Growing demand for natural gas to fire in-situ oilsands projects will inevitably reduce the amount available for export, says a Calgary energy think-tank.
According to Bill Gwozd, a gas supply analyst with Ziff Energy Group, Alberta’s oilsands use 600,000 cubic feet a day to generate steam and power needed to separate oil from the tar-soaked sands.
That figure is expected to rise to two billion cubic feet (bcf) per day by 2015, a four-fold jump due almost entirely to the proliferation of new in-situ oilsands projects.
“When we subtract the total supply from the total amount available for export, there’s not much gas left over,“ he added.
Unlike truck and shovel mining, in-situ projects use high-pressure heated steam to loosen thick oil deposits and make them flow to the surface.
In addition to growing demand for oilsands, the province of Ontario is increasing its own natural gas demand as it retires aging coal-fired power plants to reduce carbon emissions, Canada.com said.
At the same time as demand is increasing, Canadian production is expected to fall to about 17 bcf per day from about 18 bcf at present.
Ziff’s analysis includes several key assumptions--most significant that the Mackenzie Valley pipeline comes into service by 2014 followed by Alaska in 2018.
Any additional delays would exacerbate an already gloomy supply picture, Gwozd said, comparing the situation to a game of musical chairs. “Maybe we turn off gas to the oilsands for a while,“ he mused.
According to the Canadian Association of Petroleum Producers, Canada is the world’s third-largest natural gas producer and the number one supplier of gas imports to the U.S.
Canada produces about 6.2 trillion cubic feet annually, and exports more than half of it to points south.
Total gas exports fell nominally in 2006, by about three per cent, but Martin King, a commodities analyst at FirstEnergy Capital Corp., expects that figure to accelerate to about 12 per cent--or more than a billion cubic feet a day--by the end of the year.
King said the numbers are a reflection of lower drilling activity as big producers like EnCana Corp. and Canadian Natural Resources Ltd. pull the reins on capital spending.
Industry groups such as the Canadian Association of Oilwell Drilling Contractors and the Petroleum Services Association of Canada are expecting a 20 per cent drop in the number of wells drilled this year--the first year fewer than 20,000 wells will be drilled in more than half a decade.
Fewer wells inevitably lead to lower production, said FirstEnergy’s King.
“We expect Canadian gas supply to come off a lot by the end of the year,“ he explained. “By all indications it’s going lower.“
Fuelling the exodus from the field is a meltdown on natural gas markets. Since the start of the month, natural gas prices have lost about 20 per cent as hot summer weather and a rash of expected hurricanes south of the border failed to materialize.
From a peak of $8.19 US per million British thermal units at the start of the month, New York natural gas prices fell to $6.65 last week. Canadian gas prices followed suit, falling from a high of $6.65 Cdn per gigajoule to $5.70.
Even factoring in lower Canadian output, King said, there’s plenty of evidence to suggest storage inventories will reach record highs later this summer.
“People are throwing in the towel on 2007, especially in the past few days,“ he said. “It’s starting to look a lot like 2006.“

Even in the fringe world of alternative fuels, vegetable oil has mostly remained on the margins, the domain of a few do-it-yourselfers who have rigged their diesels to run on old fryer fat, making the rounds of local burger joints to fill their tanks.
But the veggie power movement is about to stick one greasy toe into the mainstream, as a company in this western Wisconsin town prepares to open what its owners believe is the first recycling and filling station for waste vegetable oil in the Midwest, and one of just a couple in the nation, chicagotribune.com reported.
“The problem with vegetable oil is not the technology, it’s the infrastructure,“ said Coulee Region Bio-Fuels co-owner Taavi McMahon, a lawyer who also is president of a biofuels cooperative in Madison. “We’ve been encouraging people to convert to vegetable oil, and when they’ve asked about fuel availability, we’ve said, well, get ready to go Dumpster-diving.“
While clean-burning vegetable oil is widely used as a fuel in Germany, it has only recently begun to catch on in the United States. It is not among the eight power sources the US government tracks through its Alternative Fuels Data Center, which provides information on biodiesel, electricity, ethanol, hydrogen, methanol, natural gas, propane and an obscure blend of fuels called P-series.
“I don’t know of anyone [in federal government] who is doing anything on vegetable oil,“ said Roxanne Dempsey, a senior project manager for the Energy Department, who noted that alternative fuels account for less than 1 percent of the nation’s energy use. The lack of data makes it difficult to judge vegetable oil against other types of alternative fuels for efficiency and other economic benefits. But McMahon, who also supports ethanol and biodiesel, says grease rises to the top in a comparison because it requires almost no heat processing or energy-adding ingredients.
“I’m relatively convinced that vegetable oil is the most efficient use“ of crop resources, he said.

Modified Engines
Engines must be modified with special tanks because veggie oil has to be preheated before it will combust, especially in winter. A diesel car or truck can be converted with kits that cost $2,000 to $4,500 at the Madison co-op, McMahon said.
INOV8, a company based in nearby La Crosse, helped develop the Blair facility to boost its line of vegetable-oil-burning water heaters and boilers.
“Most of the attention has been focused on the automobile sector, but we see huge potential in stationary uses“ including in restaurants and greenhouses, said INOV8’s Matt Fisher. “Up until this recycling center opened up, there wasn’t any easy access to this type of fuel. This expands our market base.“
McMahon said the oil center opened this month to wholesale customers. It’s located about 30 miles north of La Crosse in a town of about 1,200 and shares a white cinder-block building with a do-it-yourself carwash. It looks like anything but the home base of a green revolution.
Naturally, the water for the carwash, owned by one of McMahon’s partners, is heated in an INOV8 veggie oil burner--“the state’s only vegetable-oil-heated carwash,“ McMahon said with pride.
Inside are a half-dozen surplus milk tanks that can filter 5,000 gallons of waste vegetable oil per day. For now he’s getting most of the oil--3,000 gallons a week--from a Kettle Foods potato chip plant in Beloit, but plans to step up his efforts to procure more from restaurants and possibly other sources as he ramps up production.
“America’s obesity problem is our lifeblood here,“ he said.

Cheap Alternative
The idea is to keep the pumps flowing as much as possible with recycled oil, but McMahon said selling unused product--straight vegetable oil in greaser vernacular--is a future possibility. Recycled oil for non-transportation uses such as farm implements should sell for $1.50 to $1.75 a gallon depending on the grade, while road fuel will add about 50 cents a gallon for taxes, he said.
His ultimate goal is to create a loop: get farmers to grow canola and soybeans and press their own oil, which Coulee Region Bio-Fuels would distribute to restaurants, then collect the old grease, filter it and sell it back to farmers--cheap--to use in their tractors and trucks.
However, the business model is a work in progress. McMahon, who with his two partners invested $45,000 in the project, hopes the fuel availability persuades more drivers to convert their vehicles but cheerfully admits that he has done no real market research.
“We may be way ahead of ourselves,“ he said.
Fisher, though, sees the model of local waste oil recycling as sound business and an important advance in energy usage.
Biofuels are not without controversy. Some critics say using food crops as fuel already has driven up prices, hurting the poor, and that wealthy countries could decide they need the energy and cut back on food aid to places that cannot grow enough of their own. Moreover, waste vegetable oil is not dumped in the ground now; it’s used in cosmetics and pet food. Recycling and burning it “is an alternative, not a solution,“ McMahon said. “It’s a chance to help the rural economy by keeping things local. I just think it’s important for people to have choices.“

The annual Clean Energy Cruise is riding a fresh wind of interest in renewable energy sources.
Drawing environmentalists, consumers who want to promote alternatives to fossil fuels, and community leaders thinking about wind power in their own towns, the charter boat cruise to the Hull wind turbine at the Hull Gut is filling up fast, boston.com said.
The cruise will leave Thursday morning and take passengers past clean energy projects in the Boston Harbor neighborhood, including a solar photovoltaic (solar panel) project at the Boston Coast Guard station, a similar solar panel installation at the Spectacle Island recreational center, the wind turbine owned by electrical workers Local 103 by the Dorchester gas tank , and a methane gas producing biomass project on Deer Island in Winthrop, before arriving at Hull.
Passengers will disembark for an up-close look at the turbine known as Hull 1, and John MacLeod of the Hull Light Department will speak on the town’s plans to expand on its successes.
The growth in the number of folks looking to support wind power is “stunning,“ said Larry Chretien, head of the nonprofit Massachusetts Energy Consumers Alliance, which organizes the cruise.
“It’s just what the doctor ordered in terms of raising people’s awareness and excitement over wind power,“ Chretien said.
For industry pros, it’s a chance to exchange information and network. And it’s an opportunity for representatives of public and private organizations interested in the clean energy movement -- such as Shannon O’Brien, the former gubernatorial candidate who now heads the Girl Scouts Patriot Trails Council.
The council’s eight-person staff, and possibly the boss herself (depending on scheduling), will take the cruise to learn how to assimilate wind power and clean energy to programs involving Patriot Trails’ 23,000 girls. Her organization is developing new science patch programs for Girl Scouts with the goal of “understanding the whole energy issue and then getting them involved in practical ways to support conservation and the use of clean energy sources,“ O’Brien said.
The cruise is also an opportunity for the state agency in charge of promoting clean energy to make a pitch for the cause.
“I would encourage anyone who’s skeptical about wind power or concerned about the noise or the visibility impacts to come visit the turbine,“ said Jon Abe, project manager for Mass. Technology Collaborative’s Large Onsite Renewables Initiative, which awards grants for feasibility studies and for design and construction.
Abe, who will be on the cruise, pointed to renewable energy initiatives such as Brockton’s Brightfields, a solar installation built on a brownfields site, and a Milton Boy Scout troop’s feasibility study for a wind power turbine on a scout camp site.
Other regional initiatives include wind measurement towers in Quincy and Hanover, some small wind and solar power projects in Plymouth, and a solar energy project by Extrusion Technology in Randolph.
The Technology Collaborative’s Alyssa Rosen will also be on board to explain Clean Energy Choice, a program that rewards consumers’ cash contributions to renewable energy by giving grants to their city or town.
Mass. Energy, which purchases energy from renewable sources for the 10,000 households it serves, seeks to encourage projects similar to the Hull I wind turbine, a 660-kilowatt turbine built six years ago, and Hull 2, the larger 1.8 megawatt turbine built last year.
Hull’s municipal light department is considering building the nation’s first offshore wind power project, to consist of four turbines in state administered coastal waters, Chretien said.
Hull is still way ahead of its neighbors in wind power generation, and no similar turbines are scheduled to be built in the state this year. Said Chretien, “We’re not seeing them go up fast enough.“

Scientists in Greece announced that they found a new way of storing hydrogen in carbon nanoscrolls.

Hydrogen-powered cars seem to be the best solution to the problem of fossil fuels pollution. The ever increasing concerns about global warming and the future shortage of natural fuel sources have given the automotive industry and researchers from other fields alike a new impulse in developing new technologies.
Though fuelcell could one day replace the internal combustion engine, there are still some technological problems to be overcome, like hydrogen storage and the efficiency of the chemical processes, Softpedia.com said.
So far, the biggest downside of hydrogen-powered cars is the fact that it is very difficult to store it safely and it’s not stable, either, so these cars require bulky pressurized tanks that could explode much in the same way a methane gas tank does.
Normal fuelcells produce energy from the electrochemical reactions between hydrogen and oxygen. The best fuel cells available on the market have a range of 200 miles tops, so to increase it to 300 miles, a reasonable mileage, compared to those achieved by internal combustion engines, would require a hydrogen storage tank the size of a double-decker bus.
This problem could be solved by a recently found nanoscale solution, as scientists in Greece announced that they found a new way of storing hydrogen in carbon nanoscrolls. These materials can store more hydrogen than any other material and are safe to use for future vehicles and portable applications.
George Froudakis at the University of Crete, who led the work, said that they were able to control how tightly the scrolls wind up and, hence, how much hydrogen they adsorb, by adding impurities to the carbon nanosheets.
Their findings suggest that adding lithium ions should increase the uptake of hydrogen at atmospheric pressure and room temperature from 0.19% to 3.31%, twice the amount that other materials have achieved. Moreover, the scientists hope that by decreasing the temperature, hydrogen uptake should increase.
“Most of the scientists working on this field of research believe that the solution to this problem will arise from the synthesis of new materials,“ Froudakis says.

The London-based oil company Tullow Oil PLC has discovered natural gas in western Uganda, which the government says will be used for solving the country’s power shortages, officials said on Friday.
“We struck gas while looking for oil,“ Houer Flusee, a company official, said. “We are to study its components to establish its quality. But it seems to be good gas.“
The oil explorer was drilling the Nzizi well to check the extent of oil deposits but the hydrocarbons found turned out to be natural gas, said Honey Malinga, head of petroleum exploration and production department in the Ministry of Energy.
Uganda was once heralded as East Africa’s power house, exporting surplus hydropower electricity to neighboring countries, but it has outgrown its supply, forcing a rationing schedule that leaves the capital, Kampala, in the dark for up to 30 hours at a time, AP reported.
Electricity prices have doubled in the past year to an average of 26 cents per unit--an astronomical amount in a country of 28 million where per capita income is around $280.
“Tanzania and Nigeria are producing many megawatts of power out of their gas,“ said Malinga. “We will do the same.“
Malinga said the gas found in Western Uganda flows at a rate of 14 million cubic feet per day and will go a long way in improving the country’s economy.
Uganda, like many of its sub-Saharan counterparts, relies on hydroelectric power from Lake Victoria, the vast lake shared by Uganda, Kenya and Tanzania. Since 2000, Uganda has sapped all the electricity its dams can produce. Making the problem worse, the dams are running below capacity due to falling water levels on Lake Victoria.
Malinga believes the discovered gas could partly cover domestic needs of factories and hospitals.
“It can also be used for domestic purposes such as cooking or in hospitals and factories,“ Malinga said.
The energy crisis in Uganda has been caused in part by the country’s rapid growth. The economy has doubled in the past decade, according to Uganda’s Investment Authority. And the population has exploded at a rate of about 3.6 percent a year--the highest rate in Africa, according to the United Nations.
To help close the energy gap, the government installed two diesel generators last year producing 50 megawatts each. But fuel is costly, with each unit consuming about 42,000 gallons each day--the equivalent of four tankers. The government, which subsidizes the fuel to the tune of $150 million each year, and consumers have carried the cost burden.
Tullow has been exploring for oil in Uganda for the last four years. So far it has discovered oil in four wells, which have a cumulative flow of 12,050 barrels oil per day.