Historically , congress has enacted bans in in offshore drilling along pacific and atlantic coasts due to environmental concerns and impact on tourism industry.Now the US senate has voted to open waters off the atlantic and pacific coasts to oil and gas drilling.The purpose of this legislation is however not clear as it allows for drilling in areas 50 miles away from sea, into areas that contain just 5 % of the estimated reserves.Even this drilling is subject to coastal states agreement which may not be very forthcoming as this legislation does not give them any share from royalty earned by energy production.
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Is That a Yes to Offshore Drilling ?
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US Wind Power Sector Blowing Strong
Srikant RajanThe first wind farm to be constructed in Arizona has already found buyers of its power yet to be produced.The Dry Lake Wind Project , being built by Iberdrola Renewable’s has entered into agreement with Salt River Project (SRP), according to which SRP would purchase 100% of power generated by this wind farm.The contract also give SRP an option to buy additional power in case of capacity expansion.
SRP’s optimistic estimation of power demand is partly governed by strong business sense .The existing transmission line in Arizona are in proximity with the proposed wind farm,which would save a significant amount of additional construction for building up transmission capabilities.And Iberdrola seems to have got right its market estimate regarding wind power viability . It had recently signed up with GE for delivery of 200 wind turbines .Judging by the present demand , Iberdrola would find good use for all 200 of the wind turbines.
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US Introduces New Plan for Biofuel Commercialization
Srikant RajanUS congress has approved a new bill providing a sum of $75 million to hasten commercialization of biofuels.This new legislation provides for a maximum of 30 % of construction cost of biorefineries producing "advanced" biofuels.In addition loan guarantees of $250 million for construction of such biorefineries has also been introduced .This bill also authorizes $150 million/year in discretionary funding .A new tax credit of $1.01/gallon for biofuel produced from wood ,grass and non-edible plant parts has been introduced.Interestingly,this tax credit is applicable for biofuel produced and consumed in US.
Increasing criticism form the international community,raging debates on "food or fuel"has given biofuels an ugly face.This bill has puts a great deal of emphasis on promotion of "advanced" biofuels or biofuels produced from sources other than corn kernel and also aims to promote production of cellulosic biofuels.Thus it may provide the necessary "facelift" to biofuels which may lead to favorable public opinion.
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Iberdrola Targeting US Wind Energy Sector
Srikant RajanIberdrola a company based in Bilbao, northern Spain has a major presence in the global wind energy sector.The company has an installed capacity of 2392MW in Spain, 3483MW abroad and nearly1,367 MW under construction worldwide.Iderbola has recently signed a contract with General Electric for supplying turbines with a total capacity of 300MW.Under the terms of this agreement, Iberdrola plans to acquire ,200 General Electric turbines of 1.5 MW capacity each, for delivery in 2010 to its wind farms in the United States.Iderbola is targeting a 15% share of the US wind power market by the year 2010 and expects to strengthen its presence in the US wind power market with the aid of such supply contracts.
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Biofuel from Garbage
Srikant RajanEthanol production in US is to a large extent done by processing corn fuel.However the process of corn cultivation requires significant input of land and energy ,in addition to raising the ethical question of trading food for fuel.In addition the green efficiency of ethanol produced from this method is low and this process may actually pollute the environment.Alternatives sources such as grass,wood require few resources for ethanol production but in turn need expensive processing technology.Coskata, a startup based in Warrenville is pioneering a radical method which it believes will reduce the processing cost associated with any organic material.This startup’s technology has caught attention of giants such as General Motors which is partnering with Coskata to help commercialization of the technology on a big scale.
