Downstream - An Eastern Shift

For the downstream oil industry, earth is rotating clockwise, as according to Vienna-based consultancy, JBC Energy, refiners in Europe, N. America may shut 11% capacity by 2013, followed by 19% of capacity taken off-stream by 2020.

On the other hand OPEC Secretary General Salem El-Badri said in the latest OPEC Bulletin, "Over the next decade, members were expected to invest around $40 billion in refining capacity expansion". He added that in 2009, around 30 projects came on-stream in OPEC member countries, resulting in an increase of 1.5 million barrels a day in net crude and liquids capacity. Furthermore, over the next five years 140 projects are expected to be completed and this will add about 12 million barrels a day of gross crude and liquids capacity. "This represents a huge level of investment, estimated at $160 billion. However, it should be enough to satisfy growing demand for OPEC crude, as well as provide a comfortable cushion of capacity, which already exceeds 6 million barrels a day," El-Badri said.

Besides, the two Asian countries, China and India, have considerably expanded their share in the downstream pipe.

The shift is real and certain in otherwise misty global economic climate.

Wind but Yawn

Despite Danielle threatening to strengthen into a hurricane, oil is looking weak. The current rally in world markets is losing steam in absence of any real trigger.

Hydrogen seeks divorce

Singularity has once again come to the rescue of humanity as hydrogen breaks free from carbon and oxygen to yield clean energy in it's stag form.

Our present system, which is unfortunately highly inefficient and energy consuming, has put a question mark on survival of the mankind because of it's dependence on diminishing and polluting energy resources. Man is now desperately searching for alternate resources of clean renewable energy. Most unpublicised out of them is hydrogen. Though the process to separate this active element is energy consuming, but with development of nano technology for solar panelling and fuel cells, which use hydrogen to generate electricity, it looks a reality more than just a pipe dream that we may finally be able to harness inexhaustible sources of clean energy such as sun and wind.

It is believed that in coming years, hydrogen will quickly replace hydrocarbons as the major source of energy after the development of required infrastructure and distribution system. However, oil prices are holding the key at the moment. But just an eventuality, it would be.

Notwithstanding, the advent of this clean resource and India's absolute dependence on imported crude, India's current obsession with the petroleum refineries is something beyond my comprehension. We need to invest in and develop alternate resources as a line of defence against any shock and awe attack by OPEC.

Whatever, it is rather strange and comical that man has gotten himself in a very complex and complicated system to fulfil his basic needs. It is like doing day long absurd routine of acrobatics just to pick a fallen apple from the ground in the end.

A hole that was not to be - Oil RIP

The infamous leaking oil well off Louisiana, which drilled a big hole in BP's pocket, will soon be resting in peace as BP is all set to pump mud in the well. The 'static kill' will be deployed today to close the most expensive oil well ever drilled forever. With this BP would heave a sigh of relief ahead of yet another hurricane formation on the 'deep sea horizon'.

Life on Gulf beaches will bounce back to normal and business as usual, but scar will remain and haunt offshore drilling industry forever. We just learnt a lesson the hard way.