F1 boffin’s turbine is a thing of beauty – whatever the weather! May 05 2015

David Derbyshire – The Sunday Times (30/3/14)

A decade ago Michael Blaize was devising ways to make gas-guzzling Formula One cars go faster. Now the engineer is the brains behind a slimline wind turbine that could usher in a new era of low-carbon public transport.

His invention, an elegant structure in curved carbon fibre that resembles the double helix of DNA (see image below), is billed as the most advanced vertical axis turbine in the world. Revolutionary – excuse the pun!

“The design is smaller, quieter and easier to maintain and less offensive to the eye than traditional wind turbines” Blaize claims.

A full-sized prototype is being put into production soon and within two years five test turbines should be up and running. If all goes to plan then thousands of them could be installed alongside railways in an attempt to generate 70% of the network’s electricity needs!

Vertical-axis turbines, in contrast to regular conventional wind turbines, can spin no matter which way the wind blows making them ideal in places that wind is changeable. With a much smaller footprint they can be installed more densely and their simpler design makes repair and maintenance much cheaper.

It has two spiral blades, arranged in a double helix, and can generate electricity for 13 homes. It is 19 metres tall and sits on a 30 metre mast, making it as high as an electricity pylon. It spins at up to 60 revolutions a minute, starts with wind speeds of 8mph and stops at 56mph. Blaize’s prototype – XW-80, was created to bridge the gap between small-scale vertical axis turbines generating 10kW or so and the giant horizontal axis 10MW machines used in commercial wind farms. Tests on a smaller 6kW model installed on the Isle of Wight last year showed it performed comparably to traditional horizontal axis turbines but at lower wind speeds and closer to the ground.

Blaize claims that “The design could help to get around some of the objections of the anti-turbine lobby. It provides clean energy but with a much lower visual impact and its smaller scale is more appealing to look at.” This, along with it being quieter and easier to maintain makes it ideal for sites with restricted access or limited space.

His long term goal is to have 12,000 turbines installed along Britain’s railways. Network Rail are very interested in getting involved in the two year project to develop these turbines. An initial investment of £1.5bn could save them around £3.8bn in energy over 30 years. He is targeting the end of March 2015 as the date by which two turbines should be in operation.

Britain is in the middle of an extraordinary boom. During the month of February, wind farms generated a record 11% of the country’s electricity, 2.7GW - which is enough to power 6.5m homes. Concerns over the gas supply from Russia have focused our attentions on the instability of imports. We need a stable domestic energy sector. David Milborrow, technical adviser to Renewable UK and a wind-power expert stated “X-Wind Power have clearly solved some of the problems that have hampered previous designs and if they point to performance results from its 6kW turbine, it will be in a strong position.”

Note: Another company capatalising on Formula 1 technology, namely the scientists from the team that invented the Blown Diffuser on the Brawn Formula 1 car (now the Mercedes team) have also established a new technology company which claims to be able to generate increased output at low wind speeds - see Anakata Wind Power Resources for details.

Emergency Tax Cut Needed to Rescue North Sea Oil January 14 2015

Based on an article by Danny Forston: The Sunday Times – 11/01/15

The oil price collapse in December 2014 has led to a sharp drop in North Sea drilling and a flurry of job and pay cuts.  The industry employs 375,000 people and is one of the biggest contributors to the exchequer - remember the Independence for Scotland debate?

Production last year averaged just 1.2m barrels a day - a 75% drop from the 1999 high.  Companies say one of the biggest challenges facing small or depleted oil fields is the tax take, which can still run to 80% for old fields. The basic levy is 60%.  Further, the cost base for exploration and production has soared out of control.  After decades of production, only small and, at these prices, barely economic fields are left.

A supplementary corporation tax charge was introduced in 2002 by Gordon Brown.  Osborne lopped 2% from the basic rate in the autumn statement but the industry says this is not enough.  The proposals under discussion include removing the supplementary tax altogether for new developments, and creating a simpler regime to replace the jumble of allowances and tax breaks that govern North Sea work.

Burgate, a little oil company run by a trained geophysicist Tim Boycott-Brown, was among the 60 or so companies the government chose, in November 2014, to receive exploration and development permits in the North Sea.  It came at a critical juncture.  North Sea production had fallen to a low of 1.2m barrels a day, down more than three-quarters on its 1999 high.  Exploration has slowed to levels not seen since the industry's founding.  The exchequer's take was at a 10 year low, and that was before the oil price collapsed.  Its drop from $114 a barrel in July 2014 to $49 in January 2015 has thrown the industry into chaos.

Big Oil has largely abandoned the North Sea.  Most of the companies handed new licences in the recent round do not have the expertise, money or even the intention to develop their acreages.  That is because most of them were handed "promote" licences.  These were introduced in 2003 to open up the industry to smaller players which lack the financial clout to develop a prospect, but are willing to expend the effort to find those geological gems that Big Oil has missed.

Of the 130 or so publicly traded oil companies, 55 have no reserves on their books.  Their bosses are just like Boycott-Brown: big plans but no cash to back them up and the future of the North Sea lies in the hands of companies such as these.

Big Oil has steadily sold out in recent years as its focus shifts to new basins that offer bigger returns and larger reservoirs, from east Africa to offshore Brazil.

The huge rise in government tax-take has whittled away profits.  Gordon Brown introduced the supplementary corporation tax on the North Sea in 2002.  It was increased twice thereafter before Osborne introduced a 2% reduction last year, taking the basic rate back to 60% - still three times that levied on other industries.  The chancellor said this week that the budget in March "may well involve further reducing the burden of tax on investment in the North Sea."  That will only help so much.

Even though oil has more than halved in price, average earnings estimates have fallen by 25%, cashflow estimates have fallen 12% and the stocks have fallen 20% on average.  If today's crude prices persist, these numbers will trend towards 50%, 22% and 50% respectively.

It has been years since any North Sea explorer found a big new field.  Anthony Lobo, head of oil and gas at KPMG, said: "The question is whether they take their losses and sell out now, or wait and hope for an increase in the oil price or improved exploration success - neither seem likely in the short term".

Could this be the time that the gloomsters are finally right? Probably not.  There are possibly still billions of barrels to be recovered, money to be made, tax to be collected.  And oil represents one of the last bastions of Britain's shrinking industrial base, one that fosters skills which are exportable around the world.  However, to squeeze out those last drops will require the Treasury to do some painful tax gymnastics, and sub-contractors to lower their charges.

'The price of crude will stay in the doldrums for the forseeable future' January 08 2015

Articles from The Sunday Times - 28/12/14 & 01/03/15

Last week Ali al-Naimi, Saudi Arabia's oil minister, gave the strongest indication yet that the price of crude will stay in the doldrums for the forseeable future.  Speaking on behalf of Opec, the cartel of oil-producing nations that accounts for a third of the world's output, he said: "It is not in the interest of Opec producers to cut their production, whatever the price is.  Whether it goes down to $20, $40, $50, $60, it is irrelevant". 

The fall is the result of a confluence of factors.  One is the slowing down in China.  For the past decade the world's most populous country was the main source of demand growth.  It's economy has finally started to cool.  At the same time the shale revolution in America has brought new supplies on a scale few foresaw. 

For the first time in years, supply is outstripping demand.  American production has accounted for virtually all of the increase (outside of Opec) over the past four years.

Saudi Arabia's strategy appears to be to choke off the newcomers by letting the price stay low.  Riyadh is estimated to need oil at $95 to balance its national budget but has enough cash reserves to see it through for a while.  And on a per-barrel basis, nobody can compete.

By virtue of the sheer size of its reservoirs and the fact that they are on land, Saudi crude costs as little as $2 a barrel to pump out of the ground.  Some of America's frackers, on the other hand, need crude near $70 to break even.  Nearly all of them struggle to make money at $50.

That's because fracking, the process of blasting underground rock formations with high pressure water, chemicals and sand to free the fuel locked inside, is expensive.  To maintain production, new wells need to be sunk constantly because the formations drain quickly once they have been tapped.

Of the world's 3,000 drilling rigs, nearly half - 1,450, according to research from Canaccord Genuity - are operating in America.  However, hundreds have already been pulled out of action.  About two thirds of the oil rigs in Texas are expected to be shut in 2015 according to forecasts from the oil companies themselves.  There is still oil and gas being produced but the exploration has stopped until the oil price recovers.

As of 7th January 2015:

Brent Crude - USD50 per barrel
US Oil Price - USD50 per barrel
(West Texas Intermediate)

This is the lowest price since April 2009.