Global energy demand continued its sluggish rise last year as growth in Chinese consumption fell to its lowest in nearly two decades, while renewables flourished, Reuters reported, citing BP's  latest report

Slower demand growth helped stall the acceleration of greenhouse gas emissions for a third year to levels not seen since the 1980s, but emissions remained well above targets set out globally under the 2015 Paris accord on climate change.

Coal's share in the energy mix declined to its lowest since 2004 at around 28%, while production of the highly polluting fossil fuel saw its largest ever annual drop at 6.2%, BP said.

Global energy demand grew by 1% in 2016, a rate similar to those seen in the previous two years but well below the 10-year average of 1.8%, the British company said in its benchmark Statistical Review of World Energy.

"This is a third year where we've seen weak growth in world energy demand ... The new normal is that all of this growth is coming from developing economies," particularly China and India, BP Chief Economist Spencer Dale told reporters.

China's energy demand growth in 2015 and 2016, 1.2% and 1.3% respectively, although still the strongest in the world, marked its lowest over a two-year period since 1997-98.

While that slowdown resulted from sluggish global economic activity, it also stemmed from greater efficiency in engines and factories, he said.

Cheaper and abundant gas supplies in the United States and China's drive to switch to cleaner feedstock for its power plants led to a 1.7% drop in demand for coal, the most pollutant fossil fuel.

Renewables such as solar and wind power were the fastest-growing source of energy, rising by 12% and accounting for a third of the overall growth in demand.

Still, renewables provide only 4% of the world's primary energy. China, meanwhile, overtook the United States for the first time as the largest producer of renewable power.

The slowing growth in energy demand, the shift to cleaner fuels and energy efficiency meant carbon emissions grew by 0.1% last year, similar to the prior two years, making it the lowest three-year average for emissions growth since 1981-83.

"While welcome, it is not yet clear how much of this break from the past is structural and will persist. We need to keep up our focus and efforts on reducing carbon emissions," BP Chief Executive Bob Dudley said.

http://www.sxcoal.com/news/4557299/info/en

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Attached Files

China's May power output up 5pct YoY

http://en.sxcoal.com/

The chief executive of Anglo-Australian miner Rio Tinto , which owns iron ore, diamond and aluminum mines and processing facilities in Canada, said on Tuesday that it was becoming tougher to do business in the resource-rich country.

"You know mining well and you understand its value, but to be very frank it has been getting harder to do business here over the years - from employee relations to tax to managing land access," Rio Tinto CEO Jean-Sebastien Jacques said in prepared remarks to be delivered at the International Economic Forum of the Americas in Montreal. Jacques did not elaborate on his comments.

Calling it the "biggest mining and metals company in Canada," Jacques said Rio Tinto had paid C$3.9 billion ($2.93 billion) in Canadian taxes since 2011 while investing more than C$8 billion.

Rio Tinto employs around 15,000 people in Canada at more than 35 sites, including the Iron Ore Company of Canada in Quebec and Newfoundland and Labrador, the Diavik diamond mine in the Northwest Territories and an aluminum smelter in British Columbia.

A Quebec court ruled in 2014 that a C$900 million lawsuit by two Canadian aboriginal communities against a subsidiary of Rio Tinto can proceed. The communities in eastern Canada have said that more than 50 years of iron ore mining in the region has disrupted their traditional way of life.

Jacques said that investment and growth drove wealth generation, which in turn created higher living standards. Fair trade was also key, he said.

"The danger in the current climate is that we focus on wealth distribution and not wealth creation. Both are absolutely critical, but without growth we will have no wealth created to fairly distribute," he said.

http://www.reuters.com/article/rio-tinto-ceo-canada-idUSL1N1J91SN

Argentina's national government and the governors of 20 provinces signed a mining deal on Tuesday to harmonize taxes and regulations in hopes of attracting investment, but the action was criticized by industry sources and environmentalists alike.

The agreement, which needs approval from Congress and the 20 provincial legislatures, sets a 3 percent ceiling on royalties mining companies pay to provinces.

"It's an activity that could be one of the pillars of job creation," President Mauricio Macri said of mining at the signing ceremony. "We can develop it with perfect care of the environment."

Latin America's third-largest economy has fallen behind Chile and Peru in attracting mining investment despite rich deposits of copper, gold, silver and zinc. Macri's center-right government has been trying since last year to unify regulations to woo foreign miners.

Shortly after taking office, Macri eliminated export taxes on metals and lifted a prohibition on companies sending profits overseas, two moves celebrated by the sector. But seven of the country's 23 provinces still prohibit certain practices, like open-pit mining and the use of cyanide, crucial to extraction.

Despite the limit on royalties, the deal signed on Tuesday would allow provinces to levy a tax of up to 1.5 percent of miners' sales for local infrastructure funds.

"The new deal doesn't change the regressive nature of the current tax, which is on mineral sales, and furthermore adds another tax of 1.5 percent. It will reduce the sector's competitiveness," said an industry source who spoke on condition of anonymity.

"Investments will continue to favor Chile and Peru."

Among the three provinces that declined to sign the deal was Chubut, located in the southern region of Patagonia, where Pan American Silver's Navidad project has been on hold since 2013 when it ran afoul of provincial rules banning the use of cyanide and open-pit mining.

Manuel Jaramillo, executive director of environmental NGO Fundacion Vida Silvestre, told Reuters that environmental groups were not invited to participate in the crafting of the deal and that the government never requested public comment on the details of the agreement.

http://www.reuters.com/article/argentina-mining-idUSL1N1JA1ES

A judge in Brazil has ordered a corruption investigation against Aldemir Bendine, the former head of state-run oil company Petrobras, according to a court document released Tuesday.

Federal judge Sergio Moro also found Sergio Cabral, a former governor of Rio de Janeiro state, guilty on corruption and money laundering charges and sentenced him to over 14 years in prison.

Investigators allege that while Bendine was at the head of Petrobras, he asked for and received 3 million reais ($907,770) in bribes from construction firm Odebrecht SA.

Bendine was tapped by former president Dilma Rousseff to lead Petroleo Brasileiro SA, known as Petrobras, in early 2015, after the public learned about the sprawling "Car Wash" corruption investigation.

Moro's order suggests corruption may have continued at Petrobras while the Car Wash probe investigated construction firms for paying billions of dollars in kickbacks to politicians and former executives at the oil company in return for lucrative contracts.

Bendine's lawyers, Bottini and Tamasauskas Advogados, said in an emailed statement that he never received any bribe while at Petrobras or when he was head of state-run Banco do Brasil.

Petrobras did not respond to requests for comment.

The accusation against Bendine is based on plea-bargain testimony from Odebrecht's imprisoned former chief executive Marcelo Odebrecht, who testified Bendine was paid in return for helping his company win contracts.

Odebrecht is among several firms that have admitted guilt and reached leniency deals during the three-year probe, which has expanded to include alleged graft at several other state-run enterprises.

Odebrecht's media office said in an emailed response that it was fully cooperating with authorities on all investigations, as the leniency deal the company signed demands.

Bendine resigned from the helm of Petrobras in May 2016 after the impeachment of Rousseff.

Federal prosecutors late last year accused Cabral of leading a criminal organization they say took 224 million reais in bribes from construction firms in exchange for infrastructure contracts from 2007 to 2014, when he was serving as governor.

Cabral was specifically found guilty of receiving 2.7 million reais in bribes from construction firm Andrade Gutierrez that was paid in exchange for the company winning building contracts for a petrochemical complex in Rio, according to a court document.

During his trial, Cabral said he did not receive the bribe. Andrade Gutierrez said it would not comment on the case.

Cabral, who faces nine other corruption trials, will appeal the verdict, said Rodrigo Roca, one of his lawyers.

http://www.reuters.com/article/us-brazil-corruption-idUSKBN1942KU

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Attached Files

An unregulated benchmark used to set the price of plastics in Europe has veered above the true cost in recent years, because of secret rebates chemical companies give each other that disguise the price of the main precursor, four sources familiar with the industry say.

Ethylene, a flammable gas, is the main feedstock used to synthesise the most commonly used plastics, found in the vast majority of all manufactured goods. It is produced in refineries from natural gas or crude oil, as one of the main products of the $400 billion global petrochemicals industry.

When manufacturers buy and sell plastic, a benchmark of the ethylene price is often written into their purchase contracts, to reflect the raw material cost.

But the European index is unregulated and, the sources said, has overstated the actual price for the past four years because it does not take into account the now common practice of firms negotiating rebates.

The sources include one person at a petrochemical company and three people who research the industry.

The actual price companies charge each other for the chemical is secret, and companies tend to offer big clients discounts from the benchmark to reflect economies of scale, local market conditions, or other factors. But those discounts have grown, making the benchmark a less accurate reflection of the real costs.

Companies do not have to pass the rebates on to their customers further down the supply chain, who are contractually obliged to pay prices based on the higher benchmark.

Reuters was unable to assess the degree to which the practice has hurt manufacturers of goods made from plastics. More than 10 companies that buy or sell ethylene, contacted by Reuters, declined to discuss their pricing, including any rebates they offer or receive.

Most of the sources that spoke to Reuters said they did not believe rebates had made the market unfair. But they say the lack of transparency, and the divergence between the published benchmark and the true price, could create the potential for suppliers to overcharge customers who may be unaware of the practice.

"There's an understanding that this is not a perfect process," said Matthew Thoelke, senior director of olefins and derivatives at analysis firm IHS.

The sources said the petrochemical companies that participate in setting the ethylene contract price while giving or receiving rebates include Europe's biggest, such as BASF, Royal Dutch Shell, Total and LyondellBasell. BASF, Shell and Total declined to comment on their pricing. LyondellBasell did not respond to Reuters request for comment.

LEVEL PLAYING FIELD

The benchmark for the price of ethylene used in nearly all European contracts is produced by the Independent Chemical Information Service, or ICIS, which has published its "ethylene contract price" since 1980.

ICIS is now a unit of Reed Business Information. Thomson Reuters, parent company of Reuters, competes with Reed as a supplier of benchmark prices for other commodities but does not publish a rival index price for ethylene.

ICIS senior editor Nel Weddle said the benchmark, published after confirming agreements with at least four companies who buy and sell ethylene, allows everyone to start on a "level playing field" with knowledge of prices.

However, the figures it uses to compile the index do not include rebates off the benchmark price. ICIS said it is not responsible for collecting information about such rebates, which it called "a common part of any supply or purchase contract".

Although ICIS is the most widely used benchmark in Europe, it is not the only one. A competitor, Argus, publishes a rival index, which also does not take rebates into account. It declined to comment.

Another competitor, Platts, has launched a new rival index which it says will better reflect the true market price by taking into account the rebates.

The sources familiar with the practice said refineries began offering substantial rebates in 2013 to clear their stocks during a period of oversupply of ethylene. But instead of being a temporary measure to deal with local market conditions, the rebates grew after oil and gas prices tumbled in 2014, and have continued to widen since.

The contract price of ethylene has hovered around 850-1,050 euros per tonne over the past year, down from a range of 1,200-1,300 euros before oil and gas prices fell in 2014. Rebates now run at more than 100 euros a tonne, the sources said.

One of the sources, at a major research consultancy, said his firm's staff use their own contacts at chemical companies to get a sense of the secret rebates. The rebates are now a key to understanding the profitability of businesses in the sector, which is therefore harder to forecast solely from public data.

Weddle of ICIS said the company was not aware of complaints from users of its benchmark about its omission of the rebates.

However, last year ICIS conducted a review of its methodology and posted feedback online from some users of the index. One of three respondents whose views ICIS posted wrote that the published prices should begin to reflect rebates.

"Otherwise, the reported contract prices do not reflect the real market situation and especially smaller suppliers and consumers are left in the dark," the respondent wrote. ICIS confirmed that the response was genuine but declined to identify who had written it.

Some in the industry who spoke to Reuters sought to play down the significance of the disparity between the index and the price after rebates, saying the market is competitive enough to prevent customers who rely on the benchmark being overcharged.

While Europe's benchmarks have their problems, "the situation in general is fair", said Jose Manuel Martinez, the chief executive of the Spanish oil company Cepsa's petrochemicals business.

NO REGULATION

Unlike benchmarks for crude oil or the major refined fuel products like diesel and gasoline, the ICIS benchmark for ethylene is not formally scrutinised by regulators, as ethylene contracts are not typically traded on securities exchanges.

https://www.reuters.com/article/us-petrochemicals-companies-insight-idUSKBN1950HN

Eastern Australia's power grid will be stretched again if fierce heatwaves hit over the next two summers, despite recent government steps to beef up supply, the nation's electricty market operator said on Thursday.

The latest outlook from the Australian Energy Market Operator (AEMO) comes three months after it warned that Australia's most populous states face a gas shortfall from the end of 2018 that could spark power or gas cuts to homes and businesses.

That warning, a string of blackouts and soaring energy prices led the Australian government and states to step in to shore up supply, including restarting a mothballed gas-fired power plant, funding huge storage batteries and limiting gas exports.

"This latest analysis indicates there will be challenges that will need to be managed proactively on days of extreme conditions to maintain secure, reliable and affordable energy to Australian consumers," AEMO Chief Executive Audrey Zibelman said in a statement.

The AEMO said power supply should be adequate in normal summer weather, assuming 140 megawatts (MW) of energy storage backed by the South Australian and Victorian state governments is in place, there are no planned generator outages and three gas-fired generators return to service as promised.

The market will need more coal-fired power in the state of New South Wales, more renewable power and higher output from gas-fired generators to replace a 1,600 MW plant shut by France's Engie SA in neighbouring Victoria in March.

The grid would be most vulnerable in extreme heat on weekday afternoons and evenings when people switch on air conditioners, with the risk rising if the wind drops and the sun is down or other generation is disrupted at the same time, the AEMO said.

Gas supply for two power stations that are being resuscitated to stabilise the grid will be key to avoiding power cuts, the body said in its Energy Supply Outlook (ESO).

"The ESO analysis suggests gas supply remains tight, however, the latest industry projections of gas production are just sufficient to meet current projections of gas demand," the AEMO said.

Companies ranging from the world's biggest miners, BHP and Rio Tinto, to steelmakers and brickmakers have raised alarm over unstable power supplies and soaring prices, which are threatening jobs.

The AEMO's outlook comes on the heels of a call by Australia's chief scientist calling for the federal government to set a "fuel neutral" clean energy target that provides an incentive to build new generation to cap soaring power prices, cut carbon emissions and keep the lights on.

http://www.reuters.com/article/australia-energy-idUSL3N1JB626

 I am a building inspector and fire engineer with 30 years’ experience. I’ve overseen numerous projects across London, including new builds and refurbishments, making sure buildings comply with the proper regulations, and post-occupation fire risk assessments. Given my experience, I was shocked by the blaze which engulfed Grenfell Tower in the early hours of Wednesday morning. 

At this point in time it’s very hard to tell precisely what went wrong. We don’t know where the fire started and we don’t know how it spread. What we can say for sure is how the building should have performed – and that it definitely did not perform that way. If regulations were followed, what happened at Grenfell Tower should never have been possible, and there are very big question which need to be answered. There are already suggestions that proper planning procedures were not followed.

Normally, British fire regulations assume that fires will start in one location only – and normally, this is completely reasonable. In a big tower block like Grenfell, each individual flat is a fire-tight box from which flames should not be able to escape, and a fire which starts in one tends to stay in it. That is why residents are usually advised to stay within their own rooms and wait for rescue. The fire service should arrive within ten minutes, ascend the building, and tackle the fire where it burns, while other residents sit quite happily in place.

This is also why we shouldn't be disturbed by reports from Grenfell that there was no common alarm system installed. Most residential blocks don’t have common alarms, because they could trigger a mass panic in which everyone tries to evacuate via the same stairwell which the fire service are using to reach the fire. Unlike in a hotel, there are no fire trained fire wardens to safely direct such an evacuation. In the event that a fire grows too large, firefighters might sometimes decide to evacuate the floor immediately above. Otherwise, it’s better everyone stays where they are. That policy has worked several hundred times over the past few years without a problem.

What happened at Grenfell was something else entirely. Firefighters were on site six minutes after being called, which is within expectations. But it is extremely unusual for the fire to spread this far and with this speed and ferocity. Within half an hour or so it had travelled way beyond the first flat, making it very difficult for the fire services to control it. Even more worryingly, survivors have reported that stairwells and lobbies were choked with smoke, which should never happen: there are supposed to be means of clearing smoke from such areas. In those circumstances, “stay and hide” becomes obsolete.

And yet to me the fire spread still had a horrifying familiarity. This has happened before, and – if we are not careful – it may happen again.

ADVERTISING

In Knowsley Heights in Manchester in 1991, fire spread in a way no one had predicted via the decorative cladding on the outside of the building. These plastic or metal panels are installed to protect a building from weather or improve its appearance, but between them and the wall there is a cavity where rain can run down. In the event of a fire this acts like a chimney, drawing the hot air up through itself and making the flames burn brighter. In this way fire travelled all the way up from the base of the building to the very top.