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Archive for February 26, 2007

Is Chevron Getting Into Trouble?

Transitions Online (TOL) and neweurasia, February 23rd, 2007Tengiz, Kazakhstan’s biggest onshore oil field, is known to produce sulphur-rich crude. ChevronTexaco, exploring, developing and producing at Tengiz since the early 1990s, has had different ideas how to get rid of this unwanted by-product. Until today, these attempts have not yielded any noticeable success, though. In 2001, St. Petersburg Times correspondent Christopher Pala reported:

There are 4.5 million tons of sulfur at Tengiz spread out on football-field-sized cakes that are 7.5 meters thick. And every day another 4,500 tons of liquid sulfur comes up with the oil and is sprayed with agricultural watering equipment out onto the yellow slabs, solidifying rapidly into a luminous, porous material that gives off hardly any odor at all….

“According to our data, this sulphur negatively affects the environment,” said Turaly Onerbayev, regional representative of the natural resources and environmental protection ministry.

The sheer size of the amassed sulphur deposits became an environmental hazard, and several people had to get relocated several miles away from wind corridors. The Guardian ran a story on this in 2002:

Even before the imposition of the fine, it was clear that about 3,000 people were having to be moved 50 miles away because of pollution - and they blame sulphur dust for their illnesses.

TCO [Tengizchevoil] denies the charge and says the sulphur is safe, but has decided to get rid of it. Until recently it had virtually no outlet for it; in landlocked Kazakhstan the only route out for large volumes of sulphur has been by rail, but TCO has used every available slot for transporting oil.

Now, however, TCO has linked up with the Russian oil pipelines, so most of its output no longer needs to go by rail. But there is a second problem: a worldwide sulphur glut. Some 40m tonnes of sulphur a year is used by industry, mostly in the form of sulphuric acid, but there is still an excess. From a peak of £100 a tonne in 1988, sulphur prices have dropped to £20 a tonne this year. To unload an additional six million tonnes on the market would mean the price would drop to near zero.

But TCO has to do something. It has put in a £30m plant to process the sulphur into flakes for the Chinese fertiliser market and granules for the western market. The flakes are already being exported by rail to China and the granules will be heading west to Black Sea ports for European and American markets.

At most TCO expects to be selling 3,000 tonnes a week next year [2003], but even that vast quantity means the sulphur mountain will still be growing at 1,000 tonnes a week. (Full Story)

…There is not a lot Chevron can do. The world market price for sulphur is relatively weak and would of course not survive a massive injection of the Tengiz deposits without plunging. The further reprocessing of the sulphur to chemical fertiliser has been attempted, but also here prices are volatile and of course very supply-elastic.

The bottom line is that Chevron would have to invest millions of dollars to get rid of the stuff - without earning a single dime….Chevron has one month to come up with an action plan on how to get rid of the now almost 10 million tonnes of sulphur that have piled up….(Full Story and Photo)

Kenya: UN Agency calls for ban on high-sulphur diesel

Pambazuka News; 2007-02-22

A UN agency on environment has recommended phasing out of high sulphur diesel in Kenya to reduce air pollution. The United Nations Environment Programme (Unep) Partnership for Clean Fuels and Vehicles (PCFV) says use of high sulphur diesel is contributing to environmental degradation. (Source: Daily Nation)

The Effect of Air Pollution on the Chinese Population

By Aditya Shirali ‘08, Cornell University…Chinese health officials have noticed a troubling increase in respiratory and cardiovascular diseases due to pollution….Sulfur dioxide, a noxious compound produced in coal combustion, contributes to approximately 400,000 premature deaths a year in China through its damaging effects on the environment and health of citizens (Bradsher & Barboza, World Business)….Sulfur dioxide results in the formation of acid rain, which now falls on approximately 30% of China’s cultivated land area (EIA 2006). Consumption of crops and water affected by acid rain can have drastic effects on human health, such as arsenic poisoning and suppression of the immune system. However, a source of worry regarding acid rain is the destruction of crop yields, significantly inhibiting the growth of the agricultural sector….China has seen a soaring rise in respiratory diseases, which are currently the leading cause of death in China….In an attempt to reduce sulfur dioxide emission, the Chinese government established protocols to require smokestacks of all new coal-fired plants to be fitted with devices that remove up to 95 percent of the sulfur (Bradsher & Barboza, World Business).* (Full Story)
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* Note by folc.ca: That ought to have a negative impact on Canada’s (read Alberta’s) prospects to increase waste sulphur exports to China.  The world market for waste sulphur is already glutted.

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