Energy

Written by Wilber W sood, For the Outpost
Wednesday, 18 June 2008

“That’s money!” exclaimed the senator when oil started dripping from the seed crusher into a receptacle.
The senator was Jon Tester, and the crusher was racketing away in a barn on the Charter Ranch, 20 miles north of Billings.
It was Friday, June 13, and Sen. Tester had just flown in from Washington, D.C., for the weekend. Two aides, Rachel Court and Dana Swanson, along with his Montana press secretary, Aaron Murphy, had accompanied him here – along with a news crew from KTVQ-television – and everyone was watching safflower seeds being poured into a container that fed them into a slowly revolving hopper that heated the seeds before the oil was separated from the husks.
Tester would soon board a flight out of Billings to Great Falls, and from there travel to his farm near Big Sandy. Would he just kick back and relax? No, he had to get some work done.
“I think I may have to do some swathing,” he said.
The Tester family farm, an organic operation in north-central Montana’s “Golden Triangle,” was being tended while the senator and his wife resided in the nation’s capital, but Tester said that their son-in-law had not yet moved there full-time to run the farm.
So Tester has had to simplify. He used to raise a variety of crops, but now he’s down to just two. Half of his family’s 1,400 acres are planted to kamut, an ancient grain with unusually large kernels, high in protein, possibly a variety of durum wheat, that originated in the Middle East. He sells this to a growing niche market - many natural food stores buy kamut for its nutritional qualities - while the other half of his acres are planted to peas.
He could harvest some peas this year, he told me, “but I’ll probably just plow them back in,” since their primary function is as a “green manure” crop. Peas, lentils, beans of various kinds, as well as plants like black medic are used by organic farmers because they “fix” nitrogen from the air and thus can provide a homegrown substitute for fossil-fuel derived fertilizers.
“Homegrown” is the key word here – eliminating more and more expensive fossil-fuel based chemical “inputs” – and this includes homegrown fuel to run tractors and trucks on the farm.
Tester fully supports the idea of farmers producing their own fuel, on a variety of scales – be they farm-ranch operations such as what Jeanne and Steve Charter are experimenting with, or cooperative efforts among groups of farmers, or community-scale businesses such as one that Earl Fisher is setting up in Chester.
I asked Tester if he’d heard how that Chester operation was coming along, and he said, “One step forward, a couple steps back, then maybe two steps forward.” But he had hopes that it would become a success.
One of Tester’s neighbors near Big Sandy is Bob Quinn, a fellow organic farmer who actually developed the modern form of kamut. Quinn is also a renewable energy entrepreneur who calculated a few years ago that he ought to be able to plant approximately 8 percent of his acreage to oilseed crops and produce enough fuel to power his entire farming operation.
Quinn is among a number of Montana farmers and ranchers now experimenting with growing and extracting oils from safflower, flax, canola, camelina or other crops. They either burn these vegetable oils directly in their vehicles or, in a relatively simple process, add certain ingredients and convert the triglycerides in these oils to single-chain fatty acids and produce biodiesel.
At the Charter Ranch, however, the main challenge has been getting this particular machine to produce oil without continually clogging up. Two biofuel enthusiasts with mechanical expertise, Craig Hall and Rick Williams, have been tinkering with this machine since the Charters imported it from India awhile ago, and they are here tinkering with it today.
They are aided by Ressa Charter (Steve and Jeanne’s son) and by Paul Miller, a Billings man who is on the verge of buying a larger oilseed crusher, and is considering putting it on a trailer and towing it to farms to crush oilseeds in a similar way that crews travel from farm to farm to harvest wheat or from ranch to ranch to shear sheep.
Jon Tester spent a lot of time in discussion with Craig Hall, who runs his own truck exclusively on “waste” vegetable oil garnered from various restaurants around Billings.
After Tester left for the Billings airport, Hall and Williams were still discussing certain internal adjustments, and also noting Tester’s suggestion that chrome plating the innards of the crusher likely would reduce the number of times operators would have to stop the process to scrape away seed husks clinging to the grinder.
“Good idea, but expensive,” said Williams.
But Hall and Williams were happy. “This machine decided to work better today than it ever has.”
Most oilseed crushing operations in Montana are clustered along the northern tier, and most so far have focused on producing higher value cooking oils and lubricants. Fuel is down the list.
The payoff for livestock producers like the Charters would be to derive some fuel, at a competitive price with petroleum-derived diesel, but perhaps more importantly to use the highly nutritious residue from this process to feed cattle or sheep or hogs.
Farmers like Bob Quinn also see the advantage of using oilseed crops in rotation with wheat and other grains. Managed properly, oilseed crops, whether used for fuel or lubricants or food, can actually enhance Montana soils, not deplete them.
And of course, the more localized the production and consumption, the better. Hauling feedstocks too many miles eliminates the advantage, and hauling the fuel or livestock feed too many miles does the same thing.
Coming from a rural town, Tester understands this, mentioning without prompting the value of decentralized production - not only of biofuels but also of other “second crops” for Montana farms and ranches.
The more localized the energy system, the less money is exported, and more money remains to circulate through in the local community.
Reaping the wind
Another important Montana “energy crop” is windpower.
Tester’s neighbor, Bob Quinn, also ran the windpower consulting firm which took on the difficult task of developing Montana’s first large scale wind farm at Judith Gap, doing all the energy and environmental studies, obtaining all the permits, up to the point where the project needed a large infusion of capital to proceed.
Quinn’s group then sold the project to Invenergy, a Chicago-based company that raises money to develop wind farms and also natural gas power plants around the United States.
Invenergy now runs Judith Gap, supplying as much as 135 megawatts of some of the lowest priced electricity in the region to NorthWestern Energy, on a 20-year contract.
As valuable as Judith Gap is to the local economy, creating more than a dozen jobs, raising Wheatland County’s tax base, sending lease payments to private landowners and state government (many of its 90 generators are sited on state lands), the profits do flow out of state.
While glad to have participated in Judith Gap, Bob Quinn no longer wants to work on that large-scale, centralized basis.
He has told me that he’d prefer to see up to three megawatts of windpower installed at every electricity substation in the state where there is a decent breeze.
Tester agrees with this approach, commenting that one virtue of decentralized windpower is that while “the wind might not be blowing in Big Sandy, it could very well be blowing in Big Timber.”
However, as he slipped into the car that would take him to the airport, the senator said, “Realistically, what we’re probably going to see is both things – both large and small-scale renewable energy.”

Thu Jun 19, 2008 3:36pm BST

June 19 - Fitch Ratings has affirmed the 'A' Issuer Default Rating (IDR) and 'A' senior unsecured rating of Northern Natural Gas Co (NNG). The Rating Outlook is Stable. Approximately $952 million of debt is affected.

The ratings reflect the strong standalone credit profile of NNG, which benefits from solid credit protection measures, favorable operating characteristics and low regulatory risk. NNG also has a solid competitive position, with flexible access to five major supply basins and a customer base that is primarily composed of local distribution companies (LDCs). Favorably, approximately 90% of market area capacity is contracted beyond 2009, 45% beyond 2015. Fitch notes that NNG has been generally successful in renegotiating contracts with its customers over the past several years, albeit with moderate rate discounting.

NNG's credit metrics are consistent with the 'A' rating category. Fitch forecasts the ratio of EBITDA-to-interest and the funds flow coverage to be consistently above 6 times (x) over the next five years. Additionally, leverage, as measured by the ratio of debt-to-EBITDA, is projected to remain at or below 2.6x over the same time period.

Rating concerns facing the company relate primarily to the competitive conditions in the Midwest pipeline sector. However, Fitch believes that NNG's market position is relatively secure, given its customer base and geographical location. The Kinder Morgan-sponsored Rockies Express Pipeline ([REX] IDR rated 'BBB', Stable Outlook by Fitch) which transports natural gas from the Rocky Mountains to the Eastern markets, began to intersect with NNG in early 2008. As a result, there may be a modest drop off from NNG's field area services; however, the company's more significant market area should be minimally affected. NNG's capital expenditures has been at elevated levels for the past few years, and will continue to remain lofty through 2009 as NNG works on its Northern Lights expansion projects and storage expansion. Capital spending is forecasted to decline starting in 2010. Financing for capital projects is expected to be met through a mix of internally generated cash flows and debt issuances.

The Stable Rating Outlook for the company reflects Fitch's expectation that NNG will continue to post strong financial results, maintain a moderate leverage position, and will not require a rate case over the next several years. If the emergence of other pipelines in the Midwest market results in a decline in NNG's competitive position and a commensurate deterioration in credit fundamentals, the ratings of the pipeline could be negatively affected.

NNG, a subsidiary of MidAmerican Energy Holdings Co., is an interstate gas pipeline system that runs 15,900 miles and transports natural gas from the Permian Basin in Texas to the upper Midwest. (New York Ratings Team)

© Thomson Reuters 2008 All rights reserved.

JAMMU, JUN 19 (PTI)

Jammu and Kashmir government today floated global tenders for setting up of 690 mw rattle power project in Kishtwar district of the state, in tune with the new hydro-electric power policy, on river Chenab.

"After formation of the new Hydro-Electric Power (HEP) policy to tap power generation potential of river Chenab, Jammu and Kashmir Power Development Corp (JKDPC)) has floated global tenders for construction of biggest 690 mw rattle power project on river in Kishtwar," JKPDC sources told PTI.

The project would be awarded to the successful bidder fulfilling all proposed parameters, they said, adding, upfront premium quoted by the bidder should be above Rs 5 lakh per mw.

The project is to be developed on Build, Own, Operate and Transfer (BOOT) basis, they added.

The bidder, a single entity or consortium must have necessary technical and financial expertise to execute large projects of this size.

The bidding firm or the consortium must have experience of developing infrastructure projects such as power ports, airports roads, rails, refineries, steel plants, gas pipelines, canals, dams, bridges, telecommunications, shipping etc.

Also, bidders' aggregate capital cost must not be less than Rs 520 crore in last 10 years, out of which minimum Rs 175 crore should be from hydroelectric project and related activities and capital cost of at least one infrastructure project should minimum be Rs 90 crore.

This would be the fourth HEP project on the river Chenab in Jammu region, they said, adding that 390 mw Dulhasti power project in Kishtwar, 450 mw Baglihar project in Ramban, 360 mw Salal HEP project in Reasi have already been setup on the river," they said.

19 June 2008
Posted to the web 19 June 2008

Iyobosa Uwugiaren
Abuja

President Umaru Musa Yar'Adua is exploring the possibility of acquiring, in the long-term, an electro-nuclear programme to meet the huge energy demands in the country.

The President's current thinking, according to a senior official in the presidency, would be taken care of in the holistic measures being designed to tackle energy crisis in the country. And France is expected to play a key role in the plans.

"In a joint communiqué adopted by President Yar'Adua and President Nicolas Sarkozy of French Republic, recently in France both of them agreed to strengthen cooperation in the energy, which is an area of priority for Nigeria," our source stated last night.

LEADERSHIP gathered that the cooperation between the two countries would take the form of an energy partnership, covering all the relevant sectors: electricity and nuclear energy.

According to the joint communiqué, France is disposed to give careful consideration to Nigeria's request in this area.

"Both sides decided to consider, with due respect to contractual international obligation, particularly within the framework of the International Atomic Energy Agency, the conditions for the implementation of such a project, notably with regard to safety," the presidency source added.

In economic matters, both sides also pledged to give priority, in the first instance, to seven sectors, which offer specific opportunities for developing fruitful and mutual cooperation, notably oil, gas and energy, transportation, security, agriculture, education and vocational training, infrastructure, and environment.

France is expected to examine the possibility of providing assistance in these areas where its companies have acquired internationally recognised expertise.

They also agreed to work jointly in the area of gas. "Concerning gas, Nigeria and France shall encourage the development of gas reserves in Nigeria for electricity generation, domestic market, liquefied natural gas, reduction of greenhouse gas emission and the search for better energy efficiency," our source said.

"In this regard, they propose to launch as soon as possible, new gas projects of interest to both countries and express their desire to support the early conclusion of an agreement on the launching of the Obite power generation station."

In the area of migration, our correspondent gathered that Nigeria and France recognised the need to improve the level of their cooperation. They proposed to commence negotiations on the conclusion of an agreement on the concerted management on migratory flow.

"This agreement is in conformity with the spirit of the Rabat and Tripoli conference and the forthcoming meeting in Paris, in the autumn, based on the ED-Africa Lisbon strategy, in particular in its article 69. The ultimate objective is to facilitate legal migration, combat illegal migration and ensure the conditions of a mutually beneficial co-development," LEADERSHIP gathered.

"In the area of defence, the French took note of Nigeria's request for equipment, communication divides and training for improvement of energy security in the Gulf of Guinea.

"France is determined to give favourable consideration to these requests, particularly the issue of training. To this effect, she is ready to send a short-term mission to assist the Nigerian navy build its capacity in maritime and river control and capability in sea interception."

Nuclear energy is not new to the nation. The quest for scientific breakthrough and the institutionalisation of scientific infrastructure in the field of nuclear technology yielded results on September 30, 2004, when the much-awaited Nigeria Nuclear Research Reactor, dubbed NNRR-1, was commissioned by former President Olusegun Obasanjo, who was represented by the then Science and Technology Minister, Professor Turner Isoun.

The march towards the development of nuclear technology in Nigeria started about 28 years ago when the then military regime promulgated the Atomic Energy Commission Decree in 1976 which, following a series of amendments, gave birth to the Energy Commission of Nigeria.

In line with international regulations, the Nigerian Nuclear Research Reactor is purely for peaceful application just as the Centre for Energy Research and Training, where the research reactor is located, had emphasised that it is aimed at the economic development of Nigeria in the areas of agriculture, solid minerals, health, water resources, environment, industry, education and training.

The government had said, "Acquire nuclear technology and all other technologies shall be added unto thee," to emphasise the importance Nigeria attached to the acquisition of nuclear technology.

It added, "owing to the human resources development programmes of the nuclear energy research centres, there exists an indigenous pool of nuclear scientists and engineers, which can form the initial critical mass of the professionals needed, to start and sustain a structured nuclear programme.

"With the reasons and purposes for which we intend to use our nuclear technology for, we hope nobody will seek to blackmail us that our reactor is for reasons other than these," the government had said.

The project is also very important to the International Atomic Energy Agency (IAEA) because of the strong ties it had developed with Nigeria over the years.

By Jonathan Rynn

When New York City wanted to make the biggest purchase of subway cars in US history in the late 1990s, more than US$3 billion worth, the only companies that were able to bid on the contract were foreign. The same problem applies to high-speed rail today: only European or Japanese companies could build any of the proposed rail networks in the United States.

The US has also ceded the high ground to Europe and Japan in a broad range of other sustainable technologies. For instance, 11 companies produce 96% of medium to large wind turbines; only one, GE, is based in the United States, with a 16% share of the global market. The differences in market penetration come down to two factors: European and Japanese companies have become



more competent producers for these markets, and their governments have helped them to develop both this competence and the markets themselves.

Take Germany as an example. Even though the sun is not so shiny in that part of Europe, Germany has put up 88% of the photovoltaics for solar power in Europe. Partly, this was the result of a feed-in tariff; that is, Germany guarantees that it will pay about 0.10 euro (15 US cents) per kilowatt/hour of electricity to whoever produces wind or solar electricity. The average for electricity that is paid for nonrenewable sources is about 0.05 euro per kwh, so Germany is effectively paying double for its renewable electricity in a successful effort to encourage its production. Every year, the guaranteed price is lowered, so that the renewable sector can eventually compete on its own, having gotten over the hump of introducing new technology.

Germany's other advantage is that it is a world leader in manufacturing renewable technology equipment - 32% of the solar equipment manufacturers in the world are located in Germany. In addition, almost 30% of global wind turbine manufacturing capacity is German.

In Denmark we can see the advantages of good policy plus competence in building machinery. The world's largest wind turbine manufacturer, Vestas, is Danish. According to the Earth Policy Institute, "Denmark's 3,100 megawatts of wind capacity meet 20% of its electricity needs, the largest share in any country." The Danes have created a fascinating experiment in democracy by building most of their wind turbines through the agency of wind cooperatives, which may be joined by individuals and families.

Spain has undertaken one of the most ambitious programs in wind, solar, and high-speed trains. The Gamesa Corporation is the second-largest wind turbine manufacturer, and Acciona Energy is the largest wind-park developer. The Spanish government has very ambitious plans for wind production, and occasionally wind power provides as much as 30% of the country's electrical power.

Spain is also the world's fourth-largest producer of solar energy equipment and is a leader in the development of concentrated solar power - a form of solar power obtained by using a very large quantity of mirrors, typically, to concentrate solar rays onto a tower that produces steam, which then turns a turbine, generating electricity. They are often built in deserts and can spread over several acres. These new solar technologies will probably result in lower-cost electricity for long-distance applications than photovoltaics.

Asia is an important producer of renewable energy and train equipment as well. As of 2006, Japan produced about 39% of the solar cells in the world and has encouraged solar energy in Japan with subsidies for purchasing the equipment as well as generous research budgets. Japan's Shinkansen high-speed rail network covers much of the country. China is set to take off as one of the world’s biggest producers of solar and wind equipment owing to its rise as a manufacturing nation.

Europe sets the pace
But Europe and Japan's dominance in renewable technologies is really based in a broader domain of competitive competence. They dominate the most fundamental sector of the economy, namely the production of machinery for manufacturing industries in general (often referred to as the mechanical engineering sector).

The European Union produces almost twice as much industrial equipment overall as the United States, according to data compiled by the EU, Japan produces almost as much as the US, with about half the population. The split among the EU, US, and Japan, which together produce most of the world's machinery, is 52%, 27% and 21%, respectively.

A robust industrial sector is the infrastructure we need for building the tools that will help us to avert climate catastrophe. Think of the industrial sector of an economy as an ecosystem. Instead of the grass and leaves that feed the plant-eaters that feed the meat eaters, a modern economic ecosystem contains industrial equipment that makes production technology that creates the goods and services that people consume.

The different niches of an economic ecosystem, such as the various machinery and equipment sectors, thrive as a self-reinforcing web of engineers, high-skill production workers, operational managers and factories. As of 2003, Europe's manufacturing sector made up 32% of its nonfinancial economy, while the manufacturing sector of the United States comprised only 13% of its nonfinancial sectors. The decline of American machinery and manufacturing sectors, in conjunction with the on-again/off-again nature of American renewable energy policy, explains why Europe and Japan are so far ahead of the United States in the transition to a more sustainable economy.

And America's decline can be traced to one overriding factor: a military budget that comprises nearly half of the world's military spending. For decades, as the late Professor Seymour Melman showed in many books (such as After Capitalism) and in numerous articles, the Pentagon has been draining not just money but also the engineering, scientific and business talent that Europe and Japan have been using for civilian production. As Melman often pointed out, the US military budget is a capital fund, and American citizens can use that fund to help finance the construction of the trains, wind and solar power, and other green technologies that will help us to avoid economic and environmental collapse.

That economic collapse, if it comes, will be caused by two major factors: the end of the era of cheap oil, coal and natural gas; and the decline of the manufacturing and machinery base of the economy. Both problems can be addressed simultaneously, as Europe and Japan are showing, by moving the economy from one based on military and fossil fuel production to one based on electric transportation and the generation of renewable electricity.

Jonathan Rynn, PhD, is a frequent contributor to the Grist environmental blog and a contributor to Foreign Policy In Focus.

June 19, 2008 - 10:16am — Terry Davis

Failing to capture $2.5 million in state money during the 2008 legislative session has stopped the promoter of a plasma gasification energy test project from seeking Minnesota money for it.

Minneapolis-based Phoenix Solutions has proposed working with Hutchinson Utilities Commission to use a plasma reactor burning various biofuels to create a synthetic gas to generate electricity.

Utilities plans to apply for a grant for between $250,000 to $500,000 from the Minnesota Department of Employment and Economic Development to help get the project off the ground. The board of the city-owned power company approved putting together a grant application when it met two weeks ago.

Phoenix Solutions, which has a test facility in Hutchinson, just a few hundred yards northeast of Utilities’ industrial park plant and headquarters, approached the commission in December. The idea was to put together a $5 million demonstration project that would burn biofuels such as corn stover.

Read more about the idea in the Leader’s June 19 print edition.

(Terry Davis is a Hutchinson Leader staff writer. E-mail him at davis@hutchinsonleader.com.)

Thu Jun 19, 2008 9:05am EDT

LOS ANGELES (Reuters) - The Marble River 229-megawatt wind project in upstate New York was approved by the state utility regulator on Wednesday, said its owners, AES-Acciona Energy NY and Horizon Wind.

By the time it goes into operation by the end of 2009, it will be the second-largest wind farm in the state. The 320-MW Maple Ridge project in Lewis County is the biggest in the state.

The wind farm near Clinton and Ellenburg in Clinton County will have 109 wind turbines, each 2.1-MW in capacity, with some blades towering 407 feet.

The project's output is to be sold into the wholesale markets and the spot markets administered by the New York Independent System Operator.

Horizon Wind is owned by Energias de Portugal, which has a renewable energy unit EDP Renewables.

EDP has quickly built up its windpower business and has wind parks in countries including Spain, Portugal, France and Poland. In the United States, EDP bought Horizon Energy from Goldman Sachs for $2.2 billion last year.

AES-Acciona Energy NY is a joint venture between AES Corp based in Arlington, Virginia and Acciona based in Madrid.

The American Wind Energy Association ranks New York No. 16 among the top U.S. states for potential for wind power development. The latest AWEA rankings show New York 11th among U.S. states in installed wind capacity, which is the highest for any state east of the Mississippi River except Illinois.

New York had 425 megawatts of installed wind generation capacity by the end of 2007, the AWEA rankings show.

(Reporting by Bernard Woodall, editing by Richard Chang)