Fuel for Thought – Feb 24th

24 Feb, 2012

European gas supply diversity:  The cold snap this month and resulting constraints around Russian gas supplies have revitalised the debate around the benefits of European supply diversity.  One of the most important new sources of supply will be the huge BP operated Shah Deniz II field on the deep water shelf of the Caspian Sea.  After a major setback late last year, the Nabucco pipeline consortium has introduced a slimmed down plan to compete for the right to access this gas, with a decision expected over the summer.  Meanwhile Russia is taking its own steps towards alleviating export supply constraints with Gazprom claiming that the Southstream pipe has moved into the construction phase.

France/UK nuclear deal:  After the recent childish spat between Britain and France over EU bailout funding, it is somewhat of a surprise to see Cameron and Sarkozy shaking hands in an agreement over nuclear power.  In a sense their hands are tied, since the operation and development of UK’s nuclear fleet is effectively in the hands of EDF.  EDF and Areva need the British as customers, while Britain needs French nuclear expertise and funding to deliver on its decarbonisation agenda.  Mark Lynas explored this relationship as well as looking at some fourth generation nuclear technology in an article this week.

EU and Canada lock horns over tar sands: In what is shaping up to be another unproductive political spat, Canada has threatened the EU with a trade war over its plans to inhibit imports of oil sourced from tar sands.  There is no lack of scientific evidence that on a carbon lifecycle basis, tar sand production is highly carbon intensive.  But the scale of the tar sands resource backed by the Canadian government and production company interests is a force to be reckoned with.  Canada’s recent decision to pull out of the Kyoto protocol does not bode well as to their intentions.  What is urgently needed is a comprehensive shift in global carbon policy away from burner tip emissions to focus on lifecycle emissions including extraction, processing and transportation.  There are some big challenges to making this a reality, but until it becomes so carbon policy will be plagued by complex one-off rulings and inconsistencies.

Picture of the week:

Cable Installation Vessel Nostag 10 lies on Barkby Beach in North Wales as it connects cables that will flow to Ireland as part of the East West Interconnector project.  The interconnector is a 261km cable that connects Wales with County Dublin and is scheduled for commissioning in September 2012.