The company’s formula for success is astonishingly simple – it sold oil at much higher prices, compensating for losses in its other businesses.

Oil prices at an average of $109 per barrel, up from $88 per barrel the previous year, led to Shell to announce profits of £18.1 billion in 2011.

The company warned of falling profit margins and decreased production in other areas of the business however, with its downstream operations (petrol station and refining) suffering significant losses in the fourth quarter of 2011.

Shale of the century?

Shell recently announced its latest strategy, with $30bn of investment planned this year, mostly on upstream operations, including new exploration and extraction of oil and gas.

Shell’s oil and gas fields produced 3% less in 2011 compared with the previous year.

Oil and gas production will be increased, the company says, especially from unconventional sources such as oil and gas shale.

A report commissioned by the EU recently found that the various regulatory frameworks in place are sufficient for fracking activity to continue in the UK.

Dial meters like this one will be replaced by Smart Meters with digital displays, but is forcing them on consumers too much?

As we reported back in March last year, the DECC has already set out its plans for a nationwide smart meter rollout during the years 2014 – 2019, calling it “a crucial step in delivering the UK’s energy security and low carbon future”.

Currently we are in the ‘foundation stage’, where domestic consumers and businesses have to choose to install a smart meter, with the costs of installation and hardware built in to their bills or paid for upfront. However, the government is planning a forced ‘mass rollout’ from 2014 – the proposed second stage.

The DECC said that during the foundation stage “the Government will work with industry, consumer groups and other stakeholders to ensure all the necessary groundwork is done for the second stage”. This has clearly failed so far if the largest consumer watchdog (Which?) is campaigning publicly to get the proposals looked at again.

“The government must not write a blank cheque on behalf of every energy customer, especially at a time when millions of people are struggling to pay their bills.” said Richard Lloyd, Executive Director of Which?

Cost effective?

Which? says the campaign was sparked due to consumers raising concerns about the cost effectiveness of programme. The DECC said back in March 2011 that the average household would save “around £23 per year on their energy bill as a result of smart metering”. All of the big six suppliers hiked their energy prices again this winter, by around 10-20% in most cases, pushing annual bills up towards the £1200 mark.

Business users will also be required to have smart meters installed after 2014. At Utilities Savings we have implemented many smart meter installations, but usually they are due to the business using enough energy to warrant the costs of installation – the savings are large enough and the payback period is reasonable, so the company chooses to do it for financial reasons.

If you are only spending £1,000 a year and it costs £500 to buy and install the meter, then most companies would rather just keep on top of their meter readings to prevent inaccurate estimated bills. What do you think?

Sources:
Which? – Time to stop and review the smart meter rollout
DECC – Press Release 31/03/2011
DECC – Smart Meters

Would this be better or worse with a wind turbine?

The reforms laid out by the coalition government aim to simplify the application process – fast tracking wind farms, many pieces of essential infrastructure, such as airports, waste processing plants and nuclear power stations.

In simple terms, there will need to be enough protest by residents speaking out against any “sustainable development” to halt it, rather than support for it to go ahead. Many feel that wind farms will automatically fall into this category, and are concerned that regulations that have protected the British countryside for many decades is about to be re-written.

The idea is to give the power to approve projects to local governments, abandoning the current top-down approach, but lobbyists are worried that local people will not be able to fight the large corporations seeking to get permission for new developments. The Campaign to Protect Rural England have outlined their concerns over the propsals.

Smaller projects such as personal wind turbines and solar panels will now need no planning permission.

Chancellor George Osborne expressed an inkling of doubt in regard to Britain’s “low-carbon economy” at the Conservative Part Conference earlier today, saying that “Britain makes up less than 2% of the world’s carbon emissions… We’re not going to save the planet by putting our country out of business.”

This comes a few days after Greg Clark agreed to listen to concerns over the planning reforms, promising that suitable amendments will be made.

Wind Power took another hit in recent weeks, with studies on Texas, Colorado and Irish grids showing that that wind power only reduces CO2 output by around 2%, due to the need to spin up gas-fired power stations whenever the wind is not blowing strongly enough.

An Energy White Paper is due to be released tomorrow (Wednesday) which will outline the government’s plans for the future of Britain’s energy policies.

200 trillion cubic feet of gas could be 'fracked'

The company that halted the controversial ‘fracking’ process after a minor tremor near Blackpool earlier this year says that the resources found beneath the Northwest of England are extremely vast.

Hydraulic Fracturing, or ‘fracking’, is a process which is enabling companies to extract gas trapped inside layers of shale rock by injecting a special fluid into it at high pressure, which releases the gas for extraction.

Although the technique is not new, having been used to extend the life of gas wells for years, the use of it as a method of accessing previously untapped resources is an understandable bone of contention for many.

Concerns have been expressed about contamination of water supply from the fluid used, earthquakes being caused by the fracturing process, and the further use of hydrocarbons instead of renewable technology such as wind and solar power.

More certainly needs to be known about the process before it is adopted in any widespread fashion. Some people in the U.S. who live close to shale gas wells have been able to set their tap water on fire due to contamination.

Cuadrilla Resources however, are keen to stress that the technology is safe and could create thousands of highly skilled jobs across the UK. Cuadrilla CEO Mark Miller said “The way we do things is fundamentally different and the regulatory process is different.”

The new system would use cables laid under the sea, making it easier to connect offshore wind farms to the grid, eliminating the need for pylons that run from the countryside to the coast.

It would also serve as a new way of balancing the load on the system, which could reduce wasted energy that is lost in the grid during transmission, as well as balancing the difference in supply and demand across the whole of Europe.

The report comes from the Energy and Climate Change Committee, whose Chairman Tim Yeo said: “Developing an integrated and interconnected offshore network would allow us to tap these huge resources cost-efficiently and prepare the ground for a future European Supergrid – if it is necessary and feasible in future”.

The committee says that although the costs of implementing such a grid are high, they could deliver a 25% capital saving on the cost of connecting each offshore wind farm individually.

Various media outlets around the world are reporting on what’s becoming known as the Solyndra Scandal. Solyndra was a company that made solar panels, and was funded by Obama’s green-tech subsidy program.

“The future is here” said Mr. Obama, when he visited the plant in May 2010, citing the plant’s ongoing production as proof that “the promise of clean energy isn’t just an article of faith”.

The company, which received over half a billion dollars of taxpayer money in the form of a loan, declared itself bankrupt recently, leaving around 1,100 employees out of work.

This story has highlighted the fact that the green-tech program has only actually created around 3,500 permanent jobs in the last two years, having already distributed nearly half of the money it has made available.

However, this graphic from the US Department of Energy shows that the permanent jobs are only a fraction of the “green jobs” that would be “created or saved” by the program. It shows 33,000 jobs at Ford Motor Company as being saved by a $5.9 billion loan allowing them to create more energy efficient vehicles, therefore converting them regular jobs to “green manufacturing jobs”.

The Global Warming Policy Foundation has stated here that the permanent jobs created have cost around $5 million each.

Sources: The Foundry | Washington Post | New York Times

The new technology uses lasers to compress hydrogen atoms together until they fuse, releasing large amounts of energy.

Experiments at The National Ignition Facility (NIF) in the US have been promising, producing huge bursts of energy.

UK company AWE and the Rutherford Appleton Laboratory have now joined with NIF, attempting to make laser fusion a viable commercial energy source.

The NIF uses 192 laser beams, targeted at an area no more than 2mm containing extremely cold hydrogen isotopes, which when the laser is fired, are compressed until they fuse.

In the instant during which the NIF’s laser is fired, it uses more power than the combined electricity consumption of the whole of America.

But in a recent experiment, a burst of power was released from the fusion reaction that was equivalent to the entire world’s consumption.

The aim is to achieve “ignition” of the fuel- a self-sustaining fusion reaction that would release enough energy to far surpass the ‘break even’ point.

David Willets, the UK’s science minister said: “This is an absolutely classic example of the connections between really high-grade theoretical scientific research and a fundamental human need: our energy supply.”

The programme will train students in the design of wind turbine blades, amongst other renewable energy initiatives.

Business Secretary Vince Cable said the scheme will help to pay for 50 students to be trained in the most innovative future technologies.

The investment programme is part of a plan to boost the UK’s offshore wind and marine energy sectors.

Students will focus on the commercial application of research, spending time on projects with industry partners such as BP, EDF Energy, E.ON, Shell and Rolls-Royce.

Speaking during a visit to Edinburgh University, Dr. Cable said: “Engineering skills are vital for the growth of a more sustainable economy and are in high demand from employers. This scheme will see industry working with universities to provide students with the training and commercial experience businesses want.”

“Scotland has real strengths in renewable energy – wind, wave and tidal power, building on a strong tradition of hydro. These students will have the chance to work with some of the leading energy companies based here and tackle one of our biggest challenges – developing technology for a greener future.”

Barclays say research shows more than one third of UK farmers want to install renewable energy projects on their farmland, most of them within a year.

Farmers hope to generate average returns of £25,000 pounds per year, Barclays said.

The 100-million pound fund is to help farmers finance projects such as solar panels, wind farms, hydro plants and organic waste power.

Barclays says there is a fast growing number of agricultural businesses seeking to benefit from government support tariffs.

The survey of 300 agricultural customers showed four out of five farmers recognize renewable energy can reduce costs and 60 percent see it as a potential source of additional income.

“We want to signal very clearly to the market that we consider this to be a big future industry, a big opportunity for agricultural businesses and also a big opportunity for the renewables,” said Barclays Business’ Product and Marketing Director, Travers Clarke-Walker.

The fund’s loan budget is unlimited and the first £100m could support more than 100 projects as the average cost varies between £250,000-£700,000, Clarke-Walker said.

UK Energy Minister Charles Hendry announced the acceptance of the proposal from Drax, who owns the country’s largest coal-fired power station.

The two plants are of 299MW capacity each, but the plans will reportedly be scrapped if the government does not up the subsidy available.

Air Products, announced on Wednesday that it had received planning permission for a plant that would convert waste into gas, producing enough energy for 50,000 homes and taking 300,000 tonnes of waste a year from landfills.

The proposed 49-megawatt power station will be constructed at a site near Billingham, the company said today in a statement. The plant may be operational in 2014, subject to financing.

Ian Williamson, from Air Products said: “Our facility will be using the latest and most advanced gasification technology from AlterNRG to generate renewable power and at the same time, contribute towards Stockton Council’s environment, energy and economic investment objectives.”