The Straits Times/28 August 2017
WASHINGTON (NYTIMES) – Two deadly collisions between high-tech destroyers and easy-to-spot, slow-moving cargo ships in a little over two months have stunned many in the US Navy and sent top leaders scrambling for answers.
But shipboard veterans had long seen signs of trouble. Factor in a shrinking navy performing the same duties as a larger fleet did a decade ago, constant deployments that leave little time to train and relentless duties that require sailors driving 9,000-tonne vessels to endure sleepless stretches that would be illegal for bus drivers and avoidable accidents can happen, current and former officers said.
“What seems impossible – that two ships could hit in the middle of the ocean – becomes very real,” said Robert McFall, a former navy lieutenant commander who served as the operations officer of the destroyer USS Fitzgerald in 2014. “If you are not at your best, events can start that lead to a disaster.”
Since the loss of 17 sailors after the Fitzgerald collided with a freighter near Tokyo in June, and a second destroyer, the USS John S. McCain, collided with a tanker on Aug 21 while approaching Singapore, navy investigators have been piecing together the causes of the fatal crashes. Congress has scheduled hearings next month that will include top commanders and safety auditors.
Officers said the accidents were almost certainly influenced by systemic problems that persist despite repeated alarms from congressional watchdogs and the navy’s own experts.
In interviews, more than a dozen current and former ship commanders who served in the western Pacific said the strain on the navy’s fleet there had caused maintenance gaps and training shortfalls that had not been remedied or had received only cursory attention as leaders focused on immediate missions.
Compounding the stress, the officers and crew said, the navy allows ships to rely on grueling watch schedules that leave captains and crews exhausted, even though the service ordered submarines to abandon similar schedules two years ago.
The navy recognises that safety problems may go beyond what occurred on the two destroyers, and its examination of whether systemic issues contributed to the accidents will also review ship operations and episodes at sea over the past decade, with a focus on the western Pacific.
The Straits Times/28 August 2017
HOUSTON (BLOOMBERG) – Hurricane Harvey’s lashing across southern Texas is turning into an economic catastrophe – with the damage likely to stretch into tens of billions of dollars and an unusually large share of victims lacking adequate insurance, according to early estimates.
Harvey’s cost could mount to US$24 billion (S$33 billion) when including the impact of relentless flooding on the labour force, power grid, transportation and other elements that support the region’s energy sector, said Chuck Watson, a disaster modeller with Enki Research.
That would place it among the top eight hurricanes to ever strike the US.
“A historic event is currently unfolding in Texas,” Aon Plc wrote in an alert to clients. “It will take weeks until the full scope and magnitude of the damage is realised,” and already it’s clear that “an abnormally high portion of economic damage caused by flooding will not be covered,” the insurance broker said.
Many forecasters were hesitant over the weekend to make preliminary estimates for how much insurers might pay, potentially speeding recovery. Researchers were shifting from examining Harvey’s landfall Friday as a roof-lifting category 4 hurricane to the havoc it later created inland as a tropical storm.
Typical insurance policies cover wind but not flooding, which often proves costlier. Blaming one or the other takes time.
In the Houston area, rainfall already has surpassed that of tropical storm Allison in 2001, which wreaked roughly US$12 billion of damage in current dollars. In that case, only about US$5 billion was covered by insurance, according to Aon.
Those storms are dwarfed by Hurricane Katrina, which struck in 2005 and devastated New Orleans. By some estimates, it inflicted US$160 billion in total economic damage.
Most people with flood insurance buy policies backed by the federal government’s National Flood Insurance Program. As of April, less than one-sixth of homes in Houston’s Harris County had federal coverage, according to Aon. That would leave more than one million homes unprotected in the county. Coverage rates are similar in neighbouring areas. Many cars also will be totalled.
“A lot of these people are going to be in very serious financial situations,” said Loretta Worters, a spokesman for the Insurance Information Institute. “Most people who are living in these areas do not have flood insurance. They may be able to collect some grants from the government, but there are not a lot, usually they’re very limited. There are no-interest to low-interest loans, but you have to pay them back.”
The federal program itself is already struggling with US$25 billion of debt. The existing program is set to expire on Sept 30 and is up for review in Congress, which ends its recess Sept 5. Investors Brace Costs still will likely soar for insurance companies and their reinsurers, biting into earnings.
As Harvey bore down on the coastline last Friday, William Blair & Co., a securities firm that tracks the industry, said the storm could theoretically inflict US$25 billion of insured losses if it landed as a “large category 3 hurricane.”
Policyholder-owned State Farm Mutual Automobile Insurance Co. has the largest share in the market for home coverage in Texas, followed by Allstate Corp., which is publicly traded. William Blair estimated that, in that scenario, Allstate could incur US$500 million of pretax catastrophe losses, shaving 89 cents off of earnings per share.
Investors began bracing for losses last week. But many didn’t believe that Harvey could wipe out bonds that were issued to protect insurers against storm damage in the region, according to Brett Houghton, a managing principal at Fermat Capital Management. His firm manages more than US$5 billion, with allocations to catastrophe bonds.
The Swiss Re Cat Bond Price Return Index dropped 0.44 per cent in the week ended Aug 25, the steepest decline since January. The benchmark is recalculated every Friday, so it’s unclear how the debt performed as the storm continued through Sunday.
Reinsurers, which provide a backstop for primary carriers, also may get burnt. That group include Bermuda-based companies Arch Capital Group Ltd., Axis Capital Holdings Ltd. and RenaissanceRe Holdings Ltd., according to a note last week from Meyer Shields, an analyst at Keefe, Bruyette & Woods.
Businesses are probably better covered than individuals. Companies across the retailing, manufacturing, healthcare and hospitality industries will be seeking reimbursements from insurers for lost revenue during the storm and subsequent repairs, said Aon’s Jill Dalton, who helps manage claims.
But for Texas’s massive energy industry, it’s still too early to project how badly the storm will disrupt supply and distribution. That’s because the devastation keeps spreading.
“If it continues to rain, I just don’t think the situation is going to get better any time soon,” said Rick Miller, who leads Aon’s US property practice. “In fact, it could get a lot worse.”
The Guardian/28 August 2017
A new essay prize has been set up in the name of Dr Gill Owen, the energy efficiency expert and social equity campaigner who died last year.
Supported by the Guardian Australia and University of Technology Sydney’s Institute of Sustainable Futures, the essay prize will address the future of energy efficiency and social justice. The winning essay will receive $3,000, while two runner up essays will each be awarded $1,000.
In a statement Prof Stuart White, director of the Institute for Sustainable Futures said: “Gill made an important contribution to the empowerment of the disadvantaged, and highlighted the often overlooked importance of improving energy efficiency. This essay prize is about recognising Gill, but equally it provides an opportunity to build on her legacy.
“Social equity and energy efficiency are important issues in their own right, but they are also essential elements in a successful transition to a sustainable and fair energy system.
Throughout her career Owen, who worked in Australia and the UK, helped bring the voice of the consumer and the disadvantaged to the energy policy debate.
As a researcher and consultant, she advised government and regulators on energy efficiency, fuel poverty, economic regulation and sustainability in energy and water, smart meters, distributed energy and demand response.
In the UK, she was the founding chief officer of National Energy Action, and went on to become the deputy chair of the UK government’s Fuel Poverty Advisory Group. She worked closely with environmental think tank Sustainability First for 15 years, and she was also on the board of UK’s Office of Gas and Electricity Markets (Ofgem) and Water Services Regulation Authority (Ofwat).
Former deputy Victorian premier Prof John Thwaites worked with Owen when he was minister for environment and climate change. He says the introduction of the Victorian energy efficiency target in 2007 was due in part to advice from Owen and David Green, her husband and the former CEO of the Australian Clean Energy Council, based on the UK experience of energy efficiency programs for households.
When Owen moved to Australia, she took up a senior role at Monash University’s Sustainable Development Institute alongside Thwaites, working on projects looking at the impact of electricity and energy on low income households. “I always found Gill to be a really wise counsellor on energy efficiency and the impact of the electricity prices on households,” said Thwaites.
He said Owen, who died in August 2016, had a far reaching impact on energy policy in Australia and the UK. “Her great achievement was over many years to highlight the importance of energy affordability and energy efficiency for low income households and to use robust research to back energy efficiency programs that targeted low income households.”
Owen was also a senior member of the Consumer Challenge panel within the Australian Energy Regulator, set up by former prime minister Julia Gillard to tackle the cost of power networks in Australia.
Uniting Communities energy advocate Mark Henley worked with Owen on the panel.“[The business people] were arguing that we need to invest more here and more there and it will be the consumers who will be better in the future. Gill would say ‘Yes it’s always been ‘jam tomorrow’ for consumers. Tomorrow never comes but it’s always ‘jam tomorrow’.”
Henley said: “There was a twinkle in her eye when she said it but it did capture the way so many businesses behaved, of promising the world but it’s in the future.”
The required themes for the essay are social equity and energy efficiency. Owen encouraged emerging voices to take part in the discussion around social equity and energy efficiency. In that spirit the prize is open to authors aged 35 and younger. It will be open for entries until 10 November 2017.
The essays should be between 700 and 1,500 words long. Subject to editorial guidelines, the Guardian Australia will publish the winning essay once the awards are announced. Entries can be submitted through the UTS Institute of Sustainable Futures website.
The Gill Owen essay prize is also supported by AGL, Uniting Communities and the Association for Environmental and Energy Equity.
News Source: The Guardian
Read MoreThe Guardian/27 August 2017
Australia’s renewable energy sector is within striking distance of matching national household power consumption, cranking out enough electricity to run 70% of homes last financial year, new figures show.
The first Australian Renewable Energy Index, produced by Green Energy Markets, finds the sector will generate enough power to run 90% of homes once wind and solar projects under construction in 2016-17 are completed.
The index, funded by GetUp through supporter donations, underlines the advance of renewables, despite Australia’s electricity markets still leaning heavily on carbon-emitting coal and gas-fired generation.
Renewables, which made up just 7% of national electricity output a decade ago, accounted for 17.2% last financial year. This jumped to 18.8% last month.
This is saving the power sector from carbon pollution equivalent to taking more than half of all cars in Australia off the road, according to Green Energy Markets.
The biggest single source of renewable power remained hydro-electricity (40%), followed by wind (31%) and rooftop solar (18%), the index found.
Less than 2% came from large solar farms, suggesting the best is yet to come from this arm of the renewables industry which has an array of large-scale projects underway.
Green Energy Markets analyst Tristan Edis said the emergence of renewables, in particular wind and solar, as a “significant source of power” had ushered in a “construction jobs and investment boom”.
“The renewable energy sector has staged a remarkable recovery, after investment completely dried-up under former prime minister Tony Abbott,” Edis said.
He said investors had “recovered their confidence under Malcolm Turnbull”, with help also from “a range of state government initiatives”.
Edis said the renewables sector was on track to meet the federal government’s renewable energy target of 20% of total generation by 2020 over a year early, by the end of 2018.
However, the renewable jobs boom underpinned by the RET could “soon turn to bust”, he said.
Renewable investment beyond the RET risked collapsing without the Turnbull government moving forward on chief scientist Alan Finkel’s recommendation for a future “clean energy target”, he said.
At least 46 large-scale energy projects under construction by the end of June were providing enough work to employ 8,868 people full-time for a year. This figure had surged to 10,000 by July. Most jobs were in NSW (3,018), thanks largely to wind farms, while Queensland (2,625) was next, with 70% of its jobs coming from solar farms.
Rooftop solar installations supported a further 3,769 full-time jobs across Australia in 2016-17.
With most projects underway in Queensland, large solar farms still generated less than 2% of renewable energy in 2016-17, the index found.
Generation from rooftop solar, which was “back in 2008 little more than a rounding error”, had “grown spectacularly”, Edis said.
More than 150,000 systems installed in the last year alone would produce enough energy for 226,000 homes, he said.
“Meanwhile these solar systems will also save consumers $1.5 billion off their electricity bills over the next 10 years.”
Miriam Lyons, GetUp’s energy campaigns director, said that “everyday Australians are voting with their rooftops” in a move that “heralds the end of the era of big polluting energy companies dominating the market and manipulating prices to fill their own pockets”.
“Who do we have to thank for the renewables boom? Certainly not the federal government,” she said.
“Instead we can thank the thousands of everyday Australians who stood up and defended the national [RET] from Tony Abbott’s attacks, who saved [the Australian Renewable Energy Agency] from federal government budget cuts, and who pushed their state governments into showing some leadership on clean energy.”
The Australian Renewable Energy Index will be published monthly.
News Source: The Guardian
Read MoreSingapore Business Review/25 August 2017
The power systems will generate 6.2 GW of solar energy per year.
Solar energy firm Sunseap announced that it has sealed the deal with ST Engineering land systems arm ST Kinetics for a 25-year solar power purchase agreement.
According to a press release, Sunseap will provide solar energy to five ST Kinetics locations via solar panels.
Sunseap expects its 5 MWp solar PV system to be ready by October.
Once completed, it can generate up to 6.2 GW of solar energy per year. Consequently, this will help ST Kinetics reduce its carbon footprint by about 2,633 tons annually, the equivalent of planting 67,523 trees over 10 years.
Sunseap founder and director Lawrence Wu said, “It’s heartening to see leading companies like ST Kinetics making a long-term commitment towards renewable energy solutions. We hope their sustainability efforts will help send the message that going green is not a choice but a necessary condition for successful business.”
In the past, Sunseap has provided energy solutions for firms like Apple, Housing Development Board, and Panasonic.
News Source: Singapore Business Review
Read MoreSingapore Business Review/25 August 2017
All clusters posted positive growths in the said month.
Singapore’s manufacturing output saw a 21% expansion in July, thanks to the robust growth seen in all clusters.
The electronics cluster’s output increased 49.1% in July 2017, compared to the same month last year.
At the same time, the output of the precision engineering cluster grew 21.8% year-on-year in July 2017.
Meanwhile, the biomedical manufacturing cluster’s output grew 5.0% in July 2017 compared to a year ago.
For general manufacturing industries cluster, output increased 4.9% whilst the chemical cluster posted a 4.8% growth.
The transport engineering cluster’s output also increased, up 2.3% in July.
News Source: Singapore Business Review
Read MoreHR in Asia/25 August 2017
Majority of finance leaders in Hong Kong said that automation will not cause loss of jobs, but rather a shift in the skills required to be a financial professionals, recent survey found.
According to the study conducted by recruitment consultancy Robert Half, almost three quarters (72 percent) executives agreed that the coming of robot to the workplace would not mean fewer jobs for talents. Instead of seeing automation as the replacement of talents, they said expected their employees to adapt to the new technology and upgrade their skillsets.
The survey involved 100 chief financial officers and financial directors at firms across industries, such as business services, marketing, and logistics. The respondents were asked about their opinions on how automation might affect the workforce, as well as how they expect their staff to react.
Managing director of Robert Half Hong Kong Adam Johnston stated that rather than simply handing over all the control to the robots, finance professionals should actively prepare themselves with necessary skills to leverage the capabilities of automation.
“Using more advanced technology in the workplace requires additional, well-developed skills, such as advanced data analysis, interpretation skills, and decision-making skills,” he added.
The study noted that 54 percent corporate financial managers expected the employees to develop their problem-solving skills in respect to the automation. 53 percent said that staff should be able to demonstrate their strategic vision for the company, while 34 percent wanted the workers to adapt, and 33 percent focused on the talent’s communication skills.
Along with the advancement of science and technology, automative solutions are introduced and adopted in the corporate world. From algorithm that helps accountants with manual calculations and tax filings, to self-checkout machines at supermarkets and department stores, automation technology is projected to reinforce Hong Kong’s status as finance and trade centre in bay area plan.
The survey also showed 55 per cent of financial bosses believed automation could bring them better decision-making capabilities; 50 per cent thought it would free up employees to take on more value-added work; and 49 per cent said they foresaw increased efficiency and productivity.
“Contrary to many perceptions about the potential dangers of automation, the benefits of new technologies are attainable for companies who embrace workplace automation rather than resist it,” Mr Johnston said.
He added that while automation might diminish some routine manual roles, it would lead to faster decision making, reduce the risk of human errors, while eliminating stresses associated with laborious task-management responsibilities.
The poll also found that 51 percent financial bosses were optimistic that their employees could learn new skills more quickly by embracing automation. However, despite the prospect, 69 percent admitted that their companies still had “a long way to go” in adapting to the transformation, .
“Change is happening and companies need to adapt to an increasingly automated workforce – though there’s still a long way to go,” Johnston said. “It will be an ongoing process for companies to fully adapt to change, and Hong Kong organisations understand they need to refocus the workforce to truly realise the benefits of combining the right human skills with new technology.”
Lancy Chui, senior vice-president for Greater China at human resources firm ManpowerGroup, stated that giant companies were more inclined to embrace automation than the small ones because it took money to invest in it, South China Morning Post reports.
“Once the implementation has started, companies realise the investment is worth it,” Chui said. “It doesn’t mean companies don’t need any staff anymore, because you still need people to check that the analysis is correct.”
News Source: HR in Asia
Read MoreRigzone/25 August 2017
Aug 25 (Reuters) – U.S. energy firms cut oil rigs for a second week in a row ahead of Hurricane Harvey and as a more than year-long recovery in drilling slows down in reaction to soft crude prices.
Drillers cut four oil rigs in the week to Aug. 25, bringing the total count down to 759, General Electric Co’s Baker Hughes energy services firm said in its report on Friday.
That compares with 406 active oil rigs during the same week a year ago. Drillers have added rigs in 56 of the past 65 weeks since the start of June 2016.
The rig count is an early indicator of future output.
Refineries, terminals, production platforms and other infrastructure have begun shutdown procedures with Hurricane Harvey set to make landfall on the central Texas coast on Friday night or early on Saturday as a Category 3 hurricane, potentially the biggest storm to hit the mainland United States in 12 years.
Harvey could also bring flooding to inland shale oil fields in southern Texas that produce more than 1 million barrels of oil per day.
EOG Resources Inc on Thursday said it has curtailed drilling and shut in some production in the Eagle Ford shale region. Noble Energy Inc and Statoil ASA also said it was evacuating some staff from production facilities in the region.
U.S. crude futures were up 22 cents, or 0.5 percent, at $47.64 a barrel as the Gulf Coast energy hub braced for the hurricane but were down for the week as the market has been under pressure from rising U.S. production. U.S. production is expected to rise to 9.4 million barrels per day (bpd) in 2017 and a record 9.9 million bpd in 2018 from 8.9 million bpd in 2016, according to federal projections.
BHP Billiton, the world’s largest miner, said on Tuesday it would exit its underperforming U.S. shale oil and gas business it acquired at the height of the oil boom.
News Source: Rigzone
Read MoreRigzone/24 August 2017
(Bloomberg) — The good news for U.S. producers: the chief executive officer of Europe’s second-biggest oil and gas company thinks American shale assets are “quite expensive” following a recovery in the price of crude. The bad news: they’re growing more affordable.
Assets tied to shale producers, particularly those in America’s most-coveted oil field, have fallen this August thanks to concerns about oversupply that have emerged as the firms announced second-quarter results. The anxiety is evident across stocks, bonds and in the words and actions of major energy players who now say they’re eschewing the once-popular sector.
Total SA CEO Patrick Pouyanne is not alone in the comments he made earlier this week after announcing a North Sea oil acquisition. BHP Billiton Ltd. followed up up by saying the time was right to look at unloading its U.S. shale properties, a plan which would put almost a million acres of oil and natural gas fields on the market.
“This decision will resonate in all other quarters of the shale industry,” Fabio Scacciavillani, chief economist at the Oman Investment Fund, said in a Bloomberg TV interview. “It certainly will resonate on Wall Street, which has just been providing a lot of financial resources for these dependent shale oil and shale gas companies.”
The worries are most evident in the stock prices of some major Permian-players. The worries are most evident in the stock prices of some major Permian-players. Shares of Pioneer Natural Resources Co., Range Resources Corp., Newfield Exploration Co., and EOG Resources Inc. tumbled this month as investors appeared to lose faith in what was once America’s most prolific basin. The stock of pipeline-owner DCP Midstream LP followed a similar path after its CEO warned of a glut in supply.
“We love the Permian,” CEO Wouter van Kempen said on a call with analysts. “But we’ve seen a similar playbook in the past in many, many areas around the country including not too long ago the Eagle Ford where the industry is now sitting on a lot of excess processing capacity.”
Meanwhile, debt sold by energy firms with weaker balance sheets has underperformed slightly this month, with risk premiums on the Bloomberg Barclays index of high-yield energy ticking up by 42 basis points versus a 36-basis-point rise in the broader high-yield index.
The “shale industry has certainly some sweet spots as they call them but it has also a lot of places where extraction is not economically viable,” said Scacciavillani. “That, as we go ahead, will put a certain strain on the shalers and we’re going to see retrenchment in production.”
News Source: Rigzone
Read MoreRigzone/24 August 2017
Electric vehicles (EV) constitute a very small share of all cars on the road worldwide. According to the International Energy Agency (IEA), the total number of EVs hit 2 million in 2016. Compare that to the nearly 1.3 billion figure of all vehicles worldwide, according to 2015 figures from the International Association of Motor Vehicle Manufacturers, and it’s clear that EVs do not currently represent a personal transport juggernaut.
EV penetration in the global vehicle fleet could be considerably greater less than 20 years from now, however. A recent study by Wood Mackenzie and GTM Research predicts that more than one in five vehicles worldwide – or more than 350 million units – could be powered by electricity rather than the internal combustion engine. The study’s authors foresee such a sharp EV growth trajectory under what they call a “carbon-constrained scenario.”
“The carbon-constrained scenario accelerates and extends the impact of EVs, renewables and energy efficiency,” Paul McConnell, Wood Mackenzie’s research director for global trends, explained to Rigzone. “It builds an increased role for energy storage technologies, and provides access to decarbonized electricity for millions across the developing world. It posits a world in which the energy industry, policymakers and the general public are focused on minimizing the environmental impacts of their behavior. Accelerated decarbonization and lower consumption are embedded in this scenario.”
No Small Feat, But…
Achieving a point where EVs make up more than 20 percent of the world’s vehicle fleet would represent a significant milestone, but McConnell cautions that EV uptake faces some formidable obstacles. When asked what the biggest “ifs” are for EVs to become more widely accepted, he ticked off the following list:
- Battery prices will need to fall fast enough so that sticker prices reach parity with internal combustion engine-powered vehicles
- Charging infrastructure will need to be rolled out so that drivers can charge their EVs when and where they want
- The battery supply chain must “ramp up enormously,” and it needs to incorporate battery recycling
A common criticism of initiatives to boost the acceptance of EVs and renewable energy has been that they need government support to gain traction in the market. (Consider the U.S. mandate that almost all gasoline sold at retail outlets contain ethanol, federal EV tax incentives and various measures in Europe.) Although he envisions an ongoing government role for providing market frameworks to expand decarbonization, McConnell said the “critical factor in the carbon-constrained scenario” is that the technology will need to mature. In other words, EV and renewable technologies will need to stand on their own proverbial two feet.
“Here we see a world where low- or no-carbon technologies are increasingly able to compete on an economic basis,” McConnell said. “Decarbonization begins to happen in spite of policymakers, not because of them. This is a really significant change from where we were 20 years ago, when policies like the Kyoto Protocol were being developed.”
Aside from any advances in EV technology, auto manufacturers will need to offer products that people actually want to buy – without benefit of government subsidies.
“EVs need to prove themselves to the consumer to take off,” McConnell continued. “This means they need to be a good or better substitute for existing vehicle offerings – and right across vehicle segments. If manufacturers struggle to make a true mass-market EV then sales will not take off.”
Are any companies actually making strides toward the “true mass-market EV” goal? Yes, said McConnell.
“There are a number of Chinese manufacturers who are aiming at exactly that segment of the market,” he noted. “If sticker prices of EVs approach parity with internal combustion cars, they will be pretty attractive to consumers because the running costs are so much lower.”
What Could This Mean for Oil And Gas?
If these various factors actually do pan out, McConnell said that some within the oil and gas industry could still see some upside even with a wholesale – albeit gradual – shift toward renewables.
“It’s a difficult scenario, certainly, but it’s not all bad news,” noted McConnell. “Hydrocarbons – including coal – still meet 75 percent of global energy demand in 2035 in this scenario. It’s a very negative story for coal, but that decline is offset by growth for natural gas demand. Oil peaks and then declines, but demand only falls back to about where it is today – there’s still going to be a big market to satisfy.”
McConnell also expects cost pressures to be “inescapable” for oil and gas players in a carbon-constrained world.
“Those at the bottom of the cost curve will be highly advantaged,” he concluded. “Those with a high balance of gas in the portfolio should also do well through the medium term, but if renewables really surprise to the upside some of that demand growth could be at risk, too. Watching the development of energy storage technologies is really critical here.”
News Source: Rigzone
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