Week of August 29, 2005 Blockbuster Deal |
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Oil, Waste,
Atoms and Wind Giant investment projects on three continents
all have big energy in mind by ADAM BRUNS, Site Selection Managing Editor Like ghosts in a Dickens story, energy sectors prominent in the past, present and future are lining up mega-projects to help the world answer some very pressing questions.
One of the latest efforts to meet the need is in Eket, Akwa Ibom, Nigeria, where Global Environmental Energy Corp. (GEEC) subsidiary Sahara Petroleum Exploration Corp. announce in July that it has contracted to build a US$4-billion oil refinery that will pump out 70,000 barrels a day, or nearly 25 million barrels annually. That's nearly a sixth of the capacity of the country's current four refineries. Nigeria, an OPEC member that is the world's 10th-largest oil producer, relies on oil revenue for 95 percent of its foreign-exchange earnings. The Nigerian government plans to expand its proven reserves to 40 billion barrels by 2010. GEEC is the Bahamas-based rebirth of the company formerly known as Life Energy Technology Holdings (LETH), and its primary business area has been in the waste-to-energy sector. The company's announcements indicate that it "intends to become a fully integrated energy company whose interests will include traditional oil and gas and alternative energy sources, environmental infrastructure and electrical micro-power generation." The company's traditional oil and gas activity took on a stronger profile earlier this year when its Sahara group formed an alliance with Vetra Group AVV and appointed former OPEC President and former Venezuelan Minister Energy and Mines of Humberto Calderon Berti to its advisory board. Sahara also appointed to that board Karl Mazeika, former executive director of exploration, production and upgrading and vice president of Petroleos de Venezuela, S.A. That company is second in size only to Saudi Aramco on the global oil company stage. GEEC's other big push is through a proprietary system it calls the Biosphere Process. That moniker may bring smiles to many faces, recalling the failed Biosphere projects. But this experiment is one based on the conversion of waste materials into "clean, green electricity" through solid waste gasification. Among the materials this process is looking to transform: "municipal solid waste (MSW), agricultural surpluses, agricultural effluents, forestry wastes, sewage sludge, medical waste, industrial wastes, flared natural gas, shale oil, sour natural gas, high sulphur oils, waste bilge oil, waste drilling muds and fluids; and many other traditional and non-traditional waste materials." That should just about cover it. Some people in China think so, anyway. In January, the Biosphere Development Corp., the Shenzhen Branch of Yankuang Group Co., Ltd. and the Shenzhen Rayes Group Co. Ltd. signed an agreement to form new joint venture companies in China in a four- stage process that will deploy over 1,300 Biosphere(TM) Process Systems in China by 2010. The company has signed a separate JV agreement with Environmental Concrete Company Ltd. to help that country meet its building material needs when China begins pulling within the bounds of the Kyoto Protocol in 2006, according to a release from the company. That release also stated that "the Parties have chosen Shenzhen, Yantai and Guiling as suitable cities to establish an additional 3 to 5 Biosphere Process Systems before 30 June 2006 and establish no less than 30 Biosphere Process Systems before 31 December 2006. This stage of the program is estimated to generate gross sales in excess of USD$200 million. The parties have agreed to build no less than 1300 units of Biosphere System(TM) waste treatment systems in the PRC within 5 years." Like GEEC's strategic portfolio, its Chinese partners offer a blend of old and new energy. The Shenzhen Rayes Group Co. Ltd. is also known as China Online, and its main business is in developing network infrastructure and services, primarily through a vast network of Internet service provider. Yankuang Group Co., Ltd., is engaged in coal production and sales, coal chemical and civil engineering. GEEC formed its Sahara and Biosphere subsidiaries in December 2004 in the Bahamas. According to one source, the Biosphere processing units are manufactured in Eastern Europe, but when Diamond Ridge Advisors first bought a stake in LETH in August 2003, they were made in the U.S. LETH's New Orleans office filed for bankruptcy earlier this year. Nigeria is trying to expand its refinery capacity, and offering incentives for refinery projects, as well as looking into privatizing its four state-run refineries. The company approved by the Nigerian government for the Global Environmental project is called ChaseWood Consortium Nigeria Ltd., and is one of 14 approved refinery projects in Nigeria as of October 2004, according to the Energy Information Administration. Fusion's Comeback
If you think GEEC's activity is "visionary," try this one on for size:
In late June, fusion made a comeback, and it had nothing to do with Weather Report or Miles Davis. France a country that already looks to nuclear energy to supply 80 percent of
Construction costs are about half of that total price tag, and will be half-funded by the EU and France, with those other countries part of the International Thermonuclear Experimental Reactor (ITER) team each contributing 10 percent of the cost's other half. The project is expected to take nine years to construct at the 99-acre (40-hectare) site, where an additional 74 acres (30 hectares) will be in use during construction. According to ITER's Web site, the technology involved "is the experimental step between today's studies of plasma physics and tomorrow's electricity-producing fusion power plants. It is based around a hydrogen plasma torus operating at over 100 million øC, and will produce 500 MW of fusion power." "What's a torus?" you ask? Turns out it's fancy geometric talk for "doughnut." The reactor's technology also involves superconducting magnetic coils and cryogenics, as well as a tokamak ... Okay, we'll tell you: A tokamak is "a device for containing a plasma inside a torus chamber by using a combination of two magnetic fields one created by electric coils around the torus, the other created by intense electric current in the plasma itself." In fact, there are two in the U.S.: one at Massachusetts Institute of Technology in Cambridge and one at General Atomics in San Diego. Design work for the ITER iteration is being carried out simultaneously in Naka, Japan (near Tokyo), and Garchina, Germany (near Munich). Canada was the first to offer a site, followed by Spain, which was thought to have the site sewn up when the EU rejected it in November 2003, even though the country offered to invest of 900 million euros (US$1.1 billion) of its own money.
The ITER project came into being as an ideal vessel for demonstrating east-west collaboration with the fall of the Iron Curtain in the mid-1980s. Appropriately, the site decision was reached by the six participating countries at a meeting in Moscow. Situated at the confluence of the Verdon and Durance rivers, Cadarache has been an atomic research site since the late 1950s. And the highly touristic region of Provence Alpes C“te d'Azur has a lot more industrial presence than many might surmise at first glance. For starters the region is responsible for 40 percent of France's microelectronics industry production, 35 percent of its oil refining and 25 percent of its steel production. A little north of the chosen site, near Grenoble, are STMicroelectronics' renowned Crolles I and Crolles II sites for semiconductor fabrication and R&D, which have received significant government backing in recent years. In fact, government support helps define the region's R&D base. According to submitted documents for the ITER search, civil public spending on R&D in the region represents 8.5 percent of national expenditure, or US$857 million. This is divided up between university research (28 percent in six universities), the "Centre National de Recherches Scientifiques" (CNRS, 18 percent in Marseille and Sophia-Antipolis) and public applied research organizations (54 percent). The region is second only to the Greater Paris area in public researchers, with 6,500, part of a total research community of 11,000. Meanwhile, private R&D spending in the region comes to about US$1.2 billion annually.
I Say, Do You Feel a Draft?
Across the Channel, another world's largest is in the works.
In this case, it will be the globe's biggest electricity-generating wind farm, a US$2.7-billion complex called The London Array. Actually, the 270 wind turbines that the project envisions would reside where the Thames River empties into the North Sea. Among the willing participants: Royal Dutch/Shell Group of Cos.' Shell WindEnergy, E.ON U.K. Renewables and Core Ltd., a joint venture between Farm Energy and Denmark's Energi E2 A/S. The wind farm would raise a crop of 1,000 little megawatts that supporters say would supply power for more than 750,000 homes. The designated area has already been designated by the British government as one of three strategic areas for wind farm development, despite outcries from the public about the sights and sounds such developments can generate, in addition to power. Again, big-time politics and policy are also a part of the project. "Were the project to become fully operational, it would make a substantial contribution to the UK Government's renewable energy targets for 2010," states the project's Web site. "Based on the current schedule, it is expected that the project would represent nearly 10 percent of the Government's renewable target for 2010 (i.e. 10 percent of the 10 percent). It would also prevent the emissions of 1.9 million tonnes [metric tons] of carbon dioxide each year." London Array is the first of the Round 2 UK offshore wind farm projects, awarded an option for a lease by the Crown Estate in December 2003, to apply for consents. Round 1, initiated in 2000, spawned 18 approved sites, though not all have gone forward. Opposition to the project is coming from the Port of London Authority, which fears shipping hazards, and from the Kent Wildlife Trust in Graveney: "Kent Wildlife Trust is currently in discussion with London Array as the company wishes to bring the cables ashore across the Trust's South Swale Nature Reserve near Graveney," reads the group's statement on the project. "The South Swale reserve has statutory protection as a Site of Special Scientific Interest and a Special Protection Area." Among the other environmental concerns is the bird kill rate, especially where the Red Throated Diver, an endangered sea bird, is concerned. But the project site only affects a small portion of their feeding grounds. In response to ongoing consultations over the past few years, the project's size has been reduced by 20 percent in order to give more leeway to ships and birds alike. And besides, say the project backers rather matter-of-factly, "The main anticipated effect on the Red Throated Diver will be that they will avoid the wind farm once built." Sound thinking, if you're a bird. Green Support, Scottish Breezes Essential
Running counter to such concerns is project support from the likes of Greenpeace Executive Director Stephen Tindale, who said, "The UK is blessed with the best wind resource in Europe. The London Array offshore wind farm, which when complete will be the largest wind farm anywhere in the world, represents a major step forward in harnessing the UK's massive wind resource and will contribute to the UK's efforts to avoid the worst effects of climate change."
If all goes well in the permitting and consent phase, four more phases will ensue, with the entire project setting sail by 2011. Backers hope to see planning consents in place in 2006. E.ON UK Renewables already has been heavily involved in offshore U.K. action.
"Last year we completed the construction of Scroby Sands, one of the UK's first commercial-sized offshore wind farm, off the coast of Great Yarmouth," Jason Scagell, Director of E.ON UK Renewables said of a recently completed 60-megawatt complex, "and we're progressing further offshore developments around the coast of the UK." In all, the company has stakes in around 20 wind farms in the country. Shell WindEnergy is one of the 10 largest wind farms asset owners in the world and has stakes in about 740 megawatts worth of wind projects across Europe and the United States. And CORE, the originator of the London Array project, includes in its portfolio the 460 megawatts of wind energy overseen by Danish energy generator ENERGI E2, which includes the 165-megawatt Nysted wind farm in Denmark. Meanwhile, in late July, Energy Minister Malcolm Wicks from the U.K. Department of Trade and Industry presided over the opening of a 15-turbine, 20-megawatt wind development by Scottish and Southern Energy at Artfield Fell in Dumfries and Galloway. He used the occasion to release two studies related to tying in the Scottish islands of Orkney, Shetland and the Western Isles (and its pronounced wind energy) to the National Grid. Pursuant to the U.K.'s Energy Act 2004, the government will offer the islands a discount on charges to use the grid. In return the nation could see the equivalent power output of a London Array in decidedly less busy surroundings. "I have been very impressed at the renewable energy industry's commitment to our target of 10 percent by 2010 and am delighted to be making my first wind farm visit here at Artfield Fell," said Wicks of the US$28.8-million project. "But there's still much work to be done and the two consultations published today will have a major impact on how the sector develops in future. Limiting the charges paid to the National Grid by renewables generators on the Scottish Islands is vital if their vast potential is to be realized. Given the right incentives, the islands could contribute more than a percentage point towards our 10 percent target, that's enough to power three quarters of a million households, more than Edinburgh, Glasgow and Aberdeen combined. This, and separate proposals for connecting the U.K.'s offshore wind resource to the grid, are hugely important if Scotland and the U.K. as a whole are to maintain the drive towards a low carbon economy."
©2005 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.
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