"Drill Baby, Drill" may become the energy slogan of the Obama administration as the Department of Interior took the first initial steps toward drilling in the Atlantic Ocean by authorizing seismic surveys for the coast of Virginia. The Atlantic has been off-limits since the 1970s, although President Obama did suggest that restrictions might be relaxed just before the BP Gulf blowout. Virginia's two Senators have long campaigned for drilling, but New Jersey's representatives remain largely opposed. The Natural Resources Defense Council announced its immediate opposition.
While gas prices creep toward $4 a gallon, natural gas is experiencing such a glut that the industry is in terror of a complete price collapse this summer. The warm weather has left inventories are at an all-time high and Seeking Alpha says it's still prices still haven't hit bottom. Patti Domm of CNBC writes that low prices are reshaping the industry. To add to the potential glut, Greece, Cyprus and Israel are talking of a combined effort to export Mediterranean gas finds to Europe. Unlike oil, gas still suffers from being difficult to transport across the ocean. But long-range help is in sight. China just announced it will construct its biggest LNG terminal to gather imports. Now there's a potential market!
Nuclear power suffered another blow as E.On and RWE, Germany's two largest utilities, pulled out of a deal to build new reactors in Britain, leaving the UK's plans to revive nuclear "in tatters." The companies said that nuclear construction has become too expensive and they are being hurt by Germany's efforts to phase out nuclear. Bulgaria cancelled a deal with Russia to build a new reactor at Belene, also saying nuclear has become too expensive. However, it will buy the hardware to install in an existing reactor at Kozloduy. A new investigation has also discovered higher than anticipated levels of radiation in Unit 2 at Fukushima and doubts have arisen as to whether the reactor is really under control.
Hydro is faring better, although it still meets environmental opposition. China has singed a $17 billion deal to build in Indonesia. Cameroon has gotten a $107 million loan for its Lom Pangar project and Canada has proposed a $6.3 billion dam in Labrador (above). But Global Research reports that hydroelectricity and water supplies are creating conflicts in South Asia.
Finally, Total says it has located the source of the gas leak on its North Sea platform. Of course capping it may be a different story. France is making noises that both Europe and the US may be tapping their strategic oil reserves. And the International Energy Agency reports that world oil imports have hit $2 trillion. Read David Hone's "Five Short Stories from World Energy Outlook" for a nice perspective on world energy supplies.