the gas liquids to Louisiana for petrochemical refining. Similar developments are unfolding across North Dakota, Wyoming, Ohio, Colorado and even Kansas.

Environmentalists are critical because burning more fossil fuels contributes to climate change. “Life needs to be protected and global warming is the most profound threat to life on earth.” said Jay Lininger, an ecologist at the Center for Biological Diversity, which is pushing the federal government to protect wildlife from the effects of drilling in the Permian Basin, the Gulf of Mexico and the Alaskan Arctic.

Petrodollar profusion

Oil exporters are the main drivers of global imbalances.......Apr 28th 2012 THE ECONOMIST

FIRST, the good news: China, the country at the centre of the debate about global imbalances, has a current-account surplus that has fallen sharply over the past few years.

Now the bad: China was never really the prime culprit when it comes to imbalances at the global level. The biggest counterpart to America’s current-account deficit is the combined surplus of oil-exporting economies, which have enjoyed a huge windfall from high oil prices (see left-hand chart). This year the IMF expects them to run a record surplus of $740 billion, three-fifths of which will come from the Middle East. That will dwarf China’s expected surplus of $180 billion. Since 2000 the cumulative surpluses of oil exporters have come to over $4 trillion, twice as much as that of China.

One reason why this enormous stash has received much less attention than China’s is that only a fraction of it has gone into official reserves. Most of it is in opaque government investment funds. Middle Eastern purchases of Treasury bonds are often channelled through intermediaries in London, hiding their true ownership. A lot of money has been invested in equities, hedge funds, private equity and property, where ownership is harder to track. Oil exporters’ surpluses are also proving much more durable than those accumulated after previous oil-price shocks. This is partly because the tightness of oil supplies has kept prices high, and partly because oil exporters have spent less of their windfalls on imports than in previous booms.

The impact of higher oil prices on the world economy depends on whether oil exporters spend or save their petrodollars. If they recycle them by buying more from oil-importing countries, this cushions global demand. But if they save them, income is permanently transferred from oil consumers to oil producers, depressing global demand. After the oilprice shocks in the 1970s, about 70% of the increase in export revenues was spent on imports of goods and services. But IMF figures suggest that less than 50% of the windfall is likely to be spent in the three years to 2012.

Recycling initiative Moreover, whatever recycling of petrodollars occurs is unevenly distributed. Oil exporters buy a lot more of their imports from Europe and Asia than from America, so a shift in the “terms of trade”, which redistributes income from oil consumers to oil producers, tends to reduce the relative demand for American goods. According to research by the International Energy Agency, for each dollar America spent on oil imports from OPEC countries last year, only 34 cents came back in exports, whereas the European Union got back more than 80 cents. For each dollar China handed to OPEC, 64 cents flowed back in increased exports.

Oil producers understandably do not want to repeat the mistakes of previous times, when spending surged as oil prices rose—only to leave behind large deficits when prices later fell. Saudi Arabia, for instance, shifted from a current-account surplus of 26% of GDP in 1980 to a deficit of 13% in 1983. Exporters should certainly run a surplus as a buffer for when oil prices drop or wells run dry. The surpluses of 5-7% of GDP run by Russia, Nigeria and Venezuela seem sensible, but some countries’ prudence looks excessive. Saudi Arabia’s current-account surplus could hit 28% of GDP this year, and Kuwait’s 46% (see

right-hand chart). Kuwait’s cumulative surpluses over the past decade, even ignoring capital gains, amount to a whopping 200% of last year’s GDP. Normally, a large current-account surplus would be eroded over time by stronger domestic spending and a higher exchange rate. But the Gulf currencies are pegged, or closely linked, to the dollar. Over the past ten years their real trade-weighted exchange rates have stayed flat or fallen, despite the massive gain in their terms of trade. A floating exchange rate could lead to excessive volatility and discourage diversification of these economies (by making other sectors uncompetitive as the currency appreciates), but a bit more flexibility might assist global rebalancing.Some economists have suggested that oil exporters’ currencies should be pegged to a basket which includes the oil price as well as other currencies. A more flexible exchange rate which rose (and fell) with the oil price would boost (or reduce) consumers’ purchasing power, and hence imports, and also smooth out the local-currency value of government oil revenues. But that would not be a silver bullet. A 2009 IMF working paper* concluded that exchange-rate appreciation is unlikely to have much impact on oil exporters’ external balances. The authors estimated that it would take a 100% appreciation to reduce a surplus by just 2.5% of GDP, both because a revaluation has no effect on oil revenues, which are priced in dollars, and because there is little scope for imports to substitute for domestic production since the manufacturing sectors of these economies are generally tiny. A huge appreciation would also drive down the local-currency value of the large net external assets of some of these countries.

The most effective policy tool to reduce oil exporters’ current-account surpluses is public spending, and investment in particular because of its high import content. Increased public spending could also help these economies diversify away from oil. That would support their future economic development and create more private-sector jobs for young, growing populations. To maintain social stability, many of these governments need to spend more on education, health care, housing and welfare benefits. Some oil producers, such as Russia and Nigeria, are running fairly balanced budgets, but the governments of the Gulf states are awash with cash. Since 2005 Saudi Arabia, Kuwait and the UAE have increased public spending by 7-8 percentage points of GDP. Even so, the three countries are expected to run an average budget surplus of over 15% this year. That leaves plenty of room to be a little more spendthrift.

Focusing on oil was a good decision for Chevron, experts say

Chevron's decision to rely on oil and not pursue the natural gas boom in North America, as its fellow energy majors did, seems to be paying off, observers say. The company posted a 4.2% increase in its first-quarter earnings amid solid prices for oil. "It could serve them well.

They have a lot of cash on hand," said Phil Weiss, an Argus Research analyst. SeattlePI.com/The Associated Press

China adjusts fee for foreign JV energy projects

Foreign joint ventures involved in oil and gas production in China will now be charged a compensation fee calculated on production value rather than volume. China first levied a

fee on foreign joint ventures based on production volume in 1990. However, it suspended the fee in November 2011.

Keywords:

By WAYNE MA and STEVEN YANG BEIJING -- Foreign joint ventures involved in oil and gas production in China will now be charged a compensation fee calculated on production value rather than volume, the Ministry of Land and Resources said.

The fee will extend to unconventional oil and gas resources such as coal-bed methane gas, the ministry said Tuesday, adding that it will be retroactive from November 2011 and valid through March 2020.

The announcement is a consolidation of two long-standing policies that used different formulas to charge domestic and foreign joint ventures involved in the extraction of crude oil, natural gas and coal.

China first levied a fee on foreign joint ventures based on production volume in 1990.

However, it suspended the fee in November 2011.

The government began charging domestic companies a fee based on production value in 1994. Under that formula, local governments and autonomous regions kept between 50% and 60% of the proceeds and the central government took the rest.

Going ahead, foreign joint ventures will also use the domestic formula, although with some modifications.

Local governments and autonomous regions can also apply on behalf of companies for an exemption.

The announcement follows the national rollout last year of a new resource tax, which was also calculated on value rather than volume of domestic oil and gas production.

The adjustments coincided with a decline in China's special oil income levy and merely represented a shift in tax revenue from the central government to local provinces and autonomous regions.

India's exports cross $300bn, but trade deficit balloons

Braving slowdown in the US and Europe, India's exports crossed USD 300 billion in 201112, but rising import bill pushed by high crude oil prices and the country's obsession with bullion sent the trade deficit soaring to USD 185 billion.

"I am happy to announce that India's exports have crossed USD 300 billion in the last financial year," commerce and industry minister Anand Sharma said here. However, he also shared his concern over ballooning trade gap as imports shot up by 38% to USD 485 billion for the last fiscal.

Sharma noted that target of USD 300 billion was achieved despite lower export demand from traditional markets and eurozone crisis as outbound shipments grew in new markets of Latin America and Africa. "We are on course, despite very difficult global scenario and the contraction of demand in some of the traditional destinations and the eurozone crisis," the minister said while releasing the provisional data. He said imports increased mainly due to high crude oil prices and huge demand for gold and silver. Consequently, the trade deficit is estimated to have widened to USD 185 billion from USD 104.4 billion in 2010-11.

"Our current account deficit and trade deficit are a challenge. Both are under stress. Trade deficit is primarily because of high crude oil prices," he said, adding that the country would devise a strategy in its upcoming foreign trade policy to regulate and address the growing

trade gap. The maximum imports were of crude oil--USD 150 billion, while gold and silver contributed to USD 60 billion.India is world's largest gold importer.

Study: Bingaman's clean energy standard would fall short of goal, lead to price spikes

By Jonathan Crawford A proposal by the chairman of the Senate Energy and Natural Resources Committee to create a national, market-based clean energy standard, or CES, would fail to reach its goal of boosting the amount of electricity generated by clean energy sources to 84% by 2035 and would drive electricity rates significantly higher after 2025, according to a new study.

In a discussion paper released May 2, independent research organization Resources for the Future said the Clean Energy Standard Act of 2012, introduced March 1 by Sen. Jeff Bingaman, D-N.M., would fall short of meeting its renewable generation goals due to a provision that allows retail utilities to pay an alternative compliance payment instead of purchasing clean energy credits, as well as a provision that exempts small utilities from having to comply with the standard. Also, a requirement to source more electricity from renewable sources in the decades ahead would see retail prices spike higher, the group said.

"The [proposed clean energy standard] is effective in reducing CO2 emissions in the electric sector, and we find that it would have significant climate benefits," Resources for the Future senior research assistant Matt Woerman said May 9. "It would not be as efficient as a simple cap-and-trade program on the electric sector. And it would not be as effective as a clean energy standard without these provisions."

The study used simulation modeling of regional electricity markets and trade in the U.S. to analyze the effects of the policy on generation, retail prices and CO2 emissions from the electricity sector under different scenarios.

Bingaman introduced the legislation in a bid to promote greater use of the nation's clean energy resources, diversify its energy sources, spur innovation and manufacturing, and give new lifeblood to the economy. The legislation won the support of several Senate Democrats as well as industry group Solar Energy Industries Association, NextEra Energy Inc. and others. Qualifying clean energy sources consist of power generators with zero carbon emissions, such as those running on renewables and nuclear power plants, or those that have a lower "carbon intensity" than a modern, efficient coal plant.

Under the CES, the alternative compliance payment enables retail utilities to pay a price of $30 per MWh in 2015, which rises 5% per year, instead of purchasing clean energy credits.

Resources for the Future said this would have the effect of imposing a price ceiling on the credits, and in turn, it would deter greater use of renewable generation and inhibit greater emissions reductions.

Another weakness of the proposed CES, the group argued, is a compliance exemption for small utilities. The small utility exemption excludes from the CES utilities with fewer than 2 million MWh in sales initially, and utilities with less than 1 million MWh in sales ultimately.

The exemption would affect about 12.5% of the electricity sold in the contiguous U.S. beginning in 2025, which Woerman said is significant.

As for electricity rates under the CES, Resources for the Future determined that the impact on the national average retail electricity price for the first 10 years would be modest. But by 2035, under the CES those prices would jump by about 18% over a baseline scenario.

In some regions, price increases under the CES would be exacerbated as a result of an exemption from the standard for existing nuclear and hydroelectric plants, the analysis concluded. However, much of the price increase would stem from a requirement to bring online a greater proportion of electricity from renewable sources that are more costly, Woerman said.

North America to reach energy independence by 2030: BP economist

Manama (Platts)--7May2012/420 pm EDT/2020 GMT

North America will become energy independent by 2030, by which time it will have started to export natural gas, BP chief economist Christof Ruehl said Monday. Over the period to 2030, increasing crude exports from the Middle East are far from assured, he told the Middle East Petroleum and Gas conference in Manama. "The ground is shifting and there is probably a period of great uncertainty facing us over the next 20 years," Ruehl said.

As opposed to the North American continent in general -- consisting of Canada, the US and Mexico -- the US will continue to import crude, albeit at a declining rate, while exporting gas and coal, he predicted. But by 2030, global crude oil exports will be dominated by just two regions: the Middle East, which by then will be sending 90% of its exports to China and India; and the former Soviet Union, which will mainly supply Europe. However, increasing crude supplies from the Middle East are uncertain due to prospects for local oil consumption to continue rising. "The preconditions (for rising exports) are difficult, so there is substantial risk," Ruehl said. "In order to pencil in continuous export growth, we need to assume that energy intensity stops rising and starts to improve after 2020." Realizing the estimated 1% annual decline in energy consumption relative to GDP that would be required for Middle East crude exports to continue rising will be a "tall order," Ruehl predicted.

Furthermore, the region will also need to shift a significant amount of its power generation from oil to gas fuel, he said, pointing out that oil's combined share of total fuel used by the Middle East's power and industrial sectors had more than doubled to 48% in 2010 from 21% in 1970. Oil-fired power generation had fallen to 33% in 2010 from 41% of total regional electricity output in 1990, but needs to drop to 20% by 2030 if regional oil exports are to increase, as much as most analysts forecast, Ruehl said. The consensus projection

is for Middle East exports to supply 25% of oil consumption outside the region by 2030, up from 22% currently, he said.

ALTERNATIVE & RENEWABLE ENERGY Gas Hydrate US claims 'unprecedented' success in test for new fuel source

By Miguel Llanos, msnbc.com, May 14, 2012 U.S. Geological Survey Scientists have been studying methane hydrates for years, including this drill used to estimate how much there might be under the Arctic permafrost. Could the future of cleaner fossil fuel really be frozen crystals now trapped in ocean sediments and under permafrost?

Backed by an oil industry giant, the Obama administration recently tested a drilling technique in Alaska's Arctic that it says might eventually unlock "a vast, entirely untapped resource that holds enormous potential for U.S. economic and energy security." Some experts believe the reserves could provide domestic fuel for hundreds of years to come.

U.S. Geological Survey Natural gas is released from methane hydrates.

Those crystals, known as methane hydrates, contain natural gas but so far releasing that fuel has been an expensive proposition. The drilling has its environmental critics, but there’s also a climate bonus: The technique requires injecting carbon dioxide into the ground, thereby creating a new way to remove the warming gas from the atmosphere.

"You're storing the CO2, and also liberating the natural gas," Christopher Smith, the Energy Department's oil and natural gas deputy assistant secretary, told msnbc.com. "It's kind of a two-for-one."

The Energy Department, in a statement last week, trumpeted it as "a successful, unprecedented test" and vowed to pump at least $6 million more into future testing. "While this is just the beginning, this research could potentially yield significant new supplies of natural gas," Energy Secretary Steven Chu announced.

ConocoPhillips, the oil company that worked on the test at its oil facility in Alaska's North Slope, was hopeful the technique could become economically feasible for producing natural gas, a fuel that's much cleaner than petroleum. "Many experts believe that methane hydrates hold significant potential to supply the world with clean fossil fuel," spokesman Davy Kong told msnbc.com. "The completion of this successful test of technology is an important step in developing production technology to access this potential resource while sequestering carbon dioxide."

But even the CO2 bonus doesn't convince environmentalists worried about a reliance on fossil fuels -- the key source for manmade carbon dioxide emissions. "Finding new ways to produce fossil fuels doesn't change the fact that we can't transfer to the atmosphere all the

carbon in the fuels we already have without causing catastrophic climate disruption," Dan Lashof, a climate analyst with the Natural Resources Defense Council, told msnbc.com.

"Rather than perpetually seeking new sources of fossil fuel, our federal research dollars should be going into carbon-free energy sources" like solar and wind, added Brendan Cummings, public lands director at the Center for Biological Diversity, a group that's tied climate impacts to its petitions to protect wildlife. Cummings also worries about inadvertent releases of methane, which is even more powerful as a warming gas than CO2. Alaska's Arctic is the U.S. area "most under stress from warming," he added. "Even if we could safely develop and install infrastructure there, we're still industrializing an area that essentially should be left alone."

Methane hydrate fans include Vladimir Romanovsky, a permafrost expert at the University of Alaska-Fairbanks. It has "great potential and not much danger" compared to conventional natural gas, he said. "Extracting energy and sequestering CO2 is win-win situation." Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate energy committee, noted that future testing needs to look at issues like soil stability, but overall she was bullish. "If we can bring this technology to commercialization, it would truly be a game changer for America," she said in a statement. "Taken together, U.S. lands and waters contain a quarter of the world’s methane hydrates -- enough to power America for 1,000 years at current rates of energy consumption," her office added. Related: US wants 'fracking' on fed lands to list chemicals Alaska alone could hold 600 trillion cubic feet of methane hydrates onshore, the office stated, citing U.S. Geological Survey estimates. That's potentially three times more than the known natural gas deposits in Alaska. The state also estimates a whopping 200,000 trillion cubic feet of methane hydrates lie under Alaskan waters. That reflects that fact that the vast majority of methane hydrates -- the U.S. Geological Survey estimates 99 percent -- are in ocean sediments.

Related: Keystone pipeline application is back for US review A key obstacle for Alaska, and many other areas, is that natural gas pipelines would have to be built. Moreover, today's low natural gas prices due to a saturated market mean little investment incentive, at least for now.

U.S. Geological Survey A methane hydrate crystal is seen in sediment pulled up by a core drill.

Smith, the Energy Department official, said the testing done earlier this year was notable because it was the first to produce natural gas for 30 days straight. Previous tests had only been able to do that for a few days, and the longer run should make for better analysis, he said. "The next steps will be determined by what we learn" in the lab over the next few months, he added. One hydrate expert who had been skeptical said the test showed him that it is possible to remove a costly step: melting, or dissociating, methane from the hydrates to get the fuel. "The advantage I see is that the need to dissociate hydrates in order to recover the gas will be reduced and probably eliminated," Gerald Holder, dean of engineering at the University of Pittsburgh, told msnbc.com. Having worked with the Energy

Department on hydrates, Holder also said the process shouldn't have any environmental impacts "beyond what drilling for conventional gas entails."

So when might we see commercial production? "I would guess decades," he said.

"One decade would be optimistic," he added, "but not absurd."

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Shale Gas

Reliance Industries not so bullish on its Shale Gas business

21 May, 2012, 07.21PM IST, The writer has posted comments on this article Ramkrishna Kashelkar,ET Bureau MUMBAI: Reliance Industries' shale gas business is going great guns, notes the company in its annual report for FY12 published today. Its production jumped 7-fold within one year, but problems such as low gas prices, high costs and infrastructure constraints to overcome.

The company's joint ventures will have to look for more liquid rich gas and cut costs to make their investments profitable. In 2010 RIL had entered into three joint ventures (JVs) in the US shale gas assets.

These were the JVs with Chevron and Carrizo in Marcellus shale play of Pennsylvania and Pioneer Natural Resources in Eagle Ford shale Play of South Texas. In addition, RIL also partnered with Pioneer to develop hydrocarbon-transporting pipelines. FY 2011-12 represented a significant year of growth for RIL's shale gas business. "As a result of these efforts, gross production from all three JV reported an exit rate of 233 million metric cubic feet per day (MMCFPD) of gas and 34.7 thousand barrels per day of liquids in December 2011 (a 7 fold increase on year-on-year basis)," mentioned the RIL's annual report.

Pioneer JV was the biggest contributor to this, from which RIL's production share stood at 41.7 billion cubic feet equivalent (BCFe). With approximately 59% of the total production coming out as liquids this JV will continue to dominate RIL's revenues from shale assets in the US even in FY13. In comparison Chevron and Carrizo JVs put together produced 10.7 BCFe as RIL's share during the year. Chevron JV's production was hampered due to regulatory and other delays, which should ease by mid-2012.

In spite of the growing production, low natural gas prices are making things difficult for the producers. "In 2011 the natural gas production in the US increased to 4.8 billion cubic feet per day (BCFD) - a year-on-year increase of 7.9%, which is the largest increase ever recorded," notes RIL. As the demand failed to grow in line with the supplies US gas inventories bulged to record levels and the natural gas prices fell to 10-year low levels.

Nevertheless, the shale gas exploration and production efforts continue unabated as

players focus on liquid rich locations where natural gas is merely a by-product. Such a scenario makes sure that the natural gas prices will continue to remain depressed until there is substantial jump in demand or export of LNG becomes possible - both of which are several years away.

This makes the outlook difficult for the US shale gas players. RIL acknowledges, "FY 201213 will be a challenging year for shale gas, given the continuous weak gas prices, increasing wells costs in Eagle Ford due to market pressures and the need for drilling activity obligations to hold certain oil and gas leases, which will potentially expire in the near term."

Gas Drillers in Pennsylvania Trim Risks of Harm, Study Finds

By Jim Efstathiou Jr. – May 15, 2012 9:11 PM GMT+0530Tue May 15 15:41:28 GMT 2012 Natural-gas drillers inPennsylvania’s Marcellus Shale reduced the rate of blowouts, spills and water contamination by half since 2008, according to a study based on state-agency actions.

State regulators issued environmental violations at 27 percent of the wells drilled in the first eight months of 2011, 54 percent below the full-year rate in 2008, according to the study today from New York’s University at Buffalo’s Shale Resources and Society Institute, which opened last month. Stronger regulations, tougher enforcement and improved industry practices helped trim the violations, researchers found.

Technological advances in hydraulic fracturing, or fracking, have opened vast oil and gas deposits from North Dakota to West Virginia. In Pennsylvania, the Department of Environmental Protection reports more than 4,000 wells since 2009 were drilled by fracking, a technique in which millions of gallons of chemically treated water are forced underground to free trapped gas.

“The odds of non-major environmental events and the much smaller odds of major environmental events are being reduced even further by enhanced regulation and improved industry practice,” according to the study. Pennsylvania managed “the brisk pace of unconventional gas development, while preserving the economic opportunity that development has afforded the community.”

Fracking Opponents The Sierra Club and other environmental groups oppose fracking because they say it adds to air pollution and has the potential to contaminate drinking water. Shale gas has boosted U.S. supplies and driven prices to decade lows.

Drillers in Pennsylvania, which is developing its gas reserves, reported some high-profile failures. In 2010,Chesapeake Energy Corp. (CHK), the second-biggest U.S. gas producer behind Exxon Mobil Corp. (XOM), agreed to pay a $900,000 fine after wells failed in Bradford County, releasing gas into ground water.

Residents of Dimock, Pennsylvania, blame Cabot Oil & Gas Corp. (COG) for spoiling water wells. A final round of tests last month by the U.S. Environmental Protection Agency found that no wells in the area had unsafe levels of contamination.

Of 845 incidents that caused measurable amounts of pollution, 25 involved major impacts to air, water, and land resources, according to the report. Of those, environmental impacts weren’t corrected in six cases, the study found.

John Martin, who formerly studied environmental issues surrounding shale gas for the New York State Research and Development Authority, is the initute’s director and helped write the report.

American Shale Oil to launch new oil-extraction technique

American Shale Oil within weeks will launch a new method for extracting oil from shale formations that involves injecting a pool of oil and then blasting it with hot fuel gas. The company, which owns a 160-acre lease in Colorado's Piceance Basin, seeks to explore deeper into a less concentrated shale-oil layer. "We are avoiding the water-aquifer contamination problem," said Alan Burnham, chief technology officer for the company.

SALT LAKE CITY - (AP) -- A small company that holds a federal lease to extract petroleum from oil shale reserves in western Colorado is taking a new approach to withdrawing crude oil from solid rock -- one that it hopes will avoid groundwater contamination.

The process is "basically the same as steaming vegetables," said Alan Burnham, chief technology officer for Rifle, Colo.-based American Shale Oil LLC. Within weeks, the company will send a pool of oil down a well and blast it with hot fuel gas. The boiling oil will heat up an underground zone about 50 feet wide and 50 feet deep to more than 600 degrees.

Burnham described his company's process Tuesday at an unconventional fuels conference at the University of Utah. It's the latest in nearly a century of efforts by companies to unlock oil shale -- a rock that contains fossilized algae, an immature form of oil that never received enough heat or pressure to produce liquid crude.

The University of Utah conference has been a showcase of varied efforts for the past six years to develop vast reserves of oil shale and tar sands across parts of Colorado, Utah and Wyoming. This year's conference follows a decision by the federal government to limit research and development projects after an initial round of leasing in 2007.

The Bureau of Land Management has tentatively decided to lease about 460,000 acres of oil shale deposits, down from 2 million acres that the Bush administration planned to offer across the Rocky Mountains.

The agency said it would open another 91,000 acres for development of gooey tar sands, down from 431,000 acres previously. American Shale Oil is working a piece of land near another oil-shale research project by Shell Oil Co., but taking a different approach. Shell is targeting a rich zone of oil shale that has the potential for groundwater contamination.

American Shale Oil plans to drill deeper into a less concentrated layer of oil shale that it says is isolated from groundwater. "We are avoiding the water aquifer contamination problem," Burnham said. "They have spent a lot of money on that. We're a small company that wants to avoid it."

The company has no doubt it can extract high-quality crude oil from solid rock on its 160acre lease in the Piceance Basin of Colorado. Its test is more about how well it can heat a zone of rock 2,000 feet underground. The company expects to generate enough oil initially to purge startup fluids, then capture more oil in tanks for refinery tests. The company believes the oil will yield sweet or light crude with little polluting sulfur.

American Shale Oil, with just three employees and half a dozen consultants, is a joint venture of French oil company Total S.A. and Newark, N.J.-based Genie Energy Corp. It plans to spend more than $100 million on the research effort. Burnham said it's just as expensive to pump liquid crude from deep and remote parts of the world, and that oil shale could eventually prove profitable.

"If it's not profitable, it won't happen," he said.

A government and industry watchdog group called the Checks and Balances Project has chronicled failed oil-shale efforts since the 1920s. It expects American Shale Oil to do no better.

"We've been here before. We've seen small companies make big claims before going bust," said Matthew Garrington of the group based in Denver and Washington, D.C. "We've seen pilot projects before. There's nothing new about that. This is the same empty promise."

Extracting shale oil is a tough nut to crack, but companies with new technology seem closer to reaching that goal, said Philip Smith, a University of Utah chemical engineering professor.

"I definitely think it has potential. The energy resource is there, and there's so much of it," said Smith, director of the university's Institute for Clean and Secure Energy.

The West's oil shale deposits are believed to contain more than 1 trillion barrels of oil -- four times the holdings of Saudi Arabia, according to government and industry estimates. The U.S. Energy Department has said it will take a "massive capital investment" to unlock Western oil shale.

Even then, the payback is uncertain. But if it takes another century to commercialize oil shale, Smith believes the effort is worth pursuing.

"This isn't like creating a chip in your garage. It takes time," said Smith, who compared the effort to recent advances with hydraulic fracturing, which is unlocking vast reserves of natural gas in the U.S. It was small players that led the way in drilling technology, he said, and small companies will lead the way in oil shale.

"Humankind has got to have energy," he said.

Copyright 2012 The Associated Press.

Frack Water Market to Reach $9bn in 2020, Lux Says

The market for treating hydraulic fracturing water – a waste byproduct of shale gas production — will grow nine-fold to $9 billion in 2020, according to a report by Lux Research. The growth in hydraulic fracturing has energized the water industry, inspiring a bumper crop of new water treatment startups aiming to treat the challenging flowback water, according to the report, Risk and Reward in the Frack Water Market. Despite the opportunities in this growing market, only a few companies are positioned to profit, Lux said.

Hydraulic fracturing, or fracking, is a technique used to release gas trapped in shale formations. The method requires between 25,000 barrels to 140,000 barrels of water per well and produces toxin-laced brine that can be more than six times as salty as the sea, the report said. Drillers pump million of gallons of water mixed with sand and chemicals under high pressure into wells. The pressure cracks shale deposits and releases the gas. The wastewater mix is removed, often put into open pits for evaporation and eventually trucked to a disposal site.

The fracking mix, containing hydrocarbons, heavy metals, scalants, microbes and salts, represents a significant water treatment challenge on par with the most difficult industrial wastewaters, said Brent Giles, a Lux Research analyst and lead author of the report. Lux Research assessed the technical value and business execution of key companies and determined if they were poised to dominate the industry, had high potential or fell into a weaker category. It awarded “dominant” status to EcoSphere; WaterTectonics, which has a long-term alliance with Halliburton; and GasFrac, which uses technology licensed from Chevron and, with revenues of $300 million, outstrips every other startup in the report.

AquaMost ranks as “high potential.”

WIND ENERGY

Michigan Scientists install wind measuring Buoy

MUSKEGON, MI – The Grand Valley State University wind research buoy was deployed in the middle of Lake Michigan late Monday afternoon. Scientists now are collecting wind measurements for the first time from the remote location.

Arn Boezaart | GVSUWork crews prepare the GVSU wind research platform Monday for deployment in the middle of Lake Michigan. The platform was tansported to its 2012 research location by Andrie, Inc. of Muskegon.

The WindSentinel unit that was testedfor two months last fall four miles into the lake off the Muskegon shoreline now sits on the “mid-lake plateau,” where it will be working until December. The floating buoy is 37 miles west of White Lake in a shallower part of Lake Michigan in 175 feet of water, university officials said. GVSU’s Michigan Alternative and Renewable Energy Center in Muskegon has partnered with other researchers from the University of Michigan and Michigan State University along with public and private funding sources to collect data for the study of offshore wind turbines in the lake.

“This is the first time a research buoy of this type will operate this far offshore,” said MAREC Director Arn Boezaart. “Project supporters across North America are eagerly waiting for the research season results.”

The buoy spent the winter months on the wall of the Muskegon Channel next to the National Oceanic and Atmospheric Administration field station. It was transported to its 2012 research location by Andrie Inc. – a Muskegon-based marine transportation company.

The buoy is a six-ton floating structure looking like a little yellow boat. It is anchored to the bottom of the lake with a five-ton weight. The platform built by AXYS Technologies of British Columbia is equipped with a Vindicator laser wind sensor manufactured by Catch the Wind Inc. of Chantilly, Va. The buoy is only one of two in existence and the only one in the Great Lakes.

The laser wind assessment system will measure wind speed and direction every second from 250 to 575 feet off the lake surface. That height is critical for the next generation of offshore wind turbines, which will have hubs reaching such heights, Boezaart said. “The wind measurements will be especially interesting because researchers have not had this kind of real-time, hub height field data before, especially from this location which is expected to have very high wind energy potential,” said Jim Edmonson, a consultant and project manager for GVSU. Arn Boezaart | GVSUOn a flat but foggy Lake Michigan Monday, GVSU's Arn Boezaart said that 37 miles off the Michigan shoreline becomes a lonely place.

Besides the information gathered on the wind, the buoy is equipped to measure dozens of other lake factors from water temperature and wave action to the presence of birds and bats, university officials said. All of that detailed data will be stored on the buoy’s computer.

Basic hourly wind information will be transmitted by satellite to GVSU researchers. But the complete package of information will be downloaded every six weeks as the Andrie work boat makes a run out to the buoy location, Boezaart said. Participating in the wind assessment project is WE Energies in Wisconsin, which is particularly interested in the midlake wind conditions, Boezaart said. A U.S. Department of Energy research grant was the financial foundation for the $3.3 million wind buoy project.

Because of a loss of funding from the Michigan Public Services Commission, GVSU is financially supporting this year’s data collection effort. However, scientists will have a huge collection of information that will not be able to be analyzed until further research dollars are secured, Boezaart said. The university continues to seek funding partners on the project, he said.

Wind power costs less than solar in 6 developing countries

Flickr/shionmao 

Researchers from the Swiss Federal Institute of Technology found that the projected cost of wind power was lower than solar-generated energy in Brazil, Egypt, India, Kenya, Nicaragua and Thailand, according to a report published in Nature Climate

Change. Wind power costs were 2.2 to 4.5 times lower compared with solar power in the six countries, and the gap in prices are expected to remain until at least 2020, the study found.

[SANTIAGO] Generating wind energy is more than twice as cheap as solar photovoltaic (PV) energy production, a study of alternative energy in six developing countries has found.

The findings, published in Nature Climate Change last week (15 April), could help inform global debates on financing initiatives aimed at reducing greenhouse gas emissions in developing countries.

The authors note that differentiating technologies or countries is one of the reforms under discussion in the Clean Development Mechanism following its experience with nearly 3,500 projects in 70-plus countries.

They commented that there is little available data on the costs of different renewable energy technologies in developing countries, and that such information is needed to allocate funding through such mechanisms as the Green Climate Fund — which is expected to raise US$100 billion per year by 2020.

The researchers, from the Swiss Federal Institute of Technology in Zurich, studied the baseline costs of current energy sources in Brazil, Egypt, India, Kenya, Nicaragua and Thailand — including the cost of national fuel subsidies — and then investigated the relative costs of switching to wind or solar electricity.

These countries were chosen due to their variety in size, state of economic development and current variation in energy use.

Broadly speaking, the authors said that in 2010, PV electricity costs were 2.2 to 4.5 times higher than wind power in these countries, and that the cost gap between the two technologies could be expected to continue until at least 2020.

"The implication is that the cost of wind and PV generation with that of existing and future conventional power plants must be compared for each country," lead researcher Tobias Schmidt told SciDev.Net. However they found significant national differences in the cost of switching from conventional energy to wind power in the six countries studied.

They found that Kenya and Nicaragua would save money by switching to wind because their baseline energy costs are high and their wind costs would be low.

A similar switch from conventional energy would be far higher in Brazil, India and Thailand, and lower in Egypt, due to different national costs relating to wind energy and the varying contribution of high-emission oil or coal plants to total electricity production.

"Fossil fuel subsidies should [therefore] be explicitly included in the calculation, as they raise the incremental cost of renewable energy technologies," Schmidt said, adding that transitioning to renewable energy sources would need to be more gradual in countries where the elimination of fuel subsidies might lead to higher fuel prices and voter anger.

"International funding must help developing countries implement a socially-acceptable phasing out of fuel subsidies and create an attractive environment for clean technology investors," he said.

Oliver Waissbein from the Energy and Environment Group of the UN Development Programme said that "this study nicely demonstrates to policymakers how to make informed decisions about renewable energy opportunities by using detailed, data-driven cost comparisons for generating electricity in individual countries".

Link to full paper in Nature Climate Change

UK & US TO REACH AGREEMENT ON FLOATING WIND TURBINES

23 April 2012 Floating wind turbines are to be the initial focus of a new agreement between Britain and the United States this week as international talks convene in London to accelerate the deployment of clean energy technologies.

Energy Ministers from 23 of the world’s leading economies will gather in London on Wednesday and Thursday to discuss accelerating the transition to clean energy technologies.

The Clean Energy Ministerial will be co-chaired by UK Energy Secretary Edward Davey and US Energy Secretary Steven Chu. Alongside the talks, Ed Davey will sign a number of bilateral agreements with counterparts from other governments to work in collaboration over the coming years.

The UK and US will agree to collaborate in the development of floating wind technology designed to generate power in deep waters currently off limits to conventional turbines but where the wind is much stronger.

Energy Secretary Edward Davey said: “Britain has more wind turbines installed around its shores than any other country in the world and our market is rated year after year as the most attractive market among investors.

“Offshore wind is critical for the UK’s energy future and there is big interest around the world in what we’re doing.

“Floating wind turbines will allow us to exploit more of the our wind resource, potentially more cheaply.

“Turbines will be able to locate in ever deeper waters where the wind is stronger but without the expense of foundations down to the seabed or having to undertake major repairs out at sea.

“The UK and US are both making funding available for this technology and we’re determined to work together to capitalise on this shared intent.”

BACKGROUND Floating wind technology The UK benefits from a third of Europe’s offshore wind potential, has more installed offshore wind than any other country, the biggest pipeline of projects and is rated year after year by Ernst & Young as the most attractive market among investors.

Exploiting this economically, particularly in deeper waters off the west of the country, will require significant technology developments to build large offshore wind arrays. Much of the deeper waters between 60 and 100 metres are too deep for fixed structures but benefit from consistently higher wind speeds.

Floating wind technologies could therefore open up new areas off the coast of the UK. This will ultimately increase the potential of this sector, particularly post 2020 as the available shallow water sites are developed, and will help to meet our decarbonisation and energy security targets.

Major repairs on floating wind platforms can also take place when the devices are towed back to dock which will also help to reduce costs.

In the UK, the Energy Technologies Institute is currently in the process of commissioning a £25m offshore wind floating system demonstrator. Participants chosen to take part in the project will be tasked with the objective of producing by 2016 an offshore wind turbine that can produce 5-7MW. Selection of the organisation to deliver the project is ongoing and an announcement on who will be carrying out the project on behalf of the ETI is expected early next year. The ETI is also currently investigating various sites that could host the demonstrator and has announced that it is working with WaveHub, 16 kilometres north east of St Ives off the Cornish coast to carry out a site feasibility study.

In the US, the Department of Energy have recently announced a $180m funding opportunity for up to four Advanced Technology Demonstration Projects in US waters – which potentially could include a floating wind demonstration.

A new Memorandum of Understanding on ‘Collaboration in Energy Related Fields’ being agreed this week between the UK and US covers collaboration in areas such as power generation (including low carbon technologies to combat climate change), energy transmission and distribution and energy efficiency. As one of the first examples of work supporting that MOU the UK-US collaboration on floating wind will ensure that both countries align our resources to maximise the impact for both countries. It will also enable the sharing of best practice and expertise. Ultimately it is hoped that this approach will result in more cost effective, higher yield floating wind technologies being developed.

Clean Energy Ministerial The UK is hosting the third Clean Energy Ministerial (CEM3) at Lancaster House in London on 25-26 April 2012. CEM3 is an international conference aimed at accelerating the transition to clean energy technologies.

The 11 main themes covered at the CEM3 will include: energy efficiency, appliances, buildings/industry, electric vehicles, bioenergy, carbon capture and storage, hydropower, solar, wind, energy access and smart grids. There is a special emphasis on clean energy entrepreneurs and encouraging women to enter the sector.

Energy Ministers from 23 countries will attend: Australia, Brazil, Canada, China, Denmark, European Commission, Finland, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Norway, Russia, South Africa, Spain, Sweden, United Arab Emirates, United Kingdom, United States

US wind on the brink?

About: Felicity Carus previously worked on the environment desk at the UK’s Guardian newspaper. She covers renewable technology and clean energy policy and finance out of San Francisco, CA., U.S. AMERICA’S WIND industry is simultaneously on course for a record-breaking year of installations and on the brink of catastrophe – and a lot if has to do with the boom and bust of the Production Tax Credit (PTC).

Around 8.5 GW of wind will be added this year alone to the current cumulatively installed U.S. capacity of 46,919 MW, following on from a bumper 6.8 GW in 2011. Wind-generated electricity is on a correspondingly rapid rise. Last year saw a 27% rise in electricity generated by wind, accounting for 3% of total U.S. generation, according to recent fi gures from the Energy Information Agency (EIA).

But the market is set to crash in 2013 with the expiration at the end of this year of a critical tax credit – and failure to extend the PTC could cost 37,000 jobs and reduce wind investments from US$15.6 billion in 2012 to US$5.5bn in 2013, industry analysts say.

Bruce Hamilton, Energy Analyst at consultants Navigant, says that installations are set to collapse to 2.4 GW in 2013 after an “artifi cially high” year in 2012, as wind developers race to get the blades turning on their projects.

Hamilton is the lead author on the report, Impact of the Production Tax Credit on the US Wind Market, which concludes that the PTC has an impact of adding an incremental 5-6 GW of installed capacity during each year of the extension.

The PTC o•ers investors a fi xed return of US$0.022/kWh, typically over 20 years, and has been the main driver of the industry for two decades. The only remaining incentive would be the Renewable Portfolio Standard (RPS), which sets targets for green electricity generation – but only in 30 States: “RPS would keep the industry going without the PTC [but] at a much lower rate,” Hamilton says: “The wind industry could stand on its own two feet, but it would limp along.”

Political hurdles A recent failure to extend the PTC introduced by Senator Debbie Stabenow, a Michigan Democrat, followed another attempt in February to attach a PTC amendment to the payroll tax extension.

Many more attempts to hitch the PTC extension to legislation progressing through Congress will most likely go to the wall before politicians turn their full attention to energy tax credit extensions.

Rob Gramlich, Senior Vice President for Public Policy at the American Wind Energy Association (AWEA), says: “It’s not that the PTC has been singled out – it’s just in a category of issues that haven’t been taken up yet. A couple of dozen business tax credits historically always move together in December. We’re working hard to get it much earlier in the year than it’s been done in the past.”

The bipartisan passage of the payroll tax bill and the likely passage of the highway reauthorisation bill have raised hopes that the political impasse of last year has eased: “In an environment where no substantive legislation has been passed for about a year; if we get two signifi - cant pieces passed through within two months, we may have a little window of legislative activity that could open possibilities now the level of gridlock has decreased,” Gramlich says.

One major piece of bipartisan legislation introduced by House Representatives Dave Reichert, a Washington Republican, and Earl Blumenauer, an Oregon Democrat, originally sought to grant a four-year extension to the PTC for wind energy. But a year-long extension at the 11th hour, or even next year, now seems a more likely outcome.

“That’s the way it’s always been. We’ve seen this movie before,” Gramlich says. “We’re optimistic the PTC will be passed but we can’t guarantee when. We just have to keep looking at each legislative vehicle as it is put together to see what the opportunity looks like.”

Senator Stabenow’s PTC amendment to a transport bill failed to pass the Senate because of an additional inclusion of the 1603 cash grant programme for clean energy projects. At the same time, the Republicans in Congress have spent the past year battling with Democrats and the Obama Administration over spending-cuts to reduce the U.S. defi cit of US$15.5 trillion.

Election talk But it’s not just about the economy. Elections in November are a distraction for policy makers. Republicans have enthusiastically adopted subsidies to the renewables industry as evidence of Federal profl igacy, while electricity costs from conventional sources are being kept low thanks to record-low gas prices.

“Election year is probably the biggest factor [in the PTC extension] given everyone wants to be seen as being a budget hawk and [they say we] can’t a•ord all these green extensions to power,” Navigant’s Hamilton says.

For example Senator Lamar Alexander, a Tennessee Republican, has called on Congress to end subsidies to ‘Big Wind’, which he describes as “a big loophole for the rich and for the investment bankers”: “And what do we get for these billions of dollars in subsidies?,” he asked Congress earlier this year. “A puny amount of unreliable electricity which arrives disproportionately at night when we don’t need it.”

By 2017, American taxpayers would have supported the wind industry to the tune of US$27bn over 10 years, he says.

But Hamilton says that the return on investment from the PTC works out at an 80% return on investment through increased investment and tax revenues.

Industry crash Signs of a U.S. wind industry crash are already being felt from coast to coast with wind turbine orders for 2013 already drying up.

Vestas, one of the world’s largest turbine manufacturers, has made large investments in R&D and manufacturing facilities in the U.S. in recent years. But late last year, the company announced €150m in global cost-savings. Around 182 jobs have been cut from its U.S. workforce this year, and ceo Ditlev Engel has said a further 1600 jobs in the U.S. could be cut if the PTC is not extended.

Vestas will make a decision on its U.S. manufacturing facilities later in the year based on the status of the PTC, and the outlook for markets served by U.S. factories.

Mitsubishi Heavy Industries cited PTC uncertainty when in March it put the brakes on its plans to build an Arkansas manufacturing plant, which promised 330 jobs.

Wind developers are equally struggling. Iberdrola Renewables, which has invested US$6bn in the U.S. over the past three years, has downed tools on projects after 2012, and is looking to other markets for growth.

Iberdrola, a subsidiary of the Spanish wind developer, employs 850 people in the U.S. and laid o• 50 employees two months ago.

“As a global and diverse company, we are in a position to pursue the best development opportunities almost anywhere in the world,” a spokesman says. “We have had to make di• cult decisions on where to allocate capital, and the U.S. does not appear as attractive in the near term as it has been over the last decade.

“Although we remain optimistic that the PTC will pass this year, its absence would drive that investment and job creation overseas, where there are more certain regulatory environments.”

Still promising Despite the problems, the U.S. wind market is still huge, with great promise for manufacturers, developers and investors.

Wind energy is the largest source of non-hydro renewables in the U.S. And although U.S. installed capacity has reached 46 GW, it is still less than half that of Europe’s 94 GW. There’s plenty of room for growth, AWEA’s Gramlich says: “The US market provides vast geographic areas for wind development and there’s a lot of space left for utility grid operators to integrate a lot more wind around the country.”

Costs are also coming down dramatically, falling by one-third in the past three years, he adds: A recent report from the Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory (NREL) analysed onshore wind energy cost trends [see http://tinyurl.com/7pjm9z6 (pdf)]. The report found costs of wind energy trending towards an all-time low. In locations with the best wind resources, prices are now approaching US$0.03/kWh, including Federal tax incentives. Also, over the past decade, land area suitable for projects has increased by 130%-270% due to improvements in turbine technology.

“We’re confident that wind is lower cost than adding new coal fi red capacity or nuclear,” Gramlich says. “It’s really a question of how do you value diversity when utilities are looking largely at natural gas for their needs in the future. But they do want to incorporate some risk factor and get the fi xed price hedge of a source like wind energy.”

Decreasing costs in wind technology and rising demand for clean energy are expected to create a U.S. market that will eventually stand on its own feet without Government support.

But debate about when the right time to cut or phase out the PTC is, will continue beyond this year.

“Most people will agree that in the long term we need to get rid of the PTC,” Navigant’s Hamilton says. “But there’s certainly disagreement on how fast we get there.”

Wind Energy - O&M under control?

Gail Rajgor looks at the importance of adopting a proactive O&M strategy in boosting the bottom line.

About: Gail Rajgor is a writer working across the energy & environment sector. She is the former publisher of Sustainable Energy Developments magazine.

WHILE THE highest costs for a wind project are typically associated with initial capital costs for development, construction and installation, and operations and maintenance (O&M) costs “constitute a sizeable share of the total annual costs of a wind turbine,” according to Wind Energy: The Facts.

“For a new [onshore] turbine, O&M costs may easily make up 20%-25% of the total levelised cost per kWh produced over the lifetime of the turbine,” the project’s website says.

“If the turbine is fairly new, the share may only be 10%-15%, but this may increase to at least 20%- 35% by the end of the turbine’s lifetime.”

Moreover, as turbines come out of warranty, any inherent financial risk rests with the owner, making good O&M planning even more critical, the American Wind Energy Association (AWEA) stresses. Indeed, last year nearly US$40 billion worth of wind installations in the U.S. came out of warranty, “thrusting the financial risk on the owner to provide cost-e•ective operation and maintenance.” An original equipment manufacturer (OEM) typically operates a wind project through the warranty period, with optional

continued services. While in some instances, the OEM may be contracted further to conduct O&M for another term, the owner usually takes responsibility, either conducting it in-house or contracting out to a third party.

It is important, however, that the operational data is transferred to the owner on completion of the OEM service period. While a range of automated systems, on-site and remote operators determine the operational parameters of a turbine, routine servicing of a typical onshore wind farm should take place once or twice a year.

“Oil and fi lters need to be changed, operating components need to be inspected, and bolts need to be torqued,” the AWEA says. “Worn parts need to be routinely repaired or replaced every 5-15 years, depending on the component.” And as the AWEA makes clear: “Operating and maintaining wind turbines requires workers to have extensive technical knowledge and safety training; sophisticated capabilities to diagnose component performance; knowledge and skills to schedule replacement components; and ability to accommodate changing weather conditions.” So using the right personnel and equipment is vital.

Escalating costs Meantime, for o•shore wind, O&M costs account for signifi cantly more than onshore, and are “subject to considerable uncertainty,” according to the European Wind Energy Association’s (EWEA) report The Economics of Wind Power. In fact with O&M for o• shore projects being far more complicated and intensive, due to the di• cult conditions at sea, they can equal that of any initial capital investment.

O•shore O&M is 2-6 times higher than for onshore turbines, says a 2011 Wind Energy Update (WEU) Operations and Maintenance report, with operators facing O&M costs as high as €100,000-300,000 per year, per turbine, as opposed to around €45,000 per turbine onshore. Moreover, it warns that in the short-term costs could be 20% higher than that.

Indeed, the report found that spattered debris accumulation on the blade’s leading edge could result in a staggering 10% loss in revenue. Unknown component failure rates, unknown logistic equipment costs, weather windows dependent on deployment site, and a general lack of understanding of O&M cost correlation to shore distance, amongst others, are busting o• shore operations and maintenance budgets beyond all expectation. And WEU warns that o• - shore O&M costs are likely to increase around 253% over a 20-year turbine lifespan.

Keeping these costs down is therefore a natural aim of any wind farm owner, whether looking at future or existing plants. O&M costs, for both on- and o•shore projects, are now attracting greater attention in the wind community.

Manufacturers are doing their bit by trying to lower these costs by developing new turbine designs that require fewer regular service visits and less turbine downtime. An e• ective maintenance strategy will also increase operating e•ciency and plant availability, which in turn helps maximise project returns. Adopting a ‘bare-minimum’ reactive/corrective approach – at its worst, dealing with faults only when they occur or cause a major problem – may be seen as tempting in these tough economic times. It is, however, a false economy and can be the costliest option in the long-term. Indeed, the WEU report notes that 66% of o• shore O&M costs are caused by unscheduled corrective maintenance, much of which could be avoided if a proactive, preventative maintenance approach is adopted instead.

Prevention better than cure

Proactive O&M will help ensure optimal wind farm performance, avoid costly business interruptions, and maximise potential project returns. As O&M company Wind Prospect puts it: “Increase availability. Boost profi ts.”

While manufacturers work to improve the performance of technology and minimise service requirements, operators should be conducting routine service checks and using state of the art conditioning monitoring equipment to keep a constant eye on things, it says. “Proactive monitoring watches the performance of your wind farm 24/7,” explains Wind Prospect, which o•ers full operations monitoring, reporting and management services for projects in the UK, France, Ireland and Australia.

As well as the turbines themselves, O&M plans should encompass the entire site including access tracks, auxiliary buildings, and electrical infrastructure [see box, ‘a good O&M plan’, p. 44]. “We have developed a comprehensive operating, monitoring and reporting system specially tailored to wind farm operations and have established a 24-hour wind-farm operations and monitoring centre in China which has been proactively monitoring many of our sites on a 24/7 basis since 2008,” it adds.

With a proactive strategy, mechanical problems can be identifi ed early “to enable maintenance before faults impact revenue”. Maintenance can then be scheduled for low wind periods to keep turbines in optimal condition and thus help to increase turbine availability and maximise profi ts. Wind Prospect, for example, says it achieves 99.7% availability on the wind farms it operates, exceeding the 97% industry average. “Turbines often fail in high winds when they are at their most productive … [so] downtime then has a disproportionate impact on revenue,” the company explains. Proactive monitoring helps overcome this.

It is a “systemised comparative and historical analysis of all available turbine operating data including the errors logs, weather conditions, oil pressure and temperature, services and repairs record,” Wind Prospect explains. “It will identify trends in the data that could provide a warning of potential turbine component failures, thereby enabling proactive maintenance to be carried out under weather management and safely maximise the asset’s performance and long-term value.”

With today’s larger wind turbines a small increase in availability means a big increase in earnings, it stresses. Since costs remain fairly fi xed, any increase in availability has a larger positive percentage impact on profi t: If costs are 80% of revenue (profi t 20%), then a 2% increase in availability translates to a 10% increase in profi ts, it says.

Similarly, it cites a case where this proactive approach saved one wind farm up to £10,000 in potentially lost revenue. The proactive monitoring centre witnessed an increased hydraulic oil temperature on one of the turbines and reported back to the technical team and the owners. “Two days later during a scheduled visit under low wind, a damaged Oring was replaced and the hydraulic oil topped up. This preventative action saved the system from major damage … and ensured that virtually no power production was lost,” Wind Prospect says. “Had the fault not been rectifi ed so e• ciently, the turbine could have been out of action for up to one month, with lost profi ts of £10,000.”

O•shore O&M learning curve Meanwhile, with maintenance of high-value o•shore assets becoming a more important issue as further wind farms are installed, now is the time for operators to ask if the processes they have in place are fi t for purpose, says Stephen Bolton, Operations and Maintenance Director of O• shore Marine Management (OMM), based in the UK.

With little existing guidance and no legislation currently in place, “operators may not be conducting the maintenance they need in order to guarantee the integrity of their assets,” OMM believes. On the other hand, some “might be spending too much on completing unnecessary routine servicing”.

Indeed, operators are “currently exposing themselves to unnecessary and potentially serious risks”, Bolton says. These risks could result in lengthier, more costly repairs if things go wrong and ultimately long periods of lost production.

So OMM, which also has an operational support base at Cuxport, Germany has launched a new Inspection, Maintenance and Repair (IMR) service, based on best practice approaches to maintenance that exist in other markets, including the oil and gas industry, and building in a stage where maintenance plans are verifi ed by a third party: “It examines every aspect of an installation, including the crucial sub-sea elements, and identifi es those that represent the greatest risk to the project should they fail,” Bolton explains. “In a fi rst for our industry, it also ensures that the resulting maintenance plan is independently verifi ed, giving operators and their backers the assurance they need that precisely the right level of maintenance is taking place.”

He concludes: “This is not a onesize fi ts all approach – what we are advocating takes careful consideration of the nature of the project and is a technique that is thorough, while remaining entirely fl exible.” e: Gail.Rajgor@REF.contributor.com

BIO-ENERGY Big Oil's Big in Biofuels

By Ken Wells on May 10, 2012 BP (BP) has invested $7 billion in alternative energy since 2005. ExxonMobil (XOM) is spending $600 million on a 10-year effort to turn algae into oil. And Royal Dutch Shell (RDS/A) has invested billions of dollars in a Brazilian biofuels venture, buying up sugar cane mills, plantations, and refineries to make ethanol. In the U.S., Shell produces small lots of so-called drop-in biofuels—engine-ready products that can replace gasoline—from a pilot plant in Houston that uses sugar beets and crop waste.

On the way to a renewable energy future, a funny thing has happened: Big Oil has become the biggest investor in the race to create green fuels. In the last decade, the industry says, it has put $71 billion into zero- and low-emission and renewable energy technologies. The U.S. government, by contrast, has spent about $43 billion on similar efforts during the same period, according to the American Petroleum Institute (API), a trade group. “We are making huge bets” on biofuels and also investing in wind and solar, says Katrina Landis, chief executive officer of BP Alternative Energy, noting that her division has grown from a handful of employees in 2005 to 5,000 today.

Algae: Exxon; Dishes/Hands: David MaungAlgae secreting oil-like lipids Many environmentalists doubt that these investments represent more than window dressing. An API report shows that just $9 billion of the $71 billion is for renewable energy while the rest has gone toward greening up Big Oil’s fossil-fuel business. And the industry has, after all, bankrolled research casting doubt on climate change while lobbying to defeat

a White House-backed climate bill in 2010, says Simon Mui, a scientist with the Natural Resources Defense Council. “Their interest is a validation of the promise of cleantech,” he says. “But I don’t want to imply that this is something we should be falling out of our chairs over.”

The investments are less impressive, Mui says, when measured against Big Oil profits— ExxonMobil reported 2011 net income of $41 billion—and the money the companies still devote to the hunt for conventional oil and gas. Mui estimates the industry has spent about $341 billion developing tar sands, which contain heavy crude that is energy-intensive to recover and refine, over the same period that it touts its $71 billion in carbon reduction and renewables. The API dismisses such criticisms, saying it put together the report on clean investing to dispel the notion that the industry isn’t interested in climate change or reducing greenhouse gases.

Algae: Exxon; Dishes/Hands: David MaungExxon says it's still unclear whether algaebased fuels can be commercially viable The oil industry also has a major incentive for its green spending: the federal Renewable Fuel Standard. The law, signed by President George W. Bush in 2005, now requires about 15 billion gallons of alternative fuels such as ethanol in the nation’s energy mix annually, and that number is mandated to grow to 36 billion gallons by 2022. (U.S. drivers consume about 134 billion gallons of gasoline a year.)

Oil and gas companies, the act says, are among the “obligated parties” to help the U.S. reach these goals. “Inside these companies the thinking is, ‘We can’t get caught out without having an answer and a way to meet our obligations,’ ” says Wesley Bolsen, chief marketing officer for Codexis (CDXS), a Redwood City (Calif.) enzyme maker that has a five-year-old partnership with Shell. “In some ways they can’t afford not to invest. On the other hand, I think a lot of oil companies today think, ‘If we do this right, we can make a lot of money.

For Sheeraz Haji, CEO of Cleantech Group, a 10-year-old green technology consulting firm, the industry’s investments represent pragmatism, since oil companies see that long term they won’t be able to meet demand with conventional oil and gas. While PR concerns are a factor, with cleantech providing cover for carbon-centric core businesses, Haji also says it’s a matter of pride and fear. He notes that oil companies, with their technological prowess at deepwater drilling and the like, don’t want to be seen as stodgy—or worse, wake up one day to find the renewables world exploding with profits they aren’t sharing.

“We’re not talking about oil companies turning into green activists,” says Haji. “It’s tied to their view that this is economically rational.” And the scale of their investments is immense.

Sizing up Exxon’s algae play, he says, “$600 million is big money. Maybe it’s not big dollars to Exxon, but it’s still big dollars for the sector.”

Exxon’s algae project is a partnership with Synthetic Genomics, a La Jolla (Calif.) company co-founded by human genome pioneer J. Craig Venter. On paper, algae has a lot going for it. It produces energy-storing molecules called lipids similar to those extracted from crude oil. And it can be grown in saltwater on marginal land, so it won’t compete for fresh water or

valuable farm acreage. Although the project, in its third year, recently moved out of a San Diego greenhouse to an outdoor facility in Texas, Exxon says billions more in research dollars are needed before it will know whether commercial production is possible.

Shell’s partnership with Codexis uses enzymes to turn grass, stalks, and sugar cane waste into biofuels. The company has so far put about $60 million a year into the project. Such research portends the production of renewable fuels without displacing food crops. And there’s a ready supply of raw material: The Department of Agriculture estimates that U.S. farms produce 1 billion tons of crop residue each year.

Mark Brownstein, chief counsel for the Environmental Defense Fund’s energy program, warns that Big Oil will have trouble winning over skeptics. “This is an incredibly conservative and hard-headed industry,” he says. “They have a lot to prove before people are willing to believe that there has been a fundamental shift about how they think about climate and other environmental matters.” Nonetheless, Brownstein adds, “I wish ExxonMobil all the success in the world in figuring out how to commercialize biofuels. That would be great for everybody.”

The bottom line: Big Oil says it has invested $71 billion in green tech. Environmentalists question the sincerity of the industry’s environmental efforts.

BP (BP) has invested $7 billion in alternative energy since 2005. ExxonMobil (XOM) is spending $600 million on a 10-year effort to turn algae into oil. And Royal Dutch Shell (RDS/A) has invested billions of dollars in a Brazilian biofuels venture, buying up sugar cane mills, plantations, and refineries to make ethanol. In the U.S., Shell produces small lots of so-called drop-in biofuels—engine-ready products that can replace gasoline—from a pilot plant in Houston that uses sugar beets and crop waste.

On the way to a renewable energy future, a funny thing has happened: Big Oil has become the biggest investor in the race to create green fuels. In the last decade, the industry says, it has put $71 billion into zero- and low-emission and renewable energy technologies. The U.S. government, by contrast, has spent about $43 billion on similar efforts during the same period, according to the American Petroleum Institute (API), a trade group. “We are making huge bets” on biofuels and also investing in wind and solar, says Katrina Landis, chief executive officer of BP Alternative Energy, noting that her division has grown from a handful of employees in 2005 to 5,000 today.

Many environmentalists doubt that these investments represent more than window dressing. An API report shows that just $9 billion of the $71 billion is for renewable energy while the rest has gone toward greening up Big Oil’s fossil-fuel business. And the industry has, after all, bankrolled research casting doubt on climate change while lobbying to defeat a White House-backed climate bill in 2010, says Simon Mui, a scientist with the Natural Resources Defense Council. “Their interest is a validation of the promise of cleantech,” he says. “But I don’t want to imply that this is something we should be falling out of our chairs over.”

The investments are less impressive, Mui says, when measured against Big Oil profits— ExxonMobil reported 2011 net income of $41 billion—and the money the companies still devote to the hunt for conventional oil and gas. Mui estimates the industry has spent about

$341 billion developing tar sands, which contain heavy crude that is energy-intensive to recover and refine, over the same period that it touts its $71 billion in carbon reduction and renewables. The API dismisses such criticisms, saying it put together the report on clean investing to dispel the notion that the industry isn’t interested in climate change or reducing greenhouse gases.

The oil industry also has a major incentive for its green spending: the federal Renewable Fuel Standard. The law, signed by President George W. Bush in 2005, now requires about 15 billion gallons of alternative fuels such as ethanol in the nation’s energy mix annually, and that number is mandated to grow to 36 billion gallons by 2022. (U.S. drivers consume about 134 billion gallons of gasoline a year.)

Oil and gas companies, the act says, are among the “obligated parties” to help the U.S. reach these goals. “Inside these companies the thinking is, ‘We can’t get caught out without having an answer and a way to meet our obligations,’ ” says Wesley Bolsen, chief marketing officer for Codexis (CDXS), a Redwood City (Calif.) enzyme maker that has a five-year-old partnership with Shell. “In some ways they can’t afford not to invest. On the other hand, I think a lot of oil companies today think, ‘If we do this right, we can make a lot of money.

For Sheeraz Haji, CEO of Cleantech Group, a 10-year-old green technology consulting firm, the industry’s investments represent pragmatism, since oil companies see that long term they won’t be able to meet demand with conventional oil and gas. While PR concerns are a factor, with cleantech providing cover for carbon-centric core businesses, Haji also says it’s a matter of pride and fear. He notes that oil companies, with their technological prowess at deepwater drilling and the like, don’t want to be seen as stodgy—or worse, wake up one day to find the renewables world exploding with profits they aren’t sharing.

“We’re not talking about oil companies turning into green activists,” says Haji. “It’s tied to their view that this is economically rational.” And the scale of their investments is immense.

Sizing up Exxon’s algae play, he says, “$600 million is big money. Maybe it’s not big dollars to Exxon, but it’s still big dollars for the sector.”

Exxon’s algae project is a partnership with Synthetic Genomics, a La Jolla (Calif.) company co-founded by human genome pioneer J. Craig Venter. On paper, algae has a lot going for it. It produces energy-storing molecules called lipids similar to those extracted from crude oil. And it can be grown in saltwater on marginal land, so it won’t compete for fresh water or valuable farm acreage. Although the project, in its third year, recently moved out of a San Diego greenhouse to an outdoor facility in Texas, Exxon says billions more in research dollars are needed before it will know whether commercial production is possible.

Shell’s partnership with Codexis uses enzymes to turn grass, stalks, and sugar cane waste into biofuels. The company has so far put about $60 million a year into the project. Such research portends the production of renewable fuels without displacing food crops. And there’s a ready supply of raw material: The Department of Agriculture estimates that U.S. farms produce 1 billion tons of crop residue each year.

Mark Brownstein, chief counsel for the Environmental Defense Fund’s energy program, warns that Big Oil will have trouble winning over skeptics. “This is an incredibly conservative and hard-headed industry,” he says. “They have a lot to prove before people are willing to believe that there has been a fundamental shift about how they think about climate and other environmental matters.” Nonetheless, Brownstein adds, “I wish ExxonMobil all the success in the world in figuring out how to commercialize biofuels. That would be great for everybody.”

The bottom line: Big Oil says it has invested $71 billion in green tech. Environmentalists question the sincerity of the industry’s environmental efforts.

BP (BP) has invested $7 billion in alternative energy since 2005. ExxonMobil (XOM) is spending $600 million on a 10-year effort to turn algae into oil. And Royal Dutch Shell (RDS/A) has invested billions of dollars in a Brazilian biofuels venture, buying up sugar cane mills, plantations, and refineries to make ethanol. In the U.S., Shell produces small lots of so-called drop-in biofuels—engine-ready products that can replace gasoline—from a pilot plant in Houston that uses sugar beets and crop waste.

On the way to a renewable energy future, a funny thing has happened: Big Oil has become the biggest investor in the race to create green fuels. In the last decade, the industry says, it has put $71 billion into zero- and low-emission and renewable energy technologies. The U.S. government, by contrast, has spent about $43 billion on similar efforts during the same period, according to the American Petroleum Institute (API), a trade group. “We are making huge bets” on biofuels and also investing in wind and solar, says Katrina Landis, chief executive officer of BP Alternative Energy, noting that her division has grown from a handful of employees in 2005 to 5,000 today.

Many environmentalists doubt that these investments represent more than window dressing. An API report shows that just $9 billion of the $71 billion is for renewable energy while the rest has gone toward greening up Big Oil’s fossil-fuel business. And the industry has, after all, bankrolled research casting doubt on climate change while lobbying to defeat a White House-backed climate bill in 2010, says Simon Mui, a scientist with the Natural Resources Defense Council. “Their interest is a validation of the promise of cleantech,” he says. “But I don’t want to imply that this is something we should be falling out of our chairs over.”

The investments are less impressive, Mui says, when measured against Big Oil profits— ExxonMobil reported 2011 net income of $41 billion—and the money the companies still devote to the hunt for conventional oil and gas. Mui estimates the industry has spent about $341 billion developing tar sands, which contain heavy crude that is energy-intensive to recover and refine, over the same period that it touts its $71 billion in carbon reduction and renewables. The API dismisses such criticisms, saying it put together the report on clean investing to dispel the notion that the industry isn’t interested in climate change or reducing greenhouse gases.

The oil industry also has a major incentive for its green spending: the federal Renewable Fuel Standard. The law, signed by President George W. Bush in 2005, now requires about

15 billion gallons of alternative fuels such as ethanol in the nation’s energy mix annually, and that number is mandated to grow to 36 billion gallons by 2022. (U.S. drivers consume about 134 billion gallons of gasoline a year.)

Oil and gas companies, the act says, are among the “obligated parties” to help the U.S. reach these goals. “Inside these companies the thinking is, ‘We can’t get caught out without having an answer and a way to meet our obligations,’ ” says Wesley Bolsen, chief marketing officer for Codexis (CDXS), a Redwood City (Calif.) enzyme maker that has a five-year-old partnership with Shell. “In some ways they can’t afford not to invest. On the other hand, I think a lot of oil companies today think, ‘If we do this right, we can make a lot of money.’ ” For Sheeraz Haji, CEO of Cleantech Group, a 10-year-old green technology consulting firm, the industry’s investments represent pragmatism, since oil companies see that long term they won’t be able to meet demand with conventional oil and gas. While PR concerns are a factor, with cleantech providing cover for carbon-centric core businesses, Haji also says it’s a matter of pride and fear. He notes that oil companies, with their technological prowess at deepwater drilling and the like, don’t want to be seen as stodgy—or worse, wake up one day to find the renewables world exploding with profits they aren’t sharing.

“We’re not talking about oil companies turning into green activists,” says Haji. “It’s tied to their view that this is economically rational.” And the scale of their investments is immense.

Sizing up Exxon’s algae play, he says, “$600 million is big money. Maybe it’s not big dollars to Exxon, but it’s still big dollars for the sector.”

Exxon’s algae project is a partnership with Synthetic Genomics, a La Jolla (Calif.) company co-founded by human genome pioneer J. Craig Venter. On paper, algae has a lot going for it. It produces energy-storing molecules called lipids similar to those extracted from crude oil. And it can be grown in saltwater on marginal land, so it won’t compete for fresh water or valuable farm acreage. Although the project, in its third year, recently moved out of a San Diego greenhouse to an outdoor facility in Texas, Exxon says billions more in research dollars are needed before it will know whether commercial production is possible.

Shell’s partnership with Codexis uses enzymes to turn grass, stalks, and sugar cane waste into biofuels. The company has so far put about $60 million a year into the project. Such research portends the production of renewable fuels without displacing food crops. And there’s a ready supply of raw material: The Department of Agriculture estimates that U.S. farms produce 1 billion tons of crop residue each year.

Mark Brownstein, chief counsel for the Environmental Defense Fund’s energy program, warns that Big Oil will have trouble winning over skeptics. “This is an incredibly conservative and hard-headed industry,” he says. “They have a lot to prove before people are willing to believe that there has been a fundamental shift about how they think about climate and other environmental matters.” Nonetheless, Brownstein adds, “I wish ExxonMobil all the success in the world in figuring out how to commercialize biofuels. That would be great for everybody.”

Shell, Iogen scrap plans for biofuel plant in Manitoba

Cancelling project means loss of 150 jobs

BY JEFFREY JONES AND ROD NICKEL, REUTERSAPRIL 30, 2012 Royal Dutch Shell PLC and Iogen Corp have scrapped plans for a commercial-scale biofuel plant in Manitoba, spelling the loss of 150 jobs and raising questions about widespread and near-term use of fuel made from agricultural waste in Canada.

Photograph by: Simon Dawson, Bloomberg Royal Dutch Shell PLC and Iogen Corp have scrapped plans for a commercial-scale biofuel plant in Manitoba, spelling the loss of 150 jobs and raising questions about widespread and near-term use of fuel made from agricultural waste in Canada.

The Iogen Energy joint venture had been studying building a plant to make ethanol from straw and other plant waste, rather than from food crops such as corn and sugar. One location discussed was Portage la Prairie, west of Winnipeg, Manitoba.

The proposal had been in planning stages and a spokesman for Shell could not provide an estimated cost.

Shell first invested in Iogen 10 years ago and the partners have operated a demonstration plant in the Ottawa area since 2004.

“We do continue to have a relationship with them and continue to retain the licensing rights to the technology developed,” Shell spokesman David Williams said on Monday.

“It’s like a lot of things with R&D, you build demonstration plants, you get that far, and you learn from them, and this has been an important source of knowledge.”

Iogen will still employ 110 people at its Ottawa headquarters and plans to expand new technology for production of the biofuels made from cellulose, the partners said.

Cellulosic ethanol is made from the non-food portion of crops. Ethanol production from food grains, especially corn, has generated debate about the ethics of diverting food for use in fuel and has been a key reason U.S. corn stocks are projected to fall to a 16-year low this summer.

Chicago corn futures prices Cc1 hit a record peak last summer and remain historically high.

The Canadian and provincial governments spend about C$250 million ($253 million) annually, according to the agriculture think-tank George Morris Centre, to subsidize production by companies such as Husky Energy Inc and Suncor Energy Inc. One aim is to cut greenhouse gas emissions from conventional fuel.

Ottawa wants gasoline across the country to contain an average of 5 per cent ethanol, creating demand for 2 billion litres, but current production falls short of that level.

The decision by Shell and Iogen doesn’t threaten the future Canadian biofuels production, said Scott Thurlow, president of the Canadian Renewable Fuels Association.

“It’s just like any other fuel, it takes time to build up the necessary capital to implement,” he said. “While I am personally disappointed, I don’t see this decision as a threat to the industry in general.”

Thurlow said there are demonstration projects in Canada for cellulosic ethanol, but no commercial production to his knowledge.

For is part, Shell is a partner with other ethanol producers, including Brazil’s Cosan CSAN3.SA and a U.S. company called Virent, which has developed technology to convert plant sugars into hydrocarbon molecules.

IOC to review biofuelbusiness strategy

From the pages of HINDUBUSINESSLINE, New Delhi, April22: High costs, uncertainyield, less availability of wasteland are some of the reasons that havecompelled Indian Oil Corporation (IOC) to review its biofuel business strategy.At present, there is a question mark over the commercial viability oflarge-scale jatropha projects unless high-yielding planting material andfinancial support (Government incentives) are made available, say industryobservers. Jatropha is an environment-friendly oilseed plant that is used toproduce bio-diesel. “The ground reality was different than what wasexpected. We are now reviewing how to proceeding the business,” Mr A.M.K.Sinha, Director, Planning & Business Development, IOC, said.

However, the company iscommitted to its ongoing jatropha plantation projects in Madhya Pradesh,Chhattisgarh, and Uttar Pradesh, he told Business Line. A review of theMadhya Pradesh projects will be done at the end of 2013-14, while operations ofthe UP project will be reviewed soon. For the Chhattisgarh project, theinvestments planned for three years starting 2011-12 is about Rs 16 crore(investments till March 31, 2011 estimated over Rs 8 crore), the Madhya Pradeshproject had an investment plan of approximately Rs 1.5 crore (Rs 1.6 crore tillMarch 31, 2011), and Uttar Pradesh about Rs 12.5 crore (Rs 0.2 crore till March31, 2011). On the challenges before the company, Mr Sinha said, “Accessto land is a big challenge for such projects. As we started on the projects, wefound that availability of wasteland is much lower than recorded.” Thenext challenge was uncertain yield, he said, adding “we are now in talkswith a US-based company, which has developed a high-yield variety of seeds. Thecompany is also planning field trials of pongamia pinnata.” Mr Sinha saidapart from team and skill building, enhanced learning on jatropha curcasplantation with a low-cost model is being done.

Researchers Look at Using Food Waste for Hydrogen

Posted by Joanna Schroeder – May 15th, 2012 What might be a good use of food waste? Hydrogen. Researchers from the University of Birmingham in the UK are creating bioenergy in the form of hydrogen for use an an alternative to gasoline. Researchers note that in a country like Brazil that is converting sugarcane to ethanol it may not be sustainable in the long-term. The reason is because the process generates carbon dioxide and agricultural waste. The advantage of creating hydrogen is that it can use the waste generated by the production of other products and it is sustainable and emission free.

Professor Lynne Macaskie, Professor of Applied Microbiology at the University of Birmingham, gave a presentation on the hydrogen research during a collaborative workshop in São Paulo on May 14, 2012. “Fuel cells need clean energy to run them. If you provide bacteria with a supply of sugary waste from, for example, chocolate production, the bacteria can produce hydrogen. At the moment manufacturers pay to dispose of waste but with our technique they could convert it to clean electricity instead.”

According to Macaskie, the research shows a huge potential for biohydrogen as a fuel for the future. “Biohydrogen could even be made from the wastes from bioethanol production –

two biofuels for the price of one,” he said. “More work from focused teams, however, is needed, as agricultural wastes are tougher for bacteria to digest.”

The event was organized by O Conselho de Reitores das Universidades Estaduais de São Paulo (CRUESP) and the FAPESP bioenergy programme (FAPESP-BIOEN). Participants came from the University of Birmingham, the University of Nottingham, the State University of Campinas (UNICAMP), the University of São Paulo, and São Paulo State University (UNESP).

Advanced-biofuel developers are finding it tough to scale up

By Adam LesserMay. 15, 2012, Advanced-biofuel developers such as Amyris, Solazyme, KiOR and Gevo are facing difficulty scaling up production, observers said. The industry "went through a phase where there was a lot of enthusiasm and lot of companies went public, and now a lot of companies are pushing out the ramp-up on production, and stock prices are way down," said Rob Stone, a managing director at investment firm Cowen and Co. "We're waiting for the upturn on the other side of that gap where realities and perceptions will start to move in a favorable direction," Stone said The disclosure on last week’s earning call from Amyris that it was shuttering or scaling down production at two of its three facilities, effectively putting off major biofuels production for another two to three years, is not altogether surprising. Once technology risk is surmounted in the lab and a feedstock can be converted into a petroleum at a decent yield, the question always becomes: Can you do it at scale?

Early optimism The original goal had been for Amyris’s three facilities to produce 7.5 million liters of product a quarter, though the company has struggled with yield and separation loss, turning out just over 900,000 liters this past quarter. More importantly, the low production runs pushed the average selling price to $7.70 per liter, well above what the market will bear.

Hence, Amyris’s decision to focus on smaller markets with lower volumes and higher selling prices, like the moisturizer ingredient squalene, which sells for $25-30 per liter.

It’s no secret that the EPA drastically overestimated what the bioufels industry could do. In 2012 it had thought that 500 million gallons of cellulosic biofuels would be possible, even though the reality is that the industry should do a bit over 10 million gallons this year. On last week’s earning call Cowen and Company’s Managing Director of Equity Research Rob Stone pressed Amyris CEO John Melo on the question of why production wasn’t scaling and why yields had disappointed.

Melo responded that it had taken Amyris “a lot of learning to be able to get the strains to perform….as well as they have in our environment” along with the challenges presented by separation and the fermentation process. Scaling biofuels is a massive engineering feat that requires tuning to maximize performance. Unlike some industries where being first to market is advantageous, in renewable energy, there’s often a first mover disadvantage because scaling the initial technology is as difficult (or more) than proofing the tech in the lab. Even if we look at Amyris’s share price, which has been bludgeoned from its $16 per share IPO price to about two bucks today, there’s a compelling case to be made for a second mover stepping in, buying the assets (the market value of the entire company is a

scant $115 million compared to almost $2 billion at its peak), recapitalizing the company, and making a decent return.

The big picture for biofuels Amyris is not alone. Other leading biofuels companies Solazyme, Kior and Gevo are off at least 40 percent from their 2011 IPO share pricings. What keeps investors in the game is the massive reward being floated. If biofuels succeed, they have two major advantages. 1) Unlike corn ethanol which had a pricy food feedstock—corn—many of the advanced biofuels are largely feedstock agnostic and 2) it’s a drop in fuel with no limitations on the percentage that can be used. It’s ready to go, direct into the transportation fuel supply, replacing imported crude oil.

Despite asking difficult questions and having neutral recommendations on Amyris and Gevo, Stone is still cautiously optimistic. “This industry is in crossing the chasm phase. You went through a phase where there was a lot of enthusiasm and lot of companies went public, and now a lot of companies are pushing out the ramp up on production, and stock prices are way down. We’re waiting for the upturn on the other side of that gap where realities and perceptions will start to move in a favorable direction.”

Stone’s models indicate that with oil prices as low as $70 a barrel, a company like Kior could compete with imported crude if it can scale its future plants to processing 1500 tons per day of feedstock (its Columbus plant, which is expected to be on line in the second half of this year, could theoretically do 500 tons per day). And it’s proving that the initial facilities can scale reasonably in the first place that is going to be critical.

As my colleague Katie Fehrenbacher has pointed out, companies like Kior IPO’ed and raised money in public markets with very long term risk/reward horizons, and to further scale, all biofuel companies are going to have to raise more cash. That fundraising ability will all depend on showing production capacity at initial plants. Amyris raised an additional $83.7 million in February, and Stone noted of the timing of the Amyris raise, “had they waited to put out this quarterly release they may not have been able to raise as much on the same terms.”

The dream of replacing foreign oil dependence with a renewable transportation fuel is a big dream and a bigger market. But from the lab to the production facility, there’s enormous risk, and if the commercialization hurdles can’t be crossed, it’ll be just that–a dream.

SOLAR India’s solar sunrise

SOLAR ENERGY has the potential to reenergise India’s economy by creating millions of new jobs, achieve energy independence, reduce the trade defi cit and propel India forward as a ‘green nation’. In short, solar o• ers too many benefi ts for India to ignore or delay its development, believes Darshan Goswami.

Darshan Goswami About: Darshan Goswami has over 35 years of experience in the energy field and is currently working for the United States Department of Energy (DoE) as a Project Manager in Pittsburgh, PA, USA. He previously worked as Chief of Energy Forecasting and Renewable Energy from the United States Department of Agriculture (USDA).

India is one of the sun’s most favoured nations, blessed with about 5000 TWh of solar insolation every year. India should tap this vast resource to satisfy its growing energy demand – and time is of the essence. Even if a tenth of this potential was utilised, it could mark the end of India’s power problems – using the country’s deserts and farm land.

India can lead the world by embracing the power of the sun, if smart business models and favourable policies are developed and implemented nationwide as quickly as possible.

Need backing Despite the worldwide recession, the solar photovoltaic (PV) industry has demonstrated unprecedented growth over the past years, with increased demand for solar power attracting more and more players into the market. The price of solar panels fell 47% in 2011, according to Bloomberg. This has made the business case for solar more compelling because solar PV has, in some parts of the world, already reached grid parity, and it will soon be below the US$1/W cost target for most of the world - sometime this year. This is making solar technology more competitive with traditional energy sources.

The Indian Government should therefore embrace favourable tax structures and consider providing fi nancial resources to fund projects such as community solar farms as part of their energy development programmes. “India can be a great power, ushering in a gamechanging third industrial revolution by utilising its renewable energy resources and collaborating with power producers and suppliers,” says American Economist and author Jeremy Rifkin. India could become the Saudi Arabia of solar energy.

Solar energy is a win-win for India and the environment, and India should make solar energy a mainstream component of its energy diversifi cation. There is really no better economical choice for India.

India needs solar energy now India has tremendous energy needs and an increasing di• culty in meeting those requirements through traditional means of power generation. Electricity consumption in India has been increasing at one of the fastest rates in the world due to population growth and economic development. The Indian economy faces increasing challenges because energy supply is struggling to keep pace with demand, and there are energy shortages of 10%-13% daily almost everywhere in the country. Because India has so many blackouts, many factories and households use emergency diesel generators as back-ups. This backup power could be supplied by solar energy.

Solar has the potential to transform the Indian economy in the same way as the information technology (IT) and auto industry transformed the Indian economy in the 1990s. India is in a unique position to introduce clean energy solutions on an enormous scale to provide a• ordable energy for everyone – especially the poor.

India should take full advantage of this golden opportunity because solar energy has particular relevance in remote and rural areas, where around 289 million people live without access to electricity. Solar energy is the most cost-e•ective option for India to reduce energy poverty without having to extend national grid services to provide power for individual homes and buildings.

Renewable energy is an attractive investment because it will provide long-term economic growth for the country. A favourable renewable energy policy could create millions of jobs and an economic stimulus of at least US$1 trillion, and perhaps much more if all indirect economic (ripple) e•ects are included. “India is the Saudi Arabia of renewable energy

sources and if properly utilised, India can realise its place in the world as a great power,” Rifkin says.

If houses in villages and cities produce energy from solar power and then sell it to distribution companies, this could, for example, give a levelplaying fi eld to rural areas in terms of industrialisation.

The Government needs to play a decisive role, however, by providing Feed-in-Tari•s (FiTs), tax credits and other support mechanisms in order to realise the signifi cant solar potential in India. It would be a serious miscalculation, if India missed out on this opportunity.

How solar energy can work for India India needs a plan with the same spirit, boldness and the imagination of the Apollo programme that put astronauts on the moon. It’s just like the case of personal computers, which were very expensive to begin with, but with mass production, the cost has come down dramatically – the technology is well established and available today.

What is needed for the same thing to happen to solar, is political commitment and appropriate investments and funding. One step towards achieving this goal would be to start a nationwide solar initiative to facilitate growth in large-scale deployment of solar roofs and large utility-scale generation installations within the next 20 years. If such policies come into being, India could become a major player and even an international leader in solar energy for years to come.

One step in the right direction has been the establishing of the Jawaharlal Nehru National Solar Mission (JNNSM), which was launched in late 2009. However, the present JNNSM target of producing 10% of its energy – 20 GW by 2022 – is very low. JNNSM needs to take bold steps with the help of central and state Governments to play a bigger role in realising India’s solar energy potential.

Another opportunity for sparking investment in solar, is the US-India Energy Dialogue, which facilitates discussions on renewable energy and energy e• ciency. This could lay the foundation for an energy independent future – one in which the Government of India takes advantage of the vast amounts of energy available from the Rajasthan Desert sun (instead of oil from the Arab nations) to power its future energy needs. In addition, solar energy would not only create millions of jobs, but also sustain India’s positive economic growth, help lift its massive population out of poverty, and combat climate change.

Solar energy also has the advantage of allowing decentralised distribution of energy – particularly for meeting rural energy needs, and thereby empowering people at the grass roots level. Solar electricity could also shift about 90% of daily trip mileage from petroleum to electricity by encouraging increased use of plug-in hybrid cars. For drivers in India this means that the cost per mile could be reduced by a quarter in today’s prices.

Solar-powered EV charging As electric vehicles (EVs) enter the mainstream, corporate planners and municipalities need to lay the foundations for a clean transportation infrastructure through development and integration of public charging stations.

Carmakers worldwide are starting to move quickly with electric vehicles, with several models expected to hit showrooms in 2012. There is also a growing number of solar companies that are partnering with carmakers to provide solar-powered charging stations.

SunPower, for example, has forged an alliance with Ford, which recently unveiled a Drive Green for Life programme that will use a 2.5 kW solar rooftop array to charge the new Ford Focus electric vehicle due to hit the streets in 2012. Another example is SunEdison, which

has joined the Pecan Street smart grid demonstration project in Austin, Texas, USA, where it will lead the development of home PV charging stations for the Chevy Volt.

Thousands of these solar-powered recharging stations could be placed across India. Many of these charging stations could be deployed at hubs such as shopping malls, motels, restaurants, and other public places where cars might be parked long enough to get a jolt of power.

Customers could perhaps be allowed to charge their vehicles for free while shopping at the stores that are participating in a given programme. In the USA, IKEA and Kohl’s, as well as others, see EV charging initiatives as part of broader sustainability strategies. Other firms adding charging stations include Lowe’s, which is working with GE; and Walgreens, which has made the biggest commitment so far with an initiative to install charging stations at 800 stores.

A bright future Solar energy presents a bright spot on India’s economic future. If India makes a massive switch from coal, oil, natural gas and nuclear power to solar energy, it is possible that 70% of India’s electricity and 35% of its total energy could be solar-powered by 2030.

This would require large-scale deployment in the southwest and other parts of the country.

Excess daytime energy can be stored in various forms such as molten or liquid salt, compressed air, pumped hydro, hydrogen, battery storage, etc., and then be used during night-time hours.

When solar energy becomes competitive with coal as improved and e• cient solar technologies enter the market, solar can empower India’s rural economies.

Concluding remarks I personally think there are no technological or economic barriers to supplying almost 100% of India’s energy demand through the use of renewable energy from solar, wind, hydro and biogas by 2050. It’s time to recognise that our energy must ultimately come from renewable resources, and we must accelerate the deployment of renewable energy. India can ramp up its e•ort to develop and implement large utility-scale solar energy farms to meet India’s economic development goals. Solar energy will create energy independence and bring potentially enormous environmental benefi ts. Both issues have a direct infl uence on national security and the health of the Indian economy. India needs a radical transformation of its energy system to the use of renewable energy, especially solar.

By using renewable resources India can realise its full economic potential and achieve its key social, political, and environmental objectives. The Indian Government should develop favourable policies to ease the permitting process and to provide start-up capital to promote solar energy to make India’s future bright.

All that is required is the political will for a shift from fossil fuels to renewable energy. India could potentially increase grid-connected solar power generation capacity to of over 200 GW by 2030, if adequate resources and favourable policies can be developed.

Solar energy could be a gamechanger for India: It has the potential to re-energise India’s economy by creating millions of new jobs, achieve energy independence, reduce the trade defi cit and propel India forward as a ‘green nation’. Solar energy o• ers too many benefi ts for India to ignore or delay its development. e: Darshan.Goswami@REF.contributor.com The views and opinions expressed in this article are solely those of the writer and are not intended to represent the views or policies of the United States Department of Energy.

Solar energy inspiration from butterfly wings

The Economic Times Butterfly wings are not just beautiful. They are also sophisticated collectors of solar energy that help butterflies stay warm, and researchers say that their shingle-like structure could provide valuable clues into developing better solar technology.

"Light manipulation and light-harvesting abilities are important for the performance of solar energy devices," said Tongxiang Fan, a materials scientist at Shanghai Jiao Tong University in China who is leading the effort. He and his colleagues reported their findings last week at the American Chemical Society's annual meeting in San Diego.

The scientists used an electron microscope to study the wing structure of two species of black butterflies. (They picked black wings because they absorb the maximum amount of sunlight.)

They found that the wings are composed of elongated rectangular scales, arranged a bit like overlapping shingles on a roof. The scales on each type of butterfly also had steep ridges, with small holes on either side leading to a second layer.

These features direct light to the second layer, helping the butterfly to capture a lot of heat.

The researchers also built a model to harness solar power the same way the butterflies' wings do. "The prototype is very, very effective," Fan said. He and his team are now working to create a commercial product that uses the wings as inspiration.

"This is only the first step," he said.

HOW IMMERSION HELPS TO LEARN A LANGUAGE Learning a foreign language is never easy, but contrary to common wisdom, it is possible for adults to process a language the same way a native speaker does. And over time, the processing improves even when the skill goes unused, researchers are reporting.

For their study, in the journal PloS One, scientists used an artificial language of 13 words, completely different from English. "It's totally impractical to follow someone to high proficiency because it takes years and years," said the lead author, Michael Ullman, a neuroscientist at Georgetown University Medical Center.

The language dealt with pieces and moves in a computer game, and the researchers tested proficiency by asking subjects to play the game. The subjects were split into two groups. One group studied the language in a formal classroom while the other was trained through immersion.

After five months, both groups retained the language even though they had not used it at all, and both displayed brain processing similar to that of a native speaker. But the immersion group displayed the full brain patterns of a native speaker, Ullman said.

He and his team used a technique called electroencephalography, or EEG, which measures brain processing along the scalp.

The research has several applications, Ullman said. "This should help us understand how foreign-language learners can achieve native-like processing with increased practice," he said. "It makes sense that you'd want to have your brain process like a foreign speaker."

And though it may take time, and more research, the work "also could or should help in rehabilitation of people with traumatic brain injury," he added.

EVIDENCE AGAINST MOON AS METEOROID'S OFFSPRING Astronomers have long theorised that the moon was formed when an object the size of Mars slammed into Earth, sending a huge mass of rock into orbit around it. "According to the prevailing model prediction, approximately half of the moon-forming material should come from the Mars-size impactor," said Junjun Zhang, an isotope geochemist at the University of Chicago.

But samples of isotopic titanium from the moon and from Earth now suggest that material from Earth is predominant on the moon, researchers report in the journal Nature Geoscience. "The moon has an identical titanium composition as the Earth," Zhang, the study's first author, said.

She used lunar samples gathered by the Apollo missions in the 1960s and '70s. They compared the isotopic titanium ratio in these samples to that of samples from Earth.

The researchers also found that meteorites have a much wider range of isotopic titanium.

"That also tells us that the impactor that hit the Earth was very unlikely to have to the same composition as the Earth," Zhang said. "So the prevailing model of the giant impact probably needs to be revisited."

Earlier research also found similarities in the isotopic composition of oxygen on the Earth and the moon.

Is CSP Still on track?

Is demise of CSP imminent or is it just a sleeping giant waiting to be revived with new technologies and lower costs? Joyce Laird reports.

About: Joyce Laird has an extensive background writing about the electronics industry; semiconductor development, R&D, wafer/foundry/IP and device integration into high density circuit designs.

MANY ARTICLES have been written recently about the imminent demise of concentrated solar power (CSP). Because of the glut of low cost solar photovoltaics (PV), it is very fashionable to jump on this bandwagon. But, before we call CSP ‘down for the count’ it might be good to hear from both sides.

Cost is the prime reason for the predicted end of CSP. Here is what the analysts and fi nancial community are saying: Foley & Lardner LLP is a law firm dealing with energy mergers and acquisitions, buying, selling and developing energy assets, including renewable energy assets for solar and wind projects. Jason Allen, Co-Chair, says he has seen a very big push in the crystalline PV market for investors as the prices dropped dramatically: (Continued on page 56...) “The biggest factor is the price of crystalline panels coming down and the number of panel manufacturers coming from overseas: China, Korea, Japan. This has allowed PV to become much more competitive against other technologies.

“I know that in the USA some projects that were scheduled to be CSP have changed to PV type solar farms. Price is one of the big impacts. It makes it harder to justify the CSP price to build and install a utilityscale project. It makes it harder to bid for PPAs [power purchase agreements] and negotiate bi-lateral PPAs. A PV developer can o• er a much lower price and usually a much shorter time frame,” he says.

“In the overall market right now, investors are investing in PV. It is relatively fast to put up and can be sized to di•erent projects. It is an easy sell to banks and fi nancial investors.

With CSP, you have to fi nd a PPA and convince the utilities in the di•erent states that somehow you are going to be providing a better product than a PV farm can. It can be a hard sell.

“Still, I disagree that it is a dead industry – it simply needs massive projects. This is an industry for large, substantial companies with good names and backgrounds. Without government guarantees, big projects using CSP require companies that have big balance sheets,” Allen adds.

Market analyst, Andrew Skumanich, Founder & CEO of SolarVision of Silicon Valley, CA, USA, agrees with Allen. He says the real essence is the cost: “CSP had some advantages and was marginally acceptable in certain cost areas, but the market doesn’t care anymore.

The market is going to turn to the technology that is the cheapest.

“Of course, there are other aspects to CSP that are positive, but they are not enough. CSP had a window of opportunity, but it is rapidly closing. This was that it could be done at a large scale, and with that scale it could have lower electricity cost and the added option for storage which would address intermittency. But the problem is that the storage is still too expensive and it’s not fast enough to allow for it to address intermittency in a cost e•ective way. Plus, there are now battery solutions being developed that may soon put PV on the low-cost side of CSP. The PV battery combination compared to the CSP molten salt and other forms of CSP storage may be changing the storage paradigm,” he adds.

Skumanich notes that utility companies are very familiar with steam generation and have a comfort level with any technology involving steam. “How much that plays a roll in this is hard to say, but it is part of what has allowed CSP to move forward. Solar in the panelmode is a di• erent beast, but utilities are slowly starting to understand it and get comfortable with it. That’s an added reason why the window for CSP utilities is starting to close. The cost of its advantages is not dropping fast enough, while solar panel costs are dropping like a rock – and the utility companies are becoming familiar with PV and CPV.” “My prediction is that CSP plants that were built in the deserts in the 1980s and the few built in from our decade will keep chugging along, but they won’t be building any new utilityscale plants. CSP is still in the game, but it is at a ‘make it or break it’ point. It’s going to take some unbelievable technology breakthrough to tip the scale in the favour of CSP,” he concludes.

Paula Mints, Director, Energy at Navigant Consultants in Palo Alto, CA, backs the above.

When asked about the comparative strengths and weaknesses of CSP, PV and CPV in the utility-scale market, she says: “Right now, c-Si [crystalline silicon] is extremely inexpensive and other technologies are having di• culty competing. In a nutshell, this is the current situation.

“Solar technologies take considerable time to develop and the driver to larger or smaller markets is incentives. Currently, incentives are decreasing and prices for crystalline technologies are extremely low. The upfront capital cost [of CSP] trumps the operations and maintenance (O&M); and there is the water issue, which is a problem for CSP. To survive, CSP has to be able to compete with fl at-plate, tracking solar and CPV – that is, its costs need to come down.”

Support and investment

Despite some of the bad press, governments and multi-national companies are investing to bring about higher e• ciency and lower-cost CSP technologies. Why would they back a technology that analysts claim is gasping its last breath? This is their rebuttal: AREVA, which provides low-carbon energy solutions including a fully integrated nuclear and renewable energies o•ering, says its Renewable Energies Business Group is at the heart of its industrial strategy. One of its segments, AREVA Solar of Mountain View, CA, specialises in concentrated solar thermal power.

“With an expected annual growth rate of 20% in the next decade, the CSP market is a very appealing opportunity for AREVA to capture a signifi cant market share,” according to Jayesh Goyal, Global VP of Sales.

Goyal says that the general perception that CSP cannot compete with PV is based on a comparison of purchase price alone, and does not recognise the special value that CSP brings. “If the goal is only the cheapest solar panel, without worrying about storage or any of the other benefi ts, then certainly PV has an edge,” he says.

“While that may be true for some utility installations in the USA, it doesn’t mean that CSP does not still have a huge global market. There are many countries that recognise the value of CSP and are willing to create programmes to promote it as a longterm solar energy base for a country.

“Another area is ‘booster’ applications for hybrid utility plants and industrial process steam applications. CSP technology provides very low cost steam for existing power plants and industrial processes. In those markets, PV obviously does not compete at all. And it is a very big market for CSP,” Goyal adds.

AREVA’s compact linear Fresnel refl ector (CLFR) technology is just one of the technologies in the CSP family, and it is relatively new. Most plants were built using parabolic trough technology. “We took the parabolic trough concept and saw we could reduce the cost by using the Fresnel concept where you split the parabola into thin strips of fl at glass. With the lower cost of the fl at glass combined with other improvements in the system, you get the same e•ect but at a much lower cost.

“We also made enhancements to achieve steam conditions that were higher and better,” Goyal adds. “It is a direct steam based system. We are able to achieve superheated steam that’s higher pressure and temperature than what you can get from a parabolic trough system. But it still uses very common components which hold down the cost. And it uses less land while increasing e• ciency.

“A standard CSP plant typically needs 5 to 6 acres per MW. Our technology uses about 3.5 acres per MW for a stand alone plant, and only 2 acres per megawatt for a process steam application. Another benefi t CLFR technology brings is using dry cooling extensively, which reduces the water consumption of a normal water cooled system by 90%,” Goyal explains.

“We’re building a 44 MW solar booster project for CS Energy’s 750 MW coal-fi red power station in Queensland, Australia. The largest solar/coal-fi red power augmentation project in the world, the Kogan Creek Solar Boost will increase power output with solar-generated steam, avoiding approximately 35,600 metric tonnes of CO2 per year. The project is under construction and will be online in 2013,” Goyal says.

In the USA, Tucson Electric Power (TEP) is partnering with AREVA Solar on a CSP addition to TEP’s H. Wilson Sundt Generating Station in Tucson, AZ. Construction of the

Sundt Solar Boost is scheduled to begin in the spring of 2012, and the project is expected to be operational by early 2013.

“It is a sad reality though, that many CSP developers are having diffi culty fi nancing their projects. It pays to have a partner like AREVA who is fi nancially strong. The combination of a very lean design and strong position are leading to our success in the CSP market. We keep it simple, reliable and backed by very strong guarantees,” Goyal adds.

DoE speaks up The US Department of Energy (DoE) recently announced a US$20 million CSP-specifi c solicitation. “The US DoE SunShot programme embraces PV and CSP with equal intensity,” Ramamoorthy Ramesh, Director of the SunShot Initiative, says. “Looking at today’s cost structure, they are basically the same at approximately US$0.15-0.18/kWh. There is no reason why going from a photon to an electron is any di•erent than photon to thermal energy.”

At utility-scale, Ramesh says that CSP has a lot of advantages, especially with thermal storage, which PV does not have. “But, essentially these are two fairly equal siblings. When we started SunShot in January 2011 we made the commitment that we will have good investment in both areas and we do,” he says.

CSP’s edge: Storage Ramesh notes that when the sun is shining PV works very well, but every time a cloud passes, electrical output is reduced: “You can’t have e•ective utility-scale PV without some kind of backup. You could have a 50% change in energy output using only PV which is something that utilities are very concerned about, and rightfully so.

“On the other hand, with solar thermal which is what CSP is, you convert the energy from sunlight into thermal energy – molten salt for example, which is stored at ~800°C. This can’t be stored indefi nitely, but it can easily be stored for 4-8 hours. It is like having a big bank account that gives you a huge nest egg to keep in the background if you need to use it. But you don’t touch it unless you have to. Not all older CSP plants have storage, but all modern ones do at various levels. Storage is important. In our PV programme we are pushing R&D activities to develop methods of energy storage for that solar platform too,” he adds.

“You can’t even compare PV to CSP because if you put in the storage, the capacity to generate power jumps 40-50% immediately for CSP. For PV without storage, it is only 1820% which is the normal amount of electricity you can generate from the panels,” he adds.

“But, even that said, you have to keep in mind that the cost of doing CSP is very di•erent from the cost of generating power from PV or CPV because CSP is, and always has been, geared to the large utility-scale – the hundreds of megawatts.”

“CSP can also fi t into other areas. Hybrids are the next generation. Natural gas utility plants can take advantage of CSP. The same goes for clean coal. This can boost the electricity to overcome fl uctuations in power generation without adding emissions issues.

These are very alive and very vibrant topics,” Ramesh says.

Getting costs down When DoE talks about all technologies, its language is now shifting across the board to ‘levellised cost’ of approximately US$0.06/kWh for all types of solar, including installation and ongoing maintenance. According to Ramesh, PV currently has the same levellised cost and the same parity as CSP. “So the question is not who is cheaper right now. Nobody has

yet attained the operating levellised cost of US$0.06/kWh. The question is who will get there by 2020?”

Pratt & Whitney Rocketdyne (PRW), the Canoga Park, CA, fi rm best known for the development of rockets that took us to the moon and beyond, is currently working on creating better and lower cost thermal storage and delivery for CSP plants. “Our technology makes CSP much more competitive in cost, with higher value power that can be dispatched when needed,” Randy Parsley, Programme Area Manager of PWR’s Renewable and Alternative Energy division, says.

It is a molten salt technology, but said to be of a much higher standard than any other that is being tested in labs worldwide today. It is not merely the drawing board dream, but is being installed in a power plant currently under construction – the SolarReserve/PWR partnership project in Nevada, USA. The plant has broken ground and is set to be producing power by December 2013.

The salt is heated to 550°F, it transforms into a liquid that looks and behaves somewhat like water, except it remains a liquid at low pressure to over 1050°F, at which point it creates high-temperature steam, which drives a more-e• cient, standard steam generator.

“In the receiver, the sun’s concentrated solar power heats the liquid salt to over 1050°F. That is the key. That is where Pratt & Whitney Rocketdyne has the knowledge and expertise because of former applied aerospace and rocket technology. That’s the di• cult part of the design,” Parsley explains.

It is a completely closed loop system and requires little or no replenishment. Parsley says that the salt does not ever change its basic composition: “Salt does not ever change its phase from liquid to gas. It’s pure liquid salt at 550°F and when it is heated to 1050°F, it is just the same liquid salt – only hotter. Also, since there is no phase-change, there is no significant change in pressure or volume of the salt. This allows overall system pressures that are much lower. You just use the same salt over and over, every day, 365 days a year.

“By simply optimising the solar fi eld for more storage, enough energy can be stored to easily run all the way through the night without the sun. That is our expertise. That’s the technology we exclusively licensed to our customer, Solar Reserve,” Parsley adds.

Along with its receiver and heat control technology, PWR supplies the software and control system for the collector field.

Commenting on PWR’s technology, Solar Vision’s Skumanich has to admit that if Rocketdyne can prove its technology with this installation over the course of the next few years, and the costs really do look lower, this will breathe new life into CSP. A dual perspective SCHOTT Solar is both a PV panel and CSP component manufacturer, and can therefore o• er a unique insight into the PV vs. CSP question. Casey Gutowski, Vice President, Sales & Marketing, says: “The global market continues to move toward a diversified energy portfolio. We believe both PV and CSP play a significant role in that portfolio.”

On the PV side, SCHOTT Solar produces c-Si solar modules at its Albuquerque, NM, USA, facility. At the same location, the company produces what is considered the heart of the CSP solar plant – the parabolic trough receiver (PTR).

The SCHOTT PTR features coatings on both the inner steel tube and the outer glass envelope that allows the receiver to absorb and trap as much sunlight as possible. Because

the receivers operate at very high temperatures (400°C/ 750°F) the coatings are key to high plant operating e• ciencies and to keeping heat loss at a minimum.

Gutowski says: “Our goal is to work with the industry to drive costs down, and very small improvements yield very big gains. A recent example of a product improvement to the PTR receiver is a new coating that is being used for the SCHOTT PTR 70, which increases the absorption rate of the receiver to over 95.5%. At the same time, the emission level of the heat radiation sinks to under 9.5%, which increases the overall e• ciency of both the receiver and the solar field. These improvements directly result in reducing the energy production cost to the end user. Plants with SCHOTT Solar CSP receivers include the Andasol CSP plants in Spain and Nevada Solar One in the USA. CSP to rise again Gutowski concludes: “The global market demand for CSP has increased significantly in the last few years, with specific focus on the US and Spain, both set in motion by specific incentives from the governments. We are also seeing new markets developing, in the MENA region, Southeast China, India, South Africa, and Australia.”

DAE chief: India can make world's cheapest N-reactors

Indrani Bagchi | May 1, 2012, 05.12AM IST Now, India can build cheaper nuclear reactors, than even South Korea.

MUMBAI: Now, India can build cheaper nuclear reactors, than even South Korea. Talking to TOI on the eve of his retirement, Dr Srikumar Banerjee, secretary in the Department of Atomic Energy (DAE), said India can now manufacture nuclear reactors at $1,700 per unit.

Come May, Banerjee will make way for Ratan Sinha, currently director of Bhabha Atomic Research Centre (BARC), who will take over as secretary, DAE. "We are now the world's most economical manufacturer of nuclear reactors. Our cost per unit, of $1,700 (for a 700mw reactor) is substantially less than our nearest competitors. The average international cost is now between $2,500 and $3,000 (for a 1,000mw reactor).

South Korea demonstrated its ability to build nuclear reactors for less when it wrested a massive reactor deal for the UAE from French giant, Areva, a couple of years ago.

With the protests in Kudankulam piping down, Banerjee said DAE was waiting for a couple of clearances from the Atomic Energy Regulatory Board (AERB) to start Kudankulam-1.

The AERB will have to conduct a robotic inspection of the pressure vessel in the Kudankulam plant. This is done after what they call the "hot run", which is a kind of a rehearsal but without nuclear fuel. "After this, they open the cap of the pressure vessel to do a robotic inspection. Only after clearing this inspection are we allowed to put in nuclear fuel," said Banerjee.

Desalination: new frontier for renewable energy?

WATER SYSTEMS around the world are under increasing pressure due to demands from continued industrialisation and urbanisation; growing populations; and increasing pressure on agricultural systems. This is driving the early stages of a revolution in the technologies

and business models used in the water industry. Desalination is already part of this mix, but could the technologies’ high demand for energy open up a new market for renewable energy technologies?

About: Ilian Iliev works for CambridgeIP. He is a serial entrepreneur and economist. Ilian has a wide experience in IP and technology strategy, innovation policy and innovation fi nance.

About: Helena van der Vegt is a Senior Associate with CambridgeIP and leads on projects in the energy and cleantech fields. She has worked with multinationals, SMEs, start-ups and public sector organisations, providing advice on R&D and IP strategy throughout technology and innovation lifecycles.

Demand for water is increasing rapidly. Some forecasts foresee €400-€500bn of investment per annum - just to keep up with this growing demand.

Seawater desalination will form an increasingly important part of coastal water systems (where much of the population growth takes place) as an abundant source of water. And this is already happening: In recent years the use of desalination technologies in extracting potable water from seawater has spread beyond the a• uent and desert-surrounded locations in the Middle East - and a few locations in California and Australia - to major population centres in Southern Europe, India, East Asia and Africa.

In Southern Europe for example, Barcelona, Malta and Cyprus already source the majority of their potable water from desalination treatment plants, while recent investments in Israel have seen more than half the country’s water supply come from desalination sources.

Meanwhile, a desalination plant launched in 2010 in Chennai, India provides potable water for 2.5 million people.

What is the link to renewable energy?

The key challenge to deploying desalination is in the cost of energy required. The current leading desalination processes require large amounts of energy to either boil seawater (MFS technology), or push it through sophisticated membranes (RO technology). It is estimated that 28%- 50% of the total cost of running a seawater desalination facility is due to electric power useage, according to the WaterReuse Association (see http:// www.watereuse.org/sites/default/fi les/u8/ Power_consumption_white_paper.pdf) .

Traditionally desalination plants have been powered by fossil fuels, either directly drawing energy from the grid, or co-locating the plants close to coal- or natural gas-powered plants.

It stands to reason that the global scale up of desalination technology driven by the use of fossils as the primary fuel source is both extremely expensive — leading to una•ordable increases in water cost to societies — and highly polluting.

For instance in the United Arab Emirates (UAE), up to 3.5% of the total electricity produced goes towards desalination. And continued increases in power generation capacity are needed to keep up with the growing water demands of its growing population – not to mention industrialisation. While thus far increased desalination electricity requirements have been met with natural gas power, the investment and running costs are increasing

rapidly. In Abu Dhabi alone the annual cost of building, maintaining and operating desalination plants is due to reach US$3.22bn by 2016 (see http:// www.emirates247.com/business/economy fi nance/uae-desalination-plant-spending-to jump-300-2010-10-12-1.302849) .

So could the powering up of desalination plants with renewable energy sources be a logical next step in the development of seawater desalination? Until a few years ago the high cost of renewable energy and the energy ine• ciency of the available desalination technologies made such integration unfeasible on a large commercial scale, even though it may have been possible on a smaller scale (island developments for example).

Yet in recent years, solar and wind power costs have come close to grid-parity precisely in some locations where seawater is plentiful, and frequently where there is a freshwater shortage. At the same time, continued innovation in desalination technologies is contributing to the improved e• ciency of desalination processes.

Research over the past two years – undertaken by CambridgeIP - has shown steady progress in making the desalination technologies more energy e• cient, as well as increasing the maturity of direct integration technologies (see box – About CambridgeIP).

Evidence of innovation and implementation The integration of desalination processes with energy sources can be divided between those: Using mechanical power - for instance solar heat or industrial processes waste heat; or pressure from wind or wave power (so called direct integration), and; Using electricity generated from renewable sources to power the desalination plant (or ‘indirect integration’).

In both these areas we have seen a steady acceleration of inventive activity and deployment of technologies, as follows: Industrial processes integration A number of companies have developed desalination technologies intended for direct integration with solar or waste heat using low-temperature thermal processes - such as multi-e• ect humidification (MEH) or solar multistage condensation evaporation cycle (SMCEC).

For instance US-based Altela Inc. has a modular o•-grid product operating on solar thermal energy or waste heat. Examples of its application to date include the treatment of waste water from shale gas extraction.

Other companies such as Germany’s TerraWater and France’s TMW are developing similar systems for integration with solar thermal and waste heat energy.

Solar PV integration Meanwhile, Swiss-based SwissInso has developed a solar-powered Reverse Osmosis (RO) water purification system capable of producing up to 100m3 p/day of pure drinking water from brackish water or seawater (see http://www.swissinso.com/en).

The system has been deployed in rural or remote o•-grid locations in West Africa and the Middle East, and can integrate o•-the-shelf solar PV and Reverse Osmosis technologies.

The container-based product is modular and mobile, and contains all the necessary components on delivery that can be assembled locally. It also contains a back-up diesel generator in case of solar PV failure or insufficient power.

And a research collaboration between MIT and King Fahd University in Saudi Arabia has developed a modular Solar PV - RO unit, which can be used in emergency relief operations or at the household level.

Wind power integration Both Aerodyn and Enercon have in the past developed integrated wind energy and desalination units. The unit developed by Aerodyn works on mechanical vapour compression (MVC) technology, using the kinematical energy of the wind turbine directly to drive the compressor of the evaporation desalination plant. And Germany-based engineering company Synlift Systems has implemented pilot wind-powered desalination units in the Gulf region, which integrate o•-the-shelf wind turbines and RO desalination technology.

Wave power integration The Australian wave energy company Carnegie Wave Energy Ltd has combined its wave energy technology with RO desalination by using the pressure generated from wave energy to drive the RO process. Carnegie’s CETO 3 wave energy product has been shown to deliver sustained pressures capable of driving seawater reverse osmosis for commercial scale plants.

Future technologies In addition to the technologies mentioned above, there are also a number of other desalination technologies under late stages of development which, once implemented, could be natural partners for renewable energy sources, and could even transform the economics of desalination. For instance, the crossover of membranes with nanotechnology is resulting in membranes that are more efficient and more durable, leading to further efficiency gains in RO desalination.

Looking even further afi eld, companies such as Canada-based Saltworks is looking to altogether more novel desalination processes that could result in up to 80% less energy requirement. Saltworks’ patented technology is based on the concentration di•erence

between salt water solutions through a thermo-ionic process. Building from electrodialysis, Saltworks’ stack uses ion exchange membranes to separate solutions and transfer salt (see http://www.saltwork stech.com/press_20110614.php ). Low temperature waste heat from solar can help drive the system, but the system harnesses energy captured in concentrated salt solutions to initiate salt transfer.

Saltworks has already delivered a remote operated desalination unit to the Canadian Department of National Defence. And the technology will soon be tested by NASA Ames Research Centre, with hopes that it could be used on board the International Space Station (ISS) (see http:// saltworkstech.com/media.php ).

Conclusion The integration of renewable energy with desalination could transform the economics of water supply in coastal areas. This is already happening for remote/o•-grid and “waterpoor” island locations.

And while potable water is the primary usage of desalination, lowcost, sustainably-powered desalination raises the prospect of supporting agricultural development in previously unarable regions (such as through micro-irrigation), as well as improving the sustainability of water-intensive manufacturing operations such as in food and beverages. This also provides renewable energy technology and project companies with a growing market niche, where the economics may be better than that of the mainstream electricity market, and which could allow market entry into the value chain of major industry players.

Source: Online: renewableenergyfocus.com

Figure 2: Number of patent families over time for desaliantion technologies and their integration with renewable energy In recent years the use of desalination technologies in extracting potable water from seawater has spread beyond the a• uent and desert-surrounded locations in the Middle East - and a few locations in California and Australia - to major population centres in Southern Europe, India, East Asia and Africa (image shows plant in the Caribbean).

HSE, CLIMATE CHANGE & SUSTAINABILITY Climate Change

EU shifts climate change targets again

NEW DELHI: The EU has shifted its goalpost for climate change again, unilaterally seeking talks on a new global protocol from this year that puts India and other developing nations at par with developed world. Ironically, the new condition, if implemented, will exempt Europe from divulging its targets for emission reduction in violation of the existing Kyoto Protocol.

Significantly, it will make the Kyoto Protocol's second phase - slated to start from next year - redundant. Also, it will compel India bring binding commitments to reduce emissions by as early as 2015.

Predictably, the move has found support from EU's tactical allies in climate talks - the Association of Small Island States (AOSIS) - but has been opposed by China, India, Brazil and other larger developing countries. The EU had fought hard with India and other emerging economies at Durban last December to accept a middle path about a new global agreement to be implemented by 2020. In lieu, the EU was required to, along with other developed countries (except for the US), to commit to targets to reduce their emissions under the second phase of Kyoto Protocol.

India, however, objected to deciding upon the legal form of the new post-2020 arrangement, even before key issues of equity and 'common but differentiated responsibilities' could be finalized. Now, the EU has demanded that a draft protocol be put on the table that would break the firewall between the responsibilities of rich and developing world to reduce global greenhouse gas emissions. The differences among EU, AOSIS and rest of developing world is expected to turn the upcoming Bonn talks into a bitterly argumentative affair.

Indian climate negotiators pointed out that EU's demand would leave the question of

existing commitments by rich world on finance and technology transfer as well as emission reduction in limbo, forcing the world at large to dump equity and move to a new regime, where greater and costly responsibilities will have to be borne by bigger developing economies. Earlier, India had stated to UN that it would not accept any new global deal till countries agree to a formula to implement the principle of equity, which forces developed world to own up to the accumulated emissions in the atmosphere and not distribute the residual space among all nations.

Emotions and climate change

By Varun Dutt May 17 2012 Tags: Op-ed These days, the media showcases climate change with negative consequences in the near future. Some non-governmental organisations go even further, emphasising the risks by declining to mention the uncertainties involved. Of course, such an approach is likely to evoke strong reactions in audiences, including fear of worst-case climate change scenarios and even heightened interest in what can be done to avoid them. Recent research shows that, although, such emotional appeals are likely to work in the short run, they are likely to backfire in the long run, producing biases and emotional numbing.

Social science researchers have discovered that people, even those who might be described as “worrywarts”, have a limited capacity for worrying about issues. Scholars refer to this limited capacity as a finite pool of worry, and it has four main components that apply to the issue of climate change. First, because people have a limited capacity for how many issues they can worry about at once, as worry increases about one type of risk, concern about other risks may lessen. In other words, people tend to pay more attention to nearterm threats, which loom larger than long-term ones. For example, as anxiety mounted in 2008 and 2009 over the faltering economy, polls showed that many people realigned their list of concerns. The economy vaulted to the top of the list, while environmental issues and climate change fell to the bottom. A recent poll showed that climate change ranked the last among the public’s list of top policy priorities.

Second, studies show that appeals to the emotional system may work to get someone interested in an issue in the short term, but, it is hard to retain that level of interest over the long term. Unless, they are given reasons to remain engaged, people’s attention easily shifts to other issues. Third, studies also show that the effects of worry can lead to emotional numbing. This numbing occurs after repeated exposures to emotionally-draining situations and is a commonly observed reaction in individuals living in war zones or dealing with repeated hurricane threats in a short period (for example, residents of Florida). The danger of overexposure to threatening issues is especially high given the modern media environment, where people confront a puzzling number and diversity of emotional experiences every day, ranging from news stories to sensational movies.

Fourth, in response to uncertain and risky situations, like those posed by environmental issues, human beings have a tendency to focus and simplify their decision-making process.

Individuals responding to a threat are likely to rely on one action, even when it provides only incremental protection or risk reduction and may not be the most effective option.

People often take no further action, presumably because the first one succeeded in reducing their feeling of worry or vulnerability. This phenomenon is called the “single-action bias”. A recent study at Columbia University found that, to adapt to climate variability, many farmers in Argentina engaged in only one activity to protect against the impact of drought on their livelihood, despite having numerous options available to them. For instance, farmers who had the capacity to store grain on their farms were less likely to use irrigation or crop insurance, although, these measures would have added up to even greater protection against the impact of drought.

A recent Gallup poll may have found evidence of a mass single-action bias among US residents: The recent election of president Barack Obama seems to have shifted Americans’ attitudes about whether or not the state of the environment is improving. Nate Silver, of the polling blog, http://fivethirtyeight.blogs.nytimes.com, argues that Democrats increasingly believe the environment is improving simply based on Obama’s election, whereas, the number of Republicans who say the environment is improving has remained about the same since 2008.

Given the several problems associated with excessive reliance on emotional appeals, there are a number of suggestions for attracting public attention to climate change. Climate change communicators need to decide what portfolio of risks they want to make the public more aware of and then demonstrate the connection between those risks; for example, the relationship between climate change and disease.

Communicators could also balance emotional and experiential information that trigger an emotional response with more analytic information to leave a mark in more than one part of the brain. Given that people tend to focus on urgent and pressing issues, communicators could acknowledge that their audience, indeed, has other pressing issues, thereby, creating a balance between pre-existing concerns and the climate change issues to be discussed.

Effective communication also needs to gauge an audience’s degree of numbing.

Lastly, an important step toward reducing single-action bias is the use of checklists.

Effective climate communication could provide energy-saving checklists that people can place in a prominent spot in their home or office. The checklists will remind and encourage people to go beyond just one climate action. More people could take a diversified approach as a result. varundutt@mydigitalfc.com

Himalayan forests at greater risk from climate change

10 May, 2012, 07.13AM IST, The writer has posted comments on this articlePTI NEW DELHI: Climate change will be an additional stress on Indian forests, especially in upper Himalayan stretches, which are already subjected to multiple challenges including over-extraction, livestock grazing and human impact, a government report said here on Wednesday.

India's second National Communication to the UN Framework Convention on Climate Change, released by environment minister Jayanthi Natarajan said that the assessment of climate impacts showed that at the national level, 45 per cent of forested grids are likely to undergo changes. In the report, a digital forest map of the country was used to determine spatial location of all the forested areas.

This map was based on a high-resolution mapping, wherein the entire area of India was divided into over 165,000 grids. Out of these, 35,899 grids were marked as forested grids along with the forest density and forest types. Vulnerability assessment showed that sensitive forested grids are spread across India. "However, their concentration is higher in the upper Himalayan stretches, parts of Central India, northern Western Ghats and Eastern Ghats," said the MoEF report towards fulfillment of reporting obligation under the convention.

Sea, sand and survival....

N. Shiva Kumar, Head Corporate Communication, IndianOil-R&D, Published: The HINDU, April 29, 2012 ENVIRONMENT: The east coast is currently witnessing the birth of millions of olive ridley turtles. Only one in every thousand survives to adulthood Last fortnight the Indian east coast was witness to three dramatic ‘hiccup events' in the world. While two grabbed world headlines, the third event went unnoticed. The first was a traumatic tsunami scare; the second was launch of Agni-V and the third was the birth of about ten million tiny turtle hatchlings.

Under the protective cover of darkness, beaches in Ganjam district of Odisha suddenly came alive. On ground zero at Rushikulya rookery, thousands of mini landmines softly implode with newly hatched Olive Ridley Turtles. Akin to the ICBM expulsion at Wheelers Island in Odisha, tiny turtles literally launch themselves out of the sandy situation. Buried securely in the earth by their respective mothers, the turtle eggs spend 45 days incubating and growing. Once they are fully developed replicas of their parents, it is time to escape from the hidden nurseries. Bale -- the collective word for turtles -- tumble and fumble out of each pit as the countdown begins when the weather is conducive. The flush of mass emergence of baby turtles was noticed between April 16 and April 24. Thereby starts the tale of the bale of turtles which roam the oceans without touching land for 20 years until maturity.

In recent years, pristine beaches near Rushikulya river mouth have emerged as the main nesting grounds for the endangered Olive Ridleys. The other major nesting site is Gahirmatha sanctuary close to the Bhitarkanika National Park. Strangely, the sea turtles have stopped laying eggs at another location near the Devi river mouth. While Odisha is the most preferred location, there are many nesting spots across the Indian coast stretching from Gujarat, Maharashtra, Goa, Karnataka, Kerala, Tamil Nadu and Andhra Pradesh. However, the egg laying is a minimalist affair. This synchronized egg laying in Odisha called “Arribada” is a wonder of nature and continues to be a mystery. Mr. B.C. Choudhury, an authority on turtles at the Wildlife Institute of India (WII), explains, “Turtles

often migrate great distances between feeding and breeding grounds. They only assemble to breed and brood at favourable locations.”

The odyssey of endurance for the baby turtles begin right from the day mother turtle sheds her burden of gravid eggs into flask shaped pits. Due to inclement weather and oceanic conditions this year, thousands of underground eggs were washed out by the hungry tides.

“Nearly 40 per cent of the eggs laid were lost to the wanton waves of the mighty ocean.” says Mr. Rabindranath of Rushikulya Sea Turtle Protection Committee (RSTPC). But all is not lost as these eggs become food and are gobbled by land and sea creatures. Forest officials and turtle lovers managed to collect some of exposed eggs and reburied them in ‘sandy incubators'.

Emerging from the cozy comfort of the eggshells, baby turtles, as if on cue burst into the open. About 70 odd turtles emerging from their little prisons are a sight to behold as they ‘swim' out of the loose sand.

Like all young ones, they take in the first breath of fresh air and look around only to see total darkness. They resemble adult turtles but lack the hardness of the protective shell.

Equipped with a baby blue dry skin they initially toddle around to get their bearings right.

Though they seem lost, their inborn instinct makes them head straight to the sea and not the other way. Wildlife experts explain that in total darkness they initially rely on two senses.

They smell the salty sea breeze and importantly the white surf glistening on the crest of rolling waves act as a beacon. This prompting is enough for them to head straight into the cool sea waters and realise they are home. Equipped with paddle like hands and legs, swimming comes easy to the tiny turtles.

The need for speed is there in all the turtle babies, but not all are lucky in the seaward march as they face innumerable adversaries. Turtles need to cover at least 100 to 200 meters to reach the security of the sea. Meanwhile, hungry predators like jackals, feral dogs, eagles, gulls, kites, crows, mongooses are all waiting for turtle morsels. If that is not enough, turbulent seas, drowning and even dehydration can take its toll on the hapless new born. Scientists have deciphered that only one in every thousand survives to adulthood.

That is a colossal waste in human terms but nature has its own way of dealing with challenges. Hence innumerable eggs are laid so that only healthy turtles can roam the seven seas. naturenib@gmail.com Keywords: Olive Ridley turtles, Odisha coast,

Greening the white water Hydropower vs environmentalists in India's hills …..Business Standard / New Delhi May 14, 2012, 00:23IST The green bench of the HimachalPradesh High Court has ordered Jaiprakash Associates Ltd to dismantle thethermal power unit at the company’s cement plant campus in Bagheri, nearSolan (Himachal Pradesh), and also pay Rs 100 crore as damages for obtainingenvironmental clearance in a “dubious” manner. The bench, moreover,turned down the company’s plea that, since the thermal plant was alreadyfunctioning, it should not be demolished. Though this judicial decree ispath-breaking in some respects, instances of

companies being asked to shut downtheir running units on ecological considerations are not that rare any more.Not too long ago, the Supreme Court barred the French multinational Lafargefrom supplying limestone from Meghalaya to a cement plant in Bangladesh onenvironmental grounds. The Supreme Court’s forest bench took exception totribal land in the East Khasi Hill District being transferred to the Frenchcompany, and ordered mining to be stopped. This apart, several mining projects– particularly for coal and iron ore – have of late been asked tocease operation due to ecological issues.

The economic ramifications of such movesare considerable. Yet, compromising environmental protection for mining, powergeneration or similar activities is quite unacceptable, especially if thethreats outweigh the gains. Of particular concern are cases – which,sadly, are numerous – in which the mined area is left without eitherpost-project stabilisation or the restoration of green cover. Many rememberwith horror the colossal damage inflicted by indiscriminate lime-quarrying onthe hill slopes around Mussoorie in the 1970s and 1980s. Miners would leave thevulnerable mountains bare and barren, not only ruining the much-admired greencanopy of the slopes, but also threatening the region’s rich biodiversityand jeopardising the very existence of Mussoorie town. Elsewhere, the increasedsoil erosion from the surrounding, naked hills caused rapid sedimentation ofthe water bodies downstream, posing grave risks to the survival of the famedSukhna Lake, near Chandigarh. Judicial intervention had to be sought to stopquarrying and replant protective vegetation to conserve soil and stabilise theregion’s topography.

However, given the enormous potential forgenerating hydropower in the Himalayas, speedy environmental scrutiny of hydelprojects is critical. The Himalayas are known to be geologically young,unstable and earthquake-prone. Many companies besides Jaiprakash Associates areinvolved in constructing hydropower plants in the hill states.

Environmentalactivists have exaggerated the risks of these projects in the past and willcontinue to do so. Clearly, stoppage of all development activities, as most ofthem would desire, is impractical and unwise. Instead, regulation must beclearly and quickly enforced, and the projects implemented must be lightweightand low-cost. That’s particularly easy for the hydropower sector, inwhich small and micro power projects neither consume too much water norgeologically disturb native rock formations. The court’s action onJaiprakash Associates should serve as a warning that larger projects should beparticularly careful in conforming to the letter and spirit of environmentallaw. The political climate has turned against aggressive exploitation ofnatural resources by private corporations.

EPA teams up with NASCAR to promote green initiatives

Posted on May 22, 2012 at 11:22 am by Dan X. McGraw in Environment, Environmental Protection Agency NASCAR fans get ready for the EPA. The Environmental Protection Agency is teaming up with NASCAR to promote its green initiatives to the sport’s rabid fan base and businesses.

Jim Jones, the EPA’s acting assistant administrator, said the agency will get a bigger audience through its partnership with NASCAR to talk about green initiatives and products.

“Because NASCAR is followed by millions of passionate fans and many businesses, it can be a powerful platform to raise environmental awareness, drive the adoption of safer products by more Americans and support the growing green economy,” Jones said.

The agency hopes to promote its “design for the environmental” labels, which are products that perform well, cost-effective and are safer for the environment.

The agency also hopes to raise attention to its E3 tuneup that advocates for increase productivity, reduce the use of energy and lessen environmental impacts.

Finnish tax on low-CO2 energy could undermine ETS

28 Mar 2012 15:20:58 | edcm ICIS The European Commission is keeping an eye on the development of legislation in Finland that will tax low-carbon energy installations to offset the economic advantage they hold over polluting competitors covered by the EU emissions trading system (ETS). Finland's finance ministry will levy a tax against hydroelectricity and nuclear plants from 2014, hampering their advantage over fossil fuel-fired competitors, which must pay for 100% of their emissions from next year through the ETS. The mooted levy, dubbed a "windfall tax" because it penalises some companies for their profitability, is still at an early stage of development. It was due to come into force next year but implementation has been pushed back to allow the Finnish government to consult on potential tax models (see EDEM 26 March 2012).

Commission experts are in touch with Finland on the matter, and the Commission - the EU institution in charge of the ETS - is likely to look into the matter when it receives official notification of the legislation. It is unclear at this stage if the tax is contrary to the letter of ETS law, but it directly contradicts the spirit of the scheme, which aims to incentivise lowcarbon energy. The government's plans are opposed by the Finnish energy sector's representative body, which believes the ETS should be the "key instrument for the industry to ensure decarbonisation".

"The windfall tax is totally contradictory with the idea of the ETS," said Pertti Salminen, director of international and EU affairs at Finnish Energy Industries. "The basic idea of ETS is to give advantage to the non-emitting energy sources, not to punish them for that advantage," said Salminen. In 2010, the most recent year for which ETS data is available, Finland's energy sector was 6m carbon allowances short, emitting 27m tonnes of CO2 and receiving 21m allowances free.

However, under the rules of phase III of the EU ETS 2013-2020, energy companies will receive no free allowances and will have to buy carbon permits to cover 100% of their emissions at auction or on the secondary market. VF/CR

European Commission loses appeal over Polish carbon allowance cap

29 Mar 2012 18:48:16 | edcm Poland's victory over a European Commission move to cap its emissions allowances quota was confirmed on Thursday by the European Court of Justice (ECJ). The Commission appealed a 2007 ruling where it was found to have exceeded its powers when it imposed a

ceiling on the number of emissions allowances for Poland and Estonia for phase II of the EU Emissions Trading System (ETS) in 2008-12.

The decision confirmed the annulment of restrictions for EUA quotas placed on Poland and Estonia, which will impact the supply of allowances in phase III of Kyoto from 2013 onwards. The ECJ held that the commission had failed to comply with the "duty to state reasons" in relation to Poland and had not provided "sound administration" with respect to Estonia. A spokesman for Polish environment minister Martin Korolec said the decision confirmed that Poland had taken the correct course of action. "We are reluctant to use this form of 'discussion' with the Commission but sometimes there is simply no other way to defend your rights."

Six European countries challenged the Commission over its phase II National Allocation Plans in the ECJ, seeking to have the Commission's decision annulled.

The Commission reduced Poland's annual EUA quota by 26.7% and Estonia's by 47.8% on the basis that the countries' plans did not confirm to several criteria laid down in the directive. The ECJ concluded that member states have some room to manoeuvre when transposing the directive and were allowed to select those measures that were most appropriate.

Last November an ECJ advocate-general issued an opinion in favour of Poland and Estonia (see EDEM November 17 2011).

Is Arctic rush worth it?

Author(s): Richard Mahapatra DOWN TO EARTH magazine Rising temperature and melting Arctic ice are changing global geopolitics. Oil, natural gas, minerals and fish—there is enough of these trapped under the melting sea ice to satiate the world’s growing hunger. Receding ice caps are opening up new sea lanes, making the exploitation easier. The eight nations surrounding the Arctic Ocean are in a frenzy not to let go of even an inch of their territory. The newfound resource is also attracting distant players like India and China. But is the melting of the Arctic as promising as it seems? It has been under permafrost for ages. No one knows how human activity will affect its pristine ecology.

Scientists warn that locked in its permafrost is twice as much carbon as in the atmosphere.

Freeing up of this carbon and access to more hydrocarbons will accentuate global warming, causing a domino effect. Is the world being complacent about the warnings?

Richard Mahapatra finds out The 80,000-odd tourists heading for the North Pole this summer are likely to witness a changing topography: icebergs crumbling into the sea, ice shelves floating away and freely navigable sea lanes that remained icebound just five years ago. Rising global temperature is melting Arctic sea ice, making a piece of the planet accessible for the first time in living memory. On their way the tourists would often encounter cargo liners on exploration missions—each clearing the way for future routes to exploit the frozen pole. These cargo liners herald the intense competition to grab the abundance of natural resources that lie under the melting sea ice. Whether the tourist is from far away India, China or Singapore,

he or she will be able to gauge the future economic and political impacts of the disappearing ice caps on his or her respective economy.

Recent scientific studies confirm that the Arctic is warming twice as fast as the rest of the globe. The period between 2005 and 2010 was the warmest since record keeping began in 1840. In September 2011, at the height of its summertime shrinkage, ice caps covered 4.33 million square kilometers of the Arctic Ocean. This, according to the US National Snow and Ice Data Center (NSIDC), was a 50 per cent drop from the average sea ice cover between 1979 and 2000.The Arctic is also getting thinner and younger. Its thicker, older ice caps that have formed over several years and were able to survive through the summer melt season are increasingly being replaced with ice that accrues over the winter every year and then melts away. This makes the Arctic more vulnerable to global warming. By the reckoning of NSIDC, only five per cent of the Arctic ice caps were over five years old last summer. In the early 1980s as much as 40 per cent of the Arctic sea ice was over five years old. The Intergovernmental Panel on Climate Change (IPCC) in 2007 estimated that the Arctic will have an ice-free summer by the end of this century. A few recent studies predict that this may happen as early as 2030-2040. But no one can say for sure. What everyone is sure about is summer now comes early and stays longer.

“This is a very fast, profound and dramatic change in the earth system. It has significant consequences for the world,” says Vladimir Ryabinin of World Climate Research Programme. The Arctic’s vast reservoirs of fossil fuel, fish and minerals, including rare earth materials, are now accessible for a longer period. But unlike Antarctica, which is protected from exploitation by the Antarctic Treaty framed during the Cold War and is not subject to territorial claims by any country (see ‘Poles apart’), there is no legal regime protecting the Arctic from industrialization, especially at a time when the world craves for more and more resources. The distinct possibility of ice-free summer has prompted countries with Arctic coastline to scramble for great chunks of the melting ocean. The scrambling pales the Gold Rush of the 19th century in its scope and degree. Of the eight Arctic nations—Russia, Sweden, Norway, Iceland, Denmark (Greenland), Finland, Canada and the US—several have explored the Arctic waters and found over 400 oilfields with proven reserves of around 240 billion barrels of crude oil and natural gas. This is about 10 per cent of the world’s known hydrocarbon reserves. They have also discovered significant deposits of various minerals on the seabed. New reserves will be available with further melting of the polar sea ice. The US Geological Survey estimates that the Arctic holds up to 20 per cent of the world’s unexplored hydrocarbon reserves, with potential oil reserves of 90 billion barrels, natural gas reserves of 47.3 trillion cubic metres and gas condensate reserves of 44 billion barrels. Around 80 per cent of these new discoveries are likely to be found offshore at an easy depth of 500 metres.

As a bonus, the vanishing ice also opens up two new faster shipping routes that sharply reduce the distance between Western countries and Asia by connecting the Pacific and Atlantic oceans. These are the Northwest Passage along the northern coast of North America and the Northeast Passage along the Siberia coast (see map). The Northwest Passage will reduce the distance from US’ Seattle port to Rotterdam in the Netherlands by almost 25 per cent compared to the current route via the Panama Canal. The voyage from Rotterdam to Yokohama in Japan via the Northeast Passage will be 40 per cent shorter

than the traditional Suez Canal route. Explorers had long sought these trans-Arctic passages as possible trade routes. With fast-rising global temperatures, if, as some scientists predict, these passages become navigable round the year in the coming decades, they could redraw the global trading routes. Shipping routes will shift from politically unstable regions like Western Asia and piracy-infested routes like the South China Sea, the Malacca Straits and the Gulf of Aden.

The melting has been so fast that each shipping season attains a new milestone. In August 2008, a Danish cable ship became the first commercial vessel to pass through the Northwest Passage. It saved 15 days on its voyage from Japan to Newfoundland off the east coast of Canada. In September 2010, the first cargo ship with 41,000 tonnes of iron ore sailed through the Northeast Passage to Asia. Around the same time last summer, a Russian ship became the first supertanker to ferry 120,000 tonnes of gas condensate through the route. The largest-ever bulk carrier crossed the ocean when a Japanese ship with 66,000 tonnes of iron ore completed its voyage from Russia’s Kola Peninsula to Jingtang in China. Norway plans to ferry liquefied natural gas (LNG) to Japan through the route this summer. According to Canadian and US maritime experts, nearly two per cent of the ships worldwide could be sailing through the Arctic by 2030, which will grow to five per cent by 2050. Several Arctic countries are planning deep sea ports in the pole. Shipping companies have already built 500 ice-class ships, suitable for the Arctic region. More are under construction. old war / Or cooperation?

The newfound resources and routes have spurred hectic global geopolitics, especially among the Arctic nations. “North Pole melting indicates a big churning in world relations as this is arguably the largest oil and gas discovery in a long period in history,” says Vijaya Sakhuja, director (research) of the Indian Council of World Affairs, a Ministry of External Affairs-supported think-tank in Delhi. Till 2005, when definitive scientific predictions about the melting of Arctic sea ice appeared, the Arctic nations were a coherent group. They mostly focused on the environment and sustainable development of the region, says Sakhuja. They are now vying to assert their dominance in the Arctic using the UN Convention on the Law of the Sea. The law allows member states to exploit all natural resources within 370 km off their coastline. They can, however, extend their jurisdiction up to 650 km by submitting geological evidence of the limits of their continental shelves.

Russia, US, Canada, Norway and Denmark (Greenland) have submitted claims for extending their jurisdiction in the Arctic territory.

New alliances are also being forged to extend control over the newly accessible Arctic region or gain access to its resources. Except Russia, all the other Arctic nations are part of the North Atlantic Treaty Organization (NATO), a security alliance. But that has not deterred them from charting out their own strategies for the Arctic. In March this year, in an unexpected strategic move, Norway and Russia agreed to improve military relations and expand cooperation in their Arctic territories. Until two years ago, the countries were engaged in a four-decade-long dispute over the Arctic boundary. Both have created special army units for the Arctic in the past year. Russia built ice-class vessels designed to ferry

military hardware and sent extra brigades to its northernmost bases recently. Norway plans to buy 48 F-35 fighter planes to bolster its Arctic defences.

Other Arctic countries are also pumping in billions of dollars to build highly specialised ships. Canada has already put in place vessels to guard its Arctic territory and has ordered a new fleet of patrol ships and icebreakers.In a demonstration of strength, the US, Canada and Denmark staged military manoeuvres in their Arctic territories in February this year. In April, Norway undertook an extensive military exercise called Exercise Cold Response with the participation of 16,300 troops from 14 countries to acclimatize soldiers to such harsh weather. Behind these high-voltage military displays, the countries are evolving new strategies and changing national policies to govern and exploit the resources, mainly energy reserves.

Oil is the lure Russia, one-third of which lies within the Arctic Circle, has been the most aggressive in establishing itself as the superpower of the emerging region. About two-thirds of the resources of the state-owned oil behemoth Rosneft are in the Arctic offshore. But much of it is icebound with no existing infrastructure. To attract investment and technology, in February Russian president Vladimir Putin declared a new policy, allowing foreign oil companies to explore Arctic resources on their own. Within a couple of months, he declared another policy, offering tax cuts on hydrocarbons and minerals produced in the country’s Arctic territory. Now there is a virtual stampede among oil majors to reach the Russian Arctic. Rosneft has entered into two big-ticket agreements with Italy’s Eni and US’ ExxonMobil.

To gain access to resources beyond the Russian Arctic territory, another state-owned energy giant, Gazprom, is working with Norwegian energy firm Statoil and French multinational Total on their projects in the Barents Sea. “Russia’s interests in the Arctic are economic, geographical, scientific and environmental.

The Russian Arctic is also a place where the geopolitical interests of both Arctic and nonArctic states interact owing to their geographical positions,” says Valery P Pilyavsky, vicechancellor of the Research and Development at the State Polar Academy in St Petersburg, Russia.

Boris Nikitenko, an academic at the Siberian branch of the Russian Academy of Sciences, however, thinks Russia is yet to properly explore its vast Arctic territory. “For example, some US parts of the Arctic are much better explored than the Russian part. The more we wait the less right we will have to be there in future,” Nikitenko says. Every Arctic nation thinks the same way. Though Scandinavian countries own smaller chunks of the Arctic, they have plans in place on how to exploit the resources. Norway has a 20-year plan to unlock the region’s oil and gas reserves and deliver them to foreign markets. “It is the project of a generation,” the country’s foreign minister Jonas Gahr Store told the media.

Denmark recently unveiled a policy to open up its Arctic water to industry and trade.

Canada sold exploration rights to BP and Exxon Mobil.

The US has also indicated that it would auction the exploration blocks in the Arctic by 2015.

The Chukchi and Beaufort Seas off the coast of Alaska hold around 26 billion barrels of oil.

Energy major Shell has obtained conditional approval to drill exploratory wells in the region from 2013.

Non-Arctic nations in queue The latest phase of the Arctic rush is being played out in the Arctic Council, an intergovernmental forum formed by the Arctic nations and representatives of the indigenous people of the pole like the Eskimo.The council discusses issues related to the environment, sustainable development and scientific research in the Arctic, and does not deal with matters related to military security. Six non-Arctic nations—the UK, France, Spain, Germany, Poland and the Netherlands —sit in the council as observers.

More countries, including China, India, Brazil, Japan, South Korea, the EU and several individual European states, are now seeking observer status in the council. The status would not only keep them apprised of the fast-changing geopolitics in the Arctic, it might help them gain access to the region in future. However, India and China are emerging as the two strong candidates to join the ranks of the observers.

Being member of the British Commonwealth, India has rights to carry out commercial activities in the Svalbard region of Norway under the Svalbard Treaty the Great Britain signed in 1920 (see ‘Does India have rights over Arctic?’,). Using the rights granted under the treaty the country set up its research station in the Arctic in 2007. The research station, Himadri, helps study ocean currents. In April this year it joined the International Arctic Science Council, which is an observer in the Arctic Council. “We are seeking an observer status in the Arctic Council as we want to undertake scientific studies from Antarctica to the Arctic,” says Shailesh Nayak, secretary in the Union Ministry of Earth Sciences.

Even Iceland provides India and China an opportunity to manoeuvre their strategies to secure positions in the council. In 2008, the countries had saved Iceland from the verge of bankruptcy. Since then, China has been pursuing its Arctic-oriented activities through Iceland. In April this year, Chinese Premier Wen Jiabao visited the country to sign a framework on Arctic cooperation. “Cooperation (with Iceland) on the Pole is to strive to keep China from being frozen out of the Arctic,” he had told the media. Iceland’s Prime Minister Johanna Sigurdardottir gave a positive response, saying that her country supported China being given observer status in the Arctic Council. “While India’s primary interest is research, China is more into strategic interests that include cornering hydrocarbons,” says Sakhuja. The new sea routes also give China immense military advantage. Until now, it was thought that in a war with India, its largest Asian rival, the maritime action would centre on an Indian attempt to blockade the Indian Ocean. The emerging sea routes are undermining half-a-century of military strategy. China has already upgraded its aircraft carrier to be ice-class.

India has also managed to reach the Arctic for its resources. A consortium led by the public sector unit, Oil and Natural Gas Corporation, has recently acquired 15 per cent stake, worth US $3.4 billion, in an Arctic project. The project is by Russia’s largest independent natural

gas producer Novatek. “India has similar investment plans with companies of other Arctic countries. Our experience in natural gas extraction projects in Sakhalin (sub-Arctic island in Russia) prepares us to work in Arctic conditions,” says Sakhuja. India’s technological experience in ocean floor exploration for minerals and other resources may also be helpful while working in the Arctic. Nayak says India has the technology to go up to 1,524 metres below the sea surface to explore, and this can be used in the Arctic. “But it will be a decision that the government has to take.”In India, there is a debate going on over whether the country should pursue a resource-oriented approach or just strengthen its research base.

“There are experts who argue that India should follow China in seeking a share in the exploitation of Arctic resources. But this would be short-sighted,” says Shyam Saran, a senior fellow with the Centre for Policy Research, a think-tank in Delhi. India lacks in financial and technological capabilities to match the countries in the forefront of the current Arctic scramble. Besides, Saran points out, such projects ignore the much greater damage, compared to any possible benefits, that India may have to bear if the Arctic continues to be ravaged by unchecked human greed.

A walk on thin ice Costly, both for industry and environment Oil from a pipeline leaks into the surrounding wetland near the city of Usinsk, close to the Arctic Circle in northern Russia. Environmental group Greenpeace estimates that the ageing pipes have been spilling 15 million tonnes of crude oil a year for nearly two decades.

The road to Arctic’s bounty is not without obstacles. On the one hand, there are environmental concerns that call for restricting industrial activities. On the other hand, is the challenge of building infrastructure in extreme weather conditions, which may hinder exploration activities and affect the economic viability of projects.Even the existing projects may face the heat. They are built on permafrost, and in the event of its thawing the same infrastructure would have to be rebuilt. The International Energy Agency’s World Energy Outlook 2011 stated that due to logistical challenges the Russian Arctic continental shelf might not become a major production area until 2035. While the dash to claim great chunks of the Arctic has begun, there are no preparatory studies to gauge the impacts of such widespread activities on the region that so far remained under permafrost. Being the lesser studied pole, there is no accurate inventory of its ecological resources.

“The pristine Arctic nature has not been researched yet, and launching any production in the Arctic offshore would kill the natural habitat,” says Alexei Knizhnikov, head of oil and gas ecology at WWF Russia. There are also fears of oil spill, which can seriously damage the ecology. At present, Knizhnikov warns, there is a wide technology gap. There is no equipment and infrastructure to remove a massive oil spill in icy conditions, and there are no sanctions on companies in case of an accident. “The tragedy with the drilling platform Kolskaya showed that we cannot even save people, let alone nature,” he adds. The drilling platform off the Sakhalin coast capsized and sank following a severe storm in December

2011. Though no oil spill happened it brought out the dangers of offshore drilling in the Arctic.

What’s more, the melting itself may prove disastrous for the global climate. The Arctic Council in 2011 sponsored a study to gauge the impacts of climate change on snow, water, ice and permafrost in the North Pole. Some 200 scientists worked on the project. According to their report, the melting of Arctic ice and thawing of permafrost will accelerate global warming further through a mechanism called “feedback effect”.

When permafrost melts, it releases carbon into the atmosphere. Margareta Johansson, one of the researchers from Lund University in Sweden, says, “Our data shows that there is approximately double the amount of carbon in the permafrost than there is in the atmosphere today.” More greenhouses gases means more heat is trapped in the atmosphere, resulting in more global warming.

Depleting snow cover also leads to low reflection and higher absorption of sunlight. This will increase atmospheric temperature of the Arctic and induce further melting. “Comprehensive multi-disciplinary assessments for the whole Arctic and with breakdown to regions and localities that would facilitate their sustainable development, can help change the paradigm of life of the local residents from surviving to thriving, and would help protect the environment,” Johansson suggests.

The debate over whether to exploit the Arctic now revolves around two perspectives. The Arctic nations want to reap the riches, while the non-Arctic nations want the pole to be preserved as a global commons, such as Antarctica or international sea. But so far there have been no substantial global initiatives to decide how to govern the Arctic. This could be due to two major reasons. One, the Arctic has hydrocarbons. Two, its geographical location is unique.Under the UN Convention on the Law of the Sea, all eight countries bordering the Arctic have territorial claims over the ocean waters. Since researchers have confirmed that the rising temperatures will open up a treasure trove of natural resources in the Arctic, most Arctic nations have submitted claims for extending their jurisdiction in the Arctic territory.

Until the convention finalises the claims in 2014, one cannot say how much of the Arctic will come under the international law.

A similar situation of many contested claims existed for Antarctica before the Antarctic Treaty of 1961 came into force. But a provision in the treaty made the claims nonactionable to avoid future conflicts.If the claims of all Arctic nations are admitted, there will be very little sea worth a global commons management. Ironically, Vladimir Ryabinin of World Climate Research Programme, says, melting Arctic sea ice due to global warming will offer possibilities for additional extraction of hydrocarbons, which in turn will strengthen anthropogenic influence on the global climate. A warming Arctic will no doubt bring benefits to some, but the rest of the world will have to pay the cost.

After the ice melts

A possible future, 50 years from now ARCTIC RISING By Tobia S Buckell TOR PUBLICATION, US $24.4Amitabh Mitra

This novel describes a situation that many of us fear will be upon us soon. It is set in a world, 50 years from today. The polar ice caps have succumbed to global warming. The Northwest Passage, the search for which led to the doom of many a 17th century explorers, is now the gateway to a new wild West. The opening of the passage has meant that the Scandinavian countries, Canada and Greenland, are global superpowers. There is a scramble for the Arctic’s oil resources and a mad rush to explore virgin territories. The United Nations Polar Guard, an international agency that polices the Arctic Circle region, suspects the region is also rife with drug dealing and human trafficking. Nuclear and solar power are now big business. The Polar Guard suspects some of the mega corporations dealing with nuclear power of dumping their nasty waste in the deep Arctic waters.

“Now the Arctic was also seeing dumping. With the whole Northwest Passage open and free of ice, merchant ships could cross from Russia to Greenland, on through Canadian polar ports, and then to Alaska. Which also meant they crossed over some very deep Arctic water. As nuclear power boomed across Eurasia and the Americas, with smaller corporations offering small pebble-bed nuclear reactors to energy-hungry towns and small cities demanding an alternative to oils needed in the plastics industries, the waste had to go somewhere.”Enter Anika Duncan, a Nigerian airship pilot with the Polar Guard. On a routine expedition, her airship’s sensors pick up something conspicuous. Within seconds her aircraft is fired at, killing her co-pilot, Tom. The initial suspect is a ship carrying radioactive waste. Then the accusing fingers point to a nuclear warhead. But there is something far sinister floating around the Arctic Circle, a technology that could alter the geopolitics of the world for good, and whoever controls this futuristic technology can easily hold the world’s superpowers hostage.

Soon Anika finds herself hunted as a criminal and must go on the run. She can only trust a mercenary spy Roo, and an unusual drug lord Violet, and the three have journeys that are intense enough to make Arctic Rising a veritable page-turner. The swashbuckling thriller wrestles with the geopolitical consequences of global warming on the Arctic north. But unlike some other futuristic literature set in times of climate change, Arctic Rising is not preachy and apocalyptic. Tobias Buckell keeps us enraptured while he teases out a plausible future. His questions are complex: Who will benefit from global warming? Will bringing back the ice save humankind? Will techno solutions to reverse climate change work? What would be the power equations in the new world?Buckell’s descriptions of the new Northern settlements—from towns in the northern Canadian islands to the polar glacier settlement Thule—are driven by interesting sociopolitical speculations.

“The Arctic still had an island of ice floating around the actual Pole. It was kept alive by a fusion of conservationists, tourism, and the creation of a semi-country and series of ports that sprang up called Thule. They’d used refrigerator cables down off platforms to keep the ice congealed around themselves despite the warmed-up modern Arctic, a trick learnt from old polar oil riggers who’d done that to create temporary ice islands back at the turn of the century. It was an old trick that didn’t really work anywhere else but near the Pole now.”Thule is privately owned by the Thule Corporation, a consortium of oil companies that imposes minimal rules on the many entities to whom it licenses space. The main rules being that you have a right to travel anywhere in Thule you wish, you may leave Thule whenever you wish, and hindrance of free movement of any other person is prohibited. The

Thule Corporation leaves it to each of the leasing demesnes to set up their own political and legal system, so Thule comprises some 40-odd mini- countries. Anika describes Thule as “confusingly and contradictingly, a replication of relatively unfettered laissez-faire mercantilism run amok”.

The global warming-ravaged Arctic is somewhat different. It provides a refuge for an interesting cross-section of the world: many individuals and cultures on the fringes have gravitated to the Arctic. The region is in many ways akin to the early US—a melting pot bringing together people seeking an identity. The laws are loose and there are enough marginalized people willing to rough it out for a better future, a brave new world, very different from Aldous Huxley’s Pavlovian vision…..Amitabh Mitra is a lawyer, painter and writer based in New York

HSE Pollution: the great leveler

Sunita Narain…editor of DOWN TO EARTH magazine….Issue: May 15, 2012 A harried parent called a few weeks ago. She wanted to know if the pollution levels in Delhi were bad and if so how bad. The answer was simple and obvious. But why do you need to know? Her daughter’s prestigious school (which I will leave unnamed) had sent a circular to parents, saying they are planning to shift to air-conditioned buses because they were worried about air pollution. She wanted to know if this was the right decision. My answer changed. The fact is that pollution levels are high and we do need to find ways to bring them under control. But the solution is not to think that the rich can find ways to avoid breathing the air, and so keep pollution at bay. I asked her if the school was also planning to build an air-conditioned funnel for walkways and an air-conditioned gymnasium so that children would not be exposed to this foul air.

What an irony that instead of fighting pollution and demanding change, the city’s rich and famous—many drive big cars and run them on subsidized diesel—think they can escape this noxious air. They can opt out of the whole “dirty”system and even generate their own air to breathe. But escape is not so easy. Air pollution and, in fact, environmental degradation are great levellers. Consider this: there is more than enough evidence that invehicle pollution is often a greater risk than the air outside, however foul. Worse, airconditioned vehicles are more polluted than those with no air-conditioning. A recent study from China (where pollution levels are certainly bad) shows that the air inside airconditioned buses was dangerously high on air toxins like benzene, toluene and xylene.

The level of toxins in these buses was higher than in open buses. This is easy to understand.

The pollution inside a vehicle is caused by air intake—what the vehicle takes through vents from outside—as well as “self-pollution”—vehicle exhaust in the passenger cabin because of leakage. In air-conditioned and sealed vehicles, this trapped air circulates and gets even more concentrated in terms of exposure than just ordinary but dirty air. The air-conditioning system is not designed to filter bad air. In California, where also there is a serious ambient air quality problem, a study found that children in school buses with closed windows were exposed to much higher and unacceptable levels of air pollutants. In this case, the exhaust

concentrations inside the vehicle were 2.5 times higher when the windows were closed as compared to when they were open. So, if you think you are “safe” inside your car, my advice is roll down the window and don’t smell the air but scream instead that pollution levels are hurting you and your child’s health. We also think that we can run away from pollution by moving to greener areas with less traffic in our cities and that we can find our island of clean air. But think again.

In heavy traffic areas, particularly along main roads, air pollution is high. In most cities, growing use of diesel is leading to hazardous levels of nitrogen oxide. This toxin is particularly high in heavy traffic zones and main roads. We know this. What we do not know is that there is another present and invisible danger aground—ozone, which directly affects our lungs. But it is not to be found where you would expect it. High levels of nitrogen oxides and volatile hydrocarbons interact with sunlight to form ozone. But as nitrogen oxide then reacts with ozone and mops it up, this gas drifts to areas where there is little pollution. This way, ozone levels are high in the green areas of the city. This pollutant, formed from the toxic exhaust of vehicles, looks for safe havens where the air is clean. It is no wonder then that the limited studies conducted in Delhi—where there are ample sunny and hot days— found ozone levels highest in the green areas of Civil Lines in the north and Siri Fort in the south.

The powerful rich of the world believe they can survive climate change, too. Their emissions may be the cause of this catastrophic problem, but the poor are vulnerable. So, the rich do nothing to reduce emissions at the scale and pace needed. They are not victims, and they can “adapt”. They will build sea walls to keep out the next storm and they have enough food and money to buy their way out of the next drought or flood. They do not have to worry. Not seriously at least. This is simply not true. The fact is that the rich may have the financial resources to cope with climate-related disasters the world is seeing today. But this is because global temperature increase is still only 0.8°C with another 0.8°C in the works. But this is before climate change spirals out of control when global average temperature increase gets to 3°C and above. At this level, even the richest will find it difficult to survive. So, let us be clear that there is no escape route. We cannot run. We have to stay and fight. And we have to win. It is in the interest of all of us. Post script: The school, I have been told, has gone ahead and bought air-conditioned buses. The literate Indians are clearly environmentally illiterate.

Poison in India's groundwater posing national health crisis

Nitin Sethi | May 2, 2012, 03.54AM IST

Depletion of groundwater and its increasing pollution could be leading may : to a silent, nationwide public health crisis as aquifers in many stretches across India are becoming unfit for drinking, according to the government's own figures.

NEW DELHI: Depletion of groundwater and its increasing pollution could be leading to a silent, nationwide public health crisis as aquifers in many stretches across India are becoming unfit for drinking, according to the government's own figures. Data submitted in Parliament by the water resources ministry on Monday shows groundwater in pockets of 158 out of the 639 districts has gone saline. It says in pockets across 267 districts,

groundwater contains excess fluoride; in 385 districts, it has nitrates beyond permissible levels; in 53 there's arsenic and there's high level of iron in 270 districts.

Besides this, aquifers in 63 districts contain heavy metals like lead, chromium and cadmium, the presence of which in any concentration poses a danger.The record submitted in answer to a question by Congress MP Shruti Chowdhry presents a countrywide map of where groundwater has become unfit for drinking and where contamination levels have breached government standards of safety. In Delhi, a number of areas are not safe to draw groundwater from. Aquifers in north, west and southwest districts along the Najafgarh drain contain lead. The southwest district has cadmium and northwest, south and east Delhi have chromium, rendering the water not just bad but dangerous to drink.

Adding to the danger is the fact that only about 65% of the city's population (predominantly in the better-off localities) is serviced by the water supply system of Delhi Jal Board.

Besides heavy metal contamination, fluoride has been found in aquifers in New Delhi and those in east, central, north, northwest, south, southwest and west Delhi. Apart from these, areas in east, central, New Delhi, northwest, south, southwest and west contain nitrates.

The stealthily growing health crisis could be worse in rural India where facilities to even detect chronic health problems arising out of water contamination do not exist. Nearly 80% of India's rural drinking water comes from underground sources.

Drinking fluoride-laden water beyond safe levels can lead to fluorosis which hits teeth and bones. Arsenic causes problems in the nervous system, reduces IQ level in children and in extreme cases can also cause cancer. Chromium is a known carcinogen. Presence of nitrates in drinking water leads to what is commonly called as blue baby disease which hits infants and can lead to respiratory and digestive system problems. These chemicals have appeared in the water sources either due to too much water being drawn from deeper and deeper in the ground, or due to industrial and human waste contamination.

Arsenic and fluoride are typically found in groundwater where chemicals have leeched from the bedrock due to over-exploitation of the source. Heavy metals are likely to flow in from industrial waste dumped untreated into water-systems. Nitrates are likely to appear in groundwater because of excess or repetitive use of fertilizers over time. Government reports have shown that water withdrawal from underground aquifers is higher than the annual recharge levels in almost 15% of the country's geographical area. The number of wells are increasing rapidly and so are the depths to which people are plumbing to bring water out as the sources dry up.

Life Cycle Analysis for optimizing packaging

Sustainable Packaging Symposium 2012, the second edition of the event, organized by Greener Package and the American Institute of Chemical Engineers’ Institute for Sustainability, kicked off in Houston, TX, with an emphasis on packaging’s role in the sustainable supply chain and the importance of Life Cycle Analysis for optimizing packaging.

Day one keynote presenter Dr. Bill Flanagan, leader of the Ecoassessment Center of Excellence for GE Global Research, began the event by enumerating for attendees the benefits of the LCA. “The LCA is a qualitative assessment,” he said. “If we are going to be making decisions, we want to be sure that we are not shifting the burden.”

He added that a LCA allows a company to: • Focus on the areas where they can make the most impact • Communicate fairly complex product benefits to consumers • Foster transparency with stakeholders Dr. Flanagan advised that the LCA should be used strategically, undertaken only for those products where it provides the most benefit. He then outlined for attendees the four-step screening process by which GE determines those products that require a full LCA. “Overall, we want to make sure we are not distracting ourselves,” he said. “We want to make real changes. We don’t want to do anything that is a barrier to innovation.”

Following Dr. Flanagan, Lauran Flanigan, a consultant with PE International, Inc., opened the “Leadership and the Sustainable Supply Chain Session” by echoing many of the keynote themes, saying, “Transparency is the new sustainability.”

“You have to know what it is you are trying to achieve before you begin,” she said. “You have to determine your vision. That will help you determine the tools you will use. You have to plan long-term.”

Recycling challenges addressed Two engaging presentations during “The Importance of Packaging in the Sustainable Product Supply Chain” spoke to the opportunities and the challenges faced by consumer packaged goods companies when looking at recycling. Jeff Meyers, Sustainable Packaging Program Manager for Coca-Cola Refreshments, outlined The Coca-Cola Company’s fourpronged sustainable packaging strategy for attendees. The “Reduce” aspect involves lightweighting its packaging; “Renew” involves the use of renewable resources in the form of its PlantBottle packaging; “Recover” means getting material back through recycling; and “Reuse” comprises using recovered materials in new packaging.

“We have to execute on each one of these strategies well in order to ensure they all work,” said Meyers. The biggest challenge for the company right now he added is the availability of recycled PET materials.

Ryan L’Abbe, vice president and general manager of Ice River Springs, a bottled water company in Canada that has successfully built a closed-loop system for recovering PET and manufacturing 100% rPET bottles, expressed the same frustration when it comes to material availability. “There is a breakdown in the collection system,” he said, adding that until packaging materials are perceived to have value, the problem will remain. “Once there is value to the material,” he said, “economies will develop to collect it.”

Stay tuned for more coverage of the Sustainble Packaging viaGreenerPackage.com and the pages of Packaging World magazine.

Symposium,

Poison in India’s groundwater posing national health crisis

TNN | May 2, 2012, 03.54AM IST Depletion of groundwater and its increasing pollution could be leading to a silent, nationwide public health crisis as aquifers in many stretches across India are becoming unfit for drinking, according to the government’s own figures.

NEW DELHI: Depletion of groundwater and its increasing pollution could be leading to a silent, nationwide public health crisis as aquifers in many stretches across India are becoming unfit for drinking, according to the government's own figures.

Data submitted in Parliament by the water resources ministry on Monday shows groundwater in pockets of 158 out of the 639 districts has gone saline. It says in pockets across 267 districts, groundwater contains excess fluoride; in 385 districts, it has nitrates beyond permissible levels; in 53 there's arsenic and there's high level of iron in 270 districts.

Besides this, aquifers in 63 districts contain heavy metals like lead, chromium and cadmium, the presence of which in any concentration poses a danger.

The record submitted in answer to a question by Congress MP Shruti Chowdhry presents a countrywide map of where groundwater has become unfit for drinking and where contamination levels have breached government standards of safety.

In Delhi, a number of areas are not safe to draw groundwater from. Aquifers in north, west and southwest districts along the Najafgarh drain contain lead. The southwest district has cadmium and northwest, south and east Delhi have chromium, rendering the water not just bad but dangerous to drink.

Adding to the danger is the fact that only about 65% of the city's population (predominantly in the better-off localities) is serviced by the water supply system of Delhi Jal Board.

Besides heavy metal contamination, fluoride has been found in aquifers in New Delhi and those in east, central, north, northwest, south, southwest and west Delhi.

Apart from these, areas in east, central, New Delhi, northwest, south, southwest and west contain nitrates.

The stealthily growing health crisis could be worse in rural India where facilities to even detect chronic health problems arising out of water contamination do not exist. Nearly 80% of India's rural drinking water comes from underground sources.

Drinking fluoride-laden water beyond safe levels can lead to fluorosis which hits teeth and bones. Arsenic causes problems in the nervous system, reduces IQ level in children and in extreme cases can also cause cancer. Chromium is a known carcinogen. Presence of nitrates in drinking water leads to what is commonly called as blue baby disease which hits infants and can lead to respiratory and digestive system problems.

These chemicals have appeared in the water sources either due to too much water being drawn from deeper and deeper in the ground, or due to industrial and human waste contamination.

Arsenic and fluoride are typically found in groundwater where chemicals have leeched from the bedrock due to over-exploitation of the source. Heavy metals are likely to flow in from industrial waste dumped untreated into water-systems. Nitrates are likely to appear in groundwater because of excess or repetitive use of fertilizers over time.

Government reports have shown that water withdrawal from underground aquifers is higher than the annual recharge levels in almost 15% of the country's geographical area. The number of wells are increasing rapidly and so are the depths to which people are plumbing to bring water out as the sources dry up.

Sustainability

Sell the oilsands better, Daniel Yergin tells Alberta

Greater supply role and lower carbon footprint should be stressed

By Rebecca Penty, Calgary HeraldApril 24, 2012 CALGARY — Alberta must better deliver the message that its growing oilsands production is an increasingly significant source of global oil and correct rising misinformation or face further risk tied to environmental opposition, energy economist Daniel Yergin told a business luncheon on Tuesday.

Yergin, the chairman of U.S. energy consultancy IHS CERA, said Alberta Premier Alison Redford and other key players in the energy sector need to fan across the United States, to educational institutions, and convince them of the need for oilsands crude in the market and share technological improvements that are lowering the carbon footprint of bitumen extraction.

“It’s not just Washington,” Yergin said, addressing an audience of more than one hundred — including energy industry chief executives, bankers and academics.

“There is not a recognition of the role of Alberta, how big a role it is, and it is a global role,” he said, stating that the latest production numbers show oilsands output has tripled since 2000.

“I remember when it was a very fringe source.”

New urgency to bring Alberta’s landlocked crude by pipeline to southern markets, due to high gasoline prices during a presidential election campaign, makes it an opportune time to tackle two perennial key questions around energy, as they relate to the oilsands — price and environmental footprint, he said.

Characterizing the strategy as “man-to-man defence,” Yergin pushed proponents to dispel views that oilsands bitumen is much more carbon-intensive than other sources of crude.

“You’re talking about five to 15 per cent more carbon and going down,” said Yergin, whose company was the first to prepare a study suggesting oilsands bitumen is marginally more greenhouse gas intensive, on a life cycle basis, than other crudes — an assertion some environmental groups have denied is true.

A decision on the Alberta-to-Texas Keystone XL pipeline, which was first delayed and then answered with a “no” from U.S. President Barack Obama, was a “political litmus test” of the views of Democrat donors and supporters on the oilsands, he said.

Yergin was invited to speak by the University of Calgary’s School of Public Policy, through a lecture series sponsored by Imperial Oil Ltd. Imperial Oil chief executive Bruce March said in an interview that industry has been waging public relations war over the oilsands for about three years and must sustain its messaging around land impacts, water use compared with other industries and other issues.

“We’re probably never going to be able to get over the visual land impact of an open-pit mine but we try and point out what copper mines look like, what open-pit coal mines look like, gold mines are just as big. It’s not just oilsands,” March said.

Jack Mintz, director of the school of public policy, said mudslinging aimed at the oilsands during the U.S. election must be addressed, through visits south of the border by independent voices, not just politicians and industry.

“It’s really important when people are talking about Keystone, talking about these issues, that we get down there and really give a fair point of view,” Mintz said.

Redford said on Tuesday, following her Monday election as premier, that she’s working to frame the oilsands in a national light as an economic driver, and has had discussions with Prime Minister Stephen Harper and Natural Resources Minister Joe Oliver about that.

“There are some interesting ideas we are going to be able to pursue that are going to allow us to talk about energy as it should be talked about, in the best interests of the country,” Redford told reporters in Calgary, noting the province will continue advocating for the U.S. approval of Keystone XL through representatives in Washington and Chicago.

— With files from James Wood. rpenty@calgaryherald.com

Reduced Emissions from Deforestation and Forest degradation :REDD

Norway is spending about $3 billion to make REDD happen.

December 10, 2011 Some climate strategists are looking beyond the United Nations and the idea of remaking the energy economy — and toward the world's tropical forests.

The basic idea is to provide rich countries that emit lots of climate-warming gases another way to reduce their carbon footprint besides replacing or retrofitting factories and power plants. Instead, they could just pay poorer countries to keep their forests, or even expand them. Forests suck carbon out of the atmosphere. It's like paying someone to put carbon in a storehouse. This is called REDD, for short: Reduced Emissions from Deforestation and Forest Degradation.

Hans Brasker, foreign minister of Norway, thinks it's a great idea, and not just to slow warming. "We very strongly believe that we will have established a genuine global partnership to save the treasures of the remaining tropical forest," he told the delegates at the South African climate talks. But skeptics question whether forest storehouses are safe.

What's to stop people from cutting them down someday and releasing all that carbon back into the atmosphere? What about indigenous people who live in forests? Will they lose their homes if the woods are turned into carbon "plantations"?

At the climate talks, some skeptics mocked the idea of REDD. Simone Lovera from the Global Forest Coalition announced the "muddled moose" award at a press conference, explaining that it's meant to alert people to "the big fairy tales that are being told about REDD." But REDD's backers say it offers something for rich and poor countries alike. And some are not waiting for the United Nations to decide on a final REDD process.

"International action would be great," says Tony Brunello, a forestry expert with the REDD Offset Working Group in the U.S. "But we're not seeing it. We're not seeing it anywhere."

Testing REDD's Technology Brunello wants California, where he once advised the governor on climate issues, to partner with states in other countries on REDD projects. Even though the U.S. does not limit greenhouse gases, California will, starting in 2013. "The fundamental issue is to give a signal to the rest of the world that it's possible," Brunello says, "and also a stamp of approval from California, and that people should invest in it."

Deforestation and forest fires are responsible for 75 percent of the carbon dioxide emissions in Brazil. Above, smoke from a fire on livestock pastures in Brazil's Mato Grosso state breaks into the forest, September 2009.

California businesses will need to buy so-called carbon offsets — paying someone, somewhere, to remove carbon from the atmosphere because it's cheaper than the businesses doing it themselves. Brunello's group will match those businesses with states like Acre in Brazil and Chiapas in Mexico. Those places have lots of forest they can preserve, for a price. But so far there are no rules.

"How does a company in California — a Pacific Gas and Electric, a Southern California Edison — how would they legally go and talk with the people in one of our states in Acre in Brazil and do a carbon offset trade?" Brunello asks. California officials are open to the idea, but cautious. "We don't have the resources ourselves to, you know, take over the forest management of those parts of the world," says Mary Nichols, who runs the state's climate program at the Air Resources Board.

And carbon banks will need to be managed. For example, you'll need to measure exactly how much carbon is stored in a forest, because companies will be paying for it by the ton.

Then how do you safeguard your investment? The Amazon is a carpet of green about twothirds the size of the continental U.S. Environmental scientist Greg Asner at Stanford University thinks he's got a solution: LIDAR, a special laser carried on an airplane. "That laser is able to pick up the three-dimensional structure of the canopy, all the way down to the ground," says Asner, "and all the layers in between, from the top down to the bottom. It's like a virtual world. You can find the species you're interested in, you can understand its carbon, you can understand how tall the trees are, how many branches they have."

Asner, who works with the Offset Group, has flown his device over some of the most remote parts of the Amazon. He says he can tell how healthy a forest is, how diverse, even what kind of animals live there. The offset working group is crafting rules and technical specs for REDD projects. Acre and Chiapas have already passed measures to pave the way. The team figures if it works for California, they can take it on the road, with or without an international treaty.

Innovation & R&D IndianOil conferred the SCOPE award for R&D, Technology Development & Innovation

At a glittering ceremony at the Vigyan Bhavan today to celebrate the third Public Sector Day, Her Excellency Smt. Pratibha Devisingh Patil, Hon'ble President of India today conferred the SCOPE Meritorious Award 2010-11 for R&D, Technology Development & Innovation upon IndianOil. The award was received by Mr. R.S Butola, Chairman in the presence of Mr. Praful Patel, Union Minister of Heavy Industries & Public Enterprises, Mr. OP Rawat, Secretary, Department of Public Enterprises and Dr. Nitish Sengupta, Chairman, BRPSE. Senior officials from SCOPE and senior executives from a cross section of Public Sector Companies were present on the occasion.IndianOil was previously the winner of the Best Practices in Human Resource Management category for the year 2009-2010.

The Standing Conference of Public Enterprises (SCOPE) is an apex organization of Public Sector Enterprises (PSEs). In its pursuit to promote excellence and competitiveness of public enterprises, it regularly recognises performance in various categories. The award was presented as a part of the celebrations of the third Public Sector Day.

Brian Greene: Welcome to the Multiverse

The latest developments in cosmology point toward the possibility that our universe is merely one of billions.

by Brian Greene | May 21, 2012 “What really interests me is whether God had any choice in creating the world.”

That’s how Albert Einstein, in his characteristically poetic way, asked whether our universe is the only possible universe.

The reference to God is easily misread, as Einstein’s question wasn’t theological. Instead, Einstein wanted to know whether the laws of physics necessarily yield a unique universe— ours—filled with galaxies, stars, and planets. Or instead, like each year’s assortment of new cars on the dealer’s lot, could the laws allow for universes with a wide range of different features? And if so, is the majestic reality we’ve come to know—through powerful telescopes and mammoth particle colliders—the product of some random process, a cosmic roll of the dice that selected our features from a menu of possibilities? Or is there a deeper explanation for why things are the way they are?

In Einstein’s day, the possibility that our universe could have turned out differently was a mind-bender that physicists might have bandied about long after the day’s more serious research was done. But recently, the question has shifted from the outskirts of physics to the mainstream. And rather than merely imagining that our universe might have had different properties, proponents of three independent developments now suggest that there are other universes, separate from ours, most made from different kinds of particles and governed by different forces, populating an astoundingly vast cosmos.

The multiverse, as this vast cosmos is called, is one of the most polarizing concepts to have emerged from physics in decades, inspiring heated arguments between those who propose that it is the next phase in our understanding of reality, and those who claim that it is utter nonsense, a travesty born of theoreticians letting their imaginations run wild.

So which is it? And why should we care? Grasping the answer requires that we first come to grips with the big bang.

In Search of the Bang In 1915, Einstein published the most important of all his works, the general theory of relativity, which was the culmination of a 10-year search to understand the force of gravity.

The theory was a marvel of mathematical beauty, providing equations that could explain everything from the motion of planets to the trajectory of starlight with stupendous accuracy.

Within a few short years, additional mathematical analyses concluded that space itself is expanding, dragging each galaxy away from every other. Though Einstein at first strongly resisted this startling implication of his own theory, observations of deep space made by the great American astronomer Edwin Hubble in 1929 confirmed it. And before long, scientists reasoned that if space is now expanding, then at ever earlier times the universe must have been ever smaller. At some moment in the distant past, everything we now see—the ingredients responsible for every planet, every star, every galaxy, even space itself—must have been compressed to an infinitesimal speck that then swelled outward, evolving into the universe as we know it.

Direct evidence for the multiverse might come from a collision between our expanding universe and its neighbors. (Mehau Kulyk / Photo Researchers, Inc.) The big-bang theory was born. During the decades that followed, the theory would receive overwhelming observational support. Yet scientists were aware that the big-bang theory suffered from a significant shortcoming. Of all things, it leaves out the bang. Einstein’s equations do a wonderful job of describing how the universe evolved from a split second after the bang, but the equations break down (similar to the error message returned by a calculator when you try to divide 1 by 0?) when applied to the extreme environment of the universe’s earliest moment. The big bang thus provides no insight into what might have powered the bang itself.

Fuel for the Fire In the 1980s, physicist Alan Guth offered an enhanced version of the big-bang theory, called inflationary cosmology, which promised to fill this critical gap. The centerpiece of the proposal is a hypothetical cosmic fuel that, if concentrated in a tiny region, would drive a brief but stupendous outward rush of space—a bang, and a big one at that. In fact, mathematical calculations showed that the burst would have been so intense that tiny jitters from the quantum realm would have been stretched enormously and smeared clear across space. Like overextended spandex showing the pattern of its weave, this would yield a precise pattern of miniscule temperature variations, slightly hotter spots and slightly colder spots dotting the night sky. In the early 1990s, NASA’s Cosmic Microwave Background Explorer satellite first detected these temperature variations, garnering Nobel Prizes for team leaders John Mather and George Smoot.

Remarkably, mathematical analysis also revealed—and here’s where the multiverse enters—that as space expands the cosmic fuel replenishes itself, and so efficiently that it is virtually impossible to use it all up. Which means that the big bang would likely not be a unique event. Instead, the fuel would not only power the bang giving rise to our expanding realm, but it would power countless other bangs, too, each yielding its own separate, expanding universe. Our universe would then be a single expanding bubble inhabiting a grand cosmic bubble bath of universes—a multiverse.

It’s a striking prospect. If correct, it would provide the capstone on a long series of cosmic reappraisals. We once thought our planet was the center of it all, only to realize that we’re one of many planets orbiting the sun, only then to learn that the sun, parked in a suburb of the Milky Way, is one of hundreds of billions of stars in our galaxy, only then to find that the Milky Way is one of hundreds of billions of galaxies inhabiting the universe. Now, inflationary cosmology was suggesting that our universe, filled with those billions of galaxies, stars, and planets, might merely be one of many occupying a vast multiverse.

Yet, when the multiverse was proposed back in the 1980s by pioneers Andrei Linde and Alexander Vilenkin, the community of physicists shrugged. The other universes, even if they existed, would stand outside what we can observe—we only have access to this universe. Apparently, then, they wouldn’t affect us and we wouldn’t affect them. So what role could other universes possibly play in science, a discipline devoted to explaining what we do see?

And that’s where things stood for about a decade, until an astounding astronomical observation suggested an answer.

The Mystery of Dark Energy Although the discovery that space is expanding was revolutionary, there was one aspect of the expansion that most everyone took for granted. Just as the pull of earth’s gravity slows the ascent of a ball tossed upward, the gravitational pull of each galaxy on every other must be slowing the expansion of space.

In the 1990s, two teams of astronomers set out to measure the rate of this cosmic slowdown. Through years of painstaking observations of distant galaxies, the teams collected data on how the expansion rate of space has changed over time. And when they completed the analysis, they all nearly fell out of their chairs. Both teams found that, far from slowing down, the expansion of space went into overdrive about 7 billion years ago and has been speeding up ever since. That’s like gently tossing a ball upward, having it slow down initially, but then rocket upward ever more quickly.

The result sent scientists across the globe scurrying to explain the cosmic speedup. What force could be driving every galaxy to rush away from every other faster and faster? The most promising answer comes to us from an old idea of Einstein’s. We’re all used to gravity being a force that does only one thing: pull objects toward each other. But in Einstein’s general theory of relativity, gravity can also do something else: it can push things apart.

How? Well, the gravity exerted by familiar objects like the moon, the earth, and the sun is surely attractive. But Einstein’s equations show that if space contains something else—not clumps of matter but an invisible energy, sort of like an invisible mist that’s uniformly spread through space—then the gravity exerted by the energy mist would be repulsive.

Which is just what we need to explain the observations. The repulsive gravity of an invisible energy mist filling space—we now call it dark energy—would push every galaxy away from every other, driving the expansion to speed up, not slow down.

But there’s a hitch. When the astronomers deduced how much dark energy would have to permeate every nook and cranny of space to account for the observed cosmic speedup, they found a number that no one has been able to explain. Not even close. Expressed in the relevant units, the dark-energy density is extraordinarily small: At the same time, attempts by researchers to calculate the amount of dark energy from the laws of physics have yielded results that are typically a hundred orders of magnitude larger, perhaps the greatest mismatch between observation and theory in the history of science.

And that has led to some soul searching.

Physicists have long believed that with sufficient hard work, experimentation, and industrious calculation, no detail about the fundamental makeup of reality would lie beyond scientific explanation. Certainly, many details still lack an explanation, such as the masses of particles like electrons and quarks. Yet the expectation has been that in due course physicists will find explanations.

The spectacular failure of attempts to explain the amount of dark energy has raised questions about this confidence, driving some physicists to pursue a radically different

explanatory approach, one that suggests (once again) the possible existence of a multiverse.

The Multiverse Solution The new approach has scientific roots that stretch back to the early 1600s, when the great astronomer Johannes Kepler was obsessed with understanding a different number: the 93 million miles between the sun and the earth. Kepler struggled for years to explain this distance but never succeeded, and from our modern perch the reason is clear. We now know that there are a great many planets, orbiting their host stars at a great many different distances, demonstrating the fallacy in Kepler’s quest—the laws of physics do not single out any particular distances as special. Instead, what distinguishes the earth-sun distance is simply that it yields conditions hospitable to life: were we much closer or farther from the sun, the extreme temperatures would prevent our form of life from taking hold. So, although Kepler was on a wild goose chase in seeking a fundamental explanation for the earth-sun distance, there is an explanation for why we humans find ourselves at such a distance.

In seeking an explanation for the value of dark energy, maybe we’ve been making a mistake analogous to Kepler’s. Our best cosmological theory—the inflationary theory— naturally gives rise to other universes. Perhaps, then, just as there are many planets orbiting stars at many different distances, maybe there are many universes containing many different amounts of dark energy. If so, asking the laws of physics to explain one particular value of dark energy would be just as misguided as trying to explain one particular planetary distance. Instead, the right question to ask would be: why do we humans find ourselves in a universe with the particular amount of dark energy we’ve measured, instead of any of the other possibilities?

This is a question we can address. In universes with larger amounts of dark energy, whenever matter tries to clump into galaxies, the repulsive push of the dark energy is so strong that the clump gets blown apart, thwarting galactic formation. In universes whose dark-energy value is much smaller, the repulsive push changes to an attractive pull, causing those universes to collapse back on themselves so quickly that again galaxies wouldn’t form. And without galaxies, there are no stars, no planets, and so in those universes there’s no chance for our form of life to exist.

And so we find ourselves in this universe and not another for much the same reason we find ourselves on earth and not on Neptune—we find ourselves where conditions are ripe for our form of life. Even without being able to observe the other universes, their existence would thus play a scientific role: the multiverse offers a solution to the mystery of dark energy, rendering the quantity we observe understandable.

Or so that’s what multiverse proponents contend.

Many others find this explanation unsatisfying, silly, even offensive, asserting that science is meant to give definitive, precise, and quantitative explanations, not “just so” stories.

But the essential counterpoint is that if the feature you’re trying to explain can and does take on a wide variety of different mathematical values across the landscape of reality, then seeking a definitive explanation for one value is wrongheaded. Just as it makes no sense to ask for a definitive prediction of the distance at which planets orbit their host stars, since there are many possible distances, if we’re part of a multiverse it would make no sense to ask for a definitive prediction of the value of dark energy, since there would be many possible values.

The multiverse doesn’t change the scientific method or lower explanatory standards. But it does ask us to reevaluate whether we’ve mistakenly posed the wrong questions.

Hanging by Strings Of course, for this approach to succeed, we must be sure that among the multiverse’s many different dark-energy values is the very one we’ve measured. And that’s where a third line of investigation, string theory, comes to the fore.

String theory is an attempt to realize Einstein’s dream of a “unified theory” capable of stitching all matter and forces into a single mathematical tapestry. Initially formulated in the late 1960s, the theory envisions that deep inside every fundamental particle is a tiny, vibrating, stringlike filament of energy. And much as the different vibrational patterns of a violin string yield different musical notes, so the different vibrational patterns of these tiny strings would yield different kinds of particles.

Pioneers of the subject anticipated that string theory’s rigid mathematical architecture would soon yield a single set of definitive, testable predictions. But as the years passed, detailed analysis of the theory’s equations revealed numerous solutions, each representing a different possible universe. And numerous means numerous. Today, the tally of possible universes stands at the almost incomprehensible 10500, a number so large it defies analogy.

For some string-theory advocates, this stupendous failure to yield a unique universe— ours—was a devastating blow. But to those advancing the multiverse, string theory’s enormous diversity of possible universes has proven vital.

Just as it takes a well-stocked shoe store to guarantee you’ll find your size, only a wellstocked multiverse can guarantee that our universe, with its peculiar amount of dark energy, will be represented. On its own, inflationary cosmology falls short of the mark.

While its never-ending series of big bangs would yield an immense collection of universes, many would have similar features, like a shoe store with stacks and stacks of sizes 5 and 13, but nothing in the size you seek.

By combining inflationary cosmology and string theory, however, the stock room of universes overflows: in the hands of inflation, string theory’s enormously diverse collection of possible universes become actual universes, brought to life by one big bang after another. Our universe is then virtually guaranteed to be among them. And because of the special features necessary for our form of life, that’s the universe we inhabit.

High-Risk Science Years ago, Carl Sagan emphasized that extraordinary claims require extraordinary evidence. So, can we gather evidence supporting a proposal that invokes other universes?

Because the other universes would lie beyond what we can observe, it might seem that the answer is no, placing the multiverse outside the bounds of science. But that’s too quick.

Evidence for a proposal can be amassed even when some of its important features are inaccessible.

Take black holes. Scientists routinely use general relativity to speak with confidence about what happens inside a black hole, even though nothing, not even light, can escape a black hole’s interior, rendering such regions unobservable. The justification is that once a theory makes a slew of accurate predictions about things we can observe, as general relativity

has, we justifiably gain confidence in the theory’s predictions about things we can’t observe.

Similarly, if a proposal that invokes the multiverse gains our confidence by making correct predictions about things we do have access to, things in our universe, then our confidence in its prediction of other universes, realms we don’t have access to, would rightly grow too.

As of today, we are far from crossing this threshold. Inflationary cosmology makes accurate predictions about microwave background radiation; dark energy accurately explains accelerated expansion. But string theory remains hypothetical, largely because its primary distinguishing features become manifest at scales billions of times smaller than we can probe even with today’s most powerful accelerators.

More direct evidence for the multiverse might come from potential collisions between our expanding universe and its neighbors. Such a cosmic fender bender would generate an additional pattern of temperature variations in the microwave background radiation that sophisticated telescopes might one day detect. Many consider this the most promising possibility for finding evidence in support of the multiverse.

That there are ways, long shots to be sure, to test the multiverse proposal reflects its origin in careful mathematical analysis. Nevertheless, because the proposal is unquestionably tentative, we must approach it with healthy skepticism and invoke its explanatory framework judiciously.

Imagine that when the apple fell on Newton’s head, he wasn’t inspired to develop the law of gravity, but instead reasoned that some apples fall down, others fall up, and we observe the downward variety simply because the upward ones have long since departed for outer space. The example is facetious but the point serious: used indiscriminately, the multiverse can be a cop-out that diverts scientists from seeking deeper explanations. On the other hand, failure to consider the multiverse can place scientists on a Keplerian treadmill in which they furiously chase answers to unanswerable questions.

Which is all just to say that the multiverse falls squarely in the domain of high-risk science.

There are numerous developments that could weaken the motivation for considering it, from scientists finally calculating the correct dark-energy value, or confirming a version of inflationary cosmology that only yields a single universe, or discovering that string theory no longer supports a cornucopia of possible universes. And so on.

But as with all rational bets, high risk comes with the potential for high reward. During the past five centuries we’ve used the power of observation and mathematical calculation to shatter misconceptions. From a quaint, small, earth-centered universe to one filled with billions of galaxies, the journey has been both thrilling and humbling. We’ve been compelled to relinquish sacred belief in our own centrality, but with such cosmic demotion we’ve demonstrated the capacity of the human intellect to reach far beyond the confines of ordinary experience to reveal extraordinary truth. The multiverse proposal might be wrong.

But it might also be the next step in this journey, unveiling a breathtaking panorama of universes populating a vast cosmic landscape. For some scientists, including me, that possibility makes the risk well worth taking.

Let’s Debunk 4 Myths About How Great Companies Innovate

WRITTEN BY: Jeffrey Phillips HOW DO APPLE, GOOGLE, AND 3M CONTINUE TO DISRUPT THEIR MARKETS? THE TRUTH DOESN'T LIE IN COMMON MYTHS ABOUT VISIONARY LEADERS OR BUSINESS STRATEGY, BUT RATHER SIMPLER TRUTHS, ARGUES JEFFREY PHILLIPS IN "RELENTLESS INNOVATION." The following is an excerpt from Relentless Innovation: What Works, What Doesn’t--and What That Means for Your Business by Jeffrey Phillips.

In the United States alone there are hundreds of large, successful firms with recognizable brand names that we encounter every day. We constantly hear innovation success stories about firms like Apple and Procter & Gamble, but we rarely hear about innovation in their direct competitors, Dell and Unilever, much less about innovation in any of the thousands of firms worldwide that compete in these markets. In every region and industry the same pattern is repeated: A small handful of firms are recognized as consistent innovators, used as case studies and examples, while we hear little or nothing about innovation in the vast majority of the other firms in those industries.

So what is it that differentiates a successful, consistent innovator from its close competitors, firms of the same relative size that compete in the same industries and geographies, that aren’t viewed as innovative? What factors or attributes accelerate innovation in these successful companies? Are those factors or attributes lacking or underrepresented in lower performing firms? Or are firms like Apple and Google better at attracting marketing and publicity? Is it safe to say that the majority of firms in every region of the globe are not innovative, or is it simply that they don’t receive as much media attention? What happens at Target that does not take place at Kmart? What is Apple doing that Dell is not? And what about 3M compared to Avery Dennison?

Several possible factors spring to mind, including the executive management, the nature of the industry, or the capabilities of a firm’s research and development teams. Much of the mythology built around innovation identifies these factors as the main components of innovation success and it is true that each of them may contribute to a stronger innovation capability. But in the long run, none of them are the key drivers. Let’s review the myths and debunk the conventional wisdom, then confront the simpler realities.

EXECUTIVE MANAGEMENT Myth: Individual, innovative leadership accounts for the majority of a firm’s success.

Truth: Sustained innovation success does not rely on visionary leaders alone.

In the 1990s, a cult of personality arose around some senior executives, especially individuals like Jack Welch of General Electric and Lou Gerstner of IBM. The media led the public to believe that these CEOs accounted for much of their firms’ success while they were at the helm. During Welch’s tenure at GE he implemented several programs that were attributed with driving new value and differentiation for the company, including ranking employees into categories and only participating in markets or industries in which GE could

be one of the top three players. Many analysts have also attributed much of GE’s success in the 1980s and 1990s to Welch’s leadership.

ALTHOUGH HE WAS A VISIONARY, OLSON DID NOT FORESEE IMMINENT CHANGES. Strong, visionary leaders matter, but do visionary leaders account for the differences in innovation competence? Certainly, to some degree. For example, everyone recognizes Steve Jobs’s influence on Apple and the company’s decade-long dominance in consumer electronics and innovation. Jobs, however, isn’t the only visionary leader in the computing space, which was created by a number of innovative trend-setters.

Look no further than Kenneth Olson, the founder of Digital Equipment Corporation (DEC), who disrupted the mainframe market with minicomputers, but failed to see the further disruption of the minicomputer market by the personal computer. He is attributed as saying “there is no reason anyone would want a computer in their home.” Although he was a visionary leader, Olson did not foresee the imminent changes in the computing market, and DEC was soon disrupted by personal computer (PC) manufacturers such as Compaq, which made the first “portable” PC. Michael Dell at Dell Computer is every bit as dynamic a leader as Jobs is at Apple, and he was heralded as an innovative leader in the 1990s, constantly on the cover of magazines like Fortune and Forbes. Dell disrupted the existing business model in the PC market, which enabled his company to grow faster and supplant many larger and well-established firms, including Compaq. In fact, far more people own Dell PCs than own Apple PCs, yet Jobs is constantly feted as an innovator while Dell is hardly considered in the same league.

Dell and Olson were both recognized for their vision and innovative capabilities at a point in time, but their firms did not sustain innovation over time. But, back to the initial question of how much impact a CEO has on innovation. If we assert that Jobs is a unique case, can we identify innovative firms that don’t have visionary CEOs? Certainly; W. L. Gore is an excellent example.

W. L. Gore is a privately held firm with more than $2.5 billion in revenue, headquartered in Newark, Delaware. Gore manufactures Gore-Tex, the waterproof, breathable fabric that is used in a wide range of outdoor clothing and gear. The company has sought and found numerous uses for its PFTE polymer, creating dental floss, coatings for guitar strings, medical devices, and other applications. Beyond product innovation, however, Gore is also an innovator in organizational structure. Gore has an exceptionally flat organizational structure with no formal reporting hierarchies or organizational charts--its CEO was actually elected by its employees. Innovation at the company is therefore driven not by a single visionary CEO, but by the individuals and teams throughout the business.

Further, consider Target or 3M, firms identified earlier, which are far more innovative than their competitors. While these firms are recognized as innovation leaders, I suspect most people would have difficulty picking out any member of the executive team of either firm in a police lineup.

Another thought experiment may help clarify whether or not executive leadership is a significant driver or barrier for innovation. Let’s assume that Steve Jobs could be magically and instantly transported to Austin, Texas, where he becomes the CEO of Dell. If this were to happen, do you think Dell would become dramatically more innovative overnight, or even in several years? If Target’s CEO was recruited to Kmart, or 3M’s CEO was remanded to become the CEO of an abrasives company, would those firms instantly become innovative? Would these firms attain the level of relentless innovation of the leaders in their industries or markets, even over time?

I’d stipulate that the answer is no. Simply put, there’s more to sustained innovation than a visionary executive. Visionary, innovative, executive leadership may occur periodically, and while it may contribute to sustained innovation, it is not the only contributor to successful, long-term innovation. Sustained innovation success does not rely on visionary leaders alone.

INDUSTRY COMPETITION AND SPECIFICS Myth: The level of industry competition dictates the amount of innovation.

Truth: Industry competition is a factor in fostering innovation, but it doesn’t guarantee innovation leadership.

If executive leadership alone doesn’t account for innovation success, then perhaps the level of industry competition fosters more innovation. After all, it seems some industries are more innovative than others. A look at the mobile phone handset market provides perspective on a highly competitive and innovative industry. Consumers expect their wireless devices to offer valuable new features and capabilities. Yet, recent history suggests that while many firms in the space have been considered innovative, few of them have sustained leadership for any length of time. Nokia is a great case study in this regard as it was considered the market leader in innovative handsets for many years.

NOKIA’S CEO WROTE AN OPEN LETTER, DESCRIBING THEIR POSITION AS A 'BURNING PLATFORM.' Nokia is an example of a company that has reinvented itself as times and needs changed.

Originally a paper company, the firm has shifted its focus and business model at least three times over the course of almost 150 years. Nokia entered the cellular handset market in the late 1980s and as of 2010 was the leading handset manufacturer in terms of volume. Yet its market share has dropped precipitously according to industry analysts as it has failed to anticipate new needs and offer compelling new products.

At the time Nokia was the leading handset developer, its researchers actually designed a touchscreen mobile handset (this was years before Apple’s iPhone), but the concept was rejected by executive management, which had become complacent and comfortable with current profits. In early 2011, Nokia’s CEO wrote an open letter to his employees, describing Nokia’s position in the handset space as a “burning platform” based on the company’s shrinking market share.

As Nokia stumbled, Motorola took its place as the innovation leader in the handset industry with the RAZR phone, for a short period. The designers of the RAZR were featured in the business press and were hailed as the new leaders in cell phone design. Yet in just a few years Motorola was dethroned by Apple, showing that it was no more able to innovate consistently over time in the cell phone space than Nokia. It remains to be seen whether Apple will suffer a similar fate with the introduction of the Android operating system and new smartphones based on that technology.

While the competitive nature of an industry does increase the likelihood of innovation, it does not guarantee a firm will sustain innovation focus.

The point is that within less than a decade several firms wore the crown as the “innovation” leader in cell phone/smart-phone development and design, and all of them demonstrated periodic innovation. Yet only Apple appears to be able to sustain innovation. Just because one firm held the leadership mantle and received higher profits during its own leadership period has not meant that such firms could sustain innovation over time.

THE FAST FOLLOWER Myth: It is possible for firms to copy the product or service offerings of market leaders while retaining competitive advantage through low costs or higher service.

Truth: To remain competitive, firms must increase their innovation capabilities instead of playing 'follow the leader.'

A quick review of firms in the United States demonstrates that most industries or markets have one well-established innovator and several “fast followers.” The majority of firms in any industry don’t heavily invest in innovation. Most companies assume they can copy the strategies of the leader in their market and still retain competitive advantage through low cost or higher service--or simply through the lethargy of their customer base. Such organizations will even argue that their strategy is to be a “fast follower.” This strategy, however, is usually a difficult one to pursue and it is increasingly a dangerous proposition.

There are at least four problems with a business plan of this kind.

'FAST’ FOLLOWERS SUFFER THE MOST AS NEW INNOVATIONS ENTER A MARKET. The first problem is in the word “fast.” Customer demand and expectations are changing much more quickly than many firms have the ability to keep up with. Few products or services have the luxury of extended life cycles or little competition. A growing base of consumers with new expectations and new demands only fuels the fire for more products and services. Firms that claim to be fast followers are often merely just followers. As a firm grows and matures, its bureaucracy, decisions, and approvals inhibit its ability to bring a new product to market quickly. The company can’t respond fast enough to innovators or consumer demands. In this period of rapid change and global competition, innovation isn’t a “nice to have” but an important core competence; those firms that can’t keep up will inevitably perish.

The second problem with “fast” followers is that they become accustomed to following.

Since these companies don’t exercise any creativity or innovation skills, those capabilities have atrophied or they aren’t valued within their organizations. This lack of innovation skills

leaves the fast follower with only one recourse: to eliminate costs and inefficiencies since they can’t hope to command the attention and margins that accrue to innovators. Given new economic shifts, global competition, and customer demand, firms that cannot create new, interesting products and services exist on the very brink. To remain competitive, firms that haven’t relied on innovation as an advantage must increase their innovation capabilities, not try replicating others’ successes.

Third, “fast” followers often don’t understand what features or benefits the customer values in a product, and what challenges or issues exist in those products. By simply copying an existing product or service, they risk duplicating all the problems or issues that exist within the innovative product. Since the “fast” follower does little research, the company often doesn’t know which features or benefits are important and should be emphasized, or what hidden issues or concerns exist with the product. “Fast” followers often make the same mistakes as innovators do, but they have less opportunity to respond and encounter a customer base that has recognized both the benefits of the product or service and the issues or constraints.

'FAST’ FOLLOWERS OFTEN DON’T UNDERSTAND WHAT FEATURES OR BENEFITS THE CUSTOMER VALUES IN A PRODUCT. Finally, “fast” followers suffer the most as new innovations enter a market. They are more accustomed to implementing the business models and offerings of the innovation leaders after the models have been proven. Fresh entrants, unbound by the shape and structure of the market or competition, will enter to disrupt the existing order and make older products, services, and companies obsolete. Innovators by their very nature are constantly scanning the horizon, looking for emerging threats and new entrants. They spot disruptive trends and shift nimbly into new opportunities. Industry laggards and fast followers are impacted by disruptions far more than innovators, but the impact is more severe on fast followers since laggards really had little to lose. Since such companies are neither fast nor particularly insightful, they lose the most in a market disruption as they can’t shift away from their existing models and structures quickly enough.

The “fast follower” strategy is increasingly a difficult business proposition. Firms that focus their efforts on innovation rather than fast duplication will succeed.

As Michael Treacy established in his book The Discipline of Market Leaders, there are three differentiated positions in any market: product leadership, operational excellence, and customer intimacy. Innovation is a tool that can help an organization achieve leadership in any one of these differentiated pursuits, but clearly only one firm in an industry can be the “best” at any of these strategies. For example, we could argue that in the retail space, Target is the product leader, partner-ing with leading designers to bring interesting, attractive, and affordable products to the mass market. Wal-Mart is the operational efficiency leader, innovating new data streams and distribution tactics to keep costs and prices low. Nordstrom is the customer intimacy leader, creating a completely unique and valuable relationship with its customers. Every other retail firm lags behind these firms in one or more of the three strategic areas, and new competitors seek to enter the retail space and disrupt the leaders, much less the laggards.

Innovation is a long and winding road. Thankfully, you can steer.

SUSTAINED INNOVATION Myth: Due to changes in a globalizing world, no firm can sustain innovation leadership over the long term.

Truth: Sustained innovation resides in factors that companies can control.

Some observers argue that given heightened competition, accelerating global trade, and increasing customer demands, no firm can sustain innovation leadership over the long term. This argument, however, ignores the results of a firm like 3M. Except for a brief period between 2000 and 2005 under former GE executive James McNerney, whose focus was on profitability and efficiency, 3M has had a long history of innovation leadership, creating a range of products and services. Certainly the Post-It is probably the most well known, but over the last 50 years 3M has entered countless markets and industries, tailoring new innovations to different geographies, technologies, and market needs. Though 3M continued to innovate in spite of McNerney’s focus on efficiency, when George Buckley replaced him as CEO, one of Buckley’s first actions was to reemphasize innovation as a core capability, providing fresh focus and funding for those activities.

In my experience, it is completely possible for a firm to develop and sustain an innovation capability over time, just as a firm is able to create and sustain market leadership over time.

Innovation capability resides less in markets, strategies, technologies, or leadership than we typically suppose, and more specifically in factors that companies can control--culture, business attitudes and perspectives, focus, and intent. That’s the real lesson we can learn from relentless innovators: what drives long-term, successful innovation are the same factors that shape the way people think and act in any business--operating models, strategies, rewards, culture, and processes.

Tata-funded Artificial Leaf Project Hits Hurdle

Economic Times Not all prototypes make it out of the laboratory, but the artificial leaf is so elegant that its design seems to beg for commercial production. Described in Science last year by a team led by Dan Nocera at the Massachusetts Institute of Technology, the catalyst-coated wafer is a silicon version of a photosynthesising leaf: it turns sunlight into storable fuel by splitting water into oxygen and hydrogen.But Sun Catalytix, the company founded in Cambridge off the back of Noceras work, says that it wont be scaling up the prototype for field tests. The device offers few savings over other ways to make hydrogen from sunlight, the company says.Sun Catalytix is backed by the multinational conglomerate Tata Group and has received a $4-million grant from the energy departments Advanced Research Projects Agency-Energy (ARPA-E ).With the prices of solar cells dropping all the time, the firm is not going to make a heavy investment that’s unlikely to pay off. Instead, it is looking at cheaper designs but these require yet-to-be-invented semiconductor materials. So, for the moment, the artificial leaf is in the fridge,Sun Catalytix chemist Joep Pijpers says.

New Test to Help Detect Signs of Disease Early

Scientists have developed an ultra-sensitive test that should enable them detect signs of a disease in its earliest stages,according to a research paper published in the journal Nature

Materials on May 27.The scientists,from the Imperial College London and the University of Vigo,have created a test to detect particular molecules that indicate the presence of the disease,even when these are in very low concentrations.There are already tests available for some diseases that look for such biomarkers using biological sensors or biosensors.Professor Molly Stevens,senior author of the study from the Department of Materials and Bioengineering at Imperial College London,said: It is vital to detect diseases at an early stage if we want people to have the best possible outcome ... diseases are usually easier to treat at this stage,and early diagnosis can give us the chance to halt a disease before symptoms worsen.However,for many diseases,using current technology to look for early signs of disease can be like finding the proverbial needle in a haystack.Our new test can actually find that needle.

New Materials Identified to Cut Carbon Emissions

When power plants begin capturing their carbon emissions to reduce greenhouse gases, it will be an expensive undertaking. Current technologies would use about one-third of the energy generated by electric plants (whats called parasitic energy) and, as a result, substantially drive up the price of electricity. But in a new computer model, developed by the University of California, Berkeley, chemists show that less expensive technologies are on the horizon. They will use new solid materials like zeolites and metal oxide frameworks (MOFs) that can more efficiently capture carbon-dioxide so that it can be sequestered underground. The current on-the-shelf process of carbon capture has problems, including environmental ones, if you do it on a large scale, said Berend Smit, professor in the Department of Chemical and Biomolecular Engineering and of Chemistry at UC Berkeley and a faculty senior scientist in the Materials Sciences Division at Lawrence Berkeley National Laboratory (LBNL).Our calculations show that we can reduce the parasitic energy costs of carbon capture by 30% with these types of materials, which should encourage the industry and academics to look at them.

Technology can unlock new fields, curb fears of peak oil

Shell's new Perdido oil and natural gas platform in the Gulf of Mexico. (Melissa Phillip / Houston Chronicle) Technology advancements in the energy sector can boost oil and gas production, improve safety and curb fears that fossil fuels are rapidly running out, a Chevron official said today.

During the opening session of a Houston energy conference this morning, Jay Pryor, Chevron’s vice president for business development, touted a number of technology advancements that have improved the efficiency and safety of fossil fuel production, including enhanced oil recovery, 3D seismic imaging, horizontal wells, and hydraulic fracturing.

“Because of technology, we are producing in places once just dreamed of,” Pryor said, at the 10th annual KPMG Global Energy Conference. “In lifting those reserves, we’ve raised doubts about the eminence of peak oil.” The conference, hosted by consulting firm KPMG, is being held today and tomorrow at the InterContinental Hotel. Technology has allowed the

industry to cut the cost of production, increase the volume of fossil fuels captured, reduce environmental impacts and reach previously inaccessible deposits of oil and natural gas.

Global reserves of oil and natural gas have grown 130 percent since 1980 and more than 30 percent since 2000, Pryor said. New methods for extracting more oil and natural gas from the ground have been particularly important to growing production volumes, Pryor said. The natural flow of oil from wells only accounts for 15 percent to 20 percent of the total volume produced today, he said. Easing the flow of fossil fuels using water, carbon dioxide and other methods can enhances production by as much as 25 percent.

“And now the combined application of horizontal drilling and fracking can add another 10 percent,” he said. “Each of these technology advances unlocks more resource and reserves.” Deep-ocean drilling holds among the greatest promises for expanding oil and natural gas production, Pryor said. He noted that in the 1950s, the industry was limited to drilling in water depths less than 100 feet. Today, wells are being completed 10,000 feet below the ocean’s surface. With the industry’s venture into riskier environments, public fears have grown about accidents that could harm human life and the environment, like the fatal 2010 disaster at BP’s Macondo well in the Gulf of Mexico. Pryor said the industry must respond to the added pressure.

“We know each incident – whether it’s in the U.S. or overseas, whether it’s on land or in the water – raises fears about the safety of our industry and makes governments want to through up barriers to access worldwide,” he said. “We know that all it takes is one teaspoon of oil in the water to dampen the support of the public, the politicians and our partners.”

JNU develops antibodies to fight anthrax infection

TNN | May 2, 2012, 04.27AM IST NEW DELHI: The School of Biotechnology at Jawaharlal Nehru University (JNU) has developed therapeutic antibodies that can fight anthrax infection. The antibodies that were recently tested on mice proved to be successful but it may take longer to develop the same on a human model.

The anthrax vaccine, which was also developed by the same department a couple of years ago, is currently undergoing phase 2 human trials. Professor Rakesh Bhatnagar, lead scientist for both the projects, says that research in developing antibodies is important because anthrax is a potential bio-terrorism weapon.

"India, US, France and UK are all in a race to develop the first anthrax vaccine. Who will have it first will only depend on when they manage to complete all three human trials. One of the important reasons for developing the vaccine is its bio-threat. In 2001 we saw how anthrax can be used by enemies to kill people. Inhaling the bacteria will lead to death in 99% of cases," Bhatnagar said.

The therapeutic antibody developed at JNU was a Department of Science and Technology

(DST) funded project of about Rs 1.7 crore. It took the team about three years to develop it for a mouse model. They will now start working on a human model.

"Anthrax outbreaks happen mostly in forest areas where they spread from animals that had contracted the infection. The antibodies will help in dealing with such cases, too. It may take us five more years to have the antibodies cleared by all the regulatory checks," he added.

Once the anthrax vaccine completes all human trials, it can be given to humans as annual booster shots to keep them immunized. The team has also developed the vaccine for animals but it is yet to be commercially launched.

The team presently conducts research in a biosafety level 3 (BSL3) facility where the air continuously gets filtered. They also have biosafety cabinets which keep them further protected from contracting the infection.

Management and Leadership Women Are More Ethical Than Men . . . and We All Become More Ethical As We Get Older

Published by admin on April 17th, 2012 - in Dan & Emily Roger Steare is a British philosophy professor who consults with large companies on ethics. And he created an ethics survey that he calls ‘Moral DNA.’ –He put it online four years ago, and 60,000 people have taken the survey since then.

According to the results . . . women behave more ethically and morally than men do.

–Women are more likely to think about how their decisions affect other people, while men are more likely to act in their own self-interest.

–People also act more ethically as they get older. Roger said that when a person reaches their mid-30s, they “cross-over” and begin relying on their experience to guide their behavior.

–We behave more and more ethically as we get older, until we reach the peak of our intellectual and moral lives in our mid-60s.

If you want to take this quiz, go to www.moralDNA.org. It is kind of long though!

Are women really more ethical than men? Maybe it depends on the situation.

by James J. Hoffman Over the years U.S corporations have been caught engaging in unethical and in many cases illegal acts such as tax evasion, contractor fraud, "golden handcuffs" and "parachutes," overly large executive bonuses, the sale of unsafe products, fraud and conspiracy, industrial espionage, and product misrepresentation (Borkowski and Ugras, 1992; Donaldson and Gini, 1996). During the time when most of the decisions to commit these unethical acts were made, the top management teams of the companies which committed these acts were made up primarily or exclusively by men (see for example the composition of the top management team at Beech-Nut when the company misrepresented their apple juice product; the composition of the top management team at Ford when the

company produced unsafe Pintos; the composition of the top management team at Dow Corning Corporation when the company produced unsafe breast implants; and the composition of the top management team at Johns-Manville Corporation when the company concealed the dangers of long-term exposure to asbestos). As more women climb the corporate ladder into key decisionmaking positions, the question of whether or not women will be as likely to engage in these same unethical practices has become more relevant.

Although several research efforts have examined the effect of gender on ethical decision making, results from these studies have been mixed (Beltramini et al., 1984; McNichols and Zimmerer, 1985; Barnett and Karson, 1987; Kidwell et al., 1987; Jones and Gautschi, 1988; Harris, 1989; Tsalikis and Ortiz-Buonafina, 1990; Stanga and Turpen, 1991; Sikula and Costa, 1994).

The objective of the current study is to develop a situational dynamics based model that more fully identifies what factors affect the manner in which women and men respond to ethical dilemmas. In order to accomplish this objective several studies that have examined the effect of gender on ethical decision making will be reviewed. Once these studies have been reviewed and their shortcomings are identified, an attempt will be made by the current study to overcome the weaknesses of prior studies and shed additional light on the effect of gender on an individual's level of ethical decision making.

THE EFFECT AND INFLUENCE OF GENDER ON ETHICAL DECISION MAKING Literature Review With the advent of women managers and executives in organizational hierarchies, more attention has been given to the possible differences between the management styles and decision-making patterns of men and women. Due to the lack of empirical support for the notion that women tend to be more ethical or certainly more rules oriented than men (Brady, 1987), these differences have been particularly interesting to researchers in the field of business ethics.

One of the first major studies regarding this issue was conducted by Beltramini, Peterson, and Kozmetsky (1984). In their study of 2,856 students in 28 universities, women were found to be more concerned about ethical issues in business than men, regardless of the issue. based on their findings the authors suggested that "not only are the attitudes of future decision makers regarding ethical practices currently in the process of being shaped by educators, but to an extent it is the women students' concerns which may well be establishing a new moral force in tomorrow's business world" (1984: 199). While this study supported the thesis that women may be more moral than men in certain situations, the results are not clearly confirmed by the work of other researchers.

In a later study by Jones and Gautschi (1988) that used a fifteen question survey, the authors found that in general women and men do not indicate much difference in their ethical attitudes. However, they did find three areas where women indicated a stronger ethical response than men: product information for consumers, minority hiring, and comparable worth. Since these last two issues more directly affect women, it is easy to understand the increased level of interest by females.

In another study, Barnett and Karson (1987) focused on gender influences on personal values and business decisions. Results from their study were rather inconsistent in support of the stereotype that women are more nurturing than men and therefore more ethical in their decisions in some situations. Specifically, the authors found that women were equally

as likely as men to pursue unethical courses of action if public detection was not an issue; yet when faced with the possibility of discovery, women appeared to more.

The business case for gender-balanced leadership

By Dana Theus on April 9th, 2012 | Comments(38) 169 inShare For some 20 years, companies have been running women’s leadership development programs a lot like sensitivity seminars, to develop awareness in both women and men that business women are, well, “different” and to help women understand how best to integrate into the existing business culture.

The good news is that these efforts, combined with education and encouragement, have helped put women on 15% of the boards of the Fortune 500. More good news is that studies show that companies with about 30% gender diversity on their boards actually outperform those with no women by a wide margin measured through multiple metrics (e.g., an 84% return on sales).

The bad news is that 15% is paltry for the Fortune 500, and it looks like midcap firms’ leadership teams may be even less gender diverse. Worse news is that progress is slowing at exactly the time we need women’s strong leadership skills in upper management more than ever; and women — especially young, highly educated women — are bailing out of the system. They’re not all leaving the workforce to have babies either — many of the best and brightest are going to start entrepreneurial ventures.

This puts business leaders interested in recruiting and developing the next generation of leadership in quite a bind. On the one hand, we have an economy — in need of powerful up-and-comers — struggling to right itself into productivity, ethics, sustainability and profitability. On the other hand, we have an up-and-coming, educated, appropriately skilled resource in plentiful supply (representing over half the workforce) who is choosing to opt out of the system.

You see the danger ahead, don’t you? We’ve identified talent pool key to our economic success who’s not making it into leadership positions where they can deploy that positive impact, and thus our leadership class is becoming systematically weakened at the very time we most need to strengthen it.

This isn’t new news — the seminal research on this subject was published by McKinsey in 2007 — but discussion and action on this subject in the U.S. is far behind Europe and even developing nations. Are we asleep at the switch? As importantly, why are so many women taking the path of least resistance?

As many women entrepreneurs tell me, “Why should I put up with a culture that doesn’t meet my needs and let me shine? I know I’m good. I’ll go make money for myself.” And then — thanks to the Internet — they do, along with many creative-thinking, industrious young men. When I talk to women both in and outside corporations about why they have left, or are tempted to leave, corporate culture is most frequently cited as the barrier to bringing more women into leadership.

Corporate attempts to support “women’s leadership programs” are often seen as a burden — another job on top of the one they already have and the family they value. But as importantly, many women’s development programs are viewed as attempts to “fix them,”

which leads many to conclude they’re just round pegs being stuffed into square holes and might as well leave, taking their talent and potential with them.

It’s easy for a corporation to throw up its (metaphorical) hands and say, “It’s our culture, we can’t change,” but I submit that there’s simply too much at stake now not to change. And this change isn’t only for social justice reasons – there are hard metrics to motivate it too.

Change isn’t hard when you understand what you have to lose and what you have to gain.

After all, what would your financials look like with an 84% increase in return on sales or a 46% increase in return on equity?

I believe, after scanning almost 100 research studies on the subject, that by bringing more women into leadership, their mere presence in balanced numbers (i.e., 30% or more), with men will strengthen the capabilities of any organization’s leadership culture. This phenomenon, The Woman Effect, has already been validated through the research above and has the power to revitalize our economic engines to spur yet another wave of phenomenal growth.

However, to activate The Woman Effect in our economy, we’ve got to do it in our companies; and to activate it in our companies, we’ve got to stop running sensitivity seminars to adapt the women to the existing culture. We’ve got to take on the challenge of systemically adapting our culture to bring out the strengths of both female and male leaders, working together. This is a core strategic investment in profitability and sustainability, even more strategic than implementing a new ERP system.

The good news is that many of the same change management practices we use to implement technology can help us adjust to gender-partnered leadership. My colleagues and I will be running some change management pilot programs to do this and I’ll report back here. Go ahead and get started. You won’t be alone!

Game changers in recruiting and workforce management

By Matt Rivera on May 18th, 2012 inShare Recruiting the best and brightest talent to your team has always been a challenge. To make matters worse, the recruiting game is constantly evolving. The dawn of the Internet fundamentally changed recruiting and workforce management, and social media and mobile technology are adding opportunities — and challenges — for companies competing for top talent.

The convergence of such technology calls for fresh policy and ways of thinking about recruiting and retaining employees. Many companies focus on one technology or another, but few take a holistic look and determine what skills and processes they need to manage all of these changes.

These game changers can’t be passed down the management chain; they require the attention of the highest leaders in your organization. Here are the three biggest game changers and what leaders can do to effectively manage them.

1. Social media, human resources technology and beyond. Everyone’s talking about social media and how they’re revolutionizing customer and employee engagement and recruiting. What fewer people discuss is the effort needed to create and sustain an effective social media strategy or the risk of instantaneous communication to thousands of people. HR technology, too, creates opportunities and risks. There’s a vast amount of information that your company is responsible for securing and making available to

employees and customers. But screening requirements, privacy concerns and legislation have fueled a need for strong policy.Protect your company by regularly reviewing policies for social media, bringing your own device and other technology initiatives.

Customers and employees want to see that you’ve embraced technology, but be sure you define how it lines up with your company’s risk profile and business goals.

2. Virtual, migratory and transient workers. Since the recession, the workforce has increasingly shifted to freelancers, telecommuters and other flexible work arrangements, thanks to technology such as VoIP and Skype that makes physical location irrelevant.

Companies in tune with these arrangements are better able to attract high performers who thrive on the flexibility of this entrepreneurial environment. You’re also more likely to attract younger workers who are naturals at working in a virtual environment. But this change also demands a new thought process from business leaders. First, ensure that your information technology infrastructure can accommodate virtual workers. You also need to maintain connectivity and engagement among all employees. Leaders must understand the dynamic this varied workforce imposes and hire HR managers capable of handling it.

3. Maintaining legacy skills while responding to emerging skills. Some skills will always be in demand, while others are needed to stay on the cutting edge of technology.

One good example is mobility. You need employees who can connect your system to tablets and phones used by workers and customers, but you also need someone with legacy skills to maintain your network, infrastructure and security. As technology emerges, you need to constantly re-evaluate skills at your disposal and bridge gaps between traditional systems and new applications.

These trends are fueling a talent deficit at many companies. If you don’t react quickly to these game changers, you might find growth stunted by a limited pool of potential employees. On the other hand, companies that step up will attract and ultimately retain the best talent.

So take the plunge, make the investment and embrace these changes. Your workforce — and your organization — will be better off for it.

Matt Rivera is director of customer solutions at Yoh Services, a leading provider of highimpact talent and outsourcing services and a unit of Day & Zimmermann. For more information, visit Yoh’s website or blog.

How To Lead In A Crisis: Robert Caro's Lessons From Lyndon B. Johnson

BY DAVID D. BURSTEIN | 05-21-2012 | 6:22 A Leadership lessons from LBJ Robert Caro's lauded multivolume biography of President Lyndon B. Johnson holds important lessons for business leaders, writes David D. Burstein. The period after President John F. Kennedy's assassination is a good example: Johnson moved swiftly to consolidate power, unite the American people and drive his agenda forward. "There is but one way to get the cattle out of the swamps. And that is for the man on the horse

to take the lead, to assume command, to provide direction," Johnson once said. "I was that man."Fast Company online (5/21) Since 1982, historian Robert Caro has been chronicling the life of the 36th President of the United States, Lyndon B. Johnson. The first three volumes of the Years of Lyndon Johnsonseries were met with wide acclaim.

The third volume, Master of the Senate, won the Pulitzer Prize in 2003. Now, Caro has released volume four: The Passage of Power, which focuses on Johnson in the immediate aftermath of the Kennedy assassination in November 1963. Fast Company recently spoke with Caro, who said that one of the best ways to understand leadership is to observe leaders “during their most intense struggles, when they have to use every resource available."

"In the moments following the Kennedy assassination, every one of the resources of the presidency was not only visible, but because they were being used to the utmost, they can be observed in all their facets,” Caro says.

Here, Caro helps us parse four key leadership lessons from Johnson’s actions in the days that followed the assassination.

1. Preserve Stability And Continuity The Kennedy assassination was one of the first national crises to unfold on live television.

As a result, by the time Johnson’s plane from D.C. arrived in Dallas, the vast majority of the American public already knew what had happened. Rumors of conspiracies involving Mexico and Castro were already beginning to fly. “Johnson has to settle the country down,” Caro says. “He has to create an impression of continuity and stability. He has to make clear that the government is functioning--even though its leader had been suddenly killed.”

As part of this strategy, one of the first decisions Johnson made was to keep Kennedy’s staff and cabinet members in place. “That’s very hard to do, because they disliked him," Caro says. "In many cases, they actually had contempt for him.” While all of Kennedy’s men had initially agreed to stay on through the funeral, many of them were planning to leave shortly thereafter. Knowing this--and realizing the implications of a mass exodus-Johnson began a campaign to entice the staff to stay on. Johnson met with each individual and told him, “I need you more than Kennedy needed you.” But instead of using that same line for each person, Johnson gave each an individual reason that appealed to their particular interests, as to why he needed them to stay.

2. Use The Crisis To Move Forward On the night after the assassination, Johnson was at home in D.C. He couldn’t sleep. He called three of his aides to his bedroom. He talked to them for hours--without stopping-about what needed to be done, essentially outlining the agenda for the rest of his presidency.

Since he had been an extremely powerful Senate majority leader, Johnson was able to see that Kennedy’s legislative agenda was stalled, and had been stalled since before his death.

As president, Johnson wanted to move on this legislation. The first bill he took up was the Civil Rights Act. Johnson’s advisors expressed concern that taking up civil rights would erode his political capital. Johnson replied to them that if he couldn’t tackle an issue like civil rights as President, “What the hell is the presidency for?” In his first address to the country, Johnson said “Let us continue [the work of Kennedy].” In his book, Caro quotes

Johnson later remarking that although Kennedy had died, “his ‘cause’ was not really clear.

That was my job. I had to take the dead man’s program and turn it into a martyr’s cause.”

“He used the sympathy engendered by Kennedy’s death to pick up Kennedy’s causes and drive them forward,” Caro tells Fast Company. Although Johnson was always conscious of fact that he was not elected president outright, he refused to let that be an obstacle to carrying out his bold legislative agenda that saw major progress on everything from civil rights to Medicare.

3. Detachment As An Asset Johnson and Kennedy had a tense and often contentious relationship. While Caro acknowledges that we will never know what exactly Johnson felt personally about Kennedy’s death, it is possible that Johnson’s detachment from Kennedy may have made it easier to handle the crisis. In Dallas, Caro recounts that Johnson stood in the hospital for 45 minutes without any information about the president’s condition before an aide informed Johnson that Kennedy was dead.

“A moment later, another aide, Malcolm Kilduff, appears and he calls Johnson ‘Mr. President’ for the first time.” Caro says, “Right then, Kilduff asks Johnson to make decisions. And Johnson starts making those decisions with great precision.”

From that moment on, Johnson entered a new mode of thinking. Any personal thoughts or emotions needed to be pushed aside in order to lead the nation through a crisis and then some.

4. Big Decisions Have To Be Made Alone In the White House, Kennedy had stripped Johnson of most of his advisors in an effort to minimize his ability to exert influence over administration affairs. As a result, when Johnson found himself faced with a crisis after the assassination, he had no one with whom to consult. In this period, Caro notes, “One of the remarkable things is how little he relies on his advisors. On the plane going back to Washington, he has just a few aides with him. He really has no staff. He does this all out of his own unparalleled knowledge of government.

Johnson decides alone what has to be done. As Senate majority leader, Johnson made the Senate work. Part of that was a result of his decisiveness and his ability to think fast.

Johnson had a will to act and a will to decide.”

In his book, Caro quotes Johnson’s words about those days: Everything was in chaos. We were all spinning around and around, trying to come to grips with what had happened, but the more we tried to understand it, the more confused we got.

We were like a bunch of cattle caught in the swamp. There is but one way to get the cattle out of the swamps. And that is for the man on the horse to take the lead, to assume command, to provide direction.

Cos Walk the Extra Mile for Top Talent

Et, May 18, 2012 Bangalore-based product services firm NetApp pays extra attention to a set of 400 employees across levels. Of the 2,000 total employees, these managers have been identified as top performers. This extra attention is in the form of giving them new projects

to work on and avenues for technical development. The HR head SR Manjunath says: ‘They are also given more visibility in front of global leaders of the firm.”

NetApp is not alone. Companies across spectrum have designed ways to retain and motivate their top performers, especially at a time when budgets are tight and monetary rewards are limited.

HR pundits say when high-performing employees feel they are being under-utilised, underpromoted or under-recognised, they will move. Says Rajiv Krishnan, market business leader for human capital services at Mercer, “During bad times, companies get paranoid about their high performers because they are the first ones to be roped in by competitors.”

The top-three ways firms manage their best performers include sending them for international assignments and wide exposure across business units; long-term incentives in the form of wealth generation; and initiatives around work-life balance.

NEW SKILLS Mumbai-based Aegis has identified 500 out of 55,000 employees who are its high performers. They are enrolled into special assignments and given leadership mentoring.

There is another programme called the Aegis ACE, where those in junior management get certified and trained under communication development, strategy building and team management. The programmes are not one-size-fits-all. “These 500 are critical to us but this does not mean that the the others are not. However, the selected high performers build our talent pipeline,” says Aegis HR head SM Gupta. Delhi-based Dabur has identified around 5% of the 5,700 employees as high-fliers. At a time when pay raises can’t be high, the company is using leadership development as a talent engagement incentive. It had recently sent three of its best performers to Kellogg School of Management and some others to Indian School of Business, Hyderabad, for leadership programmes.

“The high performers are important because they bring in certain kind of disruptive innovation and think differently which works for the organisation,” said Dabur HR head A Sudhakar.

STOCK OPTIONS Bangalore-based IT firm iGate didn’t offer this last year but this time around has decided to retain its top talent by giving them stock options, said HR head of the company S Kandula.

Those who would get them are the top 10% of the 27,000 workforce across levels, barring employees at the entry level.

“Stock options will get high performers more involved in the company's operations. They are driven from within and externally we have to provide them with platforms,” says Kandula. Besides stocks, the company offers leadership training and other programmes to hone the skills of their employees.

GLOBAL EXPOSURE At Samsung, the top performers are offered global postings at the company headquarters in Korea for six months to one year. In the last two years, 12 employees at the middle and senior levels have got this opportunity.

The company also offers a global scholarship programme to employees with at least two years of proven track experience (in Samsung) and up to eight years of overall work experience. Besides these, the company also offers job rotation between sales and head office, where they can learn about other job profiles (such as product management). This too is for senior-level (branch heads and above) employees. “People are our biggest assets as they are the ones who will drive the company in the future as well,” says Samsung India VP for corporate HR Sanjay Bali.

Among a host of carrots it offers, EXL Service focuses on executive education programmes from leading universities; differential recognition; exclusive focus on development by creation of individual development plans and career planning discussion; high level of leadership interaction, and reverse mentoring.

EXL Service executive vice-president and human resources global head Mohan AVK adds: “We believe that being in the services sector, people are our biggest differentiators. By creating a dynamic learning environment, which provides multi-faceted exposure, we develop nextgeneration leaders and high-fliers, who in turn help us provide an excellent experience to our clients.” devina.sengupta@timesgroup.com

Employees opt for stability to high pay: Report

Apr 30, 2012 22:13 | Source: CNBC-TV18 Money matters but it seems job security and stability now matters even more. A recent report by staffing and HR services company Randstad on Today's Youth's Employment Choices, highlights, reports Mitra Joshi of CNBC-TV18.

Big, fat salaries are no longer top priority while seeking a job. Aware of the combined impact of an economic slowdown, high inflation and political uncertainty, its seems today's youth would rather work in companies which are financially healthy and offer long-term job security. E Balaji, MD & CEO, Randstad India says, Last year, financial stability was not ranking well. Last year, people were motivated, driver was salaries and benefits. While this year, clearly long-term security of the jobs, financial robustness of the company has come up really on top Also it seems financial sector jobs are not the top choice either. Instead, job-seekers are looking at sectors like telecom, IT, automobile, energy, transport and logistics, FMCG and trade. Microsoft India has been rated as the country's 'Most attractive employer', as well as Oracle, Google India, TCS, Nokia India, HP, L&T, E&Y, GM, Volkswagen, SBI, and SAIL.

Pankaj Bansal, co-founder & CEO, PeopleStrong says, Banking and finance is growing big time. But, inspite of that, as it is very sales oriented business, the potential employees are not very kicked about it. Because people build an assumption that if it is sales there, it must not be exciting, that's why you look at jobs which are IT centric, engineering jobs or even telecom job where the recall is not sales.

Infact, companies on their part, have also become cautious. Even though sectors like healthcare, pharma and auto component industry are hiring big-time, not only are they not offering big packages but are even offering muted increments this year.

RAPID READING PM in Myanmar, promises new relationship, stronger links

IndianExpress NAYPYIDAW : Reaching out to Myanmar as it tries to end 50 years of isolation and reduce dependence on ally China, Prime Minister Manmohan Singh arrived this evening in capital Naypyidaw. He will be holding key talks tomorrow with President U Thein Sein who, as the head of a quasi-civilian government, has stunned the world with his rapid moves to open up the country.

Before leaving New Delhi, the Prime Minister, in a statement, said: “India welcomes Myanmar’s transition to democratic governance and the steps taken by the Government of Myanmar towards a more broad-based and inclusive reconciliation process. We stand ready to share our democratic experiences with Myanmar... We will also consider new initiatives and define a roadmap for further development of our cooperation.”

He said the focus of his visit would be on “stronger trade and investment links, development of border areas, improving connectivity between our two countries and building capacity and human resource”, and added that he hoped to sign a number of agreements and MoUs to strengthen bilateral cooperation.

On Tuesday, Singh will travel to Yangon, some 300 km south, where he is scheduled to meet Aung San Suu Kyi, for long the face of Myanmar’s struggle for democracy and now a member of the country’s lower house. Before he returns home, the Prime Minister will also attend an Indian community reception and address a meeting of think tanks and business heads.

He is the first Indian Prime Minister to travel to Myanmar in a quarter century — the last visit was by Rajiv Gandhi in 1987. His visit comes at a time when sanctions are being lifted and world leaders and business teams are scrambling for a share in the resource-rich country.

Years of military rule and isolation pushed Myanmar into the arms of neighbour China which, in return for diplomatic and military support, picked up its reserves of oil, gas and timber to fuel growth at home.

In January, Yangon-based The Myanmar Times, citing Myanmar Investment Commission data, reported that China invested $13.6 billion in Myanmar, largely in the energy sector, during 2010-11. Of this, $9.6 billion was invested in 2011. An official was quoted as saying that six official Chinese delegations visited MIC in 2011 to discuss investment in infrastructure, mining, energy and manufacturing.

China has started work on twin oil and natural gas pipelines, stretching 1,060 km from the Bay of Bengal port of Kyaukpyu in the Rakhine State to Kunming, capital of its southwestern province Yunnan. Kyaukpyu sits on a harbour used for rice trade between Kolkata and Yangon.

Once complete, these pipelines will allow China to bring home fuel supplies from the Middle East and Africa without taking the long route via the Strait of Malacca. It saves time and makes strategic sense as a precaution for any future conflict that could shut the strait.

Other than shipping oil and gas overland to Yunnan, China also plans to meet its power needs from the Irrawaddy in Myanmar. China Power Investment Corporation and Myanmar conglomerate Asia World have been building what will eventually be one of the world’s largest hydroelectric power stations.

However, work on the Myitsone dam on the Irrawaddy was stopped by President Thein Sein last September, a move that both surprised and angered Beijing. Weeks later, General Min Aung Hlaing broke from tradition by heading to Vietnam, and not China, for his first trip abroad as Myanmar’s new military chief. Vietnam and China are locked in a war of words over rights to the South China Sea and the choice of the first port of call was not lost on anyone.

A former Indian diplomat believes these moves by President Sein signal that Myanmar is ready to do business with others and not be over-dependent on China.

Another former diplomat, who served in Myanmar, underlined that China was “not going to vacate space and let India rush in”. He said New Delhi must take a more pragmatic approach and try “not to be an alternative to China”. “The issue is one of economics, one that asks the question: What is it that India can do for Myanmar?” he said.

In a country with proven reserves of oil and natural gas, where infrastructure building is up for grabs and people are waiting for mobile phone and internet connectivity, the delegation of CEOs visiting Myanmar with the Prime Minister will be a keen observer of how the relationship unfolds.

Chart Of The day | Oil slicks on rupee

Livemint.com The real test for the government comes in Friday’s eGoM meeting when it considers whether to hike diesel prices, which will have a direct impact on its subsidy calculations

The hike in petrol prices might have evoked a howl of protest across the country. But it does nothing much to change the fiscal deficit. The real test for the government comes in Friday’s eGoM (empowered group of ministers) meeting when it considers whether to hike diesel prices, which will have a direct impact on its subsidy calculations. As the chart shows, it is all the more important, because while Brent crude prices in dollar terms have fallen 13% in the past couple of months, that translates only to a 5% drop in rupee terms.

Needless to say, that is due to the steep drop in the local currency. Notice the sharp rise in crude prices denominated in rupees in the last few days.

Engineering courses change gears for bigger paycheck and more job security

22 May, 2012, 05.49AM IST, The writer has posted comments on this articleNew York Times Like many college students, Katherine Bovee, a master's degree candidate at Ohio State University, struggled to find a focus for her undergraduate studies. Wanting to sample a broad range of possibilities, she enrolled in a mechanical engineering programme. As of her junior year she still hadn't found the direction she was looking for, but things began to click when she signed up for courses in thermodynamics and internal combustion engines.

Through her professor, Yann Guezennec of Ohio State's Center for Automotive Research, Bovee connected with the team working on the university's entry in EcoCAR, a greentechnology competition conducted by the Energy Department and General Motors.

"Everything I'm doing is based on what's in the automotive industry," said Bovee. As automakers increase their efforts to design vehicles that are more fuel-efficient and friendlier to the environment, engineering programmes are likewise adapting their curriculums, preparing students to build vehicles increasingly powered by batteries and managed by computers.

GM and other car companies hire about 80% of their interns because they are familiar with their development process and have shown they can work in groups, a critical skill in developing today's highly complex vehicles. While established automakers and parts suppliers remain favoured destinations, a growing number of students are foregoing a bigger paycheck and more job security and going to work for startups and smaller companies, or in developing countries, where they can have greater influence, according to Margaret Wooldridge, director of the Automotive Engineering Program at the University of Michigan.

"There are personalities that don't want to go to a big, old stable company," Wooldridge said. "What's different now is the change-the-world attitude. They're very, very genuine and unusually willing to sacrifice."

How to get mutual fund units transmitted

Livemint.com Transmission of MF units is not the same as transfer of units. While transfer of units is generally not allowed, transmission can happen after you submit certain documents

Kayezad E. Adajania Did you know that you can transfer your mutual fund (MF) units to another person, but most MFs don’t allow it? However, if the first holder dies, units can then be transferred to the surviving joint holders or to the nominee after some paperwork.

Prudent: K.V. Prashant got his father’s MF units transmitted to his mother’s name after his father died. Photo: Jadageesh N.V./Mint Bangalore-based K.V. Prashant, 43, has been investing in MFs for the past 15 years; a habit he inherited from his father, who was an MF investor since 1990. It was only natural for him then that when his father passed away in October 2011 at 74 years of age, he got his MF units transmitted to his mother’s name. It took him about a month to complete all such transfers. Here’s how you can effect a transfer.

Transfer or transmission Note that when units get transferred to the surviving members in case the first holder dies, it is called transmission of units, not transfer. On the contrary, a transfer happens even when all the unit holders are alive.

It’s important to note this difference because recently a Mint Money reader wrote to us complaining about her distributor. When her aunt passed away (the reader was the second or surviving unit holder of that folio), her distributor advised her to sell the MF units and then repurchase them in her own name.

He said this needs to be done as MF units “cannot be transferred”. Selling MF units and then buying them afresh puts commission in the agent’s pocket. Transmission, on the other hand, doesn’t; it is merely a change in the unit holder pattern.

Paras Jain/Mint Transfer of MF units has been somewhat a grey area, until now. Though the Securities and Exchange Board of India’s (Sebi) MF regulations, 1996, permit MFs to allow investors to transfer their existing MF units, fund houses don’t allow all unit holders to transfer their units, en masse. The logic they have is that since MF units can easily be extinguished (in other words, sold) with the fund house, transfer of units “do not make any sense”.

Only in selective cases, such as a unit holder’s death, do fund houses allow units to get transferred. In this case, the MF units get transferred to the second holder or the nominee if there are no joint holders.

In August 2010, Sebi issued a circular telling all MFs that they must allow dematerialized MF units to be fully and freely transferable post 1 October 2010.

This means that if you hold shares in demat form, you can transfer them to who ever you want, provided the receiver has also has a demat account. You can either sell the shares on the stock exchange during market hours or you can transfer to someone, during offmarket hours, as part of an off-market transaction (a buy-sell transaction done outside of market hours).

How to transmit units?

Coming back to transmission, there is a certain set of documents that you require. The kind of documents would depend on whether or not there is a joint holder.

And if there is no joint holder, whether or not there is a nominee.

In all these cases, though, the basic set of documents is the same. Apart from the letter from a joint holder or a nominee (in case there is no joint holder), you also need to give the death certificate of the deceased unit holder, your own know-your-client certificate and your

bank account mandate to get your own bank account registered, instead of the one that is already existent or the one belonging to the deceased unit holder.

In Prashant’s case though, since his mother (the surviving unit holder) and his late father (the deceased and first unit holder) shared the same bank account, he did not submit a separate bank mandate for his mother. However, mind your fund house’s service standards—or the lack of it—here. “Some of the fund houses we dealt with after my father’s death insisted that my mother submit the bank details attested by the branch manager. It took us quite some time to convince them that the bank account details would remain the same since both of them shared the same bank account. My impression is that since the transmission manual says we need to submit the bank account details, the MF’s customer service department just blindly follows it,” says Prashant.

Prashant’s financial planner, Anil Rego, who handled his case, feels that the agent in the case of the Mint reader “may be ignorant and may not have misinformed deliberately.

These days, with MF commissions on the lower side, it should not make such a big difference to the agent.”

Legal documents Legal documents are not required when there are joint surviving holders. But when nominees stake a claim to the investment, your fund house will ask for some legal documents. These documents range from an indemnity bond if investment amount exceeds Rs 1 lakh to an affidavit by the legal heir.

An affidavit is a legal document on stamp paper, which if you sign and submit, swears that what you’ve said on the affidavit is true and is a fact. An indemnity bond is an undertaking that we give to indemnify the firm against any losses that may arise. For instance, if the nominee is not registered in a folio and s/he comes ahead to claim the MF units of the deceased unit holder and the legal heir chooses to step aside, the legal heir must give an indemnity bond to the MF. “This means that if, in future, somebody else claims to the MF that s/he is the rightful owner, and not the one who actually claimed the money, the legal heirs (or the ones who signed the indemnity bond) are liable for the loss, and not the fund house,” says Anju Gandhi, partner, SNG and Partners, a Mumbai-based law firm.

How much time does it take?

Srinivas Jain, chief marketing officer, SBI Funds Management Ltd tells us that it usually takes a week to 10 days to get the transmission done. It took almost a month for Prashant to get the transmission done. “My 15 years of MF investing has taught me that fund houses take their own sweet time for operations other than redemptions and fresh investments,” he says. So remember to allot lots of time when beginning the process of transmission.

Maya calendar workshop documents time beyond 2012

By Alan Boyle May 14, 2012, 1:03 am Boston University archaeologist William Saturno carefully uncovers art and writings left by the Maya some 1,200 years ago. The art and other symbols on the walls may have been records kept by a scribe, Saturno theorizes. Saturno's excavation and documentation of the house were supported by the National Geographic Society.

Archaeologists have found a stunning array of 1,200-year-old Maya paintings in a room that appears to have been a workshop for calendar scribes and priests, with numerical markings on the wall that denote intervals of time well beyond the controversial cycle that runs out this December.

For years, prophets of doom have been saying that we're in for an apocalypse on Dec. 21, 2012, because that marks the end of the Maya "Long Count" calendar, which was based on a cycle of 13 intervals known as "baktuns," each lasting 144,000 days. But the researchers behind the latest find, detailed in the journal Science and an upcoming issue of National Geographic, say the writing on the wall runs counter to that bogus belief.

"It's very clear that the 2012 date, this end of 13 baktuns, while important, was turning the page," David Stuart, an expert on Maya hieroglyphs at the University of Texas at Austin, told reporters today. "Baktun 14 was going to be coming, and Baktun 15 and Baktun 16. ...

The Maya calendar is going to keep going, and keep going for billions, trillions, octillions of years into the future."

The current focus of the research project, led by Boston University's William Saturno, is a 6-by-6-foot room situated beneath a mound at the Xultun archaeological site in Guatemala's Peten region. Maxwell Chamberlain, a BU student participating in the excavations there, happened to notice a poorly preserved wall protruding from a trench that was previously dug by looters, with the hints of a painting on the plaster.

Saturno said he didn't think there'd be much to the wall, but "I felt we had a responsibility to find out at the very least how large this room was."

When archaeologists worked their way into the mound, they were amazed to find that it was a richly decorated room from the Classic Maya period, dating back to roughly the year 800. One niche was adorned with the faded picture of a Maya king, wearing a bluefeathered headdress and holding a white scepter. The picture of a scribe holding a stylus, perhaps the son or brother of the king, was painted nearby with the label "Younger Brother Obsidian." Another wall showed a row of three stylized black figures, with one bearing the hieroglyphic name "Older Brother Obsidian."

The painted figure of a man — possibly a scribe who once lived in the house built by the ancient Maya — is illuminated through a doorway to the dwelling, in northeastern Guatemala. The structure represents the first Maya house found to contain artwork on its walls. The research is supported by the National Geographic Society.

Never-before-seen artwork — the first to be found on walls of a Maya house — adorn the dwelling in the ruined city of Xultún. The figure at left is one of three men on the house's west wall who are painted in black and wear identical costumes. One of the black figures is named "Older Brother Obsidian." The figure in the center appears to be a scribe, labeled "Younger Brother Obsidian." A Maya king is portrayed at far right. Heather Hurst rendered the paintings in clearer detail below.

A vibrant orange figure, kneeling in front of the king on the ruined house's north wall, is labeled "Younger Brother Obsidian," a curious title seldom seen in Maya text. The man is holding a writing instrument, which may indicate he was a scribe. The painting re-creates the design and colors of the figure in the original Maya mural.

Three male figures, seated and painted in black, appear in a painting that re-creates the design and colors of a Mural found on the ruined house's west wall. The men wear only white loincloths and medallions around their necks, plus a headdress bearing another medallion and a single feather. One of the figures is particularly burly and is labeled "Older Brother Obsidian." Another is labeled as a youth.

A Maya king, seated and wearing an elaborate headdress of blue feathers, adorns the north wall of the ruined house discovered at the Maya site of Xultun. An attendant, at right, leans out from behind the king's headdress. The painting by artist Heather Hurst re-creates the design and colors of the original Maya artwork at the site.

Rows of numbers and hieroglyphs were painted on yet another wall. In fact, it appeared that the wall had been plastered over repeatedly and covered with new sets of figures.

"What these are giving us are time spans," Stuart said. "Not so much dates, but Maya notations of elapsed time."

Stuart said some sets of numbers denoted lunar cycles of 177 or 178 days, along with the sign for a patron god that was associated with each cycle. "This was, we think, a calculator for a Maya priest, an astronomer, to figure out lunar ages," he said. In a news release, Saturno said this represents the first look at "what may be actual records kept by a scribe, whose job was to be official record keeper of a Maya community."

"It's like an episode of TV's 'Big Bang Theory,' a geek math problem and they're painting it on the wall," Saturno said. "They seem to be using it like a blackboard." In addition to lunar cycles, the calculations on the wall could relate to the periods of Venus, Mercury and Mars, the researchers reported. Stuart said such calculations could have come into play for predicting eclipses. He imagined that there might be "one or more, maybe two or three of these astronomers or calendar priests working, sitting there on a workbench and writing these notations on the wall."

One array of numbers would be particularly intriguing to doomsday debunkers: lists that appear to denote wide ranges of accumulated time, including a 17-baktun period. "There was a lot more to the Maya calendar than just 13 baktuns," Stuart observed. Seventeen baktuns would stand for about 6,700 years, which is much longer than the 13-baktun cycle of 5,125 years. However, Stuart cautioned that the time notation shouldn't be read as specifying a date that's farther in the future than Dec. 21.

"It may just be that this is a mathematical number that they find interesting, kind of floating in time," he told me. "But it certainly is expressing a capacity of time. If they were calculating something from their time period, around 800 A.D., yeah, this would have gone way beyond 2012. But again, we're not sure exactly what the base of the calculation is."

Four long numbers on the north wall of the ruined house relate to the Maya calendar and computations about the moon, sun and possibly Venus and Mars; the dates may stretch some 7,000 years into the future. These are the first calculations Maya archaeologists have found that seem to tabulate all of these cycles in this way. Although they all involve common multiples of key calendrical and astronomical cycles, the exact significance of these spans of time is not known.

Saturno said archaeologists have been trying to get out the word that the end of the Maya culture's 13-baktun "Long Count" calendar didn't signify the end of the world, but merely a turnover to the next cycle in a potentially infinite series — like going from Dec. 31 to Jan. 1 on a modern calendar, or turning the odometer on a car over from 99999.9 to 00000.0. "If someone is a hard-core believer that the world is going to end in 2012, no painting is going to convince them otherwise," he said. "The only thing that can convince them otherwise is waiting until Dec. 22, 2012 — which fortunately for all of us isn't that far away."

Saturno and his colleagues plan to be studying the Xultun site long after that time. He said the workshop was apparently part of a residential compound that had been razed over the ages; the workshop was preserved because it was filled in with material rather than smashed down from above. That could suggest that the room was recognized as a special place even when it was abandoned. Research into the room and its purpose is continuing, Saturno said.

In its day, Xultun apparently served as one of the major ceremonial cities for the Classic Maya civilization — and yet it's just barely been explored, in part because the area is so remote.

"We have probably 99.9 percent of Xultun left to explore," Saturno said. "We're going to be working on it probably for many decades to come. ... Four or five years in to the research project, we have yet to determine its actual boundaries — so my estimate may be off. We may have 99.99 percent left to excavate."

Falling rupee bleeds OMCs of Rs 9,200 cr every year

A loss of 100 paise in rupee's value against the US dollar in a year costs oil marketing companies Rs 9,200 crore per annum, the government said on Friday. Oil marketing companies (OMCs) incur losses due to depreciation of rupee against dollar, minister of state for finance Namo Narain Meena said in a written reply in the Lok Sabha.

"The estimated impact of increase in rupee-US dollar exchange rate by Re 1 on under recovery of sensitive products - diesel, PDS kerosene and domestic LPG - is Rs 9,200 crore annually," he said. Explaining the details, he said the impact of depreciation of rupee by 100 paise on per litre of diesel, kerosene and LPG is Rs 0.87, Rs 0.85 and Rs 14.51, respectively. The estimated impact on annual basis is Rs 6,850 crore, Rs 850 crore and Rs 1,500 crore on diesel, kerosene and LPG, respectively. Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp together lost Rs 148,231 crore on selling diesel, domestic LPG and kerosene at rates lower than cost in 2011-12.

The rupee has been witnessing sharp volatility in recent times. It plunged to a new low of 54.90 against dollar in early trade today, before settling at 54.42.

Why Sri Lanka can be a Breakout Nation

I first visited Sri Lanka in 1997, shortly after a rebel bombing of the central bank headquarters had thrown the financial system into chaos. Military checkpoints made travelling around Colombo rather punishing, but the overwhelming impression was of a charming island and talented people trapped inside a seemingly endless civil war.

When I returned in 2011, the civil war had ended with surprising finality, and I took an extra day to see the country, including the huge territory that had been behind the lines of the Tamil rebels. This should have been easy enough: the Tamil capital at Trincomalee is just 160 miles from Colombo - but the new highways were still being built, and the helicopter on offer was a single-engine job of the kind that routinely crashes in India. My accommodating hosts arranged for the air force to take me up in a twin-engined helicopter.

I've taken helicopters in many emerging markets when the road network is inefficient, normally a bad sign for the economy. But the aerial views of the multiple expressways under construction, the lush green plantations of the interior, and the new resorts facing the turquoise waters that drape the island helped convince me that Sri Lanka is no longer a land in waiting.

In the 1960s, Sri Lanka was billed as the next Asian growth miracle, only to be stymied by a tryst with socialism that played a direct role in igniting the civil war. During the war, Sri Lanka grew half as fast as South Korea and Taiwan and became another country in the long line of emerging-market disappointments.

Today, it seems that Sri Lanka's time has come. The civil war is over, the process of healing is under way, and there is every chance that Sri Lanka will become a breakout nation. Despite slowing sharply during the war years, the economy continued to grow at an average pace of nearly 5% even though it was running on one engine: the prosperous Western province where Colombo is located, and where the well-educated young population was producing strong growth in industries and services.

The North and East Provinces, which account for 30% of Sri Lanka's land and 15% of its population, were largely war zones. With the nation whole again, achieving 7% growth over the next decade should be well within reach.

Since taking office in 2005, President Mahinda Rajapaksa has been consolidating power in ways that critics see as the start of a family dynasty. For now, however, he is deploying his growing powers to ends that suggest he understands the fundamentals of growth, if not of democracy.

Rajapaksa's regime is working to trim the fat left over from the socialist experiments of the 1970s, including high taxes and government debts that still equal 80% of GDP. It is also bringing the vast swaths of formerly rebel-held territory back into play; the government has established vocational training centres and low-interest loan programmes, distributed boats and livestock, and begun building roads and bridges in the former war zone.

Banks are returning, big retail chains are setting up shop, and domestic airlines are flying to Jaffna and Trincomalee again. The flood of state spending drove growth in North and East provinces up to 14% in 2009 and 2010, and they are expected to grow at above 13% for several more years, making them the fastest-growing areas of the country.

The effects reverberate nationwide. On my helicopter trip, I visited some of the newlyrenovated resorts, from the retro-chic Chaaya Blu in Trincomalee to the Cinnamon Lodge in Habarana, which lies in the 'cultural triangle' formed by Sri Lanka's three ancient cities.

It wasn't hard to imagine tourists, seduced by the country's raw appeal, coming in droves.

While prices are not as dirt cheap as they were at the height of the war, they are still very low - $150 for a high-end hotel room - which means the Sri Lankan currency is still very competitive and attractive to foreign investors.

War-zone insurance rates that had made it too expensive to dock in Sri Lanka have disappeared, leading to a large increase in cargo traffic at the main port in Colombo. The government is pouring money into new terminals there, as well as new ports and harbours in formerly rebel-held regions.

The reintegration of the marginalised Tamils - with their high levels of educational achievement and English fluency - could provide a huge boost to a nation that multiple consulting firms already rank highly as a potential destination for multinationals looking to outsource customer service, IT and other back-office operations.

It would be a mistake to sugarcoat the post-war mood. The final stages of the war were highly controversial: charges of human-rights violations still fly against both sides.

There is evidence that Tamils, embittered by the bloody endgame of the war and suspicious of Rajapaksa, continue to leave the country. But many of those who remain seem determined to put the war memories behind them. I was surprised to see Tamils in Trincomalee working to attract Indian tourists to the 'Ravana trail'.

While to Indians Ravana was the devil incarnate, in Sri Lankan legend, he was one of the most powerful and inspired of ancient kings. The difference of interpretation is of no small magnitude in Sri Lanka, which has long feared domination by its much-larger neighbour.

But in Trincomalee locals say that as long as the 'Ravana trail' is drawing tourists, subjective spins on the myth don't matter. It's only natural for nations to trade most heavily with their neighbours and, indeed, the success of east Asia has been driven in no small measure by the willingness of China, Japan, Taiwan and South Korea to leave old wars in the past, at least when they are cutting business deals. In contrast, there is no region in the world with weaker trade among immediate neighbours than south Asia where trade within the region has stagnated at 5% of total trade with the world.

Sri Lanka could be the country to move the region toward a new trade regime. The government is proposing a grand deal that could unlock trade with India and provide a huge boost to the economy. The opposition comes from Sri Lankan businessmen fearful of Indian competition. But India welcomes the deal, in part as an opportunity to balance

China's growing interest in Sri Lanka as a linchpin on its supply routes through the Indian Ocean.

Sri Lanka is only too happy to exploit its felicitous location in return for even a small share of China's gargantuan outbound investment; China is investing heavily in the Sri Lankan port at Hambantota, the home base of the Rajapaksa family. There is some risk that the peace dividend could prove fleeting: a 2009 study by the US Agency for International Development found that 40% of nations that end a civil war will revert to violence within a decade. However, Sri Lanka's peace could well hold because of the decisive end to the war.

There is also a fundamental national consensus that the future should be decided based on what works, not on the ideological debates that retarded Sri Lanka's development for so long. By the late 1990s, even the main left-leaning party, the SLFP, was moving toward a more modern development model built on an open economy and trade liberalisation. Over the course of its war, Sri Lanka grew its economy slowly but positively, by a total of 206%.

The country now has economic and administrative momentum. The government can build prosperity without interruption by suicide bombers.

The good, and bad, in fuel price hike

Sooner or later, a fuel price hike looks inevitable in India, and that carries both good and bad news for investors. Raising fuel prices would improve the government's fiscal standing, and give foreign investors some hope that India is getting serious about its woeful finances, especially if diesel prices see some kind of deregulation.

However, the trade-off would inevitably come in the form of higher inflation. Standard Chartered, for example, says a fuel price hike would push up WPI above 7%. Inflation may prove the bigger factor for bond markets, dealers say, after yields have already moved towards December 2011 highs on expectations for a reduced scope of further rate cuts from the RBI. However, oil stocks such as Indian Oil and Bharat Petroleum Corp. are likely to rally once the move is announced given the obvious impact on profit margins. As a result, the rupee could gain, tracking broader stocks on such a move, analysts say.

However, the bigger positive to the rupee would be in the form of a hopeful boost to foreign investor confidence, which has been badly rattled in recent days on policy paralysis in government.

‘Making changes to Google search is like mid-flight jet engine maintenance'

The Hindu Ben Gomes, engineer at Google, explains how the search engine really works We all use Google search but have you ever wondered how it really works. How does Google manage to pick relevant data from the mountain of information available on the Internet within a matter of seconds?

Business Line spoke to Mr Ben Gomes, a distinguished engineer at Google's headquarters in Mountain View, where he is a lead for the company's efforts on search features.

Mr Ben, who did his schooling in Bangalore, says that making changes to a search engine which gets billions of queries a day is kind of like changing out the engine of a jumbo jet while flying at 30,000 feet. Google does this through carefully designed experiments to listen to millions of users.

In fact at any given time, Google might be running up to 200 live experiments and you may have been a guinea pig even without knowing. Excerpts from the conversation.

How has search evolved?

When I first started working in Google some searches could take up to 20 seconds and today it would be shocking if it took more than a second. It's become faster and faster. It's even more astonishing when you look at the amount of data that's grown many folds. But more remarkably search has gone far more accurate than when we had less amount data to search through. We put huge amount of effort in getting newer algorithm that understands language, documents and matching what users want.

In Google, we get over a billion queries a day so we have 100 of millions of users who can give us information on whether what we are doing is good or not and that too extremely quickly. We take advantage of this for testing of ideas. What we have is a factory of new ideas. We ran over 58,000 experiments from this factory of innovation listening to millions of users.

We launch about 500 changes every year. These changes are like a complex machine such as a jet engine and what we have to do is to change the engine as you fly to make it faster, efficient and more comfortable to users.

How do you carry out such complex changes?

We have built infrastructure over the years that does this. At any given time, we would be running a couple of 100 experiments with users who are online. After an idea has been tested, senior engineers look at the implementation and kind of complexities. If it passes muster then it goes to launch. So an idea goes through a rigorous process before it's launched When a user puts in a search query how does Google know which links to show first?

There are many factors. When Google started, the words of the query mattered a lot. So we used to find pages that matched the words exactly. Over time we have got very sophisticated in how we understand your query. We process the query you type and understand all the meanings and synonyms. If you used the word ‘change' it means ‘adjust' but if you type ‘change your tires' we know it doesn't mean ‘adjust your tyre'. Then we send that to our computers that look at the index of data of the Web using semantics of your query. But that's not enough. We need to get you data from a good source that you would trust. The degree of freshness in the information also matters so we look for the latest information on your query. The next thing that we take into account is your location. If you are in Delhi and you are looking for a restaurant there's no use if I show you info about a restaurant outside the city. These are the factors that get into making search relevant for you. We have data centres all over the world and on an average your query travels over 1,500 miles.

How do you deal with those who claim to have broken Google's algorithm to ensure that their Web sites show up first on search pages?

We have developed tools to battle this. There's a lot of money in this for those who do this kind of activity but we are many steps ahead of them. It's a constant battle against people trying to fool us. This is a key area where we have invested.

Some claim that Google throws up links based on the advertisement it gets.

We have strong dividing line between search and advertisement since very early days. We have to get the right search results irrespective of the revenue. We model the way how newspapers divide editorial and advertising. We want to be making the product relevant for the users, monetising will follow.

Where is search heading? Do you think Apple has taken the next step with its Siri?

Next step for Google is towards knowledge. By that what we want to do is how we can provide answer to your questions. For example, if you want to know how tall is empire state building then I should be able to give that answer.

Beyond that we would want to give you information what you should be getting. For example, you think about fast food and there is a lot of raw information about calories but we would like to tell you eat a salad instead. We want to give you knowledge than just raw data. We are on that path although just digging at the surface. tkt@thehindu.co.in

Montek says current growth rate can finance 3% CAD

May 10, 2012 14:36 | Source: PTI Planning Commission deputy chairman Montek Singh Ahluwalia today expressed confidence that the country can finance a current account deficit (CAD) of 3%, which had reached 4.% last fiscal. "We are seen as a fast growing economy and it has that potential.

As long as that message is conveyed and people recognise that we welcome foreign investment and portfolio investment, I don't think it would be difficult to finance it (a 3% CAD)," Ahluwalia said. A CAD of % is sustainable and can be financed by a steady inflow of FDI and institutional investment through portfolio flows, he said while addressing students of the Tata Institute of Social Sciences on their convocation day here.

The CAD represents the difference between exports and imports after considering cash remittances and payments. On the back of record rise in imports, the country was left with a trade deficit of USD 185 billion last fiscal, despite exports also overshooting its target by a few billion dollars at USD 303 billion. This had a debilitating impact on the CAD position which nearly doubled to 4.3% of GDP in Q4 of the last fiscal against 2.3% for the fully FY11. "I personally feel that we should be able to finance the CAD at 3% of GDP provided we are seen as a country that is growing rapidly, that's the critical thing. We have to address many issues like power, fuel subsidies, etc (to give out that message)," he said.

He reiterated his call to deregulate oil prices as also allowing FDI in aviation and multibrand retail, saying energy prices have to be aligned with economic realities otherwise one will never see energy efficiency being pursued. On the growth prospect, he said even without any fresh doze of reforms, the economy can grow at 9% or more. "I believe with the structure that we have, it is possible to grow at 9%, even if no new reforms are done immediately. (But the) most important thing is to take care of these executive decisionmaking issues," he said.

Elderly expected to survive on Rs. 10 a day

Chetan Chauhan, Hindustan Times12:31 AM, MAY 11, 2012 Sadamma is poor, 75 years old, and can barely walk. But as far as the government is concerned, its dole of Rs. 10 should be enough to help her pull through the day. Sadamma is not alone in this predicament. Even as inflation continues to rise with each passing day, millions of elderly people like her in the country force themselves into manual labour for earning a few extra rupees - the government aid hardly enough to make both ends meet.

The Centre gives Rs. 200 as monthly pension to poor citizens between 60 and 80 years of age, and Rs. 500 to those beyond it. The state adds another Rs. 100 from its kitty. A barefooted Sharafat, who hails from the primitive Saharia tribe of Rajasthan, has no words to express his grief. "I have turned into a beggar at the age of 69," says the man, who had imagined a very different scenario for the future during India's freedom struggle. "The pension comes once in six to seven months." Hundreds of elderly people, hailing from remote villages across 20 states, came to Delhi demanding at least R2,000 as old-age pension. The Pension Parishad, led by National Advisory Council member Aruna Roy, is spearheading a campaign to push the Central government to agree to a universal pension for senior citizens.

At present, the government gives old age pension only to the ones below poverty line.

According to an estimate by Helpage India, around 90% of 10 crore people above the age of 60 work in the unorganised sector, in the absence of any social security mechanism.

Less than two crore are covered under old-age pension schemes. "I have been running from pillar to post to get old age pension," says Gadki Bai of Rajasthan. In many states, getting such funds hinge on the discretion of local legislators who are quite inaccessible.

Birla Institute of Technology & Science entrance more competitive than IIT

Sharanya Gautam, TNN | May 10, 2012, 02.47AM IST

Based on number of applications received, 1.36 lakh students are expected to take the BITSAT-2012 for admission to a total of 2,000 seats at the institute's campuses in Pilani, Hyderabad and Goa. CHENNAI: Cracking the IIT-JEE may be top priority for most students, but the BITSAT is now the most competitive of all national engineering entrance exams in the country. An average of 68 students will compete for a seat in this year's BITSAT, the online test for admission into degree courses at Birla Institute of Technology and Science, Pilani, which starts on May 10. In comparison, only 54 students contested for a seat at the IIT-JEE 2012.

Based on number of applications received, 1.36 lakh students are expected to take the BITSAT-2012 for admission to a total of 2,000 seats at the institute's campuses in Pilani, Hyderabad and Goa. The exam will be conducted in 32 centres across the country between May 10 and June 9, 2012. On the other hand, 5.2 lakh students took the IIT-JEE 2012 on April 8 to be eligible for 9,600 seats in the 15 Indian Institutes of Technology (IIT), the Institute of Technology at Banaras Hindu University (IT-BHU) and the Indian School of Mines, Dhanbad.

The VITEEE, which was conducted on April 21 for admission into deemed university Vellore Institute of Technology, follows the IITs with 48 students competing for one seat.

The exam was taken by about 1.5 lakh students across India for admission to 3,100 seats.

"VIT sees the largest number of applicants among deemed universities because of its placement record, especially in the IT sector," said Jayaprakash Gandhi, an education consultant.

Next comes the All India Engineering Entrance Exam (AIEEE), which was taken by 11 lakh students this year for admission into approximately 35,000 seats in the 31 National Institutes of Technology (NIT). The AIEEE score is also used by approximately 50 other private and government engineering institutions across the country, many of which have a majority of seats reserved for students of the home state and admit them by conducting their own regional common entrance tests. On an average, 31 students compete for one seat with the AIEEE score.

AIEEE is followed by some more private and deemed universities such as Manipal and SRM which have grown in popularity over the last few years, especially because of their superior infrastructure. Manipal recorded 27 applicants per seat this year followed by SRM with a ratio of 22 per seat.

Fewer seats gives BITS edge Educationists say it is the increase in intake at IITs that has lowered its student-to-seat ratio, putting it behind BITS. In 2008, six new IITs were established and several courses added, which took total number of seats from approximately 5,500 to 7,000. Two more IITs were added in 2009 and the number of seats went up to 8,200. Introduction of newer courses and an increase in the number of seats has taken the number of seats to 9,600 in 2011-2012.

In comparison, numbers of seats at BITS have remained constant at 2000, making it more

competitive. "The BITSAT has been growing in popularity among students since it was introduced in 2005. Over the last 2-3 years, number of applicants has increased enough to make the exam more competitive than the IIT-JEE," says S Mohan, associate dean of admissions at BITS. The institute, founded in 1964, used to admit students based on their class 12 marks before 2005. Since 2007, students are not allowed to take the IIT-JEE more than twice, slowing down the growth rate in the number of applicants. While 3.2 lakh students took the exam in 2008, 3.95 lakh took it in 2009, 4.72 lakh took it in 2010 and 4.8 lakh took it in 2011. This year, BITSAT lowered its eligibility criteria from 80% to 75% in the board exams making more students eligible. "We found that a lot of students were getting left out due to the high qualifying percentage," says Mohan.

Over the last five years, number of students applying to the BITSAT has increased steadily from around 88,000 in 2007 to 1.23 lakh in 2011 and 1.36 lakh in 2012.The BITSAT is also completely based on the NCERT school syllabus which makes it more popular, especially among CBSE school students. 'We discourage aspiring students from taking extra coaching for the exams and students who prepare well for their class 12 boards can do well in the BITSAT," says Mohan. Students also need to obtain a minimum average of 75% marks in Physics, Chemistry and Math in the board exam to qualify for a seat, the highest cut-off among all other engineering tests.

Zero-sum game

May 04 2012 If India’s mutual fund (MF) industry is commonly seen to be in its death throes, it is easy to point fingers at a handy villain: the distributor (commonly recognisable as agent) of MF schemes, the glib man who keeps at you by painting repeated visions of the number of times your investment today can multiply tomorrow.

He is believed to be not doing his job any more and is blamed for all the ills of the MF industry. Probably true — but only in part. He used to earn a commission (the industry term is ‘entry load’) by selling MF units to you. Entry load was banned in 2008, arguably a wrong time — wrong because that’s when the world’s economic troubles began and are not over yet.

With his income suddenly taken away, the distributor stopped distributing. India’s Rs 6,60,000 crore MF industry is still reeling from this.

To prove the industry’s pitiable plight, MF bigwigs quickly reach for data to show that assets under management (AUM) of the MF houses (i.e., the money they have taken from you and invested in the shares and/or debt instruments) have fallen consistently during the past three years, the folios (certificates of units that you as an investor) are contracting in number at the rate of 100,000 a month and — the most ‘clinching’ proof of the bad times — at least two global funds, including Fidelity of the US — have left India.

All true, of course. But that’s not the entire story. Also true is that the stock market, which provides the MF houses their bread and butter and greater value to the investor’s money, has done devastatingly bad for a good part of the time that has elapsed since 2008.

Another fact is that there were plenty of distributors who led a lot of gullible investors up the garden path who are unlikely to get back to MFs in a hurry. And the UTI scam of nearly two decades ago is still a bad dream for many.

The government and the Securities & Exchange Board of India (Sebi) have tried. Can’t say with much result. As an alternative to distributors, Sebi allowed selling of MF units through computer terminals of thousands of brokers. It also took one step back in allowing distributors to charge a commission of Rs 150 on an investment of Rs 10,000 or more and Rs 100 for existing investors.

On its part, the government allowed MF houses to sell schemes to overseas wealthy nonIndian qualified financial investors (QFIs), hoping that this would bring a flood of money. It didn’t. On the contrary, AUM of the industry dropped by 5 per cent in the year since these steps.

In the meantime, Sebi is under constant pressure to eat its humble pie and bring back entry load any which way. But is it necessary? Views differ.

Like all other industrial lobbies, the Association of Mutual Funds in India (Amfi) too speaks in platitudes. HN Sinor, its CEO, sees a need to align “interests of all stakeholders,” i.e., the fund houses, the distributors and the investors.

Apparent is his accent is on distributors who ditched MFs and began to sell other more paying instruments when he says that a “correct solution” to the “overall incentive structure” needs to be found.

A contrary view comes from Milind Barve, managing director of HDFC Mutual Fund, India’s biggest with assets of nearly Rs 90,000 crore. He does not see a return to entry load in the earlier format to be helpful. AMCs (asset management companies that run mutual funds), he says should generate reasonable profits to grow and invest. There has to be a reasonable balance for investors, distributors and AMCs in terms of long-term sustainability and profitability. Barve, also Amfi chairman, underlines that costs have to be borne three ways: the distributor, the customer and the AMC. This will increase MF penetration, he avers.

Fidelity, which left India, clearly could not manage this balance as its costs rose and it suffered losses without fail ever since opening for business here in 2004. L&T Finance bought over its business in March this year.

Aegon of Holland did not even bother to set up business here and simply surrendered its MF licence and went away. AXA Investment Managers, another global fund, sold its stake in Bharti AXA to Bank of India.

Barve does not agree that the industry is in a crisis, though he worries over the falling assets and the 1.4 million folios lost in the past two years.

N Sivraman, president & whole time director, L&T Finance Holdings says unless the AMC achieves a certain scale, say Rs 12,000-15,000 crore, and a favourable asset mix, it is

difficult for the AMC to be profitable. That’s why in an industry with 40-plus players, only around one-third are profitable today. “And it is also one of the reasons we see exits in this business,” he says.

An MF is as good or as bad as its underlying assets. Since most of these assets are held in the shape of stocks, an ailment in the stock market will show up as symptom in the MFs too. For the record, Sensex lost 10 per cent in 2011-12. Returns on investment in stocks have been pathetic for three years running. The point is no matter how dumb the investor is, he knows these are bad times to invest even in mutual funds. In fact, he will withdraw as long as he sees the going is good — at least for him.

Small wonder MF houses don’t have new funds to invest. Sundeep Sikka, CEO of Reliance AMC, the second-largest fund house, goes beyond the state of the stock market to explain the state of the MF industry.

According to him, the industry in India is still in baby stage and growing gradually. “We have to take all developments and steps, whether positive or negative, in our stride and course-correct to incorporate the learning to improve the system.”

What are the positives? For one, several global players have entered India in the last two years: Goldman Sachs (by acquiring Benchmark AMC), T Rowe Price (by buying 25 per cent in UTI AMC) and Schroders (by buying bought 25 per cent in Axis Mutual Fund, to name a few.

Other global players JP Morgan, Franklin Templeton and BlackRock have significant presence and are doing well here. (Exceptions are ING, HSBC and Deutsche.)

Sikka, though, sees huge potential. He is probably right: not even 1 per cent of the population is into mutual funds. Mutual funds were thrown open to the private sector in 1993. In these almost two decades, all they have to show as subscribers is less than 1 per cent Indians. No doubt, the rest 99 per cent represents a huge potential. It will take more than a lifetime to tap even a decent fraction of this potential.

In most developed markets, the ratio of mutual fund AUM to GDP is around 60-100 per cent, while in India it is around 9 per cent. With the growth in GDP per capita income, improved financial awareness and increase in individual savings, the AUMs are expected to grow at a faster pace, says L&T’s Sivraman.

To go back to the genesis of the industry’s problems, the centerpiece must be mis-selling of schemes, which took endemic proportions during 2006-08 when the stock market was rising high. Gullible investors fell for a large number of new fund offers (NFOs). In many cases, these NFOs schemes were nothing but repackaged old schemes. Ultimately, Sebi stepped in with a number of regulatory measures, and finally a ban on entry load, besides blanket stoppage on repackaged NFOs. Today the retail investor trusts neither the stock market nor mutual funds. Instead, they put their money in postal saving schemes, public provident fund, bank fixed deposits or life insurance.

Counsel them that MFs give them access to professionally-managed, diversified portfolios of equities, bonds and other securities, they will turn away.

With equities giving nothing, several MF houses have turned to asset classes. Gold, for one, has given 24 per cent returns every year over the past five years. There has been an 81 per cent growth in assets under gold ETF (exchange traded funds, or units where money is invested in gold firms) in six months. The AUM in gold ETFs was Rs 9,200 crore at the end of March.

Why have gold ETFs succeeded where other asset classes have failed? For reason, RS Srinivas Jain, senior vice-president of SBI Mutual Fund, offers a universal truth: for a product to succeed, the product should be great, and the market has to be great. “Today the appetite is limited for equity-linked products,” which explains why the investor has moved away from equity-linked schemes.

Debt, where companies and high net worth people park short-term money, has also seen action because the interest rate regime has added to demand for fixed maturity plans (FMPs), i.e., close-ended MF schemes that invest in debt and money market instruments.

Last year FMPs mobilised over Rs 1,00,000 crore.

Yet, new products like gold ETFs and index- based ETFs have failed to give a significant boost to the overall AUM of the industry.

Gone are the days when an NFO could mop up Rs 2,000 crore and more. In 2005, an NFO from SBI Blue Chip Fund raised Rs 3,000 crore. Today a fund house will consider itself lucky if its NFOs can muster Rs 150 core. And anyone raising Rs 500 crore is decidedly a thumping success. What MF houses do to make up is generate regular inflows through systematic investment plans (SIPs) and non-equity products.

To keep the business going, different MF houses use different methods. SBI Mutual Fund, for example, focuses on SIP. It has 800,000 SIP investors putting in money every month.

Last year SBI Gold Fund got 100,000 people to invest in its NFO itself and also roped in some SIP investors.

Reliance AMC has also tasted success with its gold product, having collected Rs 3,000 crore from the gold savings scheme from 400,000 investors.

Sikka believes innovation and simplicity are the keys to success of any product. “This is the way going forward.”

Among other assets that find traction today are foreign currency-based derivatives.

Besides, the commodity market too has been able to draw in both a larger basket of items and more retail and HNI participants.

DSP BlackRock Equity Fund (AUM Rs 2,599 crore) has overcome the challenges of the last two years in its own way. Apoorva Shah, executive vice-president & fund manager, points put that the strategy at his company is to largely stay invested without taking any large cash positions.

But the fund does change its sector views with changing market conditions. Last year it increased its weight in pharmaceuticals and consumer staples. “This worked well for his fund.” Of course, it has also fallen back on the old faithful, SIPs. This, he admits, has ensured a steady flow of assets.

One of the successful foreign players, Franklin Templeton Investments (India), concentrated, in its president Harshendu Bindal’s words, on consistent performance, a comprehensive product range, “deep” relationships with distributors and delivering a “positive customer experience.” The last two, he adds, are very important.

Franklin’s business model has been sustainable growth “without the distraction or pressures of asset gathering”. “Over the long run, fund houses need to have a balanced asset mix and sustainable business models to be successful,” he offers.

An analyst at an accounting firm says what’s true of China’s retail investor is also true about India’s: they like to get out after remaining invested for two years. The period of investment is another key factor. The once-popular equity-linked tax saving schemes (ELSS) locked money for three years. Money growth was not much and dividends too, did not come by. Investors in these instruments exited the moment the lock-in was over.

To breathe some life into the industry Sebi has tried to promote pension products but with little success simply because, as Bharve explains, investors are not ready to put money for 10 to 15 years in an MF scheme for pension purposes. In the US, the picture is different: the MF industry there thrives on pension money. Of the 44 AMCs in India, only a few offer pension products.

These 44 Indian AMCs together have an AUM of $140 billion, whereas China, whose demography is similar ours, is doing way better with 66 AMCs with an AUM of $400 billion.

Indians have lessons to learn from the MF industries of the US, China and Australia. In the US, most retail investors invest in MF and not directly in stocks. The country has a variable incentive structure for distributors. There are attractive schemes like “all-in fee” plans where more participants and larger average account balances tend to lower the all-in fee.

Banks have played a big role in promoting investments in MFs in China where MF penetration is 7 per cent of the population (just to jog the memory, in India it is less than 1 per cent). Most of the top 20 MF houses are owned by banks in that country.

Can banks in India, with 80,000 branches across India, help replicate China’s MF success here too?

Sinor of Amfi points out that banks here have there own mutual fund subsidiaries. SBI, ICICI Bank, HDFC Bank, Axis Bank, all the major players have their own MF arm. They already have a relationship with their customers. MF is an asset class that they can offer their customers.

Equally, banks have their own branches. “So relationship is available, branches are available. Therefore, mutual fund automatically becomes a product relevant to the banking system.”

What happened in China may be happening here too. Buttressing the point, Sinor says most of the top 10 Indian mutual funds are aligned with banks. Reliance Mutual Fund, Birla Sunlife and Franklin Templeton are exceptions.

Two key developments may propel the industry to the next level. One, the entry of QFIs and, two, the budget plan for a Rajiv Gandhi Equity Savings Scheme, which many believe will be channelled through mutual funds.

Sikka offers a suggestion: “It would be prudent if this investment is routed through MFs, as equity mutual funds, being professionally managed and highly regulated, are a safer option for small investors than direct investment in equities. Our advice to investors is to invest systematically in MFs for the long term.”

In the US, retirement savings and pension money have been fruitfully channelled into MFs. The Sebi chairman recently asked Indian MFs to focus on such products. Amfi feels the Rajiv Gandhi Equity Scheme can be one such product.

In the US, money saved under the 401(k) plan goes into mutual funds. For many Americans the plan is a key component of their retirement plans. The AMCs’ cache of money keeps growing every month as every employee in every company has to necessarily put some money in the 401 (k) plan. Plus it gives tax breaks and acts as a pull to save money in that scheme, and distributors really do not have to push the plan.

Sinor also gives the example of Australia. With a population of 30 million, the MF industry size in that country is over $2 trillion. “If there is something like 401(k) offered here or if the Rajiv Gandhi Equity Scheme invests in mutual fund schemes, we will see similar flows coming into the system.” rajeshabraham@mydigitalfc.com

Why foreign companies are ‘scared’ of investing in India

New York: Dave M Cote, chairman and CEO of US-based Honeywell International, said on Wednesday that India’s labyrinthine bureaucracy and aggressive tax policies are scaring foreign investors and will redirect investment to China and elsewhere.

“Foreign companies are starting to become scared here,” Cote told The Wall Street Journal in an interview on Wednesday.

“They are starting to say, ‘What am I doing here?’” Cote said, warning that investment could be diverted to China and other countries.

“I’ll hire people here, but I’ll be a lot more reluctant about investing, including making acquisitions,” said Cote. “I am a lot less keen on expanding our presence by putting money into the country. It’s not a smart thing for me to be doing.”

It's not a smart thing for me to do to put money into India, says Honeywell's Dave Cote.

Reuters Honeywell, a New Jersey-based technology and manufacturing giant, generated about $600 million in Indian sales and the same amount in exports from India last year, the Journal reported. The American company employs about 12,500 people in India, up from 1,000 a decade ago. It is no surprise foreign funds turned net sellers of Indian stocks in April, the first month of withdrawals in 2012, put off by proposed changes in tax rules. The Securities Exchange Board of India (SEBI) said offshore investors sold a net $102.6 million of Indian equities last month.

“Long-term investors into India aren’t increasing their exposure as the horizon isn’t clear,” A.S Thiyaga Rajan, a senior managing director at Aquarius Investment Advisors in Singapore, which has about $400 million in Indian assets, told Bloomberg. “First, there is uncertainty on tax. Second is the continuing depreciation of the rupee given weak economic fundamentals.” Pushed to a corner by a series of corruption scandals, the government has been unable to reach a consensus on policy decisions that are needed to lift investment and growth. For years, Indian entrepreneurs have boasted they can do business despite the government by adeptly working around potholed roads, clogged ports and reams of regulatory hurdles. But government inertia is taking its toll on corporate confidence.

Many executives, Indian and foreign, are exasperated with recent proposals to tax international mergers that exchange Indian assets, even after the Supreme Court ruled this year that taxes weren’t due in the Vodafone case. If applied retrospectively, the finance minister’s proposal could force British telecom giant Vodafone to pay $2.2 billion in taxes on a deal it struck offshore to enter India in 2007 through its $11 billion acquisition of the Indian telecom assets of Hong Kong’s Hutchison Whampoa. Vodafone beat back the government’s tax claim with a victory in the Supreme Court in January.

Cote zeroed in on a recent rule from market regulator Sebi requiring any company listed on an Indian stock exchange to pare its majority shareholder’s stake to a maximum of 75 percent by next June or buy out minority shareholders and delist the company. “Honeywell owns 81 percent of Honeywell Automation India Ltd. Mr Cote said the rule means Honeywell faces the dilemma of ‘paying a ridiculous price to buy out the remainder, or lose money’ reducing its stake,” said the Journal.

India’s $1.7 trillion economy slowed for four consecutive quarters through December and GDP grew only 6.9 percent in the year ended March, the least in three years, according to government estimates. These days, growth below 7 percent is enough for investors to delay projects, for banks to put off loans and for voters to get angry: 7 percent is the new 23 percent that plagued the decades after India’s independence from Britain in 1947.

“I worry that the bureaucracy is becoming stultifying” in India, Cote said. “My frustration with India is, while it grows at 7 percent a year, it could be growing at 11 percent or 12 percent.”

“I still think China is a very good place when it comes to putting money on the ground.”

Cote is the latest, prominent international CEO to warn that India risks losing foreign investment because of its policies.

You Can Reduce Your Fuel Bill, the Sensible Way Prashant Mahesh explains how sensible driving, right tyre pressure and clean air filters can bring your expenses on fuel down by as much as 20% Car users have seen their fuel bills rising significantly over the past couple of years. The price of petrol in Mumbai has moved up from . 44.55 a litre in January 2009 to . 70.68 today, a rise of 59%. Another price hike looks imminent. The government is likely to give its nod to the oil marketing companies to hike prices once again on account of higher international prices as well as depreciation of the Indian rupee. In such a scenario, one should try to reduce fuel cost by some way or the other.

According to auto experts, if you drive with a little care and maintain your car well, you can save around 10-20% on your fuel costs. “Drive sensibly, maintain your tyre pressure as specified, check the air filter at regular intervals. These simple practices could help bring down your fuel costs by as much as 10-20% over a period of time,” says Rakesh Sidana, Founder, mericar.com DRIVE SENSIBLY The manner in which you drive your car plays the most important role in saving fuel. It is possible to drive the same distance in the same time, and yet use less fuel. “The proper way is to accelerate smoothly and slowly with a light foot and get into a higher gear as quickly as possible. If you press the accelerator very hard, more power will be needed and you will end up consuming more fuel,” says Uday Prabhu of Car Choice.

Adjust gears as per your speed. Shift to the highest gear once you touch the speed of 50 km/hour. Sudden acceleration and braking tend to increase your fuel cost. Driving in a gear lower than you need wastes fuel. Similarly, if you drive in a higher gear on hills and corners, it will put extra pressure on the engine, thereby wasting fuel. “Sudden acceleration and mileage have an inverse relation. If you accelerate too fast, you end up using more fuel,” says Uday Prabhu. If you can see a signal 100 meters ahead of you, it makes no sense to accelerate and reach there, as you will burn fuel unnecessarily. Signals are another area where there is scope to save fuel. Today, many traffic signals indicate the waiting time. “If you have to wait for more than 50 seconds, it makes sense to switch off the engine, and restart it again as that saves fuel,” says Rakesh Sidana. When you drive regularly on certain routes, you can anticipate the signals and slow down gradually, instead of braking suddenly. Thus, if you drive sensibly, you could bring down your fuel bills by as much as 10%.

INFLATE TYRES TO THE RIGHT PRESSURE Under-inflated tyres can put more pressure on the engine, which is likely to guzzle more fuel. They also make steering and braking unstable. Hence tyres need to be inflated to the right pressure. For example, it is recommended that the tyres of WagonR should be inflated up to 32 psi. “Your car could consume up to 10-15% more fuel, if the tyre pressure is not adequate,” says Arun Sinha, a Mumbai-based auto expert. Hence it is advisable that you check tyre pressure at least once a month. Most petrol pumps offer you a free air check. All you have to do is to check tyre pressure whenever you go to a petrol pump to refuel your car.

CHECK AIR FILTER A dirty air filter restricts the flow of air into the engine, which affects performance and economy. When the engine air filter clogs with dirt and dust, it makes the car’s engine work harder thereby reducing fuel efficiency. If your car goes around in a dusty environment, air filters may have to be replaced faster. “Replacing a clogged air filter could improve your car’s mileage by as much as 6-10%,” says Uday Prabhu. It’s a good idea to have your engine air filter checked at each oil change. Clean oil too contributes to better mileage. Oil should be changed every 5,000 kms in case of a petrol car, and 2,500 kms in case of a diesel car.

TRY TO PARK IN THE SHADE Go for a good quality sun film as that would prevent your car from heating up fast when parked in the open. So when you start the car again, there will be less load on the air conditioner to cool, thereby saving up to 10% of your fuel cost. “A heated car will require the air conditioner to run at a higher speed to cool, which in turn will guzzle down more fuel,” says Banwari Lal Sharma, AVP (marketing), carwale.com. Of course it goes without saying, wherever possible park your car in the shade, so that when you start it again there will be lower load on the air conditioner. Shut off/unplug all powersucking accessories, such as phone chargers, air conditioning and the radio, before turning off your car. This lowers the engine load for the next time you start your vehicle and will use less gas.

Tax Sops for Non-Profit Bodies May Go

Economic Times Paper suggests stricter enforcement of the KYC norms for co-operative sector OUR BUREAU NEW DELHI The government might tighten rules and take away tax priviliges provided to non-profit organisations, following the suggestions of the White Paper on Black Money tabled in Parliament on Monday.

The paper has noted that fiscal and regulatory privileges provided to nonprofit and cooperative organisations have become a source for tax evaders to camouflage their earnings. The income, subject to various conditions, is treated differently for taxation purposes as compared to privately owned profit-oriented companies. “This creates an incentives for potential evaders to camouflage their concerns as non-profitable, charitable or cooperative,” the paper notes.

The only tangible solution, according to the paper, is to reduce the tax concessions provided to these organisations while subjecting them to a stricter regulatory regime.

However, the paper has also pointed out a glitch in implementing such a strategy. As most non-profit enterprises are working in the area of social welfare, any regulation may be seen as government opposition to such endeavors, hampering public opinion and hindering political consensus.

“This is somewhat a complex issue that may easily evoke strong emotional responses and can be implemented only after a large consensus is reached within society,” the paper notes.

The report also suggests creation of a comprehensive database of non-profit organizations.

It says the Central Board of Direct Taxes should act as a centralized agency for mandatory registration and monitoring of non-profit bodies. For the cooperative sector, which too carries risks of tax evasion, the paper suggests stricter enforcement of the Know Your Customer norms. The initiative will have to be taken by both the central and the state governments.

“Responsibility may be fixed for any lapse in this regard as well as for any subsequent failure to alert authorities on any suspicious transactions in such accounts,” the paper has said.

Airtel, ICICI among 'top 100 global brands' IANS | May 23, 2012 NEW DELHI: Indian telecom major Bharti Airtel and private sector bank ICICI Bank have been included in the 'BrandZ list' of the top 100 most-valuable global brands of 2012 by research firm Millward Brown. ICICI was ranked 63 and Airtel 71. The top five brands on the list are Apple, IBM, Google, McDonald's and Microsoft. According to the study, ICICI Bank's brand value has declined by 15 percent since 2011.

"While ICICI declined, Airtel appeared in the BrandZ Top 100 ranking for the first time," Millward Brown said on its website. The study took into account what people thought about the brands they bought alongside analysis of financial data, market valuations, analyst reports and risk profiles and covered almost two million consumers and more than 50,000 brands in over 30 countries.

"With an overall ranking of 71 and brand value of $11.5 billion, Airtel has been ranked ahead of top global brands such as Citi (82), Sony (86), MTN (88), China Telecom (90), and Volkswagen (96)," Airtel said in a statement. The study said Indians generally liked brands and were familiar with many from the West and other markets and suggested that firms take into account regional differences to establish business.

India Mobile Services Market to Reach USD 30 Billion in 2016:

India’s Mobile Connections To Exceed 900 Million To Achieve 72 Percent Penetration By 2016 In a report by Gartner, The India mobile subscriber base is forecast to reach 696 million connections in 2012, up 9 percent from 638 million in 2011. Total mobile services revenue in India is projected to reach US$30 billion in constant US dollars in 2016. The average revenue per user (ARPU) began to stabilize in 2011 – a notable change from the doubledigit decline of ARPU between 2008-2010.

“The staggering growth of mobile connections has been driven by the expansion of mobile services in semi-urban and rural markets and the availability of cheap mobile devices,” said Shalini Verma, principal analyst, Consumer Technology and Markets, at Gartner.

“However, the other performance indicators of the Indian mobile market seem modest in comparison to those of markets such as China.”

At US$40, the ARPU (avg. revenue per user) in India is among the lowest in the world and about one-third of that of China. India also lags behind China in mobile service penetration. The mobile service penetration in India is currently at 51 percent and is expected to grow to 72 percent by 2016, whereas China already achieved 71 percent mobile penetration in 2011 and is forecast to grow to 119 percent in 2016.”

Mobile data revenue has tremendous growth opportunities in India because of low Internet penetration. While fixed broadband is becoming a norm in several countries, India is lagging behind even emerging markets in fixed broadband penetration. India’s fixed broadband household penetration was 6 percent in 2011, which is lower than the overall penetration in emerging markets (estimated at 16 percent in 2011).

While Indian mobile operators have demonstrated “out of the box” thinking in IT and telecom infrastructure management to check operational costs, they have their work cut out to improve margins, by converting prepaid subscribers into postpaid.

With consumers perceiving mobile broadband as a basic necessity, mobile operators globally are reaping their investments in infrastructure through an increase in mobile data revenue. However, in India mobile operators have significant challenges, given the pragmatic nature of the emerging middle class with regards to their IT products and services spending. India could become the testing ground for innovative delivery and pricing models that could be replicated in other emerging markets. Mobile operators will need to focus on sound fundamentals such as improving the quality of service of mobile broadband.

“The industry is pegging its hope on market consolidation, which appears imminent in the aftermath of 2G license cancellations. Department of Telecom and Telecom Regulatory Authority of India have a pivotal role to play in removing uncertainties in policy-making, and license and spectrum management, so that the mobile operators can focus their energies on driving growth,” said Ms. Verma.

Abundant oil doesn't mean energy independence, SAFE report warns

WASHINGTON, DC, May 8 05/08/2012 By Nick Snow OGJ Washington Editor

Abundant US oil resources made possible by new technology potentially will provide significant economic benefits to the nation, but won’t make the country energy independent by itself, a new report from Securing America’s Future Energy’s Energy Security Leadership Council concluded. “This can only be accomplished by reducing the role of oil in our economy,” it said. “‘Energy independence’ for the United States is an admirable goal, but even if the US were to produce enough oil to meet our demand, the domestic price is still set on the global market, meaning a potential supply disruption anywhere can impact the price of oil everywhere,” said Herb Kelleher, cofounder and chairman emeritus of Southwest Airlines and a member of the ESLC, as the report was released at the Bush Institute at Southern Methodist University in Dallas on May 8. With US oil imports down to less than 50% of total supply, more production will create jobs and help reduce the nation’s foreign trade deficit, the report said. But a dramatic increase in US oil production won’t shield consumers from the economic impacts of high, and sometimes volatile, oil prices that are set on global markets, it continued. “In fact, in some cases, oil prices can be significantly impacted by events in countries that are neither large oil consumers nor large producers—for example, by countries that host important shipping channels or infrastructure,” it said. “The key consequence of this dynamic is that changes in oil supply or demand anywhere tend to affect prices everywhere. The impact on the United States—or any other consuming country—is a function of the amount of oil consumed and is not related to the amount of oil imported.” US transportation relies heavily on oil products “that affect consumer spending in real time,” it also noted. “As oil prices increase during crises such as those that occurred in 1973-74, 1979-81, 1999-2000, 2007-08, and 2011-12—or during the course of normal market fluctuations associated with the business cycle—consumers have no choice but to pay more for their fuel,” it said. “This increased spending in the short term must come at the expense of other spending on goods and services, the negative effects of which reverberate throughout the economy.” The report’s policy recommendations included increasing motor vehicle fuel efficiency requirements further, accelerating the transition to transportation fuel alternatives from petroleum-derived fuels, and stronger support for more US oil production.

10 things Kochhar had to say about ICICI Bank

ICICI Bank wowed the markets with a 31 percent surge in fourth-quarter net profit to Rs 1,902 crore. Interest income, which it earns on loans, rose 28 percent to Rs 9,175 crore, said the country’s largest private-sector lender by assets. Other income — including gains from fee, commissions, foreign-exchange and treasury transactions — climbed 36 percent to Rs 2,228 crore.

At at press conference after the announcement of the results, managing director and chief executive officer Chanda Kochhar highlighted these key facts: 1. The bank said it had maintained a strategy focusing on profitability, growth and risk management, which was reflected in its net interest margin (NIM) of 3.01 in the fourth quarter. The NIM, which is the difference between interest earned and cost of funds, averaged 2.73 percent for the year ending March 2012. It is also one of the most important indicators of profitability of a bank’s lending operations.

2. The NIM improved as a result of better yields on both advances and loans, Kochhar said.

While the NIM on local advances and loans climbed to 3.3 percent, the NIM on international loans rose to 1.5 percent, allowing an overall improvement in the NIM. 3. The bank expects a growth of 10-15 basis points (100 basis points = 1 percentage point) in the current financial year.

4. The banks’ subsidiaries finally started making a profit in the past financial year. In fact, gains in non-interest income were led by dividends of Rs 780 crore received from the bank’s insurance subsidiary and its subsidiary in the UK. The company expects even the Canadian subsidiary to start announcing dividends from 2013. Trading income has also been especially strong in the fourth quarter, across debt, equity and forex markets, Kochhar said.

5. The bank’s current and savings account (Casa) deposits stood at 43.5 percent of total deposits for the fourth quarter. For the full year, the Casa ratio averaged 39 percent.

Deposits for the March-ending quarter jumped 14 percent, she added.

6. On the loans side, corporate loans increased 26 percent in the fourth quarter from the same period last year, while retail loans climbed 8 percent. Deposits, however, slipped 2 percent during the same period.

7. Within retail loans, housing loans grew by 27 percent, auto loans increased by 14 percent and commercial vehicles loans expanded by 20 percent. In the current financial year, the focus of retail loans will be housing and auto loans, Kocchar said, while on the corporate side, it will be working capital loans.

8. In the current financial year, ICICI Bank expects domestic credit to expand by 20 percent, while deposits are expected to improve by 16 percent. She said the estimated growth in deposits is lower than that in credit because that was in line with what the bank required in terms of deposits, adding that funds lent overseas are funded via debt instruments, not deposits.

9. The bank restructured accounts totalling a net Rs 1,200 crore during the quarter, lower than what the bank estimated in the previous quarter. Kochhar said most of the restructuring of accounts was done and that the level of restructuring would come down in the current financial year.

10. The bank had an overall capital adequacy ratio of 18.52 percent at the end of March, while its Tier I capital adequacy ratio stands at 12.68 percent. Kochhar said the return on assets for the quarter ending March increased to 1.7 percent.

Decision making is slow in India, says Lakshmi Mittal

Bhatinda: Billionaire Lakshmi N Mittal today said decision-making in India is slow but he would not complain about policy paralysis.

“We have businesses all over the world. I tell my guys don’t complain about the policies, try to adopt…policies…We don’t complain. We have tried to adapt to local policies. We will all have to adjust to the new policies,” he told reporters after Prime Minister Manmohan Singh formally launched his investment arm’s refinery project here.

But, he said, decision making was slow. “Surely things are moving slowly. There is no doubt. Process approval are taking time. The biggest impediment is still infrastructure development,” Mittal added.

Asked if the perception of policy paralysis in the UPA-government was responsible for slowdown in the economy and loss of investor confidence, Mittal said his philosophy was not to complain but to adapt to local policies.

“For an emerging market like us, we should grow more. There is so much of potential,” he said.

Mittal said India was growing slower than its capability as European Union crisis has affected emerging markets.

Mittal, Chairman of ArcelorMittal, the world’s biggest steelmaker, said European economy may take 2017 to reach pre-crisis level.

“There was an impression couple of years back that India as an emerging market was decoupled from global economy. But last global crisis has proved that we are not decoupled.

“There is clear relation between global crisis (and) Indian economy,” he said.

While the US economy appears to have come out of the 2008 crisis, the recovery in EU would be slow because of various issues, Mittal said.

“My guess is that (for EU) to reach pre-crisis level of 2007, it will be 2016/17,” he added.

European scientists discover new subatomic particle

Geneva: European researchers say they have discovered a new subatomic particle that helps confirm our knowledge about how quarks bind — one of the basic forces in the shaping of matter. European researchers say they have discovered a new subatomic

particle that helps confirm our knowledge about how quarks bind — one of the basic forces in the shaping of matter.

The European Organisation for Nuclear Research, or CERN, said Friday the particle was discovered at one of CERN’s two main experiments involving thousands of researchers, in collaboration with the University of Zurich. Joe Incandela, the physicist in charge of the experiment involved with the discovery, told The Associated Press the particle was predicted long ago but finding it was “really kind of a classic tour de force of experimental work.”

The Many Wonders Of The Neem Tree •

The Neem tree is a fast growing evergreen that is native to Pakistan, India, Bangladesh and Myanmar. This amazing tree is claimed to treat forty different diseases. All the parts of the tree is used for treating illness, the leaves, fruit, seeds and even the bark all contain medicinal properties.

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The use of neem as a medicinal herb dates back over 5,000 years. Today it’s benefits have been proven by scientific research and clinical trials. And, although few of us have access to a neem tree, it can be purchased in the form of oil, powder and pills.

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To give you an idea of the healing powers of the neem tree, here are a few names that the people of India have given it, “Divine Tree”, “Village Pharmacy”, “Heal All” and “Nature’s Drugstore”. With the almost ending list of uses for neem, I think it could be called, ” The Tree of Life”!

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In treating diabetes, neem has been found to actually reduce the insulin requirements by as much as 50% without altering the blood glucose levels. Take 3 to 5 drops internally each day.

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Neem cleanses the blood, stimulates antibody protection and strengthens the immune system which improves the bodies resistance to many diseases.

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Used as a mouth wash it treats infections, mouth ulcers, bleeding sore gums and will even help prevent tooth decay!

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For pink eye the juice of neem leaves can be used as eye drops, warm 5-10 ml and apply several drops.

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To treat jaundice, mix 30 ml of neem juice with 15 ml of honey, take on an empty stomach for seven days.

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If you suffer from burning sensations and excessive sweating, add 5 to 10 drops of neem oil in a glass of milk before going to bed.

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Proclaimed the best product available in treating psoriasis, 2 capsules should be taken three times daily after meals with a glass of water.

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Another way to treat psoriasis as well as eczema, skin ulcers, fungal conditions, cold sores and athletes foot, is to mix 1 tablespoon neem oil and 4 ounces of olive oil.

This should be applied at least twice daily to the affected areas.

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For acne problems take 2 capsules twice daily, you will start to see results within a few days.

To remove moles and warts, one drop of undiluted neem oil should be directly to the mole or wart and then covered with a small bandage. The procedure should be repeated daily using fresh oil and clean bandage.

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For sinusitis, plain pure neem oil can be used as nasal drops. Use tow drops twice daily, morning and evening.

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For athletes foot, soak feet in warm water with 15 ml of neem oil.

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Neem oil will quickly stop earaches, just warm some oil and apply a few drops into the ear.

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For hemorrhoids, apply some neem oil to a cotton ball and gently rub for about a week. If preferred a paste can be made by adding a small amount of olive oil or Aloe Vera oil until desired consistency is reached.

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To prevent hair loss and enhance growth, mix a few drops of neem oil with coconut or olive oil and massage into scalp. This will even prevent your hair from graying!

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Neem oil can be applied to cuts and abrasions to help them heal quickly. Neem increases blood flow which aids in creating the collagen fibers that helps the wounds to close.

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As a treatment for burns and even sunburn, neem oil can kill the bacteria, reduce the pain and stimulate the immune system. By stimulating the immune system it speeds up the healing process and there is less scarring.

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To kill head lice, neem oil should be massaged into the scalp and left on over night.

Shampoo your hair as usual the next morning.

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Neem detoxifies the body and helps maintain healthy circulatory systems, digestive and respiratory systems and helps to keep the urinary tract free of infections.

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Scientific evidence has shown that neem is valuable in boosting the bodies immune system. A healthier immune system helps your body in fighting off many illness and diseases.

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Laboratory studies have proven neem to be effective in treating the symptoms of food poisoning associated with both salmonella and staphylococcus. Neem extracts kill the salmonella bacteria and flush it out of your system, reducing the severity and length of the ailment.

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A neem paste applied directly to the sores caused by chicken pox, will relieve the itching and reduce scarring.

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Neem tea drank once or twice weekly can even help prevent colds. If you already have the symptoms associated with a cold they can be lessened by drinking neem tea three times a day. It will help alleviate the fever, cough, aches and pains, sore throat, fatigue and nasal congestion.

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Neem also contains powerful anti-fungal properties that have been shown to aide in the treatment of athletes foot, yeast infections, thrush and even ringworm.

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In it’s use of treating hepatitis, 80% of test subjects showed a significant improvement. The neem extract can actually block the infection that causes this virus.

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Drinking neem tea during an outbreak of influenza will help alleviate some of the symptoms and speed up the recovery time. Neem has an amazing ability to literally surround viruses and prevent them from even infecting the cells.

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Use of a neem based powder for jock itch will reduce the itching, dry the area and kill the fungus. For severe cases a neem lotion may be more effective.

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The length and severity of an outbreak of mononucleosis can be decreased by drinking neem tea twice a day for two weeks.

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For shingles, neem cream should be applied to the affected area at least three times per day. Severe cases should also be treated with neem tea after each meal, but tea should not be consumed for more than two weeks at a time.

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Thrush can be effectively treated with neem tea, it will reduce the inflammation, reduce the pain and speed healing. Children under the age of 12 should not drink neem tea, for children this young it should only be used to gargle.

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Secondary bacterial infections in the nasal passages and respiratory system can be decreased by inhaling steam from boiling the leaves.

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In a recent study neem was shown to lower cholesterol levels when taken for a month in either the capsule form or the extract.

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Scientific studies have proven that neem will reduce blood clots, heart irregularities and even reduce blood pressure. Results can be seen within one month on a regimen of extract or capsules.

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Neem will increase the bodies production of T-cells, which will attack infections.

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The use of neem oil on the skin is known to actually rejuvenate the skin, it also promotes collagen and will work in the treatment of many skin conditions including acne. Acne can be cleared up with a few day by taking two neem capsules twice daily.

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It is reported that neem will help in fighting chronic fatigue.

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For headaches neem powder should be applied to the forehead, neem oil should also work in combating headaches when used the same way.

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The inflammation, pain and swelling of the joints associated with arthritis can be greatly relieved with the use of neem. Neem changes the immune systems response to arthritis and can halt the progress of this disease.

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For centuries neem has been used to reduce tumors. Clinical research has shown remarkable effects in the reduction of tumors and cancers and also in treating leukemia.

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Neem is highly effective in treating gastritis, indigestion and heartburn.

Blood disorders such as blood poisoning, kidney problems and poor circulation have been benefited by the use of neem.

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With all of the countless medicinal benefits that are already provided with the use of neem, it is also being studied very closely for a treatment for AIDS, cancer, allergies, diabetes and both male and female forms of birth control!

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Neem oil should be stored in a cool dark place, if the oil solidifies it can be placed in warm water to bring back to liquid form.

INTERVIEW

LNG business not under regulator's domain: Petronet LNG

In an interview to CNBC-TV18, Dr A K Balyan chief executive officer and managing director, Petronet LNG, says the domain of re-gasified LNG or LNG business does not fall under the domain of regulator. He also says that prices of LNG have gone up in the last six months.

"It’s time that a realistic price regime comes in practice in the world." said Balyan.

Below is the edited transcript of the interview with CNBC-TV18.

Q: Gas space has worried everyone from analysts to investors. There are two main concerns with regards to Petronet LNG " one is, a possible cap on marketing margins and the other being regulation of LNG. Do you believe any of these are possible?

A: On marketing margin issue, more than 90% of our LNG is sold back-to-back to GAIL, IOC and Bharat Petroleum. We are not engaged in any retailing activity of our own. The bulk is sold to these three off takers and they do the retailing. As a matter of fact, this does not attract any marketing margins. There is very small quantity that goes directly to some of the customers like Essar or Reliance. The domain of re-gasified LNG or LNG business does not fall under the domain of regulator.

Q: Did you speak to anyone at the PNGRB or in the ministry to clarify this doubt?

A: We don’t have any doubt and if required we will speak or write to the PNGRB or any other authority. We are quite clear, the empowerment is very clear. As far as IGL and other companies are concerned, it is actually concerning the transportation services and the compression services along with the marketing margin that attracts and definitely falls under the regulators domain.

Q: There is a feeling in the market that the PNGRB may not let companies escape with high returns. Do you think there is a rational behind capping of returns or it’s not possible?

A: The overall exercise is to rationalise the processes and systems. Margins should be market driven and established by the market forces.

Q: What are the margins at this point in time. Do you think that margins could improve in the current quarter because we hear that LNG prices have fallen considerably?

A: LNG prices have not really fallen considerably, on the contrary they have gone up in the the last six months. We expect it to soften now. The market can absorb higher prices and different marketing margins. It differs from market to market, but I think it should be determined by the market forces.

Q: How do you see re-gasification margins moving. Do you expect a 5% increase every year or could there be a move on that?

A: As far as reclassification is concerned, they are benchmarked with the world. Many factors like different kind of terminals and capacities that come up, the expenditure made on a terminal are taken into consideration to evaluate and come to re-gasification charges.

We are very competitive place in the market. Our contractual arrangement has a provision of an increase of 5% on the existing thing year to year.

Q: Do you see prices of imported LNG prices coming down? What are your margin and volume expectations in FY13?

A: The demand is rising in the country. Whatever volumes we have imported and sold in the country the future volumes are likely to be of the same order or maybe little more.

We see growth near 6-8%. As far as pricing is concerned, we believe that there is overcapacity in the world. Many of the producers are holding on and trying to create an environment where the prices remain higher. Why there should be so segmented LNG markets in the world when the commodity today can be sold from any part of the world, why there should be so much of segmentation. In coming time, years, it might take a decade but will have to really soften out to be closer markets and not highly segmented ones.

Q: What is the update on Kochi LNG? Are you signing anything in the near-term?

What’s the feedback you are getting from suppliers?

A: Recently, we have had discussion with the Qatari delegation. We are in negotiation with Gazprom of Russia and some Australian suppliers. These do not reflect right pricing and the pricing is expected to be higher. I think it’s time that a realistic price regime comes in practice in the world.

Q: So what’s the realistic price?

A: If you compare the regime just prior to the Fukushima incident, the spot cargos were prevailing around USD 9.5 or USD 10 which reflected more realistic price regime. Longterm were also much lower than what they are right now. Nothing drastically has changed.

More capacities have been added or will be added. Demand wise, American market has turned into exporter so growth is negative. Europe is just about 1-1.2% growth. The growth is only in Asia, largely in India and China.

In next four-five years Russia will come up with additional capacity of 25-30 million tonnes per annum, all this is coming to market and therefore there is an overcapacity. It should be reflected in the prevailing market. We firmly believe that these prices are higher, do not reflect rightly the demand-supply scenario.

Q: In the first nine months you made a marketing margin of about Rs 29-30. Do you expect to continue getting that into FY13 or cold there be a slight reduction?

A: I don’t know how you have calculated margins. We are looking at same volumes. Our major revenues come from re-gasification and we expect volumes to go up. We would be somewhere in that range.

BOOK SCAN The New Sustainability Advantage

Seven Business Case Benefits of a Triple Bottom Line Author: Bob Willard The New Sustainability Advantage Seven Business Case Benefits of a Triple Bottom Line – Tenth Anniversary Edition

The New Sustainability Advantage shows how the benefits of the "triple bottom line" can increase a typical company’s profit by at least 51 to 81% within five years, depending on the company’s size and industry sector, while avoiding risks that could jeopardize its financial wellbeing.

Fully revised and updated, this 10th anniversary edition clearly demonstrates that, by focusing on seven powerful yet easy-to-grasp sustainability strategies, businesses can: • Increase revenue • Improve productivity • Reduce expenses • Decrease risks.

Expressed in clear business language and presented in an appealing, graphically rich format, this practical guide and the accompanying online Sustainability Advantage Simulator Dashboard enables executives to enter their own data and quickly identify highleverage benefit areas for their organization. More detailed downloadable Sustainability Advantage Simulator Worksheets help them drill down into specific areas of interest and fine-tune the assumptions to their specific situation.

An indispensable tool for both sustainability champions and senior management, The New Sustainability Advantage proves that the quantified business case for sustainability is more compelling than ever before.

Bob Willard gave up an award-winning, successful career in senior management at IBM to devote himself full-time to building corporate commitment to sustainability. Widely in demand as a speaker, he has delivered hundreds of presentations demonstrating the business case for sustainability to companies, consultants, academics and NGOs worldwide. Bob is the author of The Sustainability Champion’s Guidebook, The Next Sustainability Wave, and the original edition of The Sustainability Advantage. He was recently appointed an inaugural member of the Sustainability Hall of Fame by the International Society of Sustainability Professionals. Conscientious Commerce, 6 x 9” / 224 pages, Charts and tables throughout US/Can $19.95, PB ISBN 978-0-86571-712-1, Ebook ISBN 978-1-55092-507-4

Street Smart Sustainability

The Entrepreneur's Guide to Profitably Greening Your Organization's DNA (Social Venture Network) Author: David Mager (Author), Joe Sibilia (Author) Paperback ISBN 9781605094656 In this book, David Mager and Joe Sibilia do include 10 reasons sustainability makes economic and ecological sense, they're not here to convince you why.

Street Smart Sustainability is about--with detailed, nuts-and-bolts, step-by-step advice on-how to green business green profitably.

Mager and Sibilia begin by discussing how to get employee buy-in to and motivate your company into becoming sustainable. Then they cover how to get started--auditing your current sustainability position, developing a plan to move forward and quantitatively measuring your progress.

Street Smart Sustainability is a roadmap to the sustainable low-hanging fruit at a time when the public is hungry for businesses that demonstrate genuine respect for the environment.

It provides simple tools so you can make continuous, cost-effective improvements in your sustainability practices--practices that diffuse into the organizational DNA and become fixtures, shifting the prevailing corporate culture.

The Greater Goal

By Ken Jennings and Heather Hyde ISBN 9781609942885 By the coauthor of the bestselling The Serving Leader Shows how superior performance is driven by aligning every person and every function around an inspiring purpose Written in a universally accessible fable format—critical for this highly collaborative process For decades we have been hearing about how strong organizational purpose drives customer and employee loyalty. Committees draft stirring mission statements and slap them on their websites, stick them on their annual reports, frame them on their lobby walls—and forget about them.

So what does it take to put an inspiring purpose into practice? How can you ensure that the highest values inform every aspect of your company’s operations and sustain high performance for years to come?

Through years of management consulting experiences, Ken Jennings and Heather Hyde have learned what it takes to connect purpose and performance. In this vivid business fable they lay out a five-point road map called “the Star Model” to guide leaders through the process of engaging executives, managers, and employees in creating a profoundly motivating purpose that becomes a basis for action at all levels. Jennings and Hyde tell the story of Alex Beckley, a new company president who receives a dramatic wake-up call that demands he live and lead differently. The Star Model transforms not only his work life but his personal life as well.

Purpose gives everyone the feeling of working for a cause, not just a company. But simply having a greater goal is not enough. Leaders must also make this greater goal the foundation of their overall strategy and execute that strategy while staying true to the larger purpose. With Jennings and Hyde’s expert assistance, you’ll discover how to articulate your higher purpose, use it to create shared goals among all stakeholders, align all functions around the shared goals and higher purpose, and thereby drive organizational performance to unprecedented levels.

Upcoming Events: World National Oil Companies Congress 2012 18-22 June 2012 Venue: The Landmark Hotel – London http://www.terrapinn.com/conference/world-national-oil-companies-congress/index.stm Shale Gas & Tight Oil Argentina II, Buenos Aires on September 18-20. 2012 http://dmtrk.net/SRO-SFG7-E13TYL5UCB/cr.aspx