Infographic: A Decade of Shale — Huge Benefits, Low and Manageable Risks

This year marks the 10-year anniversary of the shale revolution taking hold in the United States. And as EID’s new infographic, “A Decade of Shale: Huge Benefits, Manageable Risks,” shows, not only has the notion of “peak oil” been put to rest over the past 10 years — thanks largely to advances in hydraulic fracturing and horizontal drilling technology — it has also become clear that “Keep It In the Ground” movement claims that fracking poses an inherent threat to groundwater, public health and the climate are erroneous as well.

Fracking has transformed the United States’ position from that of energy scarcity to the role of being “the undisputed leader of oil and gas production worldwide,” according to International Energy Agency Executive Director Fatih Birol. And at the same time, reputable third-party research continues to demonstrate that fracking is being conducted safely.

Here is a look at 12 defining moments of the first decade of the shale revolution.

• 2009: With “tight oil” production from horizontal wells starting to take off, annual U.S. oil production increases for the first time in 18 years.

• 2011: FracFocus.org, a searchable, nationwide database, debuts. The website features information on the additives used in the fracturing process for oil and natural gas wells all across the country. Many states mandate that companies use FracFocus, and the federal government has similarly endorsed it as a useful tool for providing information to the public.

• 2011: Obama administration EPA Administrator Lisa Jackson states, “I’m not aware of any proven case where the fracking process itself has affected water,” refuting the go-to claim of the anti-fracking movement. Subsequent peer-reviewed research over the course of the next seven years further confirms Jackson’s statement.

• 2012: For the first time in 20 years, the United States overtakes Russia as the world’s top natural gas producer – a title the U.S. hasn’t relinquished since.

• 2014: A peer-reviewed National Oceanic and Atmospheric Administration (NOAA) study credits increased natural gas use for 44 and 40 percent reductions in sulfur dioxide and nitrogen oxide emissions in the U.S. since 2004. These “criteria pollutants” are responsible for millions of deaths worldwide, and have continued to decline dramatically in the U.S. as natural gas consumption has reached record levels.

• 2014: A United Nations Intergovernmental Panel on Climate Change (IPCC) assessment states that fracking is an “important reason for reduction of GHG emissions in the United States.” U.S. carbon emissions have declined 14 percent since 2005. The IPCC’s statement is all-the-more notable considering it has been called the “gold standard” to “getting a big-picture understanding of what’s happening to the climate,” according to Sierra Club Executive Director Michael Brune.

• 2015: A Harvard University-led analysis estimates shale development has created 2.7 million jobs.

• 2016: A landmark 2016 U.S. Environmental Protection Agency study concluded that, “[H]ydraulic fracturing operations are unlikely to generate sufficient pressure to drive fluids into shallow drinking water zones.” The EPA reached this conclusion even after expanding the definition of fracking to include a wide range of other oilfield activities, demonstrating the safety of the entire development process.

• 2017: A Colorado Department of Public Health and Environment health assessment based on 10,000 air samples collected near areas of significant oil and natural gas development concludes, “the risk of harmful health effects is low for residents living [near] oil and gas operations.” It is one of no fewer than 17 reports based on actual air measurements that has concluded fracking is protective of public health.

• 2017: An International Energy Agency assessment examining multiple methane leakage scenarios concludes that natural gas maintains its climate benefits even at much higher leakage rates than currently observed and “regardless of timeframe considered.”

• 2017: The United States breaks its monthly crude oil production record in November by producing an average of just under 10.1 million barrels per day (p/d). That total has been surpassed six times already in 2018, as the U.S. is on pace to pump a record-setting 10.8 million barrels p/d.

• 2018: Three peer-reviewed Appalachian Basin studies are released in the span of five weeks finding no evidence of significant groundwater impacts from fracking. They are three of no fewer than two-dozen reports that have reached the same conclusion over the past 10 years.

 

 

The post Infographic: A Decade of Shale — Huge Benefits, Low and Manageable Risks appeared first on .

Source: Energy In Depth

Flocking to Uranium

The post Yellow Cake Debut described the capital raising effort of one of the newest players in the uranium supply chain.  Yellow Cake leadership brought the aspiring intermediary to the capital market at a critical time for uranium producers.  The uranium market has been in an extended trough period since the industry peak in 2007.  At that time considerable development had been undertaken and capacity was beginning to generate sufficient supply to create stockpiled inventories.  As this bloated condition persisted, in 2011 the nuclear power and its uranium supply chain were shocked by a Pacific Ocean tsunami that led to a nuclear spill at the Fukushima Power Plant in Japan.

The world view of nuclear power shifted seemingly overnight, causing Japan as well Germany and others to take nuclear power plants offline.  Demand for uranium dried up.  These many years later, the industry is still working through excess inventories.  Selling prices for U308 were gutted after the Fukushima incident and have remained at historic low levels.

uranium mine
Ranger 3 open pit uranium mine, Northern Territory, Australia:. Photo by Geomartin [GFDL, CC-BY-SA-3.0 or FAL], from Wikimedia Commons

As a consequence company valuations have remained stubbornly stuck near historic lows.  As shown in the table below, the average of the group is a value of 2.03 times book value.

RECENT PRICE/ PRICE/ PRICE/
COMPANY SYM PRICE* SALES CSH FL BK VAL
Altius Minerals ALS:  TO $9.82 12.36 29.84 1.71
Azincourt Energy Corp. AAZ:  V $0.07 na neg 1.41
Berkeley Energia Ltd. BKY:  L $54.47 nm neg nm
Cameco Corp. CCJ:  NYSE $10.86 2.63 6.58 1.16
Energy Fuels, Inc. UUUU: NYSE $2.32 6.41 neg 1.52
NexGen Energy Ltd. NXE:  NYSE $1.93 na neg 5.16
Paladin Energy Ltd. PDN:  ASX $0.13 3.85 neg na
Peninsula Energy Ltd. PEN:  ASX $0.19 2.97 46.38 0.76
Uranium Energy Corp. UEC:  NYSE $1.62 na neg 4.06
UR-Energy, Inc. URG:  NYSE $0.68 2.32 18.26 2.19
Westwater Resources WWR:  Nasdaq $0.40 na neg 0.29
Sector Average 5.09 25.27 2.03
*Price and revenue converted to USD

It may well be an opportune time for investors to look at the uranium sector. Multiples are near historic lows, providing investors with good bargains. More importantly there is some evidence that undervaluation might be near an end, providing investors with the prospect of near-term price appreciation.  Our signal for a shift in the industry cycle off the trough, is in the production decisions of uranium suppliers.  In December 2017, JSC National Atomic Company Kazatomprom, considered to be among the lowest-cost uranium producers in the world, announced plans to cut production by 20% or about 11,000 tons over three years beginning in 2018. Kazatomprom’s announcement was followed a month later by a similar decision from Cameco (CCJ:  NYSE, CCO:  TSX) to suspend production at its McArthur River mine beginning January 2018.

These are two of the largest uranium producers in the world.  It is widely expected that with this production taken off-line, the last of uranium inventories will be burned off by existing demand.  Prices are expected to rebound and could even appreciate to the point where production capacity will be taken back out of mothballs.  It is expected that production will drive the sector going forward and the days of inventory influence are coming to an end.

In this new age which uranium producer is better than the next?  Historic profitability could be one way to sort out the best uranium company.  This would give an investor a company with a known track record for delivering profits when in production.  Alternatively, investors could choose the companies with a ready production capacity rather than companies with development projects focused on new deposits.  Those companies that had shuttered established operations will find it easier to jump back into production and begin delivering profits to the bottom line.

More importantly the recovery could dramatic, taking the uranium sector to record levels.  Global nuclear power reactor requirements are increasing in the long-term.  There are currently 465 nuclear power reactors in operation around the world.  Since Fukushima there has been a shift in the use of nuclear power from developed countries  –  U.S., France, Germany and Japan  –  to Asian countries  –  China, India.  There are currently 58 nuclear power reactors under construction around the world, representing a 16% increase in nuclear capacity.  There are another 157 reactors in the planning stages in China, India, South Korea and Russia that are expected to be operational by 2030.  This would add another 42% increase in production capacity.

With global warming and carbon emissions continuing to make the headlines, nuclear power is likely to become a larger portion of future energy.  Nonetheless, investors may have some time for due diligence.  There are signs the uranium sector is poised for a recovery, but so far there has been a limited response from investors.  Early birds still have a chance to find that special uranium worm.

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries. Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

The post Flocking to Uranium appeared first on Alternative Energy Stocks.


Source: Alt Energy Stocks

Flocking to Uranium

The post Yellow Cake Debut described the capital raising effort of one of the newest players in the uranium supply chain.  Yellow Cake leadership brought the aspiring intermediary to the capital market at a critical time for uranium producers.  The uranium market has been in an extended trough period since the industry peak in 2007.  At that time considerable development had been undertaken and capacity was beginning to generate sufficient supply to create stockpiled inventories.  As this bloated condition persisted, in 2011 the nuclear power and its uranium supply chain were shocked by a Pacific Ocean tsunami that led to a nuclear spill at the Fukushima Power Plant in Japan.

The world view of nuclear power shifted seemingly overnight, causing Japan as well Germany and others to take nuclear power plants offline.  Demand for uranium dried up.  These many years later, the industry is still working through excess inventories.  Selling prices for U308 were gutted after the Fukushima incident and have remained at historic low levels.

uranium mine
Ranger 3 open pit uranium mine, Northern Territory, Australia:. Photo by Geomartin [GFDL, CC-BY-SA-3.0 or FAL], from Wikimedia Commons

As a consequence company valuations have remained stubbornly stuck near historic lows.  As shown in the table below, the average of the group is a value of 2.03 times book value.

RECENT PRICE/ PRICE/ PRICE/
COMPANY SYM PRICE* SALES CSH FL BK VAL
Altius Minerals ALS:  TO $9.82 12.36 29.84 1.71
Azincourt Energy Corp. AAZ:  V $0.07 na neg 1.41
Berkeley Energia Ltd. BKY:  L $54.47 nm neg nm
Cameco Corp. CCJ:  NYSE $10.86 2.63 6.58 1.16
Energy Fuels, Inc. UUUU: NYSE $2.32 6.41 neg 1.52
NexGen Energy Ltd. NXE:  NYSE $1.93 na neg 5.16
Paladin Energy Ltd. PDN:  ASX $0.13 3.85 neg na
Peninsula Energy Ltd. PEN:  ASX $0.19 2.97 46.38 0.76
Uranium Energy Corp. UEC:  NYSE $1.62 na neg 4.06
UR-Energy, Inc. URG:  NYSE $0.68 2.32 18.26 2.19
Westwater Resources WWR:  Nasdaq $0.40 na neg 0.29
Sector Average 5.09 25.27 2.03
*Price and revenue converted to USD

It may well be an opportune time for investors to look at the uranium sector. Multiples are near historic lows, providing investors with good bargains. More importantly there is some evidence that undervaluation might be near an end, providing investors with the prospect of near-term price appreciation.  Our signal for a shift in the industry cycle off the trough, is in the production decisions of uranium suppliers.  In December 2017, JSC National Atomic Company Kazatomprom, considered to be among the lowest-cost uranium producers in the world, announced plans to cut production by 20% or about 11,000 tons over three years beginning in 2018. Kazatomprom’s announcement was followed a month later by a similar decision from Cameco (CCJ:  NYSE, CCO:  TSX) to suspend production at its McArthur River mine beginning January 2018.

These are two of the largest uranium producers in the world.  It is widely expected that with this production taken off-line, the last of uranium inventories will be burned off by existing demand.  Prices are expected to rebound and could even appreciate to the point where production capacity will be taken back out of mothballs.  It is expected that production will drive the sector going forward and the days of inventory influence are coming to an end.

In this new age which uranium producer is better than the next?  Historic profitability could be one way to sort out the best uranium company.  This would give an investor a company with a known track record for delivering profits when in production.  Alternatively, investors could choose the companies with a ready production capacity rather than companies with development projects focused on new deposits.  Those companies that had shuttered established operations will find it easier to jump back into production and begin delivering profits to the bottom line.

More importantly the recovery could dramatic, taking the uranium sector to record levels.  Global nuclear power reactor requirements are increasing in the long-term.  There are currently 465 nuclear power reactors in operation around the world.  Since Fukushima there has been a shift in the use of nuclear power from developed countries  –  U.S., France, Germany and Japan  –  to Asian countries  –  China, India.  There are currently 58 nuclear power reactors under construction around the world, representing a 16% increase in nuclear capacity.  There are another 157 reactors in the planning stages in China, India, South Korea and Russia that are expected to be operational by 2030.  This would add another 42% increase in production capacity.

With global warming and carbon emissions continuing to make the headlines, nuclear power is likely to become a larger portion of future energy.  Nonetheless, investors may have some time for due diligence.  There are signs the uranium sector is poised for a recovery, but so far there has been a limited response from investors.  Early birds still have a chance to find that special uranium worm.

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries. Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

The post Flocking to Uranium appeared first on Alternative Energy Stocks.


Source: Alt Energy Stocks

After a Decade of Shale, Pa. and New York’s ‘Twin’ Tiers Now Look More Like Distant Cousins

The Twin Tiers include the border counties from Chautauqua to Delaware counties in New York, and McKean to Susquehanna counties in Pennsylvania, as well as several adjacent counties. Source: Natural Gas Now

This year marks the 10-year anniversary of shale development beginning in earnest in the Marcellus and throughout the country. And as recent media spotlights have demonstrated, an unfortunate case study has developed during this time period in the Twin Tiers – the Northern Tier of Pennsylvania and Southern Tier of New York. These once strikingly similar regions now have vastly different economies that can be traced to the shale opportunities afforded Pennsylvania and denied New York.

As E&E News recently reported,

“The Southern Tier, a group of counties that border Pennsylvania, has been in economic decline for decades. But a decade ago, a promising opportunity seemed to come along: shale gas. Rigs sprung up across Pennsylvania, and some of the economic benefits even bubbled over into the Southern Tier.

“For farmers in particular, it seemed like a godsend: Land was in demand, and land was what they had. [Tioga Co., N.Y. farmer Kevin] Frisbie, and others like him, signed contracts trading access to their property for cash and royalties. At the time, many felt [N.Y. Gov.] Cuomo was on their side, because he’d campaigned on revitalizing the upstate economy.

Instead, Cuomo took New York’s energy policy on an anti-gas shift that’s continuing today.” (emphasis added)

The fallout of Gov. Cuomo’s decisions were encapsulated in 2017 by the Pennsylvania Manufacturing Association (PMA) in a video called “The Dividing Line: PA vs. NY Natural Gas Economics.” E.J. McMahon, Research Director for the Empire Center for Public Policy and an adjunct fellow at the Manhattan Institute, explained to PMA,

“What [New York] state has been doing basically is shutting off an avenue of growth.” (2:53)

“The state’s policies are basically shutting off any chance for a future for so many thousands of people in the Southern Tier.” (3:04)

And Julie Lewis, a New York landowner who travels across the border to Pennsylvania for work, told PMA,

“When New York limited or essentially banned high volume hydraulic fracturing, it sort of ended a significant opportunity for the state, and for landowners, and for the communities. I mean, if you look at what’s going on here in Pennsylvania, the opportunities are abounding and it’s not just for landowners. You see tax incentives. You see community philanthropic giving going up, and community organizations that benefit from this. And New York has missed out on that opportunity.” (16:16)

Here are a few data points showing just how much “New York has missed out” on the shale opportunity:

Gross Domestic Product

Both New York and Pennsylvania have a long history of oil and gas development, dating back to the 1800s. In fact, Pennsylvania is home to the first U.S. oil well, while New York has the first U.S. natural gas well. As such, the two states had relatively similar Gross Domestic Product (GDP) contributions from the “mining, quarrying and oil and gas” sectors prior to the shale revolution. But that changed dramatically after the shale development took off in Pennsylvania, as the following Bureau of Economic Analysis (BEA) chart shows.

Though New York has experienced some growth in its oil and gas contributions since 2005 – the 2014 fracking ban does not encompass all oil and gas activities – those contributions represent only nine percent of what has been realized in Pennsylvania during that same time frame. Pennsylvania GDP contributions from the oil and gas sector have increased by over 600 percent since 2005 for a total of more than $597.5 billion.

GDP: Mining and Quarrying and Oil and Gas Extraction (millions of dollars)

Q1 2005

Q4 2017 Percentage change

Total GDP Contribution
2005 – 2017

New York

562 980 74% 52,608
Pennsylvania 3,201 22,471 602%

597,519

 

Another interesting GDP category comparison between the two states is manufacturing.

As the above BEA chart and the following table of that data shows, New York and Pennsylvania had relatively similar GDP contributions from manufacturing until about 2010. But from 2010 to 2017, Pennsylvania saw manufacturing GDP contributions grow 24 percent, while New York’s remained practically stagnant with only a 1.5 percent growth.

GDP: Manufacturing (millions of dollars)

Q1 2005

Q1 2010 Q4 2017 Percentage change

2005 – 2017

Percentage change

2010 – 2017

New York

64,865

72,255 73,358 13%

1.5%

Pennsylvania 73,323 72,800 90,317 23%

24%

The difference? Shale.

In New York’s Southern Tier counties, many manufacturers had layoffs or closed their doors. As Lewis told PMA in 2017,

“Well, in New York state in years’ past, there’s been a lot of manufacturing in the state that supported the local community. …The loss of these types of jobs has been extremely harmful to the community, and there really isn’t anything else that’s replaced it.” (17:48)

In contrast, Pennsylvania manufacturing has been experiencing a resurgence across the state. In the Northern Tier, an abundant supply of natural gas has enabled companies like Towanda Metadyne to have a new local market for its business, which includes making drill bits out of tungsten.

And Procter and Gamble’s Wyoming County factory – which supplies the world with diapers, toilet paper and paper towels – is completely self-sufficient thanks to the shale beneath its property. As StateImpact reported in 2012, this not only benefits the company’s bottom line, but Pennsylvania’s environment, as well:

“Starting February of 2013, Pampers and Luv’s diapers, as well as Charmin’ toilet paper and Bounty paper towels will be manufactured completely off the grid, using P&G’s own Marcellus Shale gas to power the plant, and fuel its fleet of trucks.

“Not only does that save the company money, but it cuts down on lost gas that had to travel up from the Gulf of Mexico.

“The methane that comes out of P&G’s wells is pipeline quality, meaning there’s not much processing that has to happen before it goes to market, or starts generating electricity for the plant.

“With two onsite compressors and a fueling station, the company has eliminated their use of 400,000 gallons of diesel fuel a year. Fried says the emissions reduction is equal to taking 145 cars off the road.

“He says an added environmental benefit is cleaner burning natural gas from the Marcellus compared with the gas brought up from the Gulf Coast.”

The manufacturing potential in other parts of Pennsylvania are even more tremendous thanks to the wet gas – natural gas rich with ethane, propane, butane and other natural gas liquids (NGLs) – found in abundance in the southwestern portion of the state. Those NGLs have attracted a multi-billion dollar ethane cracker facility and could help Pennsylvania to become a major plastics manufacturer in the near future. The benefits from this manufacturing renaissance will be statewide, with the potential for billions of dollars to be invested in the Commonwealth.

All of this shale-related activity has also spurred job growth in Pennsylvania. But, as E&E News reported, that hasn’t been the case in New York.

“But as manufacturing began to contract in the United States, the Southern Tier experienced a convulsion. Since 1990, its total employment base has declined by more than two-thirds, according to the Federal Reserve Bank of New York. Job growth continues to lag well behind the state average. By some metrics, the Southern Tier hasn’t recovered from the Great Recession.”

That’s not to say that businesses located in New York have not been able to benefit from the opportunities across the border. Brad Robinson, Operations Manager and vice president of Robinson Contracting in Candor, N.Y. told PMA,

“So in 2009, we were just short of Fourth of July, and we still only had about 15 people on the payroll, all in – including the Robinsons. And that was very bad. We probably had 20 people on the bench, and at that time of year that isn’t good.” (10:37)

His company began doing contract work constructing well sites over the border in Pennsylvania. The result, in his words, was a “phenomenal turnaround”:

“And probably two years later we were in the seventies. And at that point there was so much work in terms of gas stuff – basically all you needed to do was answer the phone because they needed competent help. …So for us it was a phenomenal turnaround. I mean we went from being in really somewhat dire straits to being as busy as we could handle.” (12:10)

Agriculture

The Twin Tiers are comprised of very rural counties with long histories of agriculture. In recent years, the agricultural industry – and dairy farmers in particular – have struggled with low prices. As E&E News reported, unlike in Pennsylvania, New York’s farmers haven’t had shale to help “shelter” them from this price-slump. The outlet continued,

“As for the Southern Tier, Cuomo has spent billions in an attempt to guide its economy toward new industries. But farmers here say they don’t have the luxury of time. Milk prices are stuck in a four-year slump, and the state lost over 1,300 dairy farms from 2007 to 2017. New York dairy farmers see friends in Pennsylvania who, in the same market conditions, are pulling through with the help of shale.”

In Pennsylvania, agriculture has seen growth since the shale revolution began. As PA Farm Country Radio host Dave Williams wrote in a 2017 Lebanon Daily News opinion:

Put it all together and there’s simply no doubt: the shale revolution has been a huge boost for Pennsylvania agriculture.”

In fact, a 2015 Bradford County Conservation District (BCCD) study analyzed farms in Bradford County from 2007 to 2012. During this time period, the county had 1,106 shale wells drilled – more than 75% of the 1,400 plus wells in the county today. Some of the study’s topline findings include:

  • Total number of farms increased 11.8 percent (from 1,457 to 1,629)
  • Total farm acreage increased 15.5 percent (from 266,635 to 307,990 acres)
  • The estimated market value of land and buildings per farm increased 25.3 percent (from $558,698 to $700,259)

Shale has even helped the region bring in new farming opportunities, as Wyoming County, Pa. Chamber President Gina Suydan explained to PMA,

“Here in Wyoming County, compared to the Southern Tier of New York, we’ve seen a lot of resurgence in our agriculture industry. If you drive by a local farm building, you’ll see they have brand new farm buildings, brand new tractors – they’ve been kind of able to give their farm a new life. We’ve also seen agriculture grow in areas of – you know, new agricultures. We have grape farms and we have this whole Nimble Farms Vineyards and Winery. And we have this whole industry of vineyards and berry farming and some different things that agriculture has really had this new life breathed into it because of the natural gas industry.” (21:31)

Conclusion

The bottom line that these stories and the data show is that New York, and the Southern Tier in particular, has missed out on an incredible opportunity. And it’s obvious just across the border in Pennsylvania. As Lewis told PMA,

“Since drilling has come in here, there’s been a huge uptick in economic activity, diversification to the economy, and it benefits everybody. It’s not just people who are landowners. And you can see a revitalization here. You can see an uptick in business. And there may be ebbs and flows in the amount of activity that occurs, but it hasn’t left. It’s here and it’s here to stay.” (16:49)

And it’s done all of this without the claims of widespread water contamination and health impacts – that were used to justify denying the Southern Tier these opportunities – coming true.

The post After a Decade of Shale, Pa. and New York’s ‘Twin’ Tiers Now Look More Like Distant Cousins appeared first on .

Source: Energy In Depth

List of Pollution Control Stocks

Pollution control stocks are publicly traded companies whose business involves technologies for removing or reducing the emissions of harmful pollutants, contaminants, and/or waste from human activity, or removing these pollutants from the environment or water.

pollution
Pollution, Ribeira, Galicia​. Photo by Lmbuga [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

Advanced Emissions Solutions, Inc. (ADES)
Advanced Disposal Services (ADSW)
Biorem Inc. (BRM.V, BIRMF)
Casella Waste Systems (CWST)
CECO Environmental Corp. (CECE)
CDTi Advanced Materials, Inc. (CDTI)
Clearsign Combustion Corp. (CLIR)
CO2 Solutions, Inc. (CST.V, COSLF)
Donaldson Company, Inc. (DCI)
Ecolab, Inc. (ECL)
EcoSphere Technologies, Inc. (ESPH)
Euro Tech Holdings (CLWT)
Fuel Tech (FTEK)
iPath Global Carbon ETN (GRN)
Republic Services, Inc. (RSG)
Tetra Tech, Inc. (TTEK)
Trading Emissions PLC (TRE.L)
Waste Connections (WCN)
Waste Management, Inc. (WM)

If you know of any pollution control stock that is not listed here, or think one of the stocks above should not be in the list, please let us know by leaving a comment.

 

The post List of Pollution Control Stocks appeared first on Alternative Energy Stocks.


Source: Alt Energy Stocks

Event Highlights How Environmental Progress Is Being Prioritized by Oil and Gas Industry

According to last week’s panel discussion at the Bipartisan Policy Center, the oil and natural gas industry is here to stay, and is looking greener than ever – despite the constant narrative peddled by anti-fracking activists. The event, called “Environmental Progress in the Oil and Gas Industry: What’s Next?”, explored the ever-growing role of Environmental Social Governance (ESG) in the energy sector, specifically as shareholder resolutions surrounding climate change continue to dominate the media and boardrooms across the industry.

ESG is a set of standards for a company’s operations that socially conscious investors use to screen potential investments. Eighty-four percent of millennials cite ESG as an important consideration in their investment decisions for companies across all industries.

Not surprisingly, the oil and gas industry is well positioned to address these environmental concerns. The panelists, representing both upstream and downstream companies, agreed that addressing ESG concerns, such as emissions and water management, were not only economical, but the “right thing to do.”

Alanna Fishman, Director of Policy and Social Responsibility at HBW Resources, summed up ESG’s role in the oil and gas industry gas:

“ESG is a long-term investment on performance approach. Companies might take particular renewable projects into their profile. In the end, oil and gas remain a fundamental part of portfolio diversification. The opportunity for oil and gas is really to embrace that best in class approach of really managing the risk from a wholistic perspective. Oil and gas aren’t going to go anywhere. We have this for the foreseeable future so we are doing what we can to operate in the space in a way that’s sustainable on a long-term basis.”

Donald Chahbazpour, Director of Climate Change Compliance at National Grid, highlighted two industry initiatives promoting the sustainable development of natural gas. The Natural Gas Supply collaborative (NGSC) is a voluntary partnership of natural gas purchasers, including some of the largest utilities, dedicated to promoting safe and responsible practices for the natural gas supply chain. As buyers of the commodity, they are “developing non-financial criteria to promote the safe and responsible development of natural gas.” According to Chahbazpour, the collaborative evaluates potential purchases based on methane emissions, air quality, community impacts, safety, and water management.

In addition, Chahbazpour highlighted One Future, a group of natural gas companies working together to voluntarily reduce methane emissions across the natural gas supply chain. One Future is an EPA Methane Challenge-endorsed program. Members of the coalition operate in 11 of the 19 production basins.

“With operations across the entire value chain, [the coalition is] committed to having an emissions, or leak rate, of 1 percent or less from wellhead to burner tip by 2025,” Chahbazpour explained.

EPA and Global Carbon Project data show that U.S. oil and natural gas system methane emissions currently account for just 1.4 percent of overall global methane emissions.

Chahbazpour championed the energy potential of natural gas saying, “gas systems on a peak day in the winter delivers multiples of the amount of energy that an electrical system can produce on a peak day in the summer. And it does so much cheaper.”

The NGSG and One Future aren’t the only voluntary coalitions in the industry dedicated to environmental responsibility. John Williams, Director of Health Safety and Environment Affairs at Apache, discussed The Environmental Partnership, a collaboration of companies in the oil and natural gas industry “committed to continuously improve the industry’s environmental performance.”

According to Williams, the partnership is currently focusing on developing technologies to decrease emissions. “It’s challenging all members of the industry to step their game up,” he remarked. Williams estimated that close to one-third of gas production in the U.S. is currently represented within the partnership.

It’s clear that the oil and gas industry takes environmental responsibility seriously and is dedicated to ESG, without burdensome government regulation. This panel discussion is just the most recent evidence that investing in fossil fuels and addressing environmental concerns is not an either-or proposition.

The post Event Highlights How Environmental Progress Is Being Prioritized by Oil and Gas Industry appeared first on .

Source: Energy In Depth

Sunday Q&A: Subcommittee on Energy Chairman Fred Upton (R-MI)

This week, in the first of an ongoing series discussing oil and natural gas development with industry leaders, elected officials and experts, Energy in Depth interviewed U.S. Representative and Subcommittee on Energy Chairman Fred Upton (MI-06).

 

Earlier this summer, you held a hearing in the Subcommittee on Energy –“The Shifting Geopolitics of Oil and Gas”. What kind of changes, or “shift” have you seen?

Rep. Upton: In 2005, our country’s domestic oil and gas production was steadily declining while our reliance on foreign energy sources soared. At the time, we were importing eight times more energy than we were exporting. We were at risk of becoming increasingly beholden to OPEC nations for our energy needs.

I’m pleased to see the American energy industry make leaps and bounds in production. In the time since then, we’ve seen important technological breakthroughs pioneered by American companies, namely horizontal drilling and hydraulic fracturing, dramatically alter our energy outlook. These technological breakthroughs led to a surge in domestic oil and gas production, decreasing U.S. reliance on energy imports. So much so, in fact, the Energy Information Administration projects that by 2022, the United States will become a net energy exporter for the first time in over half a century.

It is clear to me that we are in the midst of an American energy revolution. Creating jobs, boosting our economy, and decreasing our reliance on foreign sources of energy — this is great news. As the United States continues to grow as a leading energy producer, you can be sure I will be at the front to lead the charge.

On oil, and liquefied natural gas (LNG) exports in particular, this was something you fought for – the ability for the U.S. to export its energy resources. Why is this ability to move in the global market so important?

Rep. Upton: American liquefied natural gas exports are important on several levels. U.S. LNG exports are primarily a positive factor in our trade and diplomatic interactions with many other nations. American LNG reaches markets in up to 26 countries, including Brazil, China, Britain and the United Arab Emirates.

Continued production promises continued investment and prospects for growth. It was once assumed that we would be an importing nation, not an exporting one. It’s consistent with the goal of securing our energy independence and stimulating our economy, LNG exports have clearly proven their worth as an American asset.

Where do you see the future of LNG exports? What, in your estimation, is the next step?

Rep. Upton: LNGs already show great promise as an export commodity. Although production and export capacity has been projected to increase from 3.1 Bcf/d to 6.9 Bcf/d within the next five years, there are certain steps that we should take to guarantee this growth.

Namely, I believe that encouraging investments through small-scale LNG operations will be critical as the next step in the near future. Diversifying LNG terminal locations will reinforce production numbers and keep American LNG prices low and competitive.

The United States is set to become the leading producer of crude oil, surpassing Saudi Arabia. Natural gas production is again setting records this year. Why is this important, and what steps do we need to take to ensure continued success in the future?

Rep. Upton: As you know, our dependence on foreign energy sources in the past has been unsustainable.

Our nation’s security cannot be bartered away. The national and energy security benefits provided by the shale energy revolution cannot be overstated. Every day we are less dependent on foreign nations and cartels, such as OPEC, to meet our domestic energy needs.

We need to maintain our country’s influence, reduce our trade deficit, and sustain our economic growth. To do that, we need to continue to take steps to bolster the American energy revolution.

Here in Congress we passed common-sense legislation that lifted the restrictions that have been stifling our competitiveness. An environment that encourages new techniques, builds stronger infrastructure, and nurtures American ingenuity will be pivotal for our nation’s continued success.   

Next week, your Subcommittee is holding a hearing on energy storage. What are you looking to learn, and why is this of importance to you and the Energy and Commerce Committee?

Rep. Upton: We recognize the importance of energy storage. As demand rises in both domestic and international markets, we must be ready with the proper techniques, facilities and know-how to store our energy supplies.

We’re interested in determining the course of our current practices and how we can improve. Better storage practices will ultimately help us smooth out variabilities between supply and demand. I’m looking forward to taking part in our hearing next week to learn more about the challenges and goals of energy storage.

Where do you see your focus moving towards next? Are there issues or challenges you’d like to address?

Rep. Upton: One of my top priorities will be improving our energy security – specifically the threat of an attack on our energy infrastructure. Congress must act swiftly by providing DOE with the tools it needs to enhance preparedness and protections of our energy systems.

This is why I introduced the Pipeline and LNG Facility Cybersecurity Preparedness Act to address this issue. This legislation requires the Secretary of Energy to establish a program to improve cooperation between federal agencies, states, and industry to ensure the safe and dependable flow of energy across the United States. This will help boost physical security and cybersecurity of energy pipelines and liquefied natural gas facilities.

Other legislation passed by the committee includes the Energy Emergency Leadership Act, the Cyber Sense Act, and the Enhancing Grid Security through Public-Private Partnerships Act. All of these bipartisan measures take practical steps to ensure that DOE can effectively carry out its emergency and security duties.

Back to your previous hearing. You brought in Daniel Yergin – a world renowned energy expert. What’s your reaction to his testimony?

Rep. Upton: Overall, Mr. Yergin’s testimony was a wealth of information and guidance. However, what really stuck out to me were his comments on the overall economic benefits the energy boom has brought. 

I was impressed to hear that the full unconventional value chain associated with natural gas and oil has yielded $75 billion in federal and state tax revenues, supported more than two million jobs, and brought up U.S. GDP by $283 billion.

The “major economic stimulus” Mr. Yergin describes has been most welcoming of all. Families across the Midwest have benefitted greatly from oil and gas exploration and investment.

With rising household disposable incomes and new manufacturing and service employment opportunities emerging, the United States stands to gain from energy growth—not lose.

Finally, you discussed earlier the remarkable shift we’ve seen with U.S. energy production since 2005. Given the vast amount of energy we’re producing, and with what’s in the Strategic Petroleum Reserve, do you see any opportunity for Harbaugh’s Wolverines to summon enough energy to win in Columbus against Ohio State? By my calculations, Michigan has only been able to muster one win in thirteen chances, and none since you got your new coach…

Rep. Upton: Coach Harbaugh has the most energy of anyone I’ve ever met. I don’t know if he needs anymore… Either way, I have the utmost confidence that when my Wolverines march into the Horseshoe this fall, they will emerge victorious. Go Blue!

Subcommittee on Energy Chairman Fred Upton represents Michigan’s 6th Congressional district. From 2010 to 2016, Rep. Upton was selected by his House colleagues to serve as Chairman of the Committee on Energy and Commerce

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Source: Energy In Depth

Earthworks releases air quality report for Noble Co., Ohio that doesn’t actually include any air quality data

Earthworks and Clean Air Task Force (CATF) released a new “report” this week on air quality in Noble County, Ohio (among others) that is based entirely on anecdotes and debunked anti-fracking talking points rather than recent academic research and data showing emissions near Utica Shale development are protective of public health.

In a blatant attempt to alarm the public – and members of the media – the group relies on “Forward Looking Infrared” (FLIR) images as the basis of its report, a scare tactic it has employed repeatedly over the past several years.

The ultimate red herring, FLIR videos and images are used to deliberately mislead the public on emissions from a variety of oil and natural gas facilities. Anti-fossil fuel activists have even admitted that their FLIR videos are not backed by scientific evidence of any sort. Most recently, an Earthworks operative attempted to use FLIR footage to paint Oklahoma’s oil and gas sites as spewing “toxic pollution into the air, like an invisible oil spill.”

In a defining statement, Earthworks’ Hilary Lewis admitted during an interview with the Kingfisher Times & Free Press that FLIR images featured in an Earthworks/Coalition for Oklahoma Renewable Energy report offered no scientific data to support the report’s claims about Oklahoma oil and gas site emissions. As the Times & Free Press reported:

No air quality tests were conducted in connection with the infrared drone photographs to quantify what amount of methane or other pollutants, if any, were being emitted at the named well sites.”

EID and those in the scientific community have covered these attempts to distort scientific evidence (or lack thereof) extensively over the years, and as our recent FLIR fact sheet shows, there is no merit to their use as evidence of anything other than deliberately mislead the public:

Earthworks has been using FLIR videos as the focal point of its recycled “Threat Maps” project, a oft-regurgitated effort designed to influence Congress to adopt costly and duplicative Environmental Protection Agency (EPA) and Bureau of Land Management methane regulations.

Earthworks has absolutely no interest in actually collecting air quality data to scientifically support its alarmist claims, preferring to work backward from a conclusion to achieve its real goal – something they revealed in a recent tweet.

To see how FLIR videos are misleading, Energy in Depth spoke to  Dr. Ram Hashmonay, an international expert in the implementation of optical remote sensing who is credited with co-inventing modern radial plume mapping technology:

Here above, infrared footage of a steaming tea kettle. While it looks quite frightening in the image, we know the plum of steam means it’s tea time, not some toxic cloud to run from. There is a reason Earthworks and CATF rely on these videos – they can be quite frightening without proper context.

As Eagle Environmental air compliance specialist Trisha Fanning told Western Wire:

“The bottom line is that they are misleading, and they are misleading on the scare tactic. Optical gas imaging is nothing more than that, it’s imaging,” she continued, saying that individuals without proper FLIR training and the understanding of many other variables could easily misinterpret what the camera sees.”

Just as far removed from actual scientific evidence as the FILR images, the Earthworks/CATF report also claims that oil and natural gas development is somehow responsible for increased asthma attack rates – ignoring actual research that demonstrates otherwise. Just across the border in Pennsylvania, the state’s Department of Health data show that age-adjusted asthma hospitalizations rates in counties where oil and gas development is taking place are far lower than nine counties with no shale gas production at all. Asthma hospitalization rates in Pennsylvania’s most heavily drilled counties have also fallen considerably since the shale revolution began.

To place blame on oil and gas activity on higher asthma rates is folly. According to the Centers for Disease Control and Prevention’s (CDC) latest asthma data, rural Vermont – a state that has completely banned fracking – actually has far higher asthma rates than the most heavily developed states in the country: Pennsylvania Texas, California, Alaska, North Dakota, and, yes, Ohio.

Facts show that it is because of increased natural gas (use made possible by fracking) that nitrogen oxide – a major ozone precursor – has decreased dramatically in recent years. That’s why EPA data show ozone levels are decreasing.

The “case-studies” featured in the report, like the one in Noble County, Ohio are not based in science or new evidence, but rather old data used in their efforts to rehash a failed attempt to update the U.S. EPA’s National Ambient Air Quality Standards (NAAQS):

“EPA data shows that as a whole Noble County, despite its agrarian nature exemplified by the Smith’s farm, ozone pollution is so high that it barely meets federal standards (which is far from clean air).”

Bottom line, Noble County is meeting federal ozone standards. The levels Earthworks and other groups are seeking are so ridged the American Action Forum found that 100 national and state parks might not meet their favored NAAQS standards. The lists included Death Valley National Park, Sequoia National Park, Big Bend National Park and Cape Cod National Seashore. That’s why the effort was opposed across the deck by elected officials and regulatory agencies across the country, including Ohio’s EPA.

Ozone forming emissions across the country have been cut in half since 1980, according to the U.S. EPA, and are expected to drop by another 36 percent over the next few years.

Earthworks and CATF, while focusing on stale data and conjecture, ignore the findings of the most recent study on air quality – one that specifically draws from actual scientific findings from Noble County. Last year, the University of Cincinnati gathered air samples near production sites in three of the top producing oil and natural gas counties in Ohio — Guernsey, Noble and Belmont — to examine air quality near natural gas extraction. And according to a media report, lead researcher Dr. Erin Hayes told local elected officials during a recent presentation on the study that “none of the air sample averages exceeded EPA levels of health concern” after being evaluated for 63 volatile organic compounds (VOCs) and formaldehyde.

The UC study is one of many studies based on actual air measurements and actual scientific research (read: not misleading FLIR videos) that have found emissions from oil and gas production sites are below the threshold that would indicate any threat to public health. These studies, uncoincidentally, have been ignored by Earthworks, CATF and other activist groups, whose claims of public health harms from fracking-related activities rely on “associations” rather than proof of causation.

According to EPA data, oil and gas related methane emissions have dropped dramatically, with methane emissions decreased by 14 percent since 1990, while natural gas and oil production have increased 50 and 21 percent, respectively, during that time. Associated volatile organic compound (VOC) emissions have also declined since the shale revolution took off.

It’s important to note that these decreases are largely a direct result of voluntarily measures such as those by ExxonMobil subsidiary XTO Energy serving as a recent example of the industry’s best practices and efforts to further curb emissions from the development process.

Clearly, for Earthworks and CATF, more unnecessary regulations are the end game for their efforts, as they state in their conclusion:

“Despite the availability of inexpensive solutions, oil and gas operators cannot be relied upon to reduce their emissions voluntarily, even when they clearly promise to do so. We need enforceable government safeguards to protect public health and the environment.”

At the end of the day, as UC and countless others demonstrate via actual scientific data, the oil and gas industry – following best practices – is already contributing to the decline in ozone related emissions. Use of natural gas has given the U.S. – and Ohio – cleaner air than we’ve had in decades. There will always be groups – like Earthworks and CATF – that will venture far from the path of scientific evidence to achieve their desired goal of a world without fossil fuels. As they’ve demonstrated here again, they have no problems ignoring science in favor of scare tactics to achieve that goal.

The post Earthworks releases air quality report for Noble Co., Ohio that doesn’t actually include any air quality data appeared first on .

Source: Energy In Depth

Amyris In The Age Of Rapid Change

by Jim Lane

Last month, Amyris (AMRS) and Chevron (CVX) announced that Novvi and Chevron have entered into an agreement to jointly develop and bring to market novel renewable base oil technologies. Novvi is Amyris’ JV with Cosan (CZZ) to produce targeted hydrocarbon molecules from plant sugar for automotive, industrial, marine, and construction applications at unbeatable economics. Think lubricants for engines and machines.

Novvi logo - Amyris JVSince launching its first commercial production in 2014, Novvi has been steadily increasing its base oil production to keep up with robust and growing demand for a variety of automotive, marine and industrial applications. Meanwhile, Chevron has one of the world’s largest base oil manufacturing platforms through its own refining network and its base oil technology licensing position. In 2016, Chevron announced an equity investment in Novvi.

It’s good news for Chevron, Amyris and Novvi — and great news for consumers — and it reminds us that just a few years back the market was expecting that Amyris’ great partners would be the likes of Chevron because of the chase on for renewable fuels. That the mutual advantage opportunities for this pair have dovetailed into base oils, that you hear more about DSM Nutrition than Total among Amyris’ backers, that the company has embarked on a major voyage into the health & beauty sector — these are all signs of Amyris’ great pivot. And lessons for all lie in what the company set out to do, what it finds itself doing, and how it sustains itself and its workforce now that its vision has changed so much and people who signed up to change the world find themselves working on facial formulations.

These days, for marketing purposes Amyris has trademarked the phrase No Compromise, but of course the entire company’s mission is a compromise and in fact it is the source of Amyris’ strength, it ability to adapt to changing conditions and find news ways to pioneer when the expected pathways to success turned out poorly for them.

Expect the Unexpected

The unexpected is not to be unexpected — in fact, we live in a new world where markets are disrupting just as fast as science is, making it difficult to bring new products forward, anticipate trends, plan for the future, count on policy support, or tame the flighty tendencies of a fickle public.

We live in a world of Facebook, Twitter, Tesla (TSLA), taxis with an app, drones above our head, and cars without the driver, we have meat without the cow, milk without the cow, leather without the cow. We live in strange world that is getting stranger. Fast is getting faster, information is beating down our doors, and for all the communication devices we carry around and use obsessively, half the world reports they are feeling more lonely.

How can companies become ready to meet the evolving markets that GenXers and Millennials have begun to dominate?  Absent a crystal ball, it certainly isn’t about the kind of corporate forecasting we used to see in the 1990s that didn’t anticipate Y2K, the dot com revolution, the dot com bust or 9/11. Or the kind of forecasting we had in the mid 2000s that didn’t anticipate the global financial crisis, the mortgage crash, the oil price crash, the rise of fracking, the Moore’s Law environment in genetics, or the advent of mobility as a service.

The Velocity of Change

How fast is fast becoming? To give an example, a company using a 300 baud modem in 1993 (and most companies back then couldn’t even have told you what a baud was, 300 was decent speed back then), could transmit a single color page over the internet in about 12 hours, if you could hold the connection that long, which you almost never could. Today, information travels up to 13 billion times faster via the internet.

And it cost a billion dollars to decode a genome just 20 years ago, and today we’re looking at a few dollars and not long from now it will be pennies. You can get more out of a call to 23andMe today than you could get from all the scientists of our national lab system a generation ago.

What can you really do in an economy that is changing this fast and that much? At the end of the day, values drive habits, habits drive actions, and actions change the world, so if you really want to change the world, it better start with values, rather than value. The value is a product of values, not the other way around.

In some ways, the company is probably going to have to think and organize itself the way that military organizations have begun to. The missions change, the tools, the team, the methods, the goals, the partners, the uniforms, the bases, the timelines. But Semper Fi goes on and on and on. The Marines are a philosophy in action, if you think about it, nothing else lasts and not much else matters except the who and the why. The what, the where and the how are ultimately the liquids of defense preparedness. The people and the values are the solids.

Values drive Habits, Habits drive Actions, Actions change the world

These days Amyris has put its values almost on the home page of its website — it’s just one click from the right location, found as you scroll down a bit on the page titled About Us — and there, the company says that it aims to “make good things, make good impact, make good choices, make good together and make good processes”, and these days they refer to embracing “intelligent risk” as a “learning organization”. Amyris has learned a lot, sometimes by not always taking intelligible risk, even if it was styled intelligent risk.

When the company was founded it was essentially focused on fuels, which made sense to many people at the time because fuels were (and remain) the giant app of the bioeconomy. And, if you could make fuels, you could make chemicals, because after all a fuel is simply a chemical that you burn instead of otherwise using in, say, green chemistry. A company that could make a good $3 fuel could do a lot for itself also selling $5 chemicals made from the same process, and fuels would give the company the base load to achieve meaningful commercial scale.

So went the idea, anyway. The inherent problem was that the company’s primary value engine, converting cane sugar to farnesene via yeast fermentation, was based around a maximum theoretical yield of 28%, and required a second processing step from farnesene (an alkene) to farnesane (a good fuel hydrocarbon).

What was the problem in that? To make a $3.00 gallon of fuel, which weighs in the range of 7.5 pounds, you needed sugar to be available at below 10 cents a pound (which costs you around $2.67 in raw materials even if that’s all the cost there is, which it’s not, and even if you hit the 28% theoretical yield limit, which you never do). Well, sugar never did fall that low. Right now, it trades on the NYMEX futures board at between $0.126 and $0.144 depending on delivery month, and there’s no 10 cent cane sugar in sight.

So, Amyris ran into the NLACM problem we have written about here and here. That is, the Natural Law of Alternative Commodity Markets, which states that no one will use a commodity to make another commodity of lower value. In short, you might as well sell the sugar as sugar.

The hope, one supposes, was that fuel prices would go bananas and Amyris could make a $5 fuel, or that companies would pay a small premium to blend in sustainable fuels sold at a green premium. Then, oil prices crashed — and green premiums were as easy to find as Chinese take-out on Neptune, and Amyris began a furious pivot towards the businesses it is in today.

Amyris’ prospects

The company is projecting for 2018 that it will reach $185-$195 million in revenue and expects more than $10 million of positive EBITDA for 2018. That’s striking — in its slides, it refers to being self-funding in the next year.

Amyris’ current markets

As Amyris CEO John Melo noted, John Melo, “We have organized around three core markets — Performance Health and Wellness, Clean Skin-Care and Pure Flavor & Fragrance Ingredients. Each of these markets is delivering strong, profitable growth underpinned by the most advantaged technology in the sector. We are making good for humanity and our planet with No Compromise products.”

Last November we reported on Amyris’ No Compromise sweetener-market entry, and news that it has sold its 40 million liter capacity Brotas production plant to DSM for $96 million, while it focuses on completing its Brotas 2 plant, where it has not yet revealed the capacity.

Equity analyst Jeff Osborne added:

Amyris has alluded to discussions with “very large consumer companies” regarding the sweetener product, which at the analyst day was referred to by an attendee in the Q&A as “Stevia-like”. Management viewed its “Sweetener 1” product as the company’s largest opportunity though 2021. The company expects a strong ramp in product sales in 4Q, which we believe to be driven largely by health and nutrition.

The DSM-Amyris deal? As CEO John Melo was clear in announcing the sale, Amyris needs different production capacity to realize its current opportunities in higher-value, smaller-volume markets. Total consideration for Amyris Brasil Ltda (which owns and operates the Brotas 1 production facility), intellectual property related to farnesene and an additional value share arrangement over a 3-year period amounts to $96 million. In addition to the consideration upfront there is potential for a future value share in line with Amyris’ business model.

DSM will continue existing supply-agreements to Amyris and other parties. DSM will also supply Amyris with specialty compounds until it realizes its Brotas 2 specialties production facility. Amyris is accelerating the construction of its second facility dedicated to specialty products while maintaining the manufacturing process development and business support capability located in Campinas, Brazil.

Then, there’s the Vitamin A front. As we reported last September, Amyris announced that it has entered into a product development and production agreement for Vitamin A with Koninklijke DSM N.V.

New production bases? Last June we reported that  Amyris and the Government of Queensland announced the next step in their plans to develop a leading industrial biotechnology hub in Southeast Asia. Plans call for developing a new production plant with support from local partners to produce Amyris’s sugar cane-based ingredient called farnesene, which is used in products including cosmetic emollients, fragrances, nutraceuticals, polymers, and lubricants.

Let’s not overlook Biossance, its health & beauty platform. Latest news there is that Amyris successfully launched Biossance into SEPHORA Canada stores, with SEPHORA U.S. sales during the year overall contributing to a greater than 650% increase in total 2017 Biossance retail sales over 2016. The company introduced pharmaceutical grade Neossance Squalane USP through its Aprinnova joint venture opening new markets among FDA regulated products such as topical and dermal applications, including therapeutic skin creams and ointments.

For the long-term

Beyond its products and markets, Amyris is working on informatics and artificial intelligence, for one.

We reported in January that Amyris announced two grants that have been awarded, valued in aggregate at approximately $25 million, to accelerate innovation and enable the company to further extend its leadership position in the industrial biotechnology sector. The first grant is in Europe and focused on furthering the company’s current artificial intelligence and Informatics platform at Amyris and the second grant is from National Institutes of Health for the development of a novel isoprenoid pharmaceutical application.

The Bottom Line

Forecasting is generally focused on the microeconomy and generally assumes not much will happen in the macroeconomy. “My product will be introduced into a market that is changing only in the forces that foster my product,” is sort of the way those business plans were written.

There’s an unknowability in markets, and as former Secretary of Defense Donald Rumsfeld put it, it it is the unknown-unknowns that keep you up at night, not the things you know but the things that you don’t know that you don’t know. Or, as the Talking Heads put it, “You may find yourself / In another part of the world…And you may ask yourself, well / How did I get here? / Letting the days go by, let the water hold me down / Into the blue again after the money’s gone / Once in a lifetime, water flowing underground.

Which is why Amyris’s pivots are really a sight to behold, even if the company has been pilloried by its critics who wander around in some post-Keynesian dream that economies are ordered, that state planning or corporate planning works, that innovation is about anticipating and meeting static and ever-reliable market demand with market supply. That theory works very well if you consider that information works in the same way, at the same speed, and at the same volumes as 100 years ago.  Amyris, for better or worse, looks a lot like companies of the future will all look — a transformative invention followed by a furious search for markets to serve as expected markets fail to materialize and new ones appear.

Which is why I sometimes wish that Amyris billed itself as The Nimble Company™ instead of the No Compromises™ guys. For compromise is what finding markets is all about, and the company that changes the world is the nimble one. Xerox made no compromises, Kodak made few either, and neither did Blockbuster. But Apple didn’t set out to make iPhones, Virgin didn’t start out in the transportation or even the music business, Mars didn’t start out with pet foods, and Microsoft didn’t even write much of MS-DOS, Excel, or the first releases of Windows.

Information is changing everything, and especially as biological sciences and information sciences are becoming almost indistinguishable. One of these days we might look at biology as an base-4 information science (with A,C,G.T as the digits instead of 0,1) , and that computer science is ultimately a simplified, inorganic version of biology. Dumbed down and stripped of the forces of life and evolution, perhaps that’s what we’ll one day think of the languages, machines, and technology that we deploy to support information in this day and age.

We don’t have much time to think about all that because information is changing, fast, and that means capabilities, habits, actions, and markets are getting shredded and born at high speed.

Making havoc for companies that attempt to navigate the choppy waters. But Amyris is coming nearer and nearer to shore. One only hopes that its workforce, those there today and those looking potentially at working there, see the mission that lies behind the products.

Biossance is a valuable product platform, but that’s not really what the work is about, is it? Year ago I subscribed to the Musical Heritage Review which wrote of Mozart and the flute this way: “Mozart loathed the flute…nonetheless, he completed and delivered two flute quartets, K. 171 and 298; the concertoK313, and the Andante, K. 315…Mozart chafed under the commission, but he needed the money and hacked away diligently.

Yet Mozart ultimately delivered The Magic Flute to us of which it is written:

Although there were no reviews of the first performances, “it was immediately evident that Mozart and Schikaneder had achieved a great success, the opera drawing immense crowds and reaching hundreds of performances during the 1790s…Mozart’s delight is reflected in his last three letters, written to Constanze, who with her sister Sophie was spending the second week of October in Baden. “I have this moment returned from the opera, which was as full as ever”, he wrote on 7 October, listing the numbers that had to be encored. “But what always gives me the most pleasure is the silent approval! You can see how this opera is becoming more and more esteemed.” … He went to hear his opera almost every night, taking along [friends and] relatives.”

The opera is today the third-most performed of all operas around the world.

What led Mozart to Die Zauberflote? As we see, not love of the flute. It was a commission. Which shows that markets have powerful impact on training great minds upon the task they will become known for; the winds of change blow us towards our most brilliant productions.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

The post Amyris In The Age Of Rapid Change appeared first on Alternative Energy Stocks.


Source: Alt Energy Stocks

Amyris In The Age Of Rapid Change

by Jim Lane

Last month, Amyris (AMRS) and Chevron (CVX) announced that Novvi and Chevron have entered into an agreement to jointly develop and bring to market novel renewable base oil technologies. Novvi is Amyris’ JV with Cosan (CZZ) to produce targeted hydrocarbon molecules from plant sugar for automotive, industrial, marine, and construction applications at unbeatable economics. Think lubricants for engines and machines.

Novvi logo - Amyris JVSince launching its first commercial production in 2014, Novvi has been steadily increasing its base oil production to keep up with robust and growing demand for a variety of automotive, marine and industrial applications. Meanwhile, Chevron has one of the world’s largest base oil manufacturing platforms through its own refining network and its base oil technology licensing position. In 2016, Chevron announced an equity investment in Novvi.

It’s good news for Chevron, Amyris and Novvi — and great news for consumers — and it reminds us that just a few years back the market was expecting that Amyris’ great partners would be the likes of Chevron because of the chase on for renewable fuels. That the mutual advantage opportunities for this pair have dovetailed into base oils, that you hear more about DSM Nutrition than Total among Amyris’ backers, that the company has embarked on a major voyage into the health & beauty sector — these are all signs of Amyris’ great pivot. And lessons for all lie in what the company set out to do, what it finds itself doing, and how it sustains itself and its workforce now that its vision has changed so much and people who signed up to change the world find themselves working on facial formulations.

These days, for marketing purposes Amyris has trademarked the phrase No Compromise, but of course the entire company’s mission is a compromise and in fact it is the source of Amyris’ strength, it ability to adapt to changing conditions and find news ways to pioneer when the expected pathways to success turned out poorly for them.

Expect the Unexpected

The unexpected is not to be unexpected — in fact, we live in a new world where markets are disrupting just as fast as science is, making it difficult to bring new products forward, anticipate trends, plan for the future, count on policy support, or tame the flighty tendencies of a fickle public.

We live in a world of Facebook, Twitter, Tesla (TSLA), taxis with an app, drones above our head, and cars without the driver, we have meat without the cow, milk without the cow, leather without the cow. We live in strange world that is getting stranger. Fast is getting faster, information is beating down our doors, and for all the communication devices we carry around and use obsessively, half the world reports they are feeling more lonely.

How can companies become ready to meet the evolving markets that GenXers and Millennials have begun to dominate?  Absent a crystal ball, it certainly isn’t about the kind of corporate forecasting we used to see in the 1990s that didn’t anticipate Y2K, the dot com revolution, the dot com bust or 9/11. Or the kind of forecasting we had in the mid 2000s that didn’t anticipate the global financial crisis, the mortgage crash, the oil price crash, the rise of fracking, the Moore’s Law environment in genetics, or the advent of mobility as a service.

The Velocity of Change

How fast is fast becoming? To give an example, a company using a 300 baud modem in 1993 (and most companies back then couldn’t even have told you what a baud was, 300 was decent speed back then), could transmit a single color page over the internet in about 12 hours, if you could hold the connection that long, which you almost never could. Today, information travels up to 13 billion times faster via the internet.

And it cost a billion dollars to decode a genome just 20 years ago, and today we’re looking at a few dollars and not long from now it will be pennies. You can get more out of a call to 23andMe today than you could get from all the scientists of our national lab system a generation ago.

What can you really do in an economy that is changing this fast and that much? At the end of the day, values drive habits, habits drive actions, and actions change the world, so if you really want to change the world, it better start with values, rather than value. The value is a product of values, not the other way around.

In some ways, the company is probably going to have to think and organize itself the way that military organizations have begun to. The missions change, the tools, the team, the methods, the goals, the partners, the uniforms, the bases, the timelines. But Semper Fi goes on and on and on. The Marines are a philosophy in action, if you think about it, nothing else lasts and not much else matters except the who and the why. The what, the where and the how are ultimately the liquids of defense preparedness. The people and the values are the solids.

Values drive Habits, Habits drive Actions, Actions change the world

These days Amyris has put its values almost on the home page of its website — it’s just one click from the right location, found as you scroll down a bit on the page titled About Us — and there, the company says that it aims to “make good things, make good impact, make good choices, make good together and make good processes”, and these days they refer to embracing “intelligent risk” as a “learning organization”. Amyris has learned a lot, sometimes by not always taking intelligible risk, even if it was styled intelligent risk.

When the company was founded it was essentially focused on fuels, which made sense to many people at the time because fuels were (and remain) the giant app of the bioeconomy. And, if you could make fuels, you could make chemicals, because after all a fuel is simply a chemical that you burn instead of otherwise using in, say, green chemistry. A company that could make a good $3 fuel could do a lot for itself also selling $5 chemicals made from the same process, and fuels would give the company the base load to achieve meaningful commercial scale.

So went the idea, anyway. The inherent problem was that the company’s primary value engine, converting cane sugar to farnesene via yeast fermentation, was based around a maximum theoretical yield of 28%, and required a second processing step from farnesene (an alkene) to farnesane (a good fuel hydrocarbon).

What was the problem in that? To make a $3.00 gallon of fuel, which weighs in the range of 7.5 pounds, you needed sugar to be available at below 10 cents a pound (which costs you around $2.67 in raw materials even if that’s all the cost there is, which it’s not, and even if you hit the 28% theoretical yield limit, which you never do). Well, sugar never did fall that low. Right now, it trades on the NYMEX futures board at between $0.126 and $0.144 depending on delivery month, and there’s no 10 cent cane sugar in sight.

So, Amyris ran into the NLACM problem we have written about here and here. That is, the Natural Law of Alternative Commodity Markets, which states that no one will use a commodity to make another commodity of lower value. In short, you might as well sell the sugar as sugar.

The hope, one supposes, was that fuel prices would go bananas and Amyris could make a $5 fuel, or that companies would pay a small premium to blend in sustainable fuels sold at a green premium. Then, oil prices crashed — and green premiums were as easy to find as Chinese take-out on Neptune, and Amyris began a furious pivot towards the businesses it is in today.

Amyris’ prospects

The company is projecting for 2018 that it will reach $185-$195 million in revenue and expects more than $10 million of positive EBITDA for 2018. That’s striking — in its slides, it refers to being self-funding in the next year.

Amyris’ current markets

As Amyris CEO John Melo noted, John Melo, “We have organized around three core markets — Performance Health and Wellness, Clean Skin-Care and Pure Flavor & Fragrance Ingredients. Each of these markets is delivering strong, profitable growth underpinned by the most advantaged technology in the sector. We are making good for humanity and our planet with No Compromise products.”

Last November we reported on Amyris’ No Compromise sweetener-market entry, and news that it has sold its 40 million liter capacity Brotas production plant to DSM for $96 million, while it focuses on completing its Brotas 2 plant, where it has not yet revealed the capacity.

Equity analyst Jeff Osborne added:

Amyris has alluded to discussions with “very large consumer companies” regarding the sweetener product, which at the analyst day was referred to by an attendee in the Q&A as “Stevia-like”. Management viewed its “Sweetener 1” product as the company’s largest opportunity though 2021. The company expects a strong ramp in product sales in 4Q, which we believe to be driven largely by health and nutrition.

The DSM-Amyris deal? As CEO John Melo was clear in announcing the sale, Amyris needs different production capacity to realize its current opportunities in higher-value, smaller-volume markets. Total consideration for Amyris Brasil Ltda (which owns and operates the Brotas 1 production facility), intellectual property related to farnesene and an additional value share arrangement over a 3-year period amounts to $96 million. In addition to the consideration upfront there is potential for a future value share in line with Amyris’ business model.

DSM will continue existing supply-agreements to Amyris and other parties. DSM will also supply Amyris with specialty compounds until it realizes its Brotas 2 specialties production facility. Amyris is accelerating the construction of its second facility dedicated to specialty products while maintaining the manufacturing process development and business support capability located in Campinas, Brazil.

Then, there’s the Vitamin A front. As we reported last September, Amyris announced that it has entered into a product development and production agreement for Vitamin A with Koninklijke DSM N.V.

New production bases? Last June we reported that  Amyris and the Government of Queensland announced the next step in their plans to develop a leading industrial biotechnology hub in Southeast Asia. Plans call for developing a new production plant with support from local partners to produce Amyris’s sugar cane-based ingredient called farnesene, which is used in products including cosmetic emollients, fragrances, nutraceuticals, polymers, and lubricants.

Let’s not overlook Biossance, its health & beauty platform. Latest news there is that Amyris successfully launched Biossance into SEPHORA Canada stores, with SEPHORA U.S. sales during the year overall contributing to a greater than 650% increase in total 2017 Biossance retail sales over 2016. The company introduced pharmaceutical grade Neossance Squalane USP through its Aprinnova joint venture opening new markets among FDA regulated products such as topical and dermal applications, including therapeutic skin creams and ointments.

For the long-term

Beyond its products and markets, Amyris is working on informatics and artificial intelligence, for one.

We reported in January that Amyris announced two grants that have been awarded, valued in aggregate at approximately $25 million, to accelerate innovation and enable the company to further extend its leadership position in the industrial biotechnology sector. The first grant is in Europe and focused on furthering the company’s current artificial intelligence and Informatics platform at Amyris and the second grant is from National Institutes of Health for the development of a novel isoprenoid pharmaceutical application.

The Bottom Line

Forecasting is generally focused on the microeconomy and generally assumes not much will happen in the macroeconomy. “My product will be introduced into a market that is changing only in the forces that foster my product,” is sort of the way those business plans were written.

There’s an unknowability in markets, and as former Secretary of Defense Donald Rumsfeld put it, it it is the unknown-unknowns that keep you up at night, not the things you know but the things that you don’t know that you don’t know. Or, as the Talking Heads put it, “You may find yourself / In another part of the world…And you may ask yourself, well / How did I get here? / Letting the days go by, let the water hold me down / Into the blue again after the money’s gone / Once in a lifetime, water flowing underground.

Which is why Amyris’s pivots are really a sight to behold, even if the company has been pilloried by its critics who wander around in some post-Keynesian dream that economies are ordered, that state planning or corporate planning works, that innovation is about anticipating and meeting static and ever-reliable market demand with market supply. That theory works very well if you consider that information works in the same way, at the same speed, and at the same volumes as 100 years ago.  Amyris, for better or worse, looks a lot like companies of the future will all look — a transformative invention followed by a furious search for markets to serve as expected markets fail to materialize and new ones appear.

Which is why I sometimes wish that Amyris billed itself as The Nimble Company™ instead of the No Compromises™ guys. For compromise is what finding markets is all about, and the company that changes the world is the nimble one. Xerox made no compromises, Kodak made few either, and neither did Blockbuster. But Apple didn’t set out to make iPhones, Virgin didn’t start out in the transportation or even the music business, Mars didn’t start out with pet foods, and Microsoft didn’t even write much of MS-DOS, Excel, or the first releases of Windows.

Information is changing everything, and especially as biological sciences and information sciences are becoming almost indistinguishable. One of these days we might look at biology as an base-4 information science (with A,C,G.T as the digits instead of 0,1) , and that computer science is ultimately a simplified, inorganic version of biology. Dumbed down and stripped of the forces of life and evolution, perhaps that’s what we’ll one day think of the languages, machines, and technology that we deploy to support information in this day and age.

We don’t have much time to think about all that because information is changing, fast, and that means capabilities, habits, actions, and markets are getting shredded and born at high speed.

Making havoc for companies that attempt to navigate the choppy waters. But Amyris is coming nearer and nearer to shore. One only hopes that its workforce, those there today and those looking potentially at working there, see the mission that lies behind the products.

Biossance is a valuable product platform, but that’s not really what the work is about, is it? Year ago I subscribed to the Musical Heritage Review which wrote of Mozart and the flute this way: “Mozart loathed the flute…nonetheless, he completed and delivered two flute quartets, K. 171 and 298; the concertoK313, and the Andante, K. 315…Mozart chafed under the commission, but he needed the money and hacked away diligently.

Yet Mozart ultimately delivered The Magic Flute to us of which it is written:

Although there were no reviews of the first performances, “it was immediately evident that Mozart and Schikaneder had achieved a great success, the opera drawing immense crowds and reaching hundreds of performances during the 1790s…Mozart’s delight is reflected in his last three letters, written to Constanze, who with her sister Sophie was spending the second week of October in Baden. “I have this moment returned from the opera, which was as full as ever”, he wrote on 7 October, listing the numbers that had to be encored. “But what always gives me the most pleasure is the silent approval! You can see how this opera is becoming more and more esteemed.” … He went to hear his opera almost every night, taking along [friends and] relatives.”

The opera is today the third-most performed of all operas around the world.

What led Mozart to Die Zauberflote? As we see, not love of the flute. It was a commission. Which shows that markets have powerful impact on training great minds upon the task they will become known for; the winds of change blow us towards our most brilliant productions.

Jim Lane is editor and publisher  of Biofuels Digest where this article was originally published. Biofuels Digest is the most widely read  Biofuels daily read by 14,000+ organizations. Subscribe here.

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Source: Alt Energy Stocks

CDPHE to Partner with the City of Broomfield on Air Quality Monitoring

As a handful of anti-fossil fuel activists attempt to use blood tests as evidence of harmful impacts of oil and gas, the Colorado Department of Public Health and Environment (CDPHE) is yet again putting on display their ability to engage with communities and respond directly to the concerns posed by residents with active field testing and science-based health information.

Tuesday during a Broomfield City Council meeting, it was revealed that CDPHE and Broomfield are forming a partnership monitor air quality in Broomfield near oil and gas operations. CDPHE is expected to deploy the department’s robust mobile air quality monitoring unit, a tool used frequently by the department throughout the state of Colorado.

The partnership would leverage CDPHE’s expertise in air quality sampling to provide updates on air monitoring activity with the intent of the City of Broomfield to provide this information to the public.

Though some claim that regulators don’t do enough when it comes to monitoring oil and gas activity, CDPHE’s track record shows just the opposite.

Read the full blog post on EIDHealth.org.

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Source: Energy In Depth

EIA: U.S. Oil Production Can Surpass Russia and Saudi Arabia Next Year

The United States will see domestic crude oil production rise to 11.8 million barrels per day (b/d) in 2019, according to the latest forecast from the Energy Information Administration (EIA). Overall, that would likely surpass leading global producers Saudi Arabia and Russia, who recorded average production levels of 10.5 and 10.1 million b/d, respectively, in 2017 according to EIA data. The forecast also noted that U.S. oil production hit 10.9 million b/d in June 2018, an all-time high.

While the Saudis have claimed to have an additional 2 million b/d of spare production capacity, several market analysts have raised doubts about whether or not the country can actually realistically add so much production into service over the course of the next year and a half. As one commodities analyst put it, “You cannot order 2 million barrels like order a coffee somewhere.”

That may be true in just about all places – except the U.S. shale patch, where development times for bringing new hydraulically fractured wells into production are as short as a month. Still not as fast as a cup of joe, but pretty darn close. With American drillers adding new production at a breakneck pace in fields across the country, the EIA’s assessment that the USA will see production rise to 11.8 million b/d is, effectively, a forecast of 2.5 million barrels being added since 2017, when we averaged 9.3 million b/d. EIA expects the U.S. to surpass the 12 mb/d threshold in the fourth quarter of 2019.

This rising production is yielding direct benefits for Americans. In the same forecast, the EIA assessed that gasoline prices have already peaked for the year, as increasing production will cause prices to decline for the rest of 2018, averaging $2.76 per gallon for the year. Furthermore, the EIA expects the continued increase in production to stabilize prices for drivers in 2019, estimating the average price of gasoline next year will be $2.77.

One of the biggest benefits of all that additional production will be a new level of energy security for our country. Long gone (but well remembered) are the days of near-total dependence on foreign supplied oil. The EIA estimates that total imports of crude oil “will fall from an annual average of 3.7 million b/d in 2017 to an average of 2.4 million b/d in 2018 and to an average of 1.6 million b/d in 2019, which would be the lowest level of net imports since 1958.”

That is an astounding accomplishment for the country, to finally be removing the economic shackles imposed by OPEC in prior decades. While the bloc is still an important factor for markets to consider, its vice-grip on the global energy industry has been broken by shale. American oil export growth is continuing this year, further countering OPEC. The United States began shipping a record 3 million b/d of crude at the end of last month, amounting to over a quarter of all U.S. oil production. “The U.S. in theory, by the early 2020s, assuming the shales retain their resilience, could be a net oil and oil product exporter. That’s incredible, actually,” Steven Kopits, managing director of Princeton Energy Advisors, told U.S. News & World Report, commenting on the EIA forecast.

Not only has the U.S. seen its oil production and exports rise, but exports of liquefied natural gas (LNG) are surging thanks to shale, vastly improving the country’s trade balance. In 2017, America was a net exporter of natural gas for the first time in 60 years, and the EIA only expects that trade surplus to grow as new export terminals become operational. The LNG export industry also provides plenty of economic benefits, such as an estimated creation of 450,000 jobs by 2040 and bolstering GDP. Some research has also pointed to climate benefits of expanded LNG trade, as natural gas exports can replace the use of dirtier fuels like coal among importing countries.

Overall, the latest EIA assessment is yet another strong indication that shale oil and gas will continue to improve the welfare of Americans far and wide. The industry’s pioneering efforts to use hydraulic fracturing and horizonal drilling techniques will sustain job growth, affordable energy, and improve economic conditions for all Americans over the next several years and beyond. By becoming the world’s leading provider of oil and gas, ahead of historically leading producers like Russia and Saudi Arabia, American trading partners worldwide can expect energy supplies to remain affordable, stable and abundant for decades to come.

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Source: Energy In Depth