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ZE DataWatch - December 2011
ZE DataWatch - December 2011
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The US shale natural gas gets more pricing points
The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
Nuclear technologies, driven by safety requirements, require substantial amounts of data to be gathered and processed at all times. At the same time, actions chosen by nations about power sources, whether they result in contraction or expansion of nuclear energy production, bring a shift in data generation and analysis.
NEW
Out
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EDIT
December 2011
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p. 3
China Approves Pilot Carbon Trading Scheme Australia Passes CO2 Emissions Trading Laws
Summary
Editorial
Growing importance of the Brent benchmark and dropping production levels in the North Sea prompt the industry to amend tradable products which are built on this type of underlying asset. Australia and China are getting closer to the introduction of carbon emission allowance markets.
Data News
Power Markets
APX-ENDEX Launches New UK Power Products CME Launches PJM West Hub Options ICE Launches PJM West Hub Swaps and Options BRIX Introduces PLD+ Premio Indexes Singapore Considers Electricity Derivatives
p. 4 - 5
p. 14
Other Matters p. 6 - 10
TeraExchange to Launch New Market for OTC Derivatives Maple Group and TMX to Create an Integrated Exchange Group
p. 15
p. 16 - 17
IIR Energy Releases New Service to Track Compliance with CSAPR CME Group Launches Argus US Biodiesel Swap Futures Contract Platts Offers New Balance-of-the-Month Information Platts Reference Information Carbon Market Data Launches the CRC Database ZEMA Data Coverage Update December 2011
CME Launches Biodiesel and Iso-Butane Products for North America CME Launches Mini Singapore Gasoil (Platts) Swap Futures M-X Re-lists Horizons Natural Gas ETF CME Launches European Biodiesel (Argus) Products Platts Expands ESPO Price Assessments CME Launches Products Built on NY ULSD Futures CME Launches DME Oman Crude Oil Options Platts Introduces Marcellus Pricing ICE Expands Oil and Refined Petroleum Contracts ICE Launches Brent NX (New Expiry) Contracts Austria to Introduce Natural Gas Virtual Hub
w w w. a r g u s m e d i a . c o m
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In Depth
p.12- 13
The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
p. 18 - 21
Nuclear technologies, driven by safety requirements, require substantial amounts of data to be gathered and processed at all times. At the same time, the actions chosen by nations about power sources, whether they result in contraction or expansion of nuclear energy production, bring a shift in data generation and analysis.
December 2011
ze datawatch
Editors letter
This month, Brent crude continued to draw attention. Over the last year, the spread between the European (Brent) and North American (WTI) benchmarks widened, at times reaching $30. It was quite a stretch given the fact that previously, this difference stayed at just a few dollars. When Brent started to climb and WTI went in the opposite direction, the global spotlight was set on Brent and its derivatives. There was no shortage in explanations for this trend. On one hand, Middle East turmoil, European financial crisis and steadily declining production volumes at the North Sea pushed the Brent prices up. On the other hand, a quite unexpected rise of the North American oil production suppressed WTI. The soaring production of Alberta oil sands, North Dakota shale oil, Saskatchewans Bakken region, and Montana keep sending more hydrocarbons into the pipeline. It is anticipated that the situation with the oil surplus on Cushing will be moderated within the next year or two. Enbridge, after purchasing a ConocoPhillips stake in the Seaway pipeline on November 16, 2011, announced that the flow of the pipeline, that brings crude from the US Gulf Coast to the fuel hub in Cushing, will be reversed by second quarter 2012, potentially moving 350,000 barrels a day. On the same day, TransCanada Corp. announced that it may be possible to build the southern leg of its Alberta-to-Texas pipeline, Keystone XL as early as 2012. Being held up by the US regulators delaying approval of the project as a whole, TransCanada Corp. is planning to begin construction of the section of pipeline between the Data Source - EIA * energy hub of Cushing and the US Gulf Coast a lot sooner. As it stands now, millions of barrels of crude are being directed to Cushing every day from all across North America; however, the shortage of infrastructure creates a bottleneck in moving oil to refineries and export ports on the Gulf Coast. Pipeline expansion and reversal of flow will start draining supplies from Cushing, thus bringing depressed North American prices up. In fact, after both announcements, WTI prices picked up. In the meantime, before the expectations for Canada and the United States to become the dominant producers of liquid hydrocarbons outside of OPEC become reality, and before WTI restores its status as the worlds most important oil benchmark, Brent contracts continue to attract the interest of tradable product developers, which are fueled by the high volumes of trades accompanied by changes in underlying assets. Thus, the dropping production volumes in the North Sea led to a reduction in the number of forward cargoes used to derive the pricing for settling derivative contracts. This prompted revisions to the assessment window, which affected the market products. The adjustments are being made to an expiry date, which brings the derivatives into alignment with the underlying physical crude oil market in the North Sea: instead of 21 days, the assessment is now conducted on a 25-day basis. The reaction to this change came from Platts, which amended the date range to calculate Brent assessments. Prompted by the move of this energy publisher, two rival exchanges, CME Group Inc. (CME) and ICE Futures Europe (ICE), made adjustments to their related products. On December 11, 2011 CME introduced new ICE Brent (Platts) futures, swaps and options contracts to be listed on NYMEX. ICE pushed the launch of the Brent NX (New Expiry) Crude futures and options contracts from the previously announced February 2012 to December 5, 2011. Additionally, ICE added a whole set of swaps contracts built on revised Brent assessment. Other fossil fuel industry developments prompted Platts to introduce new pricing points for natural gas in order to reflect the growing importance of the Marcellus shale development, as well as the expansion of Canadian crude oil products by CME to reflect the growing production of Alberta oil. As a balancing force to the expansion of the fossil fuel markets, and despite a near failure of the UN climate negotiations in South Africa, carbon emission reduction programs are being implemented and considered for development in different nations. China, one of the largest emitters, approved a pilot carbon trading scheme for seven provincial regions. Lithuania will run a national CO2 auction on EEX platform. However, the major news on this matter is approval of the CO2 emission trading program in Australia set to commence in 2015. Australian exchange ASX expressed its support to run primary and secondary emission allowances markets. Australia has already announced that it will link its emissions trading scheme with New Zealand to strengthen international carbon markets. Additionally, next year Canberra will hold talks about collaborating with the European Union Emissions Trading Scheme (EU ETS). We are very likely to see more integration and convergence of carbon markets in the near future.
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December 2011
Power Markets
CME Launches Another Option NEW Contract for PJM Western Hub
On December 11, 2011, CME Group began listing a new electricity option contract, PJM West Hub Real-Time 50 MW Off-Peak options based on PJM Off Peak Calendar Month LMP Swap Futures:
The contract will be traded for the next five calendar years with the first listed month of January 2012.
For contract specifications click here
New CME Option PJM West Hub Real-Time 50 MW Contract is based on Western Hub 50 MW Calendar-Month LMP Swap Futures. The graph of PJM West Hub Real-Time 50 MW Peak Calendar-Month Real-Time LMP Swap Futures is shown below.
Description PJM WH Real Time Peak Daily Swap PJM WH Real Time Daily Option PJM WH Real Time Same Day Swap PJM WH Real Time Same Day Option
For contract specifications click here
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December 2011
Power Markets
WATCH
The Singapore Energy Market Authority (EMA) is looking at the establishment of an electricity futures market, as stated by the EMA Chief Executive at the opening ceremony at EMART Asia on November 3, 2011. EMA will leverage the experience of the New Zealand Electricity Authority, as well as Australian and UK markets, which have successfully implemented electricity derivatives trading. The Singapore electricity industry has been vertically integrated and Government-owned. The electricity generation and retail business was separated from electricity transmission in 2001. The National Electricity Market of Singapore (NEMS) commenced operation on January 1, 2003, as a real-time electricity trading pool, where generation companies compete to sell electricity and operating reserves every half-hour. Introduction of electricity derivatives will help to improve transparency and pricing competitiveness of energy contracts, reducing entry barriers for new entrants as they will be able to hedge their fuel costs and mitigate OTC credit default risks.
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December 2011
NEW
NEW
On December 11, 2011, CME Group listed the Mini Singapore Gasoil (Platts) Swap futures. The minimum contract unit is 100 barrels instead of 1,000 barrels as in the standard contract. This contract is subject to the rules and regulations of NYMEX.
NEW
On November 14, 2011, ICE Futures launched the Coal Single Expiry Options contracts, which are options on underlying equivalent futures contracts: ICE Futures Rotterdam Coal Single Expiry Options (quarterly and calendar year) ICE Futures Richards Bay Coal Single Expiry Options (quarterly and calendar year) ICE Futures globalCOAL Newcastle Single Expiry Options (quarterly and calendar year) The Single Expiry Coal Options contracts are available for quarterly and calendar year contract periods and behave differently to the existing monthly Coal Options contracts. On expiry, the Single Expiry Coal Options will be exercised/abandoned in full against the relevant futures settlement price and directly in to the relevant futures contracts.
For contract specifications please click here
On November 14, 2011, ICE Futures launched TTF Natural Gas Options The TTF Natural Gas Options Contract is an Equity-style European option. The first listed month will be December 2011 and at launch, 36 consecutive months will be listed on the ICE platform. In ICE Block 2, participants will be able to construct composites for quarters, seasons, calendar years and any other consecutive series of months, for the purposes of registering EFSs.
For contract specifications please click here
CME Launches NYMEX Brent NEW 25-Day (Platts) Futures, Swaps and Options Contracts
Effective December 11, 2011, NYMEX lists the financially settled NYMEX Brent 25-Day (Platts) futures contract for trading on CME Globex. Monthly Brent futures contracts would be offered through to the end of 2017. In addition, financially-settled Brent 25-Day (Platts) Calendar Swap futures and three new Brent 25-Day (Platts) option contracts will be listed by the exchange.
As shown in the graph below, natural gas options are already successfully traded at CME/NYMEX for NBP European hub. Option price is coloured green, and call option price is coloured red.
Description NYMEX Brent 25-Day (Platts) Futures Brent 25-Day (Platts) Calendar Swap Futures Brent 25-Day (Platts) Option Brent 25-Day (Platts) European Option Brent 25-Day (Platts) Average Price Option
Final settlement of NYMEX Brent 25-Day (Platts) futures and options contracts will be based on the Platts 25-day Brent cash assessment. The new contract reflects changes in the way the underlying physical crude oil market in the North Sea is assessed. The new futures contract is based on 25 days instead of the usual 21 days, following a decision by price assessment agency, Platts, to change its methodology. CME already has a financially settled Brent contract based on the ICE Brent contract, which reflects a 15-day window.
For NBZ contract specifications click here For BDC contract specifications click here For BDO contract specifications click here For BDE contract specifications click here For BDA contract specifications click here
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ze datawatch
December 2011
Description Canadian Heavy Crude Oil (Net Energy) Index Average Price Option Western Canadian Select Crude Oil Futures
For WCI contract specifications click here For WCE contract specifications click here
CME Lists Biodiesel and Iso-Butane Products for North NEW America
On November 20, 2011, CME launched two new energy contracts, listed with, and subject to the rules and regulations of NYMEX:
CME has a set of products targeting Canadian crude oil. An example of this is NYMEX Light Sweet Crude Oil Index expressed as a differential of the Calendar Month Average of the futures settlement price.
Description Mont Belvieu LDH Iso-Butane (OPIS) Swap futures Biodiesel SME Houston B-100 (Argus) Swap futures
Biodiesel swap future, the first US-based biodiesel derivatives market instrument to launch in the US, reflects the value of Houston barge and rail volumes of soy methyl ester with 100% purity (SME B100).
For MBL contract specifications click here For GSI contract specifications click here
NEW
On November 29, 2011, Bourse de Montral Inc. re-introduced series on Horizons BetaPro Nymex Natural Gas Bull Plus ETF Option Class:
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ze datawatch
December 2011
NEW
NEW
On November 21, 2011, CME started listing four new European Biodiesel Swap Futures contracts:
Description RME Biodiesel (Argus) fob Rdam (RED Compliant) Swap Future FAME 0 (Argus) Biodiesel fob Rdam (RED Compliant) Swap Future RME Biodiesel (Argus) fob Rdam (RED Compliant) vs. ICE Gasoil Spread Swap Future FAME 0 Biodiesel (Argus) fob Rotterdam (RED Compliant) vs. ICE Gasoil Spread Swap Future
For RBF contract specifications click here For FBD contract specifications click here For BFR contract specifications click here For FBT contract specifications click here
On December 21, 2011, NYMEX commenced trading a set of NY Ultra Low Sulfur Diesel (ULSD) products designed on the New York Harbor Ultra-Low Sulfur Diesel (ULSD) Futures (LH):
Argus biodiesel spot prices are shown in the graph below. Prices are relatively volatile; introduction of Argus biodiesel financial contracts at CME will allow more options for hedging:
CME Code RVU ULF UCF UCP UBC USF UAO UBS UCO UCA UCB UCC UMM UCZ
Description RBOB vs. NY ULSD Swap Futures NY ULSD Last Day Financial Swap Futures NY ULSD Crack Spread Swap Futures NY ULSD Crack Spread Average Price Options NY ULSD Crack Spread BALMO Swap Futures NY ULSD Calendar Swap Futures NY ULSD Average Price Options NY ULSD BALMO Swap Futures NY ULSD Crack Spread Options NY ULSD Calendar Spread (1 Month) Options NY ULSD Calendar Spread (2 Month) Options NY ULSD Calendar Spread (3 Month) Options NY ULSD Calendar Spread (6 Month) Options NY ULSD Calendar Spread (12 Month) Options
UCO is an American type of option; other option contracts are European. All Calendar Spread Options and Crack Spread Options are physically delivered while the rest of the derivatives are settled financially.
For ULF contract specifications click here For UCF contract specifications click here For UCP contract specifications click here For UBC contract specifications click here For USF contract specifications click here For UAO contract specifications click here For UBS contract specifications click here For UCO contract specifications click here For UCA contract specifications click here For UCB contract specifications click here For UCC contract specifications click here For UMM contract specifications click here For UCZ contract specifications click here
NEW
On November 1, 2011, Platts launched a new daily price assessment, Platts ESPO M2, reflecting delivery two months forward for European Sea Ports Organization (ESPO) crude oil. The new assessment, expressed as a differential to the Platts Dubai benchmark, will be published daily in the real-time service Platts Global Alert. Platts ESPO M2 reflects cargoes loading 45 to 75 days FOB forward and exported from Russias far eastern port of Kosmino. ESPO oil includes flows from the Eastern Siberian Pacific Ocean pipeline targeted for Asia. This crude oil is lighter and contains less sulphur than Urals, the most common Russian crude oil for export. The Platts ESPO M2 assessment will continue to be reported concurrently with existing daily ESPO references, which are based on cargoes loading 15 to 45 days forward.
NEW
Effective December 11, 2011, subject to Dubai Financial Services Authority approval, DME Oman Crude Oil European Style Option will be listed for trading on CME Globex. This contract is listed with and subject to the rules and regulations of the Dubai Mercantile Exchange.
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December 2011
The new CME contract is an addition to the already existing Dubai Mercantile Exchange crude oil products such as DME Oman crude oil forward curve, shown in the graph below.
ICE Code BNL BNL NNB NUL NXD NXB NXJ NXK NXT
NEW
NXT NXX NXW NXX NXW NXP NXZ NXO NXF NXY NXC NXQ NXE NXG NXM NXV NXL NXU NXA NXR NXH NXN
Platts is expanding the pricing points for natural gas. The publisher announced its intent to add to its daily and monthly bid week North American spot-price surveys a new price location on Tennessee Gas Pipeline's 300 leg in Tioga, Bradford and Susquehanna counties in Pennsylvania (TGP Z4). The new daily posting, Tennessee zone 4-300 leg Marcellus, will appear in the "Appalachia" section of Gas Daily's "Daily price survey" table and the "Northeast" section of Energy Trader's "Daily spot gas prices" table effective January 17, 2012 for flow date Wednesday, January 18. The new monthly bid week posting will appear in the Prices of Spot Gas Delivered to Pipelines tables in Inside FERCs Gas Market Report, Energy Trader and Gas Daily Price Guide, as well as the Bid Week Physical Basis Prices Delivered to Pipelines table in Inside FERCs Gas Market Report and Gas Daily Price Guide, effective with the late-January bid week for February delivery. Despite the abundance of natural gas coming from Marcellus Shale, the market has not had pricing points for this region. At the same time, as shown in the graph below, natural gas prices at existing neighboring trading hubs have been demonstrating divergent patterns. Iroquois hub prices are set at the highest level. Chicago City Gate hub prices are usually lower, reaching a difference of $2/MMBtu while moving very closely with Transco 6 hub prices. This trend makes it difficult to approximate prices for Marcellus. Introduction of Marcellus trading hub will create an important benchmark.
Description Crude Outright - Brent NX 1st Line Swap Crude Outright - Brent NX Average Price Option Crude Outright - Brent NX Bullet Swap Crude Outright - European-Style Brent NX Option Crude Di - Brent NX 1st Line vs Dubai Crude Oil 1st Line Swap Crude Di - Dated Brent vs Brent NX 1st Line Swap Crude Di - Argus LLS vs Brent NX 1st Line Swap Crude Di - Argus Mars vs Brent NX 1st Line Swap Crude Di - WTI 1st Line Swap vs Brent NX 1st Line Option Crude Di - WTI 1st Line Swap vs Brent NX 1st Line Swap Crude Outright - Brent NX 1 Month Calendar Spread Crude Outright - Brent NX 12 Month Calendar Spread Brent NX 1 Month CSO Brent NX 12 Month CSO Fuel Oil Crack - 1% NYH Fuel Oil Cargoes vs Brent NX 1st Line Swap Fuel Oil Crack - 180 cst Singapore Fuel Oil vs Brent NX 1st Line Swap Fuel Oil Crack - 3% USGC Residual vs Brent NX 1st Line Swap Fuel Oil Crack - 3.5% FOB Rotterdam Barges vs Brent NX 1st Line Swap Fuel Oil Crack - 380 cst Singapore vs Brent NX 1st Line Swap Fuel Oil Crack - Fuel Oil 1% FOB NWE Cargoes vs Brent NX 1st Line Swap Gasoil Crack - 0.1% Gasoil CIF NWE Cargoes vs Brent NX 1st Line Swap Gasoil Crack - 0.1% Gasoil FOB Rotterdam Barges vs Brent NX 1st Line Swap Gasoil Crack - Gasoil 1st Line vs Brent NX 1st Line Swap (in bbls) Gasoil Crack - Gasoil 1st Line vs Brent NX 1st Line Swap (in MTs) Gasoil Crack - Gasoil 50 ppm FOB Rotterdam Barges vs Brent NX 1st Line Swap Gasoil Crack - Low Sulphur Gasoil 1st Line vs Brent NX 1st Line Swap (in bbls) Gasoil Crack - Low Sulphur Gasoil 1st Line vs Brent NX 1st Line Swap (in MTs) Gasoline Crack - Argus Euro BOB OXY FOB Rotterdam Barges vs Brent NX 1st Line Swap Gasoline Crack - RBOB Gasoline 1st Line Swap vs Brent NX 1st Line Swap Heating Oil Crack - NYH Heating Oil 1st Line Swap vs Brent NX 1st Line Swap Naphtha Crack - Naphtha CIF NWE Cargoes vs Brent NX 1st Line Swap
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ze datawatch
December 2011
NXD, NXB reference Platts Crude Oil Marketwire NXJ, NXK reference Argus Crude NXP, NXO reference Platts US Marketscan NXY, NXE reference Platts Asia-Pacific/Arab Gulf Marketscan NXQ, NXCNXN, NXV, NXE, and NXF reference Platts European Marketscan NXA references European Products
For contract specifications click here
ICE Futures Europe Launches Brent NX (New Expiry) Crude Futures and Options Contracts
EDIT
At the closing of the consultation process on October 21, 2011, ICE announced that the launch of ICE Brent NX Crude Futures and Options Contracts was set for December 5, 2011, with a first contract month of December 2012 (instead of February 2013 as previously proposed). The expiry calendar for ICE Brent NX Futures and Options will align the futures market with the cash 'BFOE' (Brent-Forties-Oseberg-Ekofisk) forward and Dated Brent market which is changing from a 21-day to a 25-day basis from January 2012. To ensure ICE Brent NX contracts reflect future enhancements of the assessment of the North Sea physical market, a second change to a 'Month Ahead' expiry calendar will be implemented for the March 2015 contract month onwards (rather than March 2016 as previously proposed). The amendments will affect the ICE Brent NX Futures and Options and the following related spreads: Brent NX / Brent (BNX-BRN) Gasoil / Brent NX (The Gasoil NX Crack, GAS-BNX) Low Sulphur Gasoil / Brent NX (The Low Sulphur Gasoil NXCrack, ULS-BNX) Brent NX / WTI (BNX-WBS) RBOB / Brent NX (UHU-BNX) Heating Oil / Brent NX (UHO-BNX)
For contract specifications click here
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December 2011
CME Launches U.S. Midwest Hot Rolled Coil Steel Option NEW
On December 11, 2011, CME Group launched a European-style U.S. Midwest Domestic Hot Rolled Coil Steel Average Price Option, to be listed with, and subject to the rules and regulations of NYMEX. This contract is the second metal product traded on the exchange. The underlying future is U.S. Midwest Domestic Hot Rolled Coil Steel Index Futures (HRC)
For contracts specifications click here
ICE Futures Canada Gets WATCH Closer to Introduction of Wheat and Barley Contracts
Western Canadian farmers are two more steps closer to the open market that is expected to come into existence on August 1, 2012. On November 28, 2011, the Canadian House of Commons passed Bill C-18, which will end the Canadian Wheat Board's monopoly for trading Canadian wheat and barley. The Bill still requires approval by the Senate of Canada and Royal Assent before it can become law. On November 29, 2011, ICE Futures Canada, the Winnipeg-based agricultural exchange, received approval from the Manitoba Securities Commission for new futures contracts for milling wheat, durum wheat and barley. Following enactment of the law, ICE Futures Canada expects to be able to list the new contracts in January 2012, with the first contracts for delivery in October 2012.
Description U.S. Midwest Domestic Hot Rolled Coil Steel Average Price Option
For contracts specifications click here
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ze datawatch
December 2011
NEW
NEW
On November 28, 2011, NYSE Euronext, in partnership with Bloomberg New Energy Finance, launched clean energy stock indexes for the following regions: Americas Asia and Oceania Europe, Middle East and Africa These three indexes follow performance of middle to large size companies specializing in renewable energy and energy-smart technologies.
Description NYSE-BNEF Americas Clean Energy Index SE-BNEF Asia-Oceania Clean Energy Index NYSE-BNEF Europe, Middle East and Africa Clean Energy Index
These are the first ones in a new clean energy indices family, which is expected to be expanded over the next few months. Indexes to be added at a later date will track shares of solar and wind power companies, companies specializing in energy-smart technologies such as efficiency, storage, smart grid, and companies involved in electric vehicle development. The new indexes reflect the global trend of moving toward low-carbon energy, which has seen rapid growth in capital investment
Platts announced its intent to begin daily assessments effective on December 16, 2011, for eight types and vintages of sulfur dioxide (SO2) and nitrogen oxides (NOx) emission allowances created by the Environmental Protection Agency's (EPA) Cross-State Air Pollution Rule: CSAPR Group 1 SO2 2012 CSAPR Group 1 SO2 2013 CSAPR Group 2 SO2 2012 CSAPR Group 2 SO2 2013 CSAPR Annual NOx 2012 CSAPR Annual NOx 2013 CSAPR Seasonal NOx 2012 CSAPR Seasonal NOx 2013 The CSAPR rule is scheduled to take effect January 1, 2012, unless court or congressional action affects the scheduled implementation. Although the phase 1 trading market for annual SO2 and NOx emissions does not formally begin until the implementation of the rule, market activities have prompted Platts to introduce assessments prior to the formal implementation date. The assessments will be published in Megawatt Daily, Coal Trader and Coal Outlook, on Platts Electricity Alert and in Platts Market Data.
WATCH
The underlying contract for this product is California Carbon Allowance Futures, which started being traded on August 29, 2011.
For contracts specifications click here
The Chinese government approved a pilot GHG emission rights trading scheme in seven provincial regions in an effort to encourage carbon emission reductions: Beijing Tianjin Shanghai Chongqing Shenzhen Hubei Guangdong The details of the scheme have not yet been disclosed to the public.
WATCH
On November 8, 2011, Australias Senate passed legislation on the environmental and economic reforms, the Clean Energy: - The launch of carbon scheme regulator in April 2012 - A fixed A$23 (US$23.80) tax on CO2 emissions for the countrys 500 biggest emitters from July 1, 2012, moving to a flexible price after three years - The introduction of the worlds biggest carbon trading scheme outside of Europe on July 1, 2015 Australia's main bourse, ASX, plans to support an ETS and secondary market trading and to introduce carbon futures trading before the nation's ETS begins in 2015. ASX will provide facilities for trading, clearing and settling of the physical permits.
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December 2011
WATCH
On November 30, 2011, the EU Commission announced that transition to the single EU Emissions Trading System (ETS) will be executed in two steps. In the first step, as of January 30, 2012, the single registry will be partially activated to allow airlines to open registry accounts and receive free emission allowances by the end of February 2012. The full activation of the single registry will take place by June 2012. Currently, the UN registries system, which has been in operation since 2005, is composed of the EU nations registries and the Community Independent Transaction Logs (CITL). Each EU Member State, plus Norway, Iceland and Liechtenstein, has a national ETS registry and an online database recording the following: - National plan indicating the allowances assigned to each Member State - Accounts (held by a legal entity or a physical person) to which those allowances are allocated - Allowances transactions performed by the account holders - Annual verified CO2 emissions from installations - Annual reconciliation of allowances and verified emissions CITL records transactions that take place between accounts in the EU ETS registries. The national registries are connected to the CITL through a central hub called the International Transaction Log (ITL). The new centralized registry will replace all EU ETS registries currently hosted in the Member States. It is expected that the EU registry will be used by more than 25,000 end-users (e.g. operators, traders). All transactions in the registry will be subject to the approval of the European Union Transaction Log, the successor of the CITL.
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December 2011
Out
On November 18, 2011, CME ceased reporting the following S&P Indexes:
JWE JWA JTE JTA
CME Code
Description
S-Network Water Works (EURO) S-Network Water Works S-Network Water Tech (EURO) S-Network Water Tech
EDIT
NEW
Effective December 11, 2011, the CME Eurodollar 5-Year Mid-Curve options were renamed to 4-Year Mid-Curve options. The product symbol will also be changed to (SecurityGroup=GE4, tag 55-Symbol=E4) from (SecurityGroup=GE5, tag 55-Symbol=E5) on CME Globex. The Clearing Code product symbol will change from E5 to E4. This change will introduce a consistent naming and symbol convention for Eurodollar Mid-Curve options on CME Globex and on the CME trading floor.
Effective November 21, 2011, ICE Futures US started listing a new Russian ruble-U.S. dollar futures contract. The cash-settled contract will trade alongside the existing currency pair futures contracts. Effective December 6, 2011, the exchange will permit block trades in this Ruble-Dollar futures contract with the minimum quantity requirement for block trades of 100 contracts.
NEW
Effective November 28, 2011, CME Group will start disseminating every 15 seconds this new index:
REEG REE Global Index
On December 5, 2011, CME Group began disseminating the following new indexes every 15 seconds:
Description S&P International Developed Low Volatility Index S&P Emerging Markets Low Volatility Index
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December 2011
Other Matters
WATCH
A new trading venture TeraExchange announced the launch of one of the worlds first central limit order books for OTC cleared derivatives in Q4 2011. Cleared OTC derivatives will include the following: Interest Rate Swaps Credit Default Swaps Energy Swaps Non-Deliverable Forwards Equity Swaps Creation of the venture was prompted by regulatory reform affecting and changing rules of trading and clearing OTC derivatives. Seeking first mover advantage, TeraExchange intends to become a swap execution facility once the SEC and CFTC rules are finalized as expected in early 2012. The TeraExchanges platform features integrated cross-asset trading, anonymity, pre-trade analytics and voice broker assistance, as well as central clearing through CME, ICE and LCH.Clearnet.
To learn more about the new venture click here
WATCH
On November 24, 2011, TMX Group Inc. and Maple Group Acquisition Corporation (Maple Group) proposed creation of an integrated exchange and clearing group across equity and derivative products. The pending venture will serve all market participants and Canada's capital markets overall. TMX Group's subsidiaries operate cash and derivative markets for multiple asset classes including equities, fixed income and energy. Maple Group Acquisition Corporation is a corporation whose investors comprise Canada's leading financial institutions and pension funds. To learn more about new venture click here: www.abetterexchange.com
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December 2011
IIR Energy Releases New Service to Track Compliance with Cross-State Air Pollution Rule (CSAPR)
The IIR CSAPR Analysis service is tracking more than 1,000 U.S. coal-fired units with aggregate generating capacity of more than 292,000 MW that could be affected by the EPA's new regulation. Currently, 129 coal units with aggregate generating capacity exceeding 25,000 MW are scheduled to be retired over the 2011-2015 period. We expect that number to continue rising over the next year. Right now, construction of more than 17,000 MW of new gas-fired generation is scheduled to kick off over the 2012-2015 period, leading to a generation deficit of nearly 9,000 MW that the IIR CSAPR Analysis can identify today. More than $50 billion in capital project spending is scheduled for the nation's coal and gas power fleet between now and 2018, according to the service. On July 6, 2011, the US Environmental Protection Agency (EPA) finalized a rule that protects the health of millions of Americans by helping states reduce air pollution and attain clean air standards. This rule, known as CSAPR, requires 27 states to significantly improve air quality by reducing power plant emissions that contribute to ozone and/or fine particle pollution in other states. This rule replaces EPA's 2005 Clean Air Interstate Rule (CAIR). A December 2008 court decision kept the requirements of CAIR in place temporarily but directed EPA to issue a new rule to implement Clean Air Act requirements concerning the transport of air pollution across state boundaries. This action responds to the court's concerns. Phase I implementation date is January 2012 for SO2 and May 2012 for NOx, and focuses on facilities that already have advanced emissions technology in place or under construction. Phase II is scheduled for implementation in January 2014, and focuses on reducing SO2 emissions by 73 percent from 2005 levels, and reducing NOX by 54 percent. Since the formalization of this rule, the electrical generation utilities have been on a full forces push to identify exactly what they have to do to meet the requirements of CASPR. We have identified those who chose to move forward with installation of environmental emissions reduction devices, upgrade the emissions equipment currently installed, retirement of units, fuel conversations, as well as repowering of facilities. IIR is also tracking the possible natural gas generation in development to replace the lost generation from coal-fired facilities closures."
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December 2011
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December 2011
In Depth
The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
Compiled data points are evaluated to produce experimental data supplemented with theoretical predictions. Numerical data is free and can be retrieved online from the International Atomic Energy Agency (IAEA) Nuclear Data Section web page (covering nuclear as well as atomic and molecular data). The international network of atomic and nuclear data centers ensure consistency of the activities of the major data centers around the world. As shown in the following table, the need for online data access has been increasing over the last four years.
Interactive nuclear data retrievals Interactive atomic data retrievals Data distributed on request (post) 2007 91,146 11,028 1,841 2008 114,502 16,794 1,297 2009 128,368 19,481 1,425 2010 149,672 19,296 768
The world population is increasing, and as a result, there is an increasing need for energy. Among all generation resources, nuclear power probably represents the most interesting case. The current dialogue, when it comes to nuclear power, is concentrated mostly on safety and political agenda, while other issues are typically disregarded. One of those issues is an influence on data flow from decisions on nuclear power expansion or reduction. Nuclear energy is reliable, efficient and emission-free, yet public opinion about this source is usually sharply polarized. Despite this fact, its development has been defined not as much by power industry requirements, but mostly by government agendas, and for many valid reasons. High security risks, the storage and disposal of dangerous radioactive waste, the possibility of proliferation, and the possibility of terrorist attacks - all these factors support an expansive governmental interference. In addition, every nuclear reactor accident, whether it happens in the Ukraine, the US or Japan, adds more fuel to the public fire opposing nuclear power. As a result, decisions about nuclear power development are driven by several factors, including costs, growing demand for electricity, clean air concerns, reliability of performance, an impact on local eco-systems and security; all of which is balanced by public opinion. Nuclear technologies are complex and involve substantial amounts of data gathering and processing. The need for reliable data in this industry is driven by safety concerns and is not affected by government policies on energy source development. At the same time, a particular course of action chosen by a particular nation on nuclear power sources, whether it results in contraction or expansion of nuclear energy production, can and does bring a shift in data generation and analysis.
It is unlikely that the scope of nuclear and atomic data applications and the need for data storage space will diminish; however, nuclear power generation policies can and do affect other types of data sources.
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In Depth
The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
When it comes to nuclear technologies, they are not on the list of renewable sources; however, this is changing. While Ohio is the only state that counts advanced nuclear power generation as an eligible technology, there have been several attempts to define nuclear energy as a renewable energy source. Bill S. 360 was proposed in the South Carolina Legislature in 2007-2008. Its aim was to define renewable energy resources for an Energy Efficiency Act. Among other resources, the bill listed nuclear energy as renewable energy. In 2009, the State of Utah passed the Economic Development Incentives for Alternative Energy Projects bill that included incentives for renewable energy projects. The bill defines nuclear as a renewable energy source. In 2010, the Arizona bill HB. 2701 included nuclear power in renewable resources for electric utility renewable energy standards. US lawmakers, not having achieved much success at local levels, and in an attempt to develop a nation-wide standard for cleaner power resources, have considered revising the standard by shifting the focus from renewable power to clean power. The definition of clean power includes new nuclear and advanced coal generation. The inclusion of nuclear power in the standard is debatable and provokes a lot of opposition. Although nuclear power is considered a low carbon power generation source, its legal inclusion with renewable energy power sources has been the subject of debate. Some associations argue that nuclear energy is a mature technology and hence, should not be considered under the scheme. Furthermore, nuclear plants carry the potential to cause catastrophic damage (due to accidents, sabotage, or terrorism), to produce very long-lived radioactive wastes, and to cause nuclear proliferation. There are several ways clean energy can be defined. Clean energy may be called renewable energy or green energy and it specifically refers to energy produced usually from renewable resources without creating environmental debt. In some cases, it may refer to energy processes that pollute less, or energy that doesnt pollute at all and doesnt use resources that cant be easily renewed. Sometimes renewable energy is also known as a source that supports increased efficiency. In other cases, it is sustainable energy: energy that meets the needs of the present without compromising the ability of future generations to meet their needs. Depending on which definition you choose, nuclear energy may or may not be considered a clean or renewable energy. There are several arguments supporting this premise; Nuclear energy is efficient and it can satisfy energy needs to a great extent and provide a constant supply of energy. Hence, it could be considered sustainable. Nuclear power involving breeder reactors, which create more fissile isotopes than they consume during their operation, presents a stronger case for being considered a renewable resource. Such reactors would constantly replenish the available supply of nuclear fuel by converting fertile materials, such as uranium-238 and thorium, into plutonium or uranium-233, respectively. Fertile materials are also nonrenewable, but their supply on Earth is extremely large, hence the situation is similar to geothermal power. Uranium dissolved in seawater could also be considered a renewable resource, because it is constantly replenished by rivers eroding the Earth's crust at a rate of 6500 tons per year. In 1983, Bernard Cohen proposed that uranium in the crust is effectively inexhaustible, and could therefore be considered a renewable source of energy. In the end, it all comes down to the choice of the definition made by the authority in charge.
t The quest for emissions reduction has focused even more attention toward nuclear power. In fact, according to the Nuclear Energy Institute, nuclear power results in reduction of emissions produced by fossil fuel generators.
Source: emissions avoided by nuclear power are calculated using regional fossil fuel emissions rates from the Environmental Protection Agency and plant generation data from the Energy Information Administration. Updated: 5/11
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In Depth
The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
Post-Fukushima Fears
Japans nuclear disaster in the spring of 2011 dramatically shifted the world's view of nuclear energy. In September 2010, Angela Merkel announced plans to extend the operating lives of Germanys 17 nuclear power stations and hailed a revolution in energy provision. Eight months later, the German chancellor declared that her country will become a nuclear-free state by 2022. In May 2011, the Swiss government recommended the country exit nuclear energy by phasing out its reactors and seeking alternative energy sources. Switzerland's five reactors generate roughly 40% of its energy. Some 1,000 hydropower plants provide most of the remaining energy needs. The government hasn't fixed a date for the last nuclear-power station to go offline. Experts believe it could happen around 2040 as operating licenses of the five reactors expire between 2020 and 2040. In September 2011, Siemens announced it will depart entirely from the nuclear industry as a response to the Fukushima nuclear disaster in Japan. The company withdrew from the planned construction of dozens of nuclear plants throughout Russia over the coming two decades. Other countries that reacted to the Fukushima disaster by closing or reducing nuclear power programs are Italy, Spain, Taiwan, Mexico, and Belgium. However, some countries avoided public concern. In Britain, the anti-nuclear backlash remained mild. Following the completion of a post-Fukushima safety review, the government reaffirmed its support for the technology and committed to building eight new nuclear power stations by 2025. China continues investing in nuclear generation with 25 reactors under construction.
Observations
Nuclear technologies are very complex. Policymakers have to weigh the undoubted shortcomings of nuclear power - the safety risks, nuclear waste disposal and the cost - against its advantages high reliability and low-emissions factor.
No to Nuclear
Replacing reliable power generation with renewable energy will take time, maybe decades. As Germany has discovered with wind, and Spain with solar, renewable sources of power remain expensive with maintenance costs and land requirements far exceeding other methods that produce equivalent amounts of power. However, an even bigger problem is reliability, as renewables only work 10 20% of the time. This makes it difficult to balance supply and demand as these sources cycle off and on randomly, destabilizing the electrical grid and disrupting power delivery. Abandoning nuclear power for the sake of renewable technologies is burdened not only by issues of energy balancing, energy storage advancement and later battery disposal, but also by the introduction of new types of ancillary services, intra-hour power scheduling, and more sophisticated and precise weather prediction. All of this leads to more data points and more involved analysis required to sustain a portfolio of energy sources. Another option for renewable power driven nations aiming to create a nuclear-free world is increasing the use of fossil fuels as dependable sources of power production. The result of this approach is counterproductive to the fight against global warming - an increase in global emissions. It is interesting that Japan, because of the fear of a nuclear disaster re-occurrence, is planning to curb nuclear power generation in favor of gas-fired generation. Natural gas will be delivered in the form of LNG from other countries.
Yes to Nuclear
From another point of view, since complex technologies require more than a half century to evolve into global industries, and no other open-ended energy technology approaches even one percent of world production, nuclear power and natural gas have a high chance to dominate power generation over the next hundred years. Inclusion under the "renewable energy" or clean energy classification, as well as the low-carbon classification, could make nuclear power projects eligible for development aid in many jurisdictions. Those nations that decide to retain nuclear power in their generation portfolios are likely to face other challenges. One of them is making tough choices in regard to nuclear waste disposal. Nuclear waste can last for thousands, or even millions of years before becoming safe; this is a major issue that must be resolved before the use of nuclear power is expanded. Nations have been working on developing advanced nuclear recycling technologies. Each of them has its advantages and challenges. Geologic disposal: Several countries have been considering disposal of radioactive waste by burying it in 1,000 meter deep shafts in large stable geological formations. The concern is that even a very low container leakage can be lethal. Sea-based disposal: Burial beneath a stable abyssal plain and burial beneath remote islands are attractive solutions, but require revisions to the international Law of the Sea. Transmutation: During the 1970s, the US government put an effort towards developing a type of reactor that consumes nuclear waste and transmutes it to a less-harmful form. However, the project was cancelled. Back to Summary
The response by the US nuclear industry and its safety regulator, the U.S. Nuclear Regulatory Commission (NRC), to the Fukushima event was systematic. The NRC almost immediately commenced assessment of the adequacy of actions that will be taken in response to events similar to those experienced at Fukushima and to determine whether any changes need to be made to its regulations to provide further protection of public health and safety. The consensus is that nuclear reactors in the US are safe to operate now and in the future due to strict regulation, oversight by an expert regulatory agency and a transparent public licensing process. At the same time, the US Department of Energy budget for fiscal year 2012 allocated a new type of investment in small modular nuclear reactors ($97 million). The budget also proposes increasing funding for new nuclear power loan guarantee programs: $36 billion compared to the previous $18.5 million. The funding is achieved primarily through the elimination of tax subsidies for the oil and gas industry and a 45% cut in fossil energy research programs.
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The Case for Nuclear Power: Beyond Safety and Regulatory Framework More Data
The EU took on this approach, which resulted in a transmutation nuclear research reactor called Myrrha and a research program called ACTINET to make transmutation possible on an industrial scale. President Bush's Global Nuclear Energy Partnership of 2007, while facing criticism and continued reformation, is actively promoting research on transmutation technologies. Re-use of waste: Re-use of isotopes in nuclear waste does not eliminate the need to manage radioisotopes, but it reduces the quantity of waste. The Nuclear Assisted Hydrocarbon Production Method: this is an approach that places waste materials into repositories or boreholes of unconventional oil formations. The thermal flux of the waste materials alters the properties of hydrocarbons. The radioactivity of high-level radioactive waste affords proliferation resistance to plutonium placed in the periphery of the repository or the deepest portion of a borehole. Space disposal: This permanently removes nuclear waste from the Earths environment. However, current rockets make it economically unreasonable to use this method and potential failure of a launch vehicle creates high risk. Some solutions are being considered, including developing a mass driver for disposal, although it will require international agreements on the regulation of such a program. Different technologies of radioactive waste disposal entail different monitoring approaches. Thus, from the point of view of data management, nuclear waste disposal within Earth formations would probably require more elaborate and involved monitoring procedures and data processing. Another challenge associated with the increase in nuclear power generation is water consumption. Nuclear power plants need more cooling water than fossil-fired power stations, and use large quantities of water. They usually are located close to large and reliable water sources like rivers, lakes or seas. A study of water and sustainability for power production in the US by the Electric Power Research Institute (EPRI) compared water needs and consumption rates of existing power stations by type of fuel and cooling technology. The EPRI analysis shows that existing nuclear power stations use and consume significantly more water per MWh than electricity generation powered by fossil fuels: nuclear once-through systems consume about 33%, and closed systems consume about 50% more than fossil fuel power stations. This can and does create a significant concern for the environment. Heated water, when released to bodies of water, disturbs local eco-systems. During droughts, nuclear plants have to reduce their power output or shut down completely. This can become a main limiting factor for nuclear power expansion in the regions affected by looming climate warming. Increased water usage under such conditions will result in developing and installing monitors to control water levels and properties in the areas adjacent to the large nuclear plants. The result is an increase in the amount of data points compilation, processing and analyzing.
References
Breeder Reactors: A Renewable Energy Source by Bernard L. Cohen http://sustainablenuclear.org/PADs/pad11983cohen.pdf DOE/EIA Nuclear Power Plant Operations database DOE FY 2012 Budget Overview http://energy.gov/sites/prod/files/fy12-budgetrollout-02-14-11-final-distribution.pdf EIA International Energy Statistics http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=2&pid=alltypes&aid= 12&cid=&syid=2004&eyid=2010&unit=BKWH NRC News of March 23, 2011, http://www.nrc.gov/reading-rm/doccollections/news/2011/11-055.pdf Nuclear Power Plant Fuel. Abundant Supplies of Uranium. http://www.nei.org/howitworks/nuclearpowerplantfuel/ Should Nuclear Power Qualify as "Renewable" in the RPS/RES Debate? by John Droz, Jr., May 20, 2009, http://www.masterresource.org/2009/05/should-nuclear-powerqualify-as-renewable-in-the-rpsres-debate/ South Carolina General Assembly 117th Session, 2007-2008 Legislation Introduced into the House, May, 31, 2007, http://www.scstatehouse.gov/hintro/20070531.htm The US Energy Policy Act of 2005 http://www.gpo.gov/fdsys/pkg/PLAW109publ58/html/PLAW-109publ58.htm Utah State Legislature, 2009 General Session, H.B. 430, Economic Development Incentives for Alternative Energy Projects, http://le.utah.gov/~2009/bills/hbillenr/hb0430.htm Water & Sustainability (Volume 3):U.S. Water Consumption for Power ProductionThe Next Half Century, Topical Report March 2002, EPRI, Concord. Viewed 1 November 2006. http://www.epriweb.com/public/000000000001006786.pdf
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