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China’s dangerous credit addiction

Time for Beijing to prioritise stability over growth For the past two decades China’s turbocharged growth has been the envy of the rich world as well as an aspiration for other emerging markets. Surging exports and intensive state-driven investment have lifted millions out of poverty and propelled Beijing into the exclusive club of global economic superpowers. More recently, however, doubts have emerged over the sustainability of this development model. In particular, critics point to China’s increasing addiction to cheap credit , which began when Beijing unleashed its large-scale monetary stimulus at the height of the financial crisis. Between 2008 and 2012, China’s total debt as a proportion of gross domestic product nearly doubled, jumping from 125 per cent to 215 per cent. This rise would not have been so problematic if the cash had been used to fund profitable investment. However, the opposite is often true. The more vibrant […]

Posted On : Published By : Tom Whipple
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China targets coal-to-gas output of 50 bil cu m by 2020

China is targeting to raise its synthetic coal-to-gas output to 50 billion cubic meters by 2020, accounting for over 12% of domestic supply, an official with the National Energy Administration said Wednesday. But actual output may fall short of the government’s target, as not all of the planned coal-to-gas projects may come onstream, according to a report released the same day by state-owned China National Petroleum Corp.’s Economics and Technology Research Institute. Yang Lei, deputy director of the Department of Oil and Gas at the NEA under the National Development and Reform Commission, said coal-to-gas output is targeted to hit 50 billion cu m by 2020, echoing statements made earlier this week by Wu Xinxiong, NDRC’s deputy director as well as head of the NEA. "According to our initial plan, the output of coal-to-gas will reach 50 billion cu m by 2020, accounting for […]

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Japan Approves Tepco Turnaround Plan

T, the utility at the center of Japan’s worst nuclear accident, won government approval Wednesday for a restructuring that will allow it to receive an additional ¥4 trillion ($38 billion) in state funding. But the new plan doesn’t offer a clear road map to return the company to financial health as it struggles with the high costs of cleaning up the devastated Fukushima Daiichi plant and paying compensation to those in the area affected by the high level of […]

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Alaska to Invest in Natural Gas Project

Alaska officials want to invest billions of state dollars in a major natural gas transportation project that they say will increase energy sales and boost state revenue. The administration of Gov. Sean Parnell, a Republican, said Wednesday that it would seek lawmakers’ approval of an agreement with several big energy companies that would allow Alaska to become an equity partner in the export project, which state officials have been pursuing for years. Oil production has been declining in Alaska, prompting Mr. Parnell and his predecessors to seek ways to shore up the state’s finances, which have been heavily dependent on oil taxes and royalties. Officials have been eager to unlock natural gas that is trapped underground near the Prudhoe Bay oil fields and in another gas-rich region called Point Thomson. "We have a compelling interest in seeing these resources monetized," Natural Resources Commissioner Joe Balash said […]

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Additional Comment Period May Prolong Keystone Review

The U.S. State Department will give the public more time to comment on the Keystone XL pipeline, which could delay the final decision on a project that has been under review for more than five years. The department is completing a final environmental assessment of the proposed pipeline that would carry oil sands crude from Canada to refineries along the Gulf of Mexico coast. When the assessment is released, State Department officials will start a process to determine whether TransCanada Corp. (TRP) ’s $5.4 billion project is in the national interest before President Barack Obama makes a final decision. The agency will seek public comment during the national interest determination review period, according to the official who requested anonymity to discuss decisions. The agency didn’t say how much time the public will have to submit comments. “At some point you have to say the time that it has taken […]

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Toyota Pledges to Top U.S. Push to Double Fuel Economy by 2025

Toyota Motor Corp. (7203) , the world’s biggest seller of hybrid-electric vehicles, vowed to surpass U.S. rules intended to double fuel economy and reduce carbon emissions . Automakers agreed in 2011 to a plan by President Barack Obama targeting an industrywide increase in Corporate Average Fuel Economy, or CAFE, to 54.5 miles per gallon of gasoline by 2025. Increased sales of hybrids and other alternative-powered autos will help Toyota comply with that rule, said Bob Carter , the automaker’s U.S. senior vice president. “The 2015 to 2025 CAFE regulations will require automakers to significantly reduce emissions and increase fuel economy across their fleet of vehicles,” Carter said in prepared remarks at Deutsche Bank AG’s auto industry conference in Detroit yesterday. “That won’t be easy, but at Toyota we plan to exceed these new standards.” The U.S. efficiency push has brought dozens of new hybrids, plug-in cars, electric vehicles and […]

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TransCanada Will Look At Rail If Keystone Rejected

The chief executive of TransCanada said Wednesday if the Obama administration doesn’t approve the controversial Keystone XL pipeline his company will look to the more dangerous alternative of building build rail terminals in Alberta and Oklahoma. President Barack Obama is expected to decide early this year on Keystone XL, which is under review at the State Department. The long-delayed pipeline would carry oil from Canada to the Gulf Coast. TransCanada CEO Russ Girling said pipelines are "by far a safer alternative" to oil trains but said if customers want him to build rail terminals he will. He said he’s in discussions with oil and rail companies. Concerns have been raised about the increasing use of rail to transport oil throughout North America. A number of recent derailments have worried both officials and residents close to rail lines. In July, 47 people were killed in Lac-Megantic, […]

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Polish shale gas may be too hard to exploit

The geological characteristics in Poland means it may be hard for energy companies to duplicate the shale gas success in the United States, an analyst said. New drilling technologies used for shale deposits have given energy companies access to oil and gas reserves previously out of reach, putting the United States in a leadership position in terms of production of those resources. Paul Stevens, an oil analyst at London think tank Chatham House, told the New York Times it may be tough to replicate that success in Poland. “The geology has not worked out,” he was quoted as saying Tuesday. Chevron, which has headquarters in California, is one of the few energy companies still exploring the shale reserve potential in Poland. Marathon Oil, which has headquarters in Texas, gave up on its Polish shale ambitions in 2012 and Italian energy company Eni is said […]

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New Vehicle Registrations Fell for the Successive Straight Year in 2013

;European car sales fell for the sixth straight year in 2013, despite a pickup in registrations in the final months of the year that sparked hope of a broader recovery in the region. The European Automobile Manufacturers’ Association, known as ACEA, said Thursday that 11.9 million new cars were registered in the European Union last year, a decline of 1.7% compared with the previous year. The performance marks the industry’s worst year since ACEA began collecting EU data in 2003. A moderate recovery of car sales in the second half of the year gathered pace in December, according to the ACEA data, but wasn’t strong enough to pull the industry into positive territory for the year. In December, new car registrations rose 13% to 906,294 vehicles—the strongest rate in the month of December since 2009 but still one of the lowest showings to date, ACEA said. Registrations also grew […]

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BP energy outlook sees 41% rise in world energy use to 2035

BP PLC’s Energy Outlook 2035, released Jan. 15, forecasts that world energy consumption will increase 41% between 2012 and 2035. Countries outside of the Organization for Economic Cooperation and Development, especially China and India, are believed to contribute to virtually all of this growth. Global energy intensity in 2035 is 36% lower than what it was in 2012, while energy per capita use will increase by 14%. According to the outlook, all fuels experience growth, with the fastest in renewables (+6.4% p.a.). By 2035, 14% of world electricity is from renewable sources, up from just 5% in 2012. Among fossil fuels, natural gas is fastest (+1.9% p.a.), followed by coal (+1.1% p.a.) and oil (+0.8% p.a.). Out to 2035, more than a third of global liquids will be supplied by the US, Russia, and Saudi Arabia. Natural gas supplies will reach nearly 500 bcfd by 2035, of which 20% […]

Posted On : Published By : Tom Whipple