Energy New Front in Economic Warfare

Opposition leaders in Canada suggested a string of cyber security threats to domestic companies might be the work of Chinese hackers. Twice last week, the Canadian government confirmed two separate companies -– both in the energy sector -- were the target of cyber-attacks. In the United States, meanwhile, the Obama administration said national security interests trumped energy concerns and blocked a Chinese company from constructing wind turbines near a Navy installation in Oregon. While the Chinese military isn't the overt threat like the Soviet Union was, Beijing's rise as an economic power has seemingly sparked a war of economies.

The Canadian government last week confirmed that two energy companies were the target of a cyber-attack believed to have originated from China. Though Beijing denied it was responsible for the attacks, opposition leaders in Canada said there was cause for concern given the pending Chinese takeover of Canadian energy company Nexen.

"Cyber security is something we have to pay attention to and that ... includes how deals are set up and trade deals are set up and acquisitions are made," said legislator Paul Dewar, the foreign affairs spokesman for the opposition New Democratic Party.

Nexen in August backed a $15-billion takeover bid by China National Offshore Oil Corp. Canadian Prime Minister Stephen Harper has lobbied for Chinese investments in his country's vast oil and gas riches. Those ambitions could be derailed, however, given political divisions in Canada and Dewar's comments may further exacerbate tensions following a Chinese leader's statement that Beijing can't do business in Canada if deals like Nexen become politicized.

Meanwhile, the U.S. government last week blocked Ralls Corp from moving forward with plans to install wind turbines near or within restricted air space at a naval weapons training facility in the western state of Oregon. President George H.W. Bush was the last U.S. president to declare such action when, in 1990, he blocked a Chinese aerospace technology company from buying out a manufacturing company in the United States. Ralls has four wind farm projects in various stages of development and said it would take the matter before the courts. Despite U.S. President Barack Obama's "all-of-the-above" domestic energy policy, the administration said the move to build wind installations so close to a military site was a threat to national security interests.

Beijing on Monday celebrated the 63rd anniversary of the founding of the People's Republic of China. An opinion piece in China's official Xinhua News Agency last week said the country is "confidently grasping opportunities" given the pace of economic growth since 1949. As economies expand, they must do so beyond their borders as domestic markets become saturated. With the Cold War over, it's unlikely the geopolitical fears that dominated the international arena in the 1940s would redevelop in the early 21st century. But as low-grade conflict becomes the norm, so too may a different kind of global warfare.

U.S. Navy Rear Adm. Samuel Cox last week accusing Beijing of trying to crack into the Pentagon's computer network.

"Their level of effort against the Department of Defense is constant," he said.

Source: http://oilprice.com/Energy/Energy-General/Energy-New-Front-in-Economic-Warfare.html

By. Daniel J. Graeber of Oilprice.com

Thousands of Bombs Dumped in Gulf of Mexico Pose Huge Threat to Oil Rigs

After World War II the US government dumped millions of kilograms of unexploded bombs into the Gulf of Mexico. This is no secret; many governments dumped their unexploded ordnance into oceans and lakes from 1946 up until the 1970s when it was made illegal under international treaty.

Now that technology has advanced enough for oil companies to drill deep sea wells in the Gulf of Mexico, those forgotten payloads have become a real hazard.

The US designated certain areas around its coast for the safe dumping of explosives, nerve gas, and mustard gas. The problem is that the records of where these munitions were dumped are incomplete, and many experts believe that a lot of cargo was dumped outside of the designated areas. Now, decades later, no one has any idea of where the bombs are, exactly how many were dumped, or if they still pose a threat to humans or marine life.

William Bryant, a Texas A&M University professor of oceanography, summarised the situation by saying that the "bombs are a threat today and no one knows how to deal with the situation. If chemical agents are leaking from some of them, that's a real problem. If many of them are still capable of exploding, that's another big problem."

In 2011 BP had to close down its Forties crude oil pipe in the North Sea, which carries 40% of the UK's oil production, after they found a four metre unexploded German mine laying just next to it. The giant mine was found during a routine inspection of the pipeline, and forced its closure for five days whilst engineers attempted to safely remove it and transport a safe distance away to be detonated.

Professor Bryant remarked that he has come across 227 kg bombs off the coast of Texas and well outside the designated dumping grounds. He also said that at least one pipeline from the Gulf of Mexico had been laid across a chemical weapons dump site.

Terrance Long, the founder of the underwater munitions conference, said "it makes more sense to start dealing with the munitions from a risk-mitigation standpoint to be able to conduct operations in those areas rather than trying to avoid that they are there."

Source: http://oilprice.com/Energy/Energy-General/Thousands-of-Bombs-Dumped-in-Gulf-of-Mexico-Pose-Huge-Threat-to-Oil-Rigs.html

By. Joao Peixe of Oilprice.com

Money: A New (Decentralized) Shade of Green

As America's clean energy industry takes up position in a no-man's land between subsidies and sustainability, the idea of "Green Banks" is being touted as a life-line that will push the industry into maturity, but it's an idea that will only work on a state level and by empowering states to make their own clean energy decisions.

Green Banks are essentially clean energy finance banks formed at the federal or state level that operate as public-private financing institutions with the power to raise capital to support clean energy projects through loans and loan guarantees. These banks can issue bonds and sell equity and they can often offer cheap loans.

In the US, it is the state level that would likely take the lead in forming Green Banks, and the state of Connecticut has already taken the plunge with the establishment of the Clean Energy Finance and Investment Authority (CEFIA). Launched last year, CEFIA merges several clean energy funds whose revenues come from a utility system benefit fund and the Regional Greenhouse Gas Initiative, among others, with a financing authority repurposed as a clean energy investment bank. Presently, CEFIA is talking with solar photovoltaic stakeholders to boost the bundle, and according to the Brookings Institute, is close to making its first loans.

In Germany and the United Kingdom, the idea of the Green Bank has also taken hold, with a clean energy development bank already boasting success in Germany, while the UK's is only just getting off the ground. The UK's version, however, is experiencing some setbacks in and a recession and deficit that is not falling as planned, the UK Green Investment Bank is behind on gaining borrowing powers.

The idea is being put forward by the Brookings Institute, which issued an in-depth report on Green Banks last week as part of the Brookings-Rockefeller Project on State and Metropolitan Innovation.

But the idea is not entirely new. In fact, the Export-Import Bank of the United States (Ex-Im Bank) and the Overseas Private Investment Corporation are similar endeavors that have successfully raised capital for energy and infrastructure in the past. The difference this time around is that Green Banks would be the purview of state governments rather than the federal government.

But the idea is not entirely new. In fact, the Export-Import Bank of the United States (Ex-Im Bank) and the Overseas Private Investment Corporation are similar endeavors that have successfully raised capital for energy and infrastructure in the past. The difference this time around is that Green Banks would be the purview of state governments rather than the federal government.

State budgets are challenged financially, so Green State Banks would be a sound solution that would allow states to leverage public money with private sector funds and, importantly, private sector experience. The overall effect will be to cut clean energy's dependence on federal subsidies and tax credits, which in turn will make them more competitive and hopefully push development into full maturity, all the while allowing states to make their own decisions. It is also much easier for states to forge public-private relations than it is for the federal government.

There is no single model that could work across states, however, so it is up to each state to design their own form of green banking. There are at least three models of banks that states could choose from depending on their specific circumstances and needs. The Connecticut model is a semi-public corporation that merges funds the state already has for clean energy with private investment in the bank. They could also take an existing infrastructure bank and add on a Green Bank to its services, or transform a grant authority into a lending authority in partnership with the private sector.

More to the point: How will this affect the consumer? According to Bill Ritter, Director of the Center for the New Energy Economy (CNEE) at Colorado State University, consumer purchased energy resources "have never fit well without our existing utility model" because "utilities charge consumers for energy on a monthly basis, having financed their investments over time. Yet, when a consumer purchases efficiency or generation resources, traditionally they need to make a one-time, large up-front expenditure and then see their savings accrue over time through a reduction in their utility bill."

Green Banks, he argues, would give consumers more and better options. Specifically, they would allow consumers to replace a portion of their monthly utility payment with a payment for energy efficiency or solar power and thus "protect themselves against rising utility bills and increase the value of their home or business while lowering their utility costs at the same time."

The bottom line is that green banking is a good idea, as long as it remains the purview of state governments rather than the federal government. At a time when clean energy is under attack and only on the cusp of maturity, state green banks could be the first feasible plan out there, and it's likely to be attractive to a host of governors. The idea will gain even more traction if Congress fails to extend the production tax credit (PTC) this year. Without green banking, the PTC is the only way the clean energy industry will survive. Green banking is a more viable alternative that extending the PTC.

Source: http://oilprice.com/Alternative-Energy/Renewable-Energy/Money-A-New-Decentralized-Shade-of-Green.html

By. Jen Alic of Oilprice.com