Category Archives: Alternative Energy

The Green Climate Fund and COVID-19

 The Green Climate Fund has promised developing nations it will ramp up efforts to help them tackle climate challenges as they strive to recover from the coronavirus pandemic, approving $879 million in backing for 15 new projects around the world…The Green Climate Fund (GCF) was set up under U.N. climate talks in 2010 to help developing nations tackle global warming, and started allocating money in 2015….

Small island states have criticised the pace and size of GCF assistance…Fiji’s U.N. Ambassador Satyendra Prasad said COVID-19 risked worsening the already high debt burden of small island nations, as tourism dived…The GCF  approved in August 2020 three new projects for island nations, including strengthening buildings to withstand hurricanes in Antigua and Barbuda, and installing solar power systems on farmland on Fiji’s Ovalau island.

It also gave the green light to payments rewarding reductions in deforestation in Colombia and Indonesia between 2014 and 2016. But more than 80 green groups opposed such funding. They said deforestation had since spiked and countries should not be rewarded for “paper reductions” in carbon emissions calculated from favourable baselines…. [T]he fund should take a hard look at whether the forest emission reductions it is paying for would be permanent.  It should also ensure the funding protects and benefits forest communities and indigenous people…

Other new projects included one for zero-deforestation cocoa production in Ivory Coast, providing rural villages in Senegal and Afghanistan with solar mini-grids, and conserving biodiversity on Indian Ocean islands.  The fund said initiatives like these would create jobs and support a green recovery from the coronavirus crisis.

Excerpts from Climate fund for poor nations vows to drive green COVID recovery, Reuters, Aug. 22, 2020

The End of the Mindless Self-Indulgence: the Gulf States

Algeria needs the price of Brent crude, an international benchmark for oil, to rise to $157 dollars a barrel. Oman needs it to hit $87. No Arab oil producer, save tiny Qatar, can balance its books at the current price, around $40 (summer 2020)….The world’s economies are moving away from fossil fuels. Oversupply and the increasing competitiveness of cleaner energy sources mean that oil may stay cheap for the foreseeable future. 

Arab leaders knew that sky-high oil prices would not last for ever. Four years ago Muhammad bin Salman, the de facto ruler of Saudi Arabia, produced a plan called “Vision 2030” that aimed to wean his economy off oil. Many of his neighbours have their own versions. But “2030 has become 2020…” 

Still, some see an upside to the upheaval in oil-producing states. The countries of the Gulf produce the world’s cheapest oil, so they stand to gain market share if prices remain low. As expats flee, locals could take their jobs…

Remittances from energy-rich states are a lifeline for the entire region. More than 2.5m Egyptians, equal to almost 3% of that country’s population, work in Arab countries that export a lot of oil. Numbers are larger still for other countries: 5% from Lebanon and Jordan, 9% from the Palestinian territories. The money they send back makes up a sizeable chunk of the economies of their homelands. As oil revenue falls, so too will remittances. There will be fewer jobs for foreigners and smaller pay packets for those who do find work. This will upend the social contract in states that have relied on emigration to soak up jobless citizens….With fewer opportunities in the oil-producing states, many graduates may no longer emigrate. But their home countries cannot provide a good life. Doctors in Egypt earn as little as 3,000 pounds ($185) a month, a fraction of what they make in Saudi Arabia or Kuwait. A glut of unemployed graduates is a recipe for social unrest…

For four decades America has followed the “Carter Doctrine”, which held that it would use military force to maintain the free flow of oil through the Persian Gulf. Under President Donald Trump, though, the doctrine has started to fray. When Iranian-made cruise missiles and drones slammed into Saudi oil facilities in September 2019, America barely blinked. The Patriot missile-defence batteries it deployed to the kingdom weeks later have already been withdrawn. Outside the Gulf Mr Trump has been even less engaged, all but ignoring the chaos in Libya, where Russia, Turkey and the UAE (to name but a few) are vying for control.

A Middle East less central to the world’s energy supplies will be a Middle East less important to America. ..As Arab states become poorer, the nature of their relationship with China may change. This is already happening in Iran, where American sanctions have choked off oil revenue. Officials are discussing a long-term investment deal that could see Chinese firms develop everything from ports to telecoms… Falling oil revenue could force this model on Arab states—and perhaps complicate what remains of their relations with America.

Excerpts from The Arab World: Twilight of the Petrostates, Economist, July  18, 2020

Water Conflicts: Who Owns the Nile River

The Grand Ethiopian Renaissance Dam is a giant edifice that would span the Blue Nile, the main tributary of the Nile river.  Half a century in the making, the hydro-electric dam is Africa’s largest, with a reservoir able to hold 74bn cubic metres of water, more than the volume of the entire Blue Nile. Once filled it should produce 6,000 megawatts of electricity, double Ethiopia’s current power supply. Millions of people could be connected to the grid for the first time. More than an engineering project, it is a source of national pride.

For Egypt, however, it seems a source of national danger. Over 90% of the country’s 100m people live along the Nile or in its vast delta. The river, long seen as an Egyptian birthright, supplies most of their water. They fear the dam will choke it off. Pro-regime pundits, not known for their subtlety, have urged the army to blow it up….Ethiopia wants to start filling the reservoir during this summer’s rainy season. On June 26th, 2020 after another round of talks, Egypt, Ethiopia and Sudan pledged to reach a deal within two weeks. Ethiopia agreed not to start filling the dam during that period.

Diplomats say most of the issues are resolved. But the outstanding one is big: how to handle a drought. Egypt wants Ethiopia to promise to release certain amounts of water to top up the Nile. But Ethiopia is loth to “owe” water to downstream countries or to drain the reservoir so much that electric output suffers. It wants a broader deal between all riparian states, including those on the White Nile, which flows out of Lake Victoria down through Uganda and Sudan.

Even if talks fail and Ethiopia starts filling without a deal, Egyptians will not find their taps dry. There is enough water in the reservoir behind Egypt’s Aswan High Dam to make up for any shortfall this year. But the mood in both countries is toxic. Egyptians have cast Ethiopia as a thief bent on drying up their country. In Ethiopia, meanwhile, Egypt is portrayed as a neocolonial power trampling on national sovereignty. The outcome of the talks will have political consequences in both countries, and perhaps push them to the brink of conflict—at a time when Egypt is already contemplating involvement in a war in Libya.

Ethiopia’s grand dam became a reality and a national obsession under Meles Zenawi, the longtime prime minister who ruled until 2012. His political masterstroke was asking Ethiopians to finance it through donations and the purchase of low-denomination bonds…. Most contributed voluntarily, but there was always an element of coercion. Civil servants had to donate a month’s salary at the start. Local banks and other businesses were expected to buy bonds worth millions of birr. ….

Excerpts from The Grand Ethiopian Renaissance Dam: Showdown on the Nile, Economist, July 4, 2020

.

An Impossible Made Possible: the Green Energy Revolution

Since the cost of renewable energy can now be competitive with fossil fuels. Government, corporate and consumer interests finally seem to be aligning.  The stock market has noticed. After years of underperformance, indexes that track clean-energy stocks bottomed out in late 2018. The S&P Global Clean Energy index, which covers 30 big utilities and green-technology stocks, is now up 37% over two years, including dividends, compared with 18% for the S&P 500.

This year’s Covid crisis will delay some renewable projects, but could speed up the energy transition in other ways. Alternative-energy spending has held up much better than spending on oil and gas. Globally, clean-energy investment is now expected to account for half of total investment in the entire energy sector this year, according to UBS.  Moreover, the crisis has pushed governments to spend money, including on renewable technologies. The massive stimulus plan announced by the European Union last month is decidedly green. The German government increased electric-car subsidies as part of its pandemic-related stimulus package rather than rolling out a 2009-style “cash-for-clunkers” program. China’s plans include clean-energy incentives, too.

Solar and wind are now mature technologies that provide predictable long-term returns. Big lithium-ion batteries, such as those that power Teslas, are industrializing rapidly. More speculatively, hydrogen is a promising green fuel for hard-to-decarbonize sectors such as long-haul transport, aviation, steel and cement.  Many big companies—the likes of Royal Dutch Shell, Air Liquide and Toyota —have green initiatives worth many hundreds of millions of dollars. They are, however, a relatively small part of these large businesses, some of whose other assets may be rendered obsolete by the energy transition… Early-stage electric-truck maker Nikola jumped on its market debut this month to a valuation at one point exceeding that of Ford.

Investors might be better off looking at the established specialists in between. Vestas is the world’s leading manufacturer of wind turbines. Orsted, another Danish company, has made the transition from oil-and-gas producer to wind-energy supplier and aspires to be the first green-energy supermajor. More speculatively, Canadian company Ballard has three decades of experience making hydrogen fuel cells.

Rochelle Toplensky, Green Energy Is Finally Going Mainstream, WSJ, June 24, 2020

Praying for Renewable Energy

In the wake of the Fukushima nuclear disaster in 2011, Fukushima prefecture itself pledged to get all its power from renewable sources by 2040.  The hoped-for transformation, however, has been “slow and almost invisible.”…Renewable generation has grown from 10% of the power supply in 2010 to 17% in 2018, almost half of which comes from old hydropower schemes. Most nuclear plants, which provided more than a quarter of the country’s power before the 2011 disaster, have been shut down… But for the most part they have been replaced not by wind turbines and solar panels but by power stations that burn coal and natural gas. The current government wants nuclear plants to provide at least 20% of electricity by 2030. It also wants coal’s share of generation to grow, and has approved plans to build 22 new coal-fired plants over the next five years. The target for renewables, by contrast, is 22-24%, below the current global average, and far lower than in many European countries.

Geography and geology provide part of the answer. Japan is densely populated and mountainous. That makes solar and onshore wind farms costlier to build than in places with lots of flat, empty land. The sea floor drops away more steeply off Japan’s coasts than it does in places where offshore wind has boomed, such as the North Sea. And although geothermal power holds promise, the most suitable sites tend to be in national parks or near privately owned hot springs.

Government policies also help stifle the growth of renewable energy. Since the end of the second world war, privately owned, vertically integrated regional utilities have dominated the electricity market. These ten behemoths provide stable power within their regions, but do little to co-ordinate supply and demand across their borders…The limited transmission between regions makes it even harder than usual to cope with intermittent generation from wind turbines and solar panels. It also reduces competition, which suits the incumbent utilities just fine…Recent reforms have attempted to promote renewables both directly and indirectly…The “feed-in tariff”, obliging utilities to pay a generous fixed price for certain forms of renewable energy—a policy that has prompted investors to pile into solar and wind in other countries. In 2016, the government fully liberalised the retail electricity market. It has also set up new regulatory bodies to promote transmission between regions and to police energy markets. In April 2020 a law came into force that requires utilities to run their generation, transmission and distribution units as separate businesses. These reforms constitute a policy of “radical incrementalism”.

Critics say the steps have been too incremental and not radical enough. Utilities continue to make it time-consuming and costly for new entrants to get access to the grid, imposing rules that are “not fair for newcomers”, according to Takahashi Hiroshi of Tsuru University. Existing power plants are favoured over new facilities, and the share of renewables is limited, on the ground that their intermittency threatens the grid’s stability.

But even if the government is timid, investors can still make a difference…. Several of Japan’s big multinationals have pledged to switch to clean power on a scale and schedule that put the government’s targets to shame. Environmental activism has made banks and businesses wary of investments in coal. Even big utilities have come to see business opportunities in renewables, especially in the government’s imminent auction of sites for offshore wind plants. Two of them, Tohoku Electric Power and Tokyo Electric Power (TEPCO), have announced plans this year to issue “green bonds” to finance renewables projects. In March 2020, TEPCO established a joint venture with Orsted, a Danish oil firm that has become a pioneer in offshore wind. 

Exceprts from Renewable Energy in Japan: No Mill Will, Economist, June 13, 2020

The Big Trash Burners: Does it Make Sense to Incinerate Waste?

Global waste is expected to hit 3.4 billion tons by 2050 from 2.01 billion tons in 2016, according to the World Bank. As recycling programs encounter challenges and landfills in the U.S. and Europe reach capacity or face regulations making them more expensive, incinerators are becoming the most viable option for many municipalities to deal with much of their garbage. England now burns more municipal waste than it recycles or landfills. China—already the world’s biggest trash burner—is building more incinerators. And incineration companies say, for the first time in years, expansion projects are on the table in the U.S., although the industry faces significant legal and community challenges. Overall, incinerator-plant capacity is forecast to rise 43% globally between 2018 and 2028, according to Ecoprog, a consulting firm…..

Another growth driver is a European Union target for member states to cap the amount of municipal trash they send to landfill at 10% by 2030. Local communities and environmental groups have launched strong opposition to expansion of incineration plans, citing environmental and public-health concerns. Incinerator plants are also called waste-to-energy plants since the heat from burning trash is used to generate electricity, and many governments classify that electricity as renewable energy, a characterization opponents dispute…..But advocates for clean energy…say that while some energy is recovered by burning, recycling or composting garbage would save far greater amounts of energy.

Critics also say cities that own their incinerator plants have little incentive to pursue waste-reduction efforts because the plants are designed to run at full capacity. “Many countries are over-investing in incineration to cut down on landfilling, which will eventually lock them into burning,” said Janek Vähk, development and policy coordinator for Zero Waste Europe.

Excerpts from Saabira Chaudhuri, Trash Burning Ignites as World’s Waste Swells, WSJ, June 10, 2020

Choking the Water: Dams, Dams and More Dams

Since Tibet is part of China, Chinese engineers have been making the most of that potential. They have built big dams not only on rivers like the Yellow and the Yangzi, which flow across China to the Pacific, but also on others, like the Brahmaputra and the Mekong, which pass through several more countries on their way to the sea.

China has every right to do so. Countries lucky enough to control the sources of big rivers often make use of the water for hydropower or irrigation before it sloshes away across a border. But If the countries nearest the source of water, like China,  suck up too much of the flow, or even simply stop silt flowing down or fish swimming up by building dams, the consequences in the lower reaches of the river can be grim: parched crops, collapsed fisheries, salty farmland.

Tension and recrimination have been the order of the day for China and its neighbours… In part, this is because a river like the Mekong does not contain enough water to go round. China has already built 11 dams across the main river (never mind its tributaries) and has plans for eight more; the downstream states have built two and are contemplating seven more. Last year, during a drought, the river ran so low that Cambodia had to turn off a big hydropower plant. Even when rainfall is normal, the altered flow and diminished siltation are causing saltwater to intrude into the Mekong delta, which is the breadbasket of Vietnam, and depleting the fish stocks that provide the only protein for millions of poor Cambodians.

China has long resisted any formal commitment to curb its construction of dams or to guarantee downstream countries a minimum allocation of water. It will not even join the Mekong River Commission, a body intended to help riparian countries resolve water-sharing disputes…

China has not signed any agreements about managing the Mekong with the other countries it flows through, so is not obliged to share a particular amount of water with them, nor even provide data on the flow or any warning about the operations of its dams. It does provide the Mekong River Commission with a trickle of information about water levels and planned releases from dams, which helps with flood-control lower down the river

Excerps from Water Torture: Hydropower in Asia, Economist, May 16, 2020; Torrent to Tickle: the Mekong, Economist, May 16, 2020

Will Saudi Arabia Own the United States?

In the coronavirus pandemic’s financial fallout, Saudi Arabia’s $300 billion sovereign-wealth fund has emerged as one of the world’s biggest bargain hunters, taking minority stakes worth billions of dollars in American corporations.  Saudi Arabia’s Public Investment Fund  (PIF)  in the first quarter of 2020 bought shares valued at about half a billion dollars each in Facebook, Walt Disney,  Marriott International,  and Cisco Systems.  The fund bought financial stocks, investing $522 million in Citigroup, and $488 million in Bank of America while also spending $714 million on a stake in Boeing…Crown Prince Mohammed bin Salman, the kingdom’s day-to-day ruler, tasked the sovereign-wealth fund in 2015 with diversifying the country’s economy away from oil by investing in companies and industries untethered to hydrocarbons.

PIF’s recent buying spree highlights a bold strategy of piling into global stocks even as the novel coronavirus and a crash in oil prices mean that Saudi Arabia’s financial position is now the most precarious in a decade. The Saudi government in May 2020 tripled its value-added tax rate and cut subsidies to state employees as it contends with lower oil revenue and an economy weakening under coronavirus lockdown.

Many of the stocks that PIF has targeted are trading at historic lows, bruised by the fallout from the coronavirus and rock-bottom oil prices that have battered stocks of energy companies in 2020. Teh PIF bought in 2020 undisclosed stakes in a bevy of energy companies, including Equinor (Norway), Royal Dutch Shell, Total (France) and Eni (France). The PIF invested $484 million in Shell, $222 million in Total and previously unreported stakes of $828 million in BP $481 million in Suncor Energy and $408 million in Canadian Natural Resources.

It also purchased shares valued at roughly $80 million each in: Warren Buffett’s Berkshire Hathaway; chipmakers Broadcom and Qualcom ; IBM; drugmaker Pfizer;  Starbucks; railroad company Union Pacific; outsourcer Automatic Data Processing; and Booking.com….On top of the stakes in public companies, PIF is also awaiting regulatory approval for a roughly £300 million ($363 million) buyout of U.K. Premier League soccer team Newcastle United.

Excerpts from Rory Jones and Summer Said, Saudi Sovereign-Wealth Fund Buys Stakes in Facebook, Boeing, Cisco Systems, WSJ, May 18, 2020

Wasted Energy: Methane Leakage in Permian Basin


The methane over the Permian Basin emitted by oil companies’ gas venting and flaring is double previous estimates, and represents a leakage rate about 60% higher than the national average from oil and gas fields, according to the research, which was publishe in the journal Science Advances. Methane is the primary component of natural gas. It also is a powerful driver of climate change that is 34 times more potent than carbon dioxide at warming the atmosphere over the span of a century. Eliminating methane pollution is essential to preventing the globe from warming more than 2 degrees Celsius (3.6 degrees Fahrenheit)—the primary target of the Paris climate accord, scientists say.

The researchers used satellite data gathered in 2018 and 2019 to measure and model methane escaping from gas fields in the Permian Basin, which stretches across public and private land in west Texas and southeastern New Mexico. The leaking and flaring of methane had a market value of nearly $250 million in April 2020.

Methane pollution is common in shale oil and gas fields such as those in the Permian Basin because energy companies vent and burn off excess natural gas when there are insufficient pipelines and processing equipment to bring the gas to market. About 30% of U.S. oil production occurs in the Permian Basin, and high levels of methane pollution have been recorded there in the past. Industry groups such as the Texas Methane and Flaring Coalition have criticized previous methane emission research. The coalition has repeatedly said (Environmental Defense Fund) EDF’s earlier Permian pollution data were exaggerated and flawed.

The Texas Railroad Commission, which regulates the oil and gas industry in Texas, allows companies to flare and vent their excess gas. The commission didn’t respond to a request for comment.

The use of satellites to measure methane is a different approach than the methods used by federal agencies, including the EPA, which base their estimates on expected leakage rates at oil and gas production equipment on the ground. A “top-down” approach to measuring methane using aircraft or satellite data almost always reveals higher levels of methane emissions than the EPA’s “bottom-up” approach.

Excerpts from Permian Oil Fields Leak Enough Methane for 7 Million Homes, Bloomberg Law, Apr. 22, 2020,

Sewers: Turning Wastewater into a Valuable Resource

The world’s growing flows of wastewater offer a largely untapped, potentially lucrative source of energy, agricultural fertilizers, and water for irrigation. The opportunities will increase as the annual volume of wastewater—now 380 billion cubic meters—expands by an estimated 51% by 2050, as populations and incomes multiply, says a team led by researchers at United Nations University’s Institute for Water, Environment, and Health. About 13% of global demand for fertilizer could be met by recovering nitrogen, phosphorus, and potash from wastewater; such use provides a bonus, diverting nutrients from waterways, where they can create harmful eutrophication. Sewage also offers an alternative energy source…..

Reaping Resources from Sewers, Science, Feb. 7, 2020

Human and Environmental Costs of Low-Carbon Technologies

Substantial amounts of raw materials will be required to build new low-carbon energy devices and infrastructure.  Such materials include cobalt, copper, lithium, cadmium, and rare earth elements (REEs)—needed for technologies such as solar photovoltaics, batteries, electric vehicle (EV) motors, wind turbines, fuel cells, and nuclear reactors…  A majority of the world’s cobalt is mined in the Democratic Republic of Congo (DRC), a country struggling to recover from years of armed conflict…Owing to a lack of preventative strategies and measures such as drilling with water and proper exhaust ventilation, many cobalt miners have extremely high levels of toxic metals in their body and are at risk of developing respiratory illness, heart disease, or cancer.

In addition, mining frequently results in severe environmental impacts and community dislocation. Moreover, metal production itself is energy intensive and difficult to decarbonize. Mining for copper,and mining for lithium has been criticized in Chile for depleting local groundwater resources across the Atacama Desert, destroying fragile ecosystems, and converting meadows and lagoons into salt flats. The extraction, crushing, refining, and processing of cadmium can pose risks such as groundwater or food contamination or worker exposure to hazardous chemicals. REE extraction in China has resulted  threatens rural groundwater aquifers as well as rivers and streams.

Although large-scale mining is often economically efficient, it has limited employment potential, only set to worsen with the recent arrival of fully automated mines. Even where there is relative political stability and stricter regulatory regimes in place, there can still be serious environmental failures, as exemplified by the recent global rise in dam failures at settling ponds for mine tailings. The level of distrust of extractive industries has even led to countrywide moratoria on all new mining projects, such as in El Salvador and the Philippines.

Traditional labor-intensive mechanisms of mining that involve less mechanization are called artisanal and small-scale mining (ASM). Although ASM is not immune from poor governance or environmental harm, it provides livelihood potential for at least 40 million people worldwide…. It is also usually more strongly embedded in local and national economies than foreign-owned, large-scale mining, with a greater level of value retained and distributed within the country. Diversifying mineral supply chains to allow for greater coexistence of small- and large-scale operations is needed. Yet, efforts to incorporate artisanal miners into the formal economy have often resulted in a scarcity of permits awarded, exorbitant costs for miners to legalize their operations, and extremely lengthy and bureaucratic processes for registration….There needs to be a focus on policies that recognize ASM’s livelihood potential in areas of extreme poverty. The recent decision of the London Metals Exchange to have a policy of “nondiscrimination” toward ASM is a positive sign in this regard.

A great deal of attention has focused on fostering transparency and accountability of mineral mining by means of voluntary traceability or even “ethical minerals” schemes. International groups, including Amnesty International, the United Nations, and the Organisation for Economic Co-operation and Development, have all called on mining companies to ensure that supply chains are not sourced from mines that involve illegal labor and/or child labor.

Traceability schemes, however, may be impossible to fully enforce in practice and could, in the extreme, merely become an exercise in public relations rather than improved governance and outcomes for miners…. Paramount among these is an acknowledgment that traceability schemes offer a largely technical solution to profoundly political problems and that these political issues cannot be circumvented or ignored if meaningful solutions for workers are to be found. Traceability schemes ultimately will have value if the market and consumers trust their authenticity and there are few potential opportunities for leakage in the system…

Extended producer responsibility (EPR) is a framework that stipulates that producers are responsible for the entire lifespan of a product, including at the end of its usefulness. EPR would, in particular, shift responsibility for collecting the valuable resource streams and materials inside used electronics from users or waste managers to the companies that produce the devices. EPR holds producers responsible for their products at the end of their useful life and encourages durability, extended product lifetimes, and designs that are easy to reuse, repair, or recover materials from. A successful EPR program known as PV Cycle has been in place in Europe for photovoltaics for about a decade and has helped drive a new market in used photovoltaics that has seen 30,000 metric tons of material recycled.

Benjamin K. Sovacool et al., Sustainable minerals and metals for a low-carbon future, Science, Jan. 3, 2020

The Eco-Villain of the 2020s: Moving

[E]ven “green” transport risks becoming a villain… Transport has been the only sector in which greenhouse-gas emissions have consistently risen both in the U.S. and in the European Union… Road, aviation, waterborne and rail transportation put together now account for eight metric gigatons of carbon-dioxide equivalents, which is 24% of global greenhouse-gas emissions, according to the International Energy Agency. In the U.S. this figure rises to 34%….To be consistent with the existing Paris Agreement goals, transport emissions need to peak around 2020 and then fall around 70% relative to 2015 levels, estimates by the International Energy Agency show.

In theory, electric and plug-in hybrid vehicles chart a clear path to lower emissions. Even once the costs of making the batteries and generating the electricity that feeds them is taken into account, most estimates suggest that they emit roughly half as much greenhouse gases as a gasoline car. But recent experience proves that consumer tastes can easily sabotage steps toward sustainability: In the U.S., rising demand for pickup trucks has offset any gain from electric vehicles. And faster economic development in emerging nations will inevitably mean higher emissions, even if each vehicle pollutes less.

In China and India, the number of motorized vehicles per person quintupled and tripled, respectively, between 2007 and 2017, according to U.S. Department of Energy data. Catching up with U.S. levels of motorization—which admittedly are very high—both countries would need two billion extra vehicles. Even if 100% of those were electric, they would add more emissions on their own than the total level allowed by the Paris goals.

Greenhouse gases coming from aviation also keep surging despite the fact that planes are becoming increasingly fuel efficient because air traffic growth has surged. Furthermore, while environmental policies have tended to focus on passenger transport, this misses a big chunk of the picture, because almost half of transportation emissions now come from freight.

Adoption of rail, a cleaner alternative, isn’t picking up. Meanwhile ocean freight, which is by far the most efficient form of transport per ton mile, faces a reckoning from new rules that take effect in January 2020 because it relies on the dirtiest fuel to be so economical.

Excerpts from  Jon Sindreu, In the Green Transition, Transportation Is the Next Big Baddie, WSJ, Dec. 23, 2019

The Carbon-Neutral Europe and its Climate Bank

The European Union (EU) Green Deal, a  24-page document reads like a list of vows to transform Europe into a living demonstration of how a vast economy can both prosper and prioritise the health of the planet. It covers everything from housing and food to biodiversity, batteries, decarbonised steel, air pollution and, crucially, how the EU will spread its vision beyond its borders to the wider world….The plan is large on ambition, but in many places frustratingly vague on detail.

Top billing goes to a pledge to make Europe carbon-neutral by 2050….Current policies on renewable energy and energy efficiency should already help to achieve 45-48% cuts by 2030. Green NGOs  would like to see the EU sweat a bit more and strive for 65% cuts by 2030, which is what models suggest is needed if the bloc is to do its share to limit global warming to 1.5-2ºC.

All this green ambition comes at a price. The commission estimates that an additional €175bn-€290bn ($192bn-$320bn) of investment will be needed each year to meet its net-zero goals. Much of this will come from private investors. One way they will be encouraged to pitch in is with new financial regulations. On December 5th, 2019 EU negotiators struck a provisional agreement on what financial products are deemed “green”. Next year large European companies will be forced to disclose more information about their impacts on the environment, including carbon emissions. These measures, the thinking goes, will give clearer signals to markets and help money flow into worthy investments.

Another lever is the European Investment Bank, a development bank with about €550bn on its balance-sheet, which is to be transformed into a climate bank. Already it has pledged to phase out financing fossil fuels by 2021. By 2025 Werner Hoyer, its boss, wants 50% of its lending to go to green projects, up from 28% today, and the rest to go to investments aligned with climate-change goals. Some of that money will flow into a “just transition” fund, worth €100bn over seven years. Job losses are an unavoidable consequence of decarbonising Europe’s economy; the coal industry alone employs around 250,000 people, mainly in eastern Europe. The fund will try to ease some of this pain, and the political opposition it provokes.

The Green Deal goes beyond the scope of previous climate policies. One area it enters with gusto is trade. Under the commission’s proposals, the eu will simply refuse to strike new trade deals with countries that fail to comply with the Paris agreement’s requirement that signatories must increase the scale of their decarbonisation pledges, known as “nationally determined contributions” or NDCs, every five years. That would mean no new deals with America while Donald Trump is president; it is set to drop out of the Paris agreement late in 2020. And, because the first round of enhanced ndcs is due next year, it would put pressure on countries that are dragging their feet on these, of which there are dozens—including China and India.

The deal also sketches out plans for a carbon border-adjustment levy. Under the eu’s emission-trading scheme, large industries pay a fee of about €25 for every tonne of carbon dioxide they emit. Other regions have similar schemes with different carbon prices. A border-adjustment mechanism would level the playing field.

Excerpts from, The EU’s Green Deal, Economist, Dec. 2019

The Fight for the Remnant Trees of Europe

For 120 years RWE has been one of Europe’s biggest emitters of carbon dioxide. The German utility cleared almost all of Hambacher forest, a once-vast wood in western Germany, to mine lignite, an especially filthy fossil fuel, which it burned to generate electricity. What is left of “Hambi” has become a symbol of the anti-coal movement, occupied by activists camping in 80-odd tree houses.  RWE is under fire even where it does not operate. A Peruvian farmer has sued it in a German court for its contribution to climate change that led to the melting of an Andean glacier, which threatens to flood his home. He lost but is appealing.

Peruvian farmer who sued RWE

But  in September 2019, the EU agreed to a €43bn ($47.5bn) asset swap between RWE and its rival E.ON. It turns E.ON into Europe’s largest power-grid operator by assets and RWE into the world’s second-biggest producer of offshore wind power and Europe’s third-biggest producer of renewable energy. [RWE] has vowed to become carbon neutral by 2040

Of the eu’s 28 members, 18 have pledged to emit no net carbon by 2050. Germany says it will stop using coal by 2038 and stump up €40bn to ease the transition.   RWE is demanding a chunk of the transition pot. It still runs three lignite mines, which directly employ 9,900 people and indirectly support another 20,000 jobs in the Rhine region….  [To complicate matters further], in October 2019 a court ordered a halt to the clearing of its remaining 200 hectares of the forest…RWE says the forest could be left as it is—but at a price. It may cost the company €1.5bn or so to find an alternative to a planned expansion of an open-pit mine at Hambach.

Excerpts from  RWE: After Hambi, Economist, Nov. 23, at 59

How to Own a Foreign Country: the Strategy of Gulf States in Egypt and Sudan

Nile has become a battleground. Countries that sit upriver and wealthy Gulf states are starting to use the Nile more than ever for water and electricity. That means less water for the 250 million-plus small farmers, herders and city dwellers in the Nile basin.  Dams funded by foreign countries including China and oil-rich neighbors like Saudi Arabia and other Gulf states are tapping the river to irrigate industrial farms and generate electricity. Crops grown using Nile water are increasingly shipped out of Africa to the Middle East, often to feed livestock such as dairy cows

Exporting crops to feed foreign animals while borrowing money to import wheat is “almost insane,” Sudan’s new prime minister, Abdalla Hamdok, said in an interview. “It’s exporting water, basically. We could be growing wheat and getting rid of half our import bill,” he said. Mr. Hamdok’s predecessor, dictator Omar al-Bashir, is in prison after an uprising sparked by rising prices for food….

The most dramatic change to the Nile in decades is rising in Ethiopia, where the Blue Nile originates. Ethiopia, which has one of the world’s fastest-growing economies, turned to China to help finance the $4.2 billion Grand Ethiopian Renaissance Dam project to generate electricity. While the dam, located just miles from the Sudan border, won’t supply water for farms and cities, its massive reservoir will affect the flow of water.

Downstream, Egypt is worried that Ethiopia will try to quickly fill the reservoir beginning in 2020. The issue is “a matter of life and death for the nation,” Egyptian President Abdel Fattah Al Sisi said in televised remarks in 2017. “No one can touch Egypt’s share of water.” A spokesman for Ethiopia’s Ministry of Foreign Affairs said in a September press conference that “any move that does not respect Ethiopia’s sovereignty and its right to use the Nile dam has no acceptance.”  Sharing of the Nile’s waters has long been governed by international treaties, with Egypt claiming the vast majority. Since Ethiopia wasn’t included in those treaties, it was never provided an allotment of water. Ethiopia’s massive dam has thrown a wrench into past agreements…

Sudan is stuck in the middle. Much of the water that flows through the country is already allocated. “Sudan actually doesn’t have that much free water available,” says Harry Verhoeven, author of “Water, Civilisation and Power in Sudan.”  By early 2015, Saudi Arabia doubled its investment in Sudan’s agriculture sector to $13 billion, equaling about one-third of all foreign investment in Sudanese industry….The contrast between verdant export crops watered by the Nile and parched villages was visible in the area where protests started in December 2019, during a nationwide wheat shortage.   The protesters were angry about food prices, poor job prospects, social strictures and Sudan’s moribund economy, Mr. Alsir says. “We’re surrounded by farms,” he says. “But we’re not getting any of it.

Past a rocky expanse next to the village flows a deep canal, green with weeds, dug a decade ago by a Saudi-owned company called Tala Investment Co. It runs from the Nile about 10 miles to Tala’s farm, which leases its land from the government.  Tala grows crops for export and maximizes profits using Sudan’s “cheap manpower,” the company’s website says….The alfalfa is shipped 400 miles overland to Port Sudan and then across a nearly 200-mile stretch of the Red Sea to Jeddah in Saudi Arabia, then is used for animal feed….

The Aswan dam  In Egypt is primarily used to generate electricity. But a sprawling desert farm, the Toshka project to the west, taps the reservoir. That is where Saudi Arabia and the U.A.E. have made some of their biggest agricultural investments in Egypt in the past decade.  The strategy there is straightforward, says Turki Faisal Al Rasheed, founder of Saudi agriculture company Golden Grass Inc., which has explored purchasing farms in Egypt and Sudan. “When you talk about buying land, you’re not really buying land,” he says. “You’re buying water.”

Even with all that water dedicated to growing crops, Egypt  is rapidly outstripping its resources.  This is because he country’s population is forecast to grow 20% to 120 million by 2030, and to 150 million by 2050.  Access to water in Egypt is increasingly uncertain. The country’s annual per capita water use dipped below 24,000 cubic feet in recent years and is expected to fall below 18,000 cubic feet by 2030, a level defined as “absolute water scarcity,” according to the United Nations. The comparable figure in the U.S. is 100,000 cubic feet, enough to fill an Olympic swimming pool.  Saudi Arabia and the U.A.E. control about 383,000 acres of land in Egypt, an expanse nearly twice the size of New York City, according to Land Matrix. The main crops are corn, potatoes, wheat, alfalfa, barley and fruit such as grapes that are exported back home.

Mr. Sisi is now looking for new places to grow food. In 2015 he launched a program to expand arable land by more than 1.5 million acres in the country, part of which will tap into the Nubian aquifer, an irreplaceable ancient store of water beneath the Sahara. Saudi and U.A.E. companies have bid for lands in the project, according to the New Egyptian Countryside Development Co., which is managing the project.  Mr. Al Rasheed, the Saudi farm owner in Egypt, says that for him and others from the Gulf, farming along the Nile is about building regional influence as much as ensuring food supplies. “Food is the ultimate power,” he says.


Excerpts from Justin Scheck &Scott Patterson, ‘Food Is the Ultimate Power’: Parched Countries Tap the Nile River Through Farms, WSJ, Nov. 25, 2019

Stopping GreenWashing

The EU wants to revolutionise the world of green finance. Brussels officials, MEPs and member states are currently trying to thrash out plans for a gold standard in green investment they hope will unleash tens of millions of euros of private money to fund the transition to a more sustainable world.   The project has a classically boring Brussels name — the “taxonomy” for sustainable activities — but the implications are potentially transformative. The EU wants to become the first supranational regulator to write rules that banks and funds will have to comply with when they claim to launch “green” products or investments.  As it stands, there is no global benchmark to judge just how green a financial product is. Funds and banks can sell and label sustainable finance products without an independent arbiter checking if reality meets the hype. The point of the EU’s work is to stamp out this so-called “greenwashing”…

Perhaps the most sensitive issue of all is how to handle nuclear energy. France — which has big nuclear business interests — doesn’t want the taxonomy to stigmatise nuclear as a “brown” technology. Other member states, led by Germany, want it excluded from being green, as do the MEPs. 

Excerpts from  Mehreen Khan, The Green Gold Standard, FT, Nov. 11, 2019

Bio-Energy and Food Security

In the effort to keep the planet from reaching dangerous temperatures, a hybrid approach called BECCS (bioenergy with carbon capture and storage) has a seductive appeal. Crops suck carbon dioxide (CO2) from the atmosphere, power plants burn the biomass to generate electricity, and the emissions are captured in a smokestack and pumped underground for long-term storage. Energy is generated even as CO2 is removed: an irresistible win-win. But, the United Nations’s climate panel sounded a warning about creating vast bioenergy plantations, which could jeopardize food production, water supplies, and land rights for poor farmers.

In an earlier special report in October 2018, IPCC called for holding the rise in global average temperatures to no more than 1.5°C above preindustrial conditions to avoid the worst consequences of climate change. It emphasized that cutting emissions won’t be enough to reach that goal. Replacing coal with renewable energy, and significantly cutting oil and natural gas, would still leave gigatons of excess carbon in the atmosphere. BECCS could remove it, computer models suggested, if several million square kilometers—an area the size of India—were devoted to energy crops.

But the 2019 IPCC report examines the consequences of deploying BECCS on that vast scale and concludes it could “greatly increase” the demand for agricultural land. The pressure on conventional crops could compromise food security, as happened in 2007 when rising U.S. corn ethanol production contributed to a spike in food prices. (In Mexico, the price of tortillas, a staple for the poor, rose 69% between 2005 and 2011.) The bioenergy plantations could also take a toll on biodiversity—as is happening in Southeast Asia, where plantations producing palm oil for biodiesel as well as food are displacing diverse tropical forest. And they could suck up scarce water, especially in drylands, where irrigation of crops might deplete local supplies, the IPCC report says.

Industrial bioenergy crops can lead to the same kinds of problems as intensive food production, such as the contamination of water from excess fertilizer. Scaling up bioenergy in developing countries can also exacerbate social problems like the loss of land by small farmers.

Excerpts from Erik Stokstad, Bioenergy plantations could fight climate change—but threaten food crops, U.N. panel warns, Science, Aug. 8, 2019

A Cure Worse than the Disease? Biofuels in Planes

The 2019 report by the Rainforest Foundation Norway RFN is called ‘Destination Deforestation’ and reviewed the role of the aviation industry in contributing to the climate crisis, concluding that there’s a high risk that increased use of palm and soy-based biofuel in planes will lead to increased deforestation.

Finland, the world’s largest producers of renewable diesel and the only EU country that gives additional incentives for the use of palm oil products to manufacture biofuel, could spearhead the race towards deforestation, as areas of rainforest in countries like Indonesia or in South America are cleared to plant crops that will later be used to produce the fuel.  RFN says that meeting the aviation industry’s own climate-change targets to reduce emissions could result in 3.2 million hectares of tropical forest lost, an area larger than Belgium.

Researchers at Rainforest Foundation Norway believe the Finnish incentives for (Palm Fatty Acid Distillate) PFAD-based biofuels are likely to contribute to this deforestation, since Finland’s state-owned oil company Neste produces half of the world’s renewable diesel.  “Finland continues to treat the palm oil by-product PFAD as a waste, eligible for additional incentives. In addition, Finland is home to Neste, the world’s largest producer of hydrotreated biodiesel, and uses PFAD as a raw material. Therefore, Finland’s program could contribute to the massive deforestation discussed in our report” he explains.

With Finland left isolated as the only EU country to pay producers to use waste-classified PFAD in biofuel production, Rainforest Foundation Norway cautions that the country risks becoming a dumping ground for unsustainable raw material….“As long as PFAD is classified as ‘waste’, it enjoys huge incentives from the state. Biofuels made out of PFAD are completely exempt from carbon dioxide tax in Finland. Additionally, PFAD’s emissions can be discounted, and it is not subject to the same sustainability criteria as other raw materials.

With ‘flight shame’ gaining more momentum across the world, the aviation industry is desperate to find ways to make flying compatible with climate goals. While replacing fossil fuels with renewables sounds like a great idea, the sustainability of biofuels is highly dependent on the raw materials used to produce them…The most common aviation biofuels, Hydrogenated Esters and Fatty Acids (HEFA) fuels are produced from vegetable oils and animal fats. While the use of waste oils and other recycled materials is possible, the most viable raw materials for HEFA jet fuels are food crops.  “The cheapest and most readily available raw materials for HEFA jet fuel are palm oil and soy oil, which are closely linked to tropical deforestation” Ranum says.  The experts suggest that aiming to reduce emissions by increasing demand for palm and soy oil is a cure worse than the disease.

Elias Huuhtan, Report: Finland’s push to use biofuel could cause ‘massive deforestation, https://newsnowfinland.fi/ , Oct. 7, 2019

Can Nuclear Power Beat Climate Change?

The 2019 World Nuclear Industry Status Report (WNISR2019) assesses the status and trends of the international nuclear industry and analyzes the potential role of nuclear power as an option to combat climate change. Eight interdisciplinary experts from six countries, including four university professors and the Rocky Mountain Institute’s co-founder and chairman emeritus, have contributed to the report.

While the number of operating reactors has increased over the past year by four to 417 as of mid-2019, it remains significantly below historic peak of 438 in 2002.  Nuclear construction has been shrinking over the past five years with 46 units underway as of mid-2019, compared to 68 reactors in 2013 and 234 in 1979. The number of annual construction starts have fallen from 15 in the pre-Fukushima year (2010) to five in 2018 and, so far, one in 2019. The historic peak was in 1976 with 44 construction starts, more than the total in the past seven years.

WNISR project coordinator and publisher Mycle Schneider stated: “There can be no doubt: the renewal rate of nuclear power plants is too slow to guarantee the survival of the technology. The world is experiencing an undeclared ‘organic’ nuclear phaseout.”  Consequently, as of mid-2019, for the first time the average age of the world nuclear reactor fleet exceeds 30 years.

However, renewables continue to outpace nuclear power in virtually all categories. A record 165 gigawatts (GW) of renewables were added to the world’s power grids in 2018; the nuclear operating capacity increased by 9 GW. Globally, wind power output grew by 29% in 2018, solar by 13%, nuclear by 2.4%. Compared to a decade ago, nonhydro renewables generated over 1,900 TWh more power, exceeding coal and natural gas, while nuclear produced less.

What does all this mean for the potential role of nuclear power to combat climate change? WNISR2019 provides a new focus chapter on the question. Diana Ürge-Vorsatz, Professor at the Central European University and Vice-Chair of the Intergovernmental Panel on Climate Change (IPCC) Working Group III, notes in her Foreword to WNISR2019 that several IPCC scenarios that reach the 1.5°C temperature target rely heavily on nuclear power and that “these scenarios raise the question whether the nuclear industry will actually be able to deliver the magnitude of new power that is required in these scenarios in a cost-effective and timely manner.”

Over the past decade, levelized cost estimates for utility-scale solar dropped by 88%, wind by 69%, while nuclear increased by 23%. New solar plants can compete with existing coal fired plants in India, wind turbines alone generate more electricity than nuclear reactors in India and China. But new nuclear plants are also much slower to build than all other options, e.g. the nine reactors started up in 2018 took an average of 10.9 years to be completed. In other words, nuclear power is an option that is more expensive and slower to implement than alternatives and therefore is not effective in the effort to battle the climate emergency, rather it is counterproductive, as the funds are then not available for more effective options.

Excerpts from WNISR2019 Assesses Climate Change and the Nuclear Power Option, Sept. 24, 2019

Greening Natural Gas: How to Record Gas Leaks with Hand-Held Cameras

Energy companies are producing record volumes of natural gas, thanks in part to the U.S. fracking boom. They have ambitious plans to make the cleaner-burning fuel a big part of the global energy mix for decades to come by sending tankers of liquefied gas around the world.But growing public concern over leaks and intentional releases of gas and its primary component, methane, threaten to derail the dominance of gas in the new energy world order.  Methane is far more potent than carbon dioxide in contributing to climate change. That makes it particularly harmful to the environment when it is discharged into the atmosphere.

In the U.S. alone, the methane that leaks or is released from oil and gas operations annually is equivalent to the greenhouse gas emissions from more than 69 million cars, according to a Wall Street Journal analysis using conversion formulas from the Environmental Protection Agency and emissions estimates for 2015 published last year in the journal Science….The Intergovernmental Panel on Climate Change, a United Nations body, says methane is even more potent than the estimates the EPA uses. By its calculation the annual releases would be equal to those of about 94 million cars, or roughly a third of the nation’s registered vehicles.

About 2.3% of the natural gas produced in the U.S. escapes directly into the atmosphere due in part to leaky equipment or intentional discharges, according to the Science study, which analyzed 2015 emissions. (Some discharges are legally permitted.) At that rate, it would have amounted to about $7.6 million worth of gas lost each day last year.  Another roughly $4.5 million in U.S. gas went up in smoke each day in 2018, World Bank data show, as energy companies burned fuel  (a practice known as flaring) they couldn’t move to market or chose not to ship because the cost of doing so would have exceeded the price the gas would fetch in some regions. Many companies drill primarily for oil and treat the gas released in the process as a byproduct.

Leaking and flaring are a global problem. As gas displaces coal for electricity production in the U.S. and other countries its side effects are drawing more attention, not just from environmental activists but investors fretting about how gas will compete over the long term against renewable energy sources such as wind and solar, which are dropping in price.

President Trump’s administration has moved to relax existing federal requirements for monitoring and fixing leaks. Still, from oil giants to the independent drillers powering the shale boom, companies are scrambling to rein in emissions over concerns from their executives, shareholders and environmentalists that gas waste could undermine the argument for gas as the “bridge fuel” to a cleaner future of renewables.

Methane is invisible to the naked eye, so companies detect leaks with infrared cameras and lasers. That can be a tall task—the gas can seep out of countless places, from wells to pipelines to storage facilities.  As a result, energy companies are increasingly supplementing manual inspections with aerial monitoring to survey large swaths of land checkerboarded with oil and gas infrastructure.  In West Texas, BP has begun monthly flights over its wells by a drone equipped with methane-detection equipment.   The company also is looking to cut back on flaring, which many companies do in the Permian Basin of Texas and New Mexico because they lack access to pipelines to move the product to market….BP is investing in a new gas-gathering and compression system that will allow it to send more gas to customers instead of burning it away…

Kairos,  a company, specializes in identifying larger methane releases by flying small planes about 3,000 feet above the ground. …Kairos has received funding from the Oil and Gas Climate Initiative, an industry organization whose members include Exxon Mobil Corp. and Chevron Corp. The companies in the organization have pledged to collectively cut average methane emissions to less than 0.25% of gas sold by 2025.

One reason companies are stepping up monitoring is that environmental activists are watching, using technology to record leaks as they seek to boost public awareness of methane emissions.  Sharon Wilson, an organizer for the advocacy organization Earthworks, visits the Permian almost every month to monitor leaks from oil and gas sites, using a hand-held infrared camera. She submits the footage as evidence in state regulatory complaints against energy companies and often posts it on YouTube…Earthworks has filed more than 100 complaints in Texas and New Mexico since the beginning of 2018. State regulators issued violations or compelled operators to make repairs or install new equipment in fewer than 10% of the instances as of July, according to estimates by the group.

Excerpts from Rebecca Elliott, The Leaks that Threaten the Clean Image of Natural Gas, WSJ,  Aug. 10, 2019

The Unquenchable Thirst for Oil

Demand for oil is rising and the energy industry, in America and globally, is planning multi-trillion-dollar investments to satisfy it. No firm embodies this strategy better than ExxonMobil, the giant that rivals admire and green activists love to hate. As our briefing explains, it plans to pump 25% more oil and gas in 2025 than in 2017. If the rest of the industry pursues even modest growth, the consequence for the climate could be disastrous.

To date politicians, particularly in America, have been reluctant to legislate for bold restrictions on carbon. That is in part thanks to ExxonMobil’s attempts to obstruct efforts to mitigate climate change. …ExxonMobil’s policies on climate change remain marred by inconsistencies. In October the company said it was giving $1m, spread over two years, to a group advocating a carbon tax. ExxonMobil maintains that a carbon tax is a transparent and fair way to limit emissions. But the sum is less than a tenth of its federal lobbying spending in 2018. Moreover, the carbon tax it favours would include protection for oil companies from climate lawsuits.

The firm is also working to reduce leaks of methane, a powerful greenhouse gas, from its wells, pipelines and refineries. However the American Petroleum Institute  (API) has been a main force urging Mr Trump’s administration to ease regulations on methane emissions. The API’s other efforts include lobbying against incentives for electric cars.  ExxonMobil is not alone in trying to sway the climate debate in its direction either. Shell, Total and BP are all members of the API. Marathon Petroleum, a refiner, reportedly campaigned to ease Barack Obama’s fuel-economy standards. BP spent $13m to help block a proposal for a carbon tax in Washington state in November. The Western States Petroleum Association, whose membership includes ExxonMobil and Shell, also lobbied to defeat that tax.

While oil companies plan to grow, trends in cleaner energy are moving in the wrong direction. Investments in renewables fell as a share of the total in 2017 for the first time in three years, as spending on oil and gas climbed. In 2018 carbon emissions in America grew by 3.4% as economic activity picked up, even as coal fell out of favour. Mr Woods maintains that any change to the energy supply will be gradual. “I don’t think people can readily understand just how large the energy system is, and the size of that energy system will take time to evolve,” he argues… Out at sea, ExxonMobil is working to increase production. By next year an underwater web of pipes will connect wells on the seabed to a vast vessel. From there the oil will be transferred to smaller tankers, then to the vast infrastructure that can refine and transport it until it reaches consumers in the form of fertiliser, plastic bottles, polyester or, most likely, petrol. From beneath the ocean floor to your car’s tank, for about the price of a gallon of milk.

Excerpts from  Crude Awakening, Economist,  Feb. 9, 2019; Bigger Oil, Economist,  Feb. 9, 2019

From Savior to Villain: Biofuel from Palm Oil

Globally, average palm oil yields have been more or less stagnant for the last 20  years, so the required increase in palm oil production to meet the  growing demand for biofuels  has come from deforestation and peat destruction in Indonesia.  Without fundamental changes in governance, we can expect at least a third of new palm oil  area to require peat drainage, and a half to result in deforestation.

Currently, biofuel policy results in 10.7  million tonnes of palm oil demand.  If the current biofuel policy continues we expect by 2030:
• 67 million tonnes palm oil demand due to biofuel policy.
• 4.5 million hectares deforestation.
• 2.9 million hectares peat loss.
• 7 billion tonnes of CO2 emissions over 20 years, more than total annual U.S. GHG emissions.
It must always be remembered that the primary purpose of biofuel policy in the EU and many  other countries is climate change mitigation. Fuel consumers in the European Union, Norway  and elsewhere cannot be asked to continue indefinitely to pay to support vegetable oil based
alternative fuels
that exacerbate rather than mitigate climate change.

The use of palm oil-based biofuel should be  reduced and ideally phased out entirely.  In Europe, the use of biodiesel other than that produced from approved waste or  by-product feedstocks should be reduced or eliminated.
In the United States, palm oil biodiesel should continue to be restricted from generating  advanced RINs under the Renewable Fuel Standard. Indonesia should reassess the relationship between biofuel mandate, and its  international climate commitments, and refocus its biofuel programme on advanced biofuels from wastes and residues. The aviation industry should focus on the development of advanced aviation biofuels  from wastes and residues, rather than hydrotreated fats and oils.

Excerpts from Dr Chris Malins,  Driving deforestation: The impact of expanding palm oil demand through biofuel policy, January 2018

In Feb. 28, 2019, Norway’s $1 trillion sovereign wealth fund, the world’s largest, pulled out of more than 33 palm oil companies over deforestation risks.

Climate Change: the Costs of Deep Decarbonization

Nuclear is already the largest source of low-carbon energy in the United States and Europe and the second-largest source worldwide (after hydropower). In the September 2018 report of the MIT Energy Initiative, The Future of Nuclear Energy in a Carbon-Constrained World shows that extending the life of the existing fleet of nuclear reactors worldwide is the least costly approach to avoiding an increase of carbon emissions in the power sector. Yet, some countries have prioritized closing nuclear plants, and other countries have policies that undermine the financial viability of their plants. Fortunately, there are signs that this situation is changing. In the United States, Illinois, New Jersey, and New York have taken steps to preserve their nuclear plants as part of a larger decarbonization strategy. In Taiwan, voters rejected a plan to end the use of nuclear energy. In France, decisions on nuclear plant closures must account for the impact on decarbonization commitments. In the United Kingdom, the government’s decarbonization policy entails replacing old nuclear plants with new ones. Strong actions are needed also in Belgium, Japan, South Korea, Spain, and Switzerland, where the existing nuclear fleet is seriously at risk of being phased out.

What about the existing electricity sector in developed countries—can it become fully decarbonized? In the United States, China, and Europe, the most effective and least costly path is a combination of variable renewable energy technologies—those that fluctuate with time of day or season (such as solar or wind energy), and low-carbon dispatchable sources (whose power output to the grid can be controlled on demand). Some options, such as hydropower and geothermal energy, are geographically limited. Other options, such as battery storage, are not affordable at the scale needed to balance variable energy demand through long periods of low wind and sun or through seasonal fluctuations, although that could change in the coming decades.

Nuclear energy is one low-carbon dispatchable option that is virtually unlimited and available now. Excluding nuclear power could double or triple the average cost of electricity for deep decarbonization scenarios because of the enormous overcapacity of solar energy, wind energy, and batteries that would be required to meet demand in the absence of a dispatchable low-carbon energy source.  One obstacle is that the cost of new nuclear plants has escalated, especially in the first-of-a-kind units currently being deployed in the United States and Western Europe. This may limit the role of nuclear power in a low-carbon portfolio and raise the cost of deep decarbonization. The good news is that the cost of new nuclear plants can be reduced through…modular construction shifting  labor from construction sites to productive factories and shipyards…and seismic isolation to protect the plant against earthquakes, which simplifies the structural design of the plant.

Excerpts from John Parsons, A fresh look at nuclear energy, Science, Jan. 2019

Cleaning Up Dirty Shipping

Making shipping cleaner is made more urgent by the decision of the International Maritime Organisation (IMO), the United Nations body responsible for the world’s shipping, to reduce the amount of sulphur allowed in bunker fuel from 3.5% to 0.5% by 2020. Sulphur is nasty stuff. When burned, it forms sulphates, which cause acid rain and pollute the air. A paper published in February 2017 in Nature Communications, by Mikhail Sofiev of the Finnish Meteorological Institute, found that the imo’s new rule could stop between 139,000 and 396,000 premature deaths a year.

The trouble is that sulphates also scatter sunlight and help to form and thicken clouds, which reflect solar radiation away from Earth. As a result, shipping is thought to reduce rather than increase man-made global warming—by 7% throughout the 20th century, according to one study. Dr Sofiev’s research showed that this cooling effect could fall by 80% after 2020, with the new low-sulphur standard in place…

The obvious way to offset the loss of sulphur-related cooling is by steep cuts to shipping’s planet-cooking carbon-dioxide emissions. The IMO wants these to fall by half, compared with 2008 levels, by 2050, regardless of how many vessels then ply the seas. But unlike desulphurisation, which is both imminent and legally binding, the CO2 target looks fuzzy and lacks any enforcement mechanism. An attempt to begin fleshing it out, at a meeting of  IMO member states which concluded in London on October 26, 2018 foundered.

One way to cut fuel consumption is to reduce drag by redesigning hulls and propellers. This is happening. In the past five or so years many ships’ propellers have been fitted with tip fins analogous to the turbulence-reducing upturned winglets on aeroplanes.  Further percentage points can be shaved away by smoothing hulls. This means, in particular, stopping barnacles and other creatures growing on them. Tin-based antifouling paints are now banned as toxic to sea life, so paintmakers are returning to an 18th-century solution to the fouling problem—copper.   Hulls can be scraped smooth, too, but restrictions on littering waters with paint chips and species from foreign parts have made such cleaning problematic. This may change, though, thanks to an underwater drone described by its Norwegian maker, ecosubsea, as “a cross between a vacuum cleaner and a lawnmower”. Rather than scour hulls with a metal brush, ecosubsea’s robots blast water at an angle almost parallel with the hull’s surface, which mostly spares paint from abrasion but hits marine growth perpendicularly, and thus hard. 

Many have hopes of returning to wind propulsion, and engineers have devised various modern versions of the sail. None has yet succeeded. A system developed by SkySails, a firm in Hamburg, for example, relied on kites to pull ships along. It was installed on five ships from 2008-11, but proved fiddly to use and maintain…

Some hope to cut marine emissions by employing batteries and electric motors. For transoceanic shipping this looks a long-shot. But local shipping might benefit. Norway, for instance, has started to introduce battery-powered ferries. And a Dutch company called Port-Liner is building electric canal barges for transporting shipping containers. The technology is expensive. Without taxpayer subsidy it would hardly be a runner—a fact also true of the Norwegian ferries.

The problem of shifting emissions around rather than eliminating them also applies to the idea of powering ocean-going vessels using fuel-cells. These generate electricity by reacting hydrogen and oxygen together. Given that electric propulsion more usually disguises emissions than eliminates them, some suggest the most practical approach to reducing shipping’s contribution to global warming is to switch to low-carbon fuel systems rather than conducting a futile search for no-carbon fuels. One alternative is diesel-electric propulsion.  Liquefied natural gas (lng) is another option. 

Excerpts  from Marine Technology of the Future: In Need for a Cean Up, Economist,  Nov. 3, 2018, at 75

The New Oil – Lithum

As demand heats up for lithium, a group of companies are hastening efforts to shine a light into the long-opaque market for the battery material that metal-industry cheerleaders call the “new oil.” … Auto makers, battery companies, and smartphone and laptop providers have been racing to lock down supplies of lithium from major producers such as Albemarle Corp of United States, the world’s biggest miner of lithium by volume, and Chilean company Sociedad Quimica y Minera de Chile, the No. 2 producer. Some of the world’s notable lithium users include Apple Inc., Samsung Electronics Co. and TeslaInc.

The surge in demand has sparked efforts to bring transparency to prices for lithium. …Because lithium isn’t traded on any exchange—unlike gold or silver, for instance—buyers have long been at a disadvantage in negotiations with producers, according to market watchers. In opaque markets, producers often have greater access to information about fast-moving market dynamics, such as unintended mine outages or suddenly sagging demand. That is especially the case with lithium, a metal mined by a relatively small group of big suppliers in countries from Chile to Australia…Big lithium miners “may say they support transparency, but they really don’t,” said Chris Berry, founder of New York commodity consultant House Mountain Partners. “Keeping prices secret between themselves and their end users is good for them.”

Excerpts  from Scott Patterson Lithium Boom Raises Question: What Is Its Price? WSJ,  Nov. 27, 2018

Flowering the Sahara

The installation of large-scale wind and solar power generation facilities in the Sahara could cause more local rainfall, particularly in the neighboring Sahel region. This effect,  could increase coverage by vegetation, creating a positive feedback that would further increase rainfall.

Wind and solar farms offer a major pathway to clean, renewable energies. However, these farms would significantly change land surface properties, and, if sufficiently large, the farms may lead to unintended climate consequences. In this study, we used a climate model with dynamic vegetation to show that large-scale installations of wind and solar farms covering the Sahara lead to a local temperature increase and more than a twofold precipitation increase, especially in the Sahel, through increased surface friction and reduced albedo. The resulting increase in vegetation further enhances precipitation, creating a positive albedo–precipitation–vegetation feedback that contributes ~80% of the precipitation increase for wind farms…

This highlights that, in addition to avoiding anthropogenic greenhouse gas emissions from fossil fuels and the resulting warming, wind and solar energy could have other unexpected beneficial climate impacts when deployed at a large scale in the Sahara, where conditions are especially favorable for these impacts. Efforts to build such large-scale wind and solar farms for electricity generation may still face many technological (e.g., transmission, efficiency), socioeconomic (e.g., cost, politics), and environmental challenges, but this goal has become increasingly achievable and cost-effective

Exceprts from Yan Li, Climate model shows large-scale wind and solar farms in the Sahara increase rain and vegetation, Science, Sept. 7, 2018

Mini-Green Grids

A forested village in Jharkhand state, eastern India, Narotoli is home mainly to adherents of Sarna, a nature-worshipping tribal religion. In more ways than one, it has long been off-grid… In 2018, it became one of the last in India to benefit from a push by Narendra Modi, the prime minister, to supply electricity to all the country’s villages. But the national power lines are so “reliably unreliable”, says an Indian executive, that they might as well be washing lines.

In 2016, before the national grid arrived, however, Mlinda, a social enterprise, had set up a “mini-grid”, a bank of batteries charged by solar panels and hooked up to homes, to guarantee round-the-clock power independent of the national network.  The power generated by the plant is expensive (though it costs less than villagers often pay for alternatives such as kerosene for lighting and diesel for irrigation pumps). The worry is that demand for electricity may not be enough to justify the installation cost. …But Mlinda and other mini-grid installers see them as more than a way to satisfy existing demand for electricity: they are a way to catalyse development. The installers advise villagers on irrigation, farming and marketing to help them develop businesses that require reliable electricity, which in turn justifies the expense of installation.

Vijay Bhaskar of Mlinda says a big mistake in development has been to assume that, once people are hooked up to electricity, businesses will automatically flourish. People have to be taught how to make the most of power, he says. “Bringing energy is the easy part. The hard part is finding productive ways to make use of it.”  According to one British expert, “mini-grid operators are not sellers of kilowatt-hours; they are stimulators of rural development.” Jaideep Mukherjee, the boss of Smart Power India, an NGO supported by the Rockefeller Foundation, says their job is to “demonstrate the benefits, train and then propagate”.

An independent study for Mlinda found that GDP per person in eight villages with mini-grids rose by 10.6% on average over the first 13 months, compared with 4.6% in a group of similar villages without them.  Mini-grids are being set up at the rate of just 100 or so a year, from Myanmar to Mozambique. But the International Energy Agency (IEA), a forecaster, says hundreds of thousands of them could connect 440m people by 2030, with the right policies and about $300bn of investment.

African countries used to focus almost exclusively on expanding national electricity networks. Now some, including Nigeria and Togo, have started to prioritise mini-grids. ..

Most mini-grids are green, unlike diesel, kerosene and coal- and gas-fired electricity. That is a welcome feature, though not the main aim, since the contribution of places like Narotoli to global warming is minuscule.

Excerpts from Mini-girds and development: Empowering Villages, Economist, July 14, 2018, at 61

Drones for Renewable Energy

Utilities in Europe are looking to long-distance drones to scour thousands of miles of grids for damage and leaks in an attempt to avoid network failures that cost them billions of dollars a year. w altitudes over pipelines and power lines….Italy’s Snam, Europe’s biggest gas utility, told Reuters it is trialing one of these machines – known as BVLOS drones (Beyond Visual Line of Sight) because they fly ‘beyond the visual line of sight’ of operators – in the Apennine hills around Genoa. It hopes to have it scouting a 20 km stretch of pipeline soon.

France’s RTE has also tested a long-distance drone, which flew about 50 km inspecting transmission lines and sent back data that allowed technicians to virtually model a section of the grid. The company said it would invest 4.8 million euros ($5.6 million) on drone technology over the next two years.

At present, power companies largely use helicopters equipped with cameras to inspect their networks. They have also recently started occasionally using more basic drones that stay within sight of controllers and have a range of only about 500 meters.  However an industry-wide shift toward renewable energy, and the need to monitor the myriad extra connections needed to link solar and wind parks to grids, is forcing utilities to look at the advanced technology.  “It’s a real game changer,” Michal Mazur, partner at consultancy PwC, said of drones. “They’re 100 times faster than manual measurement, more accurate than helicopters and, with AI devices on board, could soon be able to fix problems.”

In-sight drones cost around 20,000 euros each and BVLOS ones will cost significantly more, according to executives at tech companies that make the machines for utilities, and a fleet of dozens if not hundreds would be needed to monitor a network.

Power grid companies are expected to spend over $13 billion a year on drones and robotics by 2026 globally, from about $2 billion now, according to Navigant Research.  But that is still dwarfed by the amount of money the sector loses every year because of network failures and forced shutdowns – about $170 billion, according to PwC…

BVLOS drone flights are largely prohibited because of safety concerns. However over the past year European watchdogs have for the first time granted special permits to allow utilities – namely RTE and Snam – to test prototypes. it…Xcel Energy (XEL.O) in April  2018 became the first American utility to gain approval for BVLOS flights.

Excerpts from Power to the drones: utilities place bets on robots, Reuters, July 16, 2018

Furthest from their Minds: greenhouse gases in Afirca

When sub-Saharan Africa comes up in discussions of climate change, it is almost invariably in the context of adapting to the consequences, such as worsening droughts. That makes sense. The region is responsible for just 7.1% of the world’s greenhouse-gas emissions, despite being home to 14% of its people. Most African countries do not emit much carbon dioxide. Yet there are some notable exceptions.

Start with coal-rich South Africa, which belches out more carbon dioxide than Britain, despite having 10m fewer people and an economy one-eighth the size. Like nearly all of its power plants, many of its vehicles depend on coal, which is used to make the country’s petrol (a technique that helped the old apartheid regime cope with sanctions). A petrochemical complex in the town of Secunda owned by Sasol, a big energy and chemicals firm, is one of the world’s largest localised sources of greenhouse gases.  Zambia is another exception. It burns so much vegetation that its land-use-related emissions surpass those of Brazil, a notorious—and much larger—deforester.

South Africa and Zambia may be extreme examples, but they are not the region’s only big emitters . Nigerian households and businesses rely on dirty diesel generators for 14GW of power, more than the country’s installed capacity of 10GW. Subsistence farmers from Angola to Kenya use slash-and-burn techniques to fertilise fields with ash and to make charcoal, which nearly 1bn Africans use to cook. This, plus the breakneck growth of extractive industries, explains why African forests are disappearing at a rate of 0.5% a year, faster than in South America. Because trees sequester carbon, cutting them counts as emissions in climate accounting.

Other African countries are following South Africa’s lead and embracing coal…A new coal-fired power plant ….Lamu in Kenya is one of many Chinese-backed coal projects in Africa…Africa’s sunny skies and long, blustery coastlines offer near-limitless solar- and wind-energy potential. But what African economies need now are “spinning reserves”, which can respond quickly to volatile demand, says Josh Agenbroad of the Rocky Mountain Institute, a think-tank in Colorado. Fossil fuels deliver this; renewables do not…. Several countries are intrigued by hybrid plants where most electricity is generated by solar panels, but diesel provides the spinning reserves…

Excerpts from  Africa and Climate Change: A Burning Issue, Economist,  Apr. 21, 2018, at 41.

Exploiting Chaos: water management in the Middle East

A water crisis rooted in wasteful irrigation, climate change and dam-building is imperiling [the wetlands of Iraq] again.

A weakened flow into the Tigris and Euphrates rivers means that salt water from the Persian Gulf can now seep upstream into the marshes. This, coupled with farming run-off that has boosted salinity,threatens wetland wildlife, vegetation and the local Marsh Arabs who have depended on them for millennia.  The problem is partly home-made. Iraq’s irrigation methods are often wasteful, and the equipment tends to be rickety. Many farmers rely on thirsty crops such as rice. Politicians have in the past secured extra water for their upstream districts at the marshes’ expense. Reform-minded technocrats are forced to contend with deep-rooted corruption, the distracting and costly fight against the Islamic State (IS) group, and low oil prices, all of which have drained state coffers.

But other problems lie beyond Iraq’s control. For decades dams built in Syria, Turkey and Iran have swallowed up the waters of the Tigris, Euphrates and other rivers feeding the marshes. New dams due to open in Turkey, including the 1,200-megawatt Ilisu Dam, could further restrict the flow of the Tigris.

Talks over these dams have been inconclusive, partly because the Syrian and Iraqi states barely function and partly because IS has controlled swathes of the Euphrates. Turkey may be tempted to exploit its upstream position.

Climate change is taking its toll, too. Last summer temperatures of about 54°C were recorded in southern Iraq, among the hottest ever.

If only Iran, Iraq, Syria and Turkey would share their waters as amicably as the Danube countries do… Dam levels should be calibrated during wet and dry years to ensure steadier flows. Iraqi officials might also ponder novel solutions, he says, such as renting storage at the Ilisu Dam for use when needed. Yet stronger countries have exploited their advantages rather than seek compromise

Excerpts from Iraq’s Wetlands: Drying Up Again,  Economist,  Sept. 16, 2017

Cut or Pay up: Net Negative Carbon Emissions

Sweden’s parliament passed a law in June which obliges the country to have “no net emissions” of greenhouse gases into the atmosphere by 2045. The clue is in the wording. This does not mean that three decades from now Swedes must emit no planet-heating substances; even if all their electricity came from renewables and they only drove Teslas, they would presumably still want to fly in aeroplanes, or use cement and fertiliser, the making of which releases plenty of carbon dioxide. Indeed, the law only requires gross emissions to drop by 85% compared with 1990 levels. But it demands that remaining carbon sources are offset with new carbon sinks. In other words greenhouse gases will need to be extracted from the air

[I]f the global temperature is to have a good chance of not rising more than 2ºC above its pre-industrial level, as stipulated in the Paris climate agreement of 2015, worldwide emissions must similarly hit “net zero” no later than 2090. After that, emissions must go “net negative”, with more carbon removed from the stock than is emitted…

To keep the temperature below a certain level means keeping within a certain “carbon budget”—allowing only so much to accumulate, and no more. Once you have spent that budget, you have to balance all new emissions with removals. If you overspend it…you have a brief opportunity to put things right by taking out more than you are putting in…

Climate scientists like Mr Henderson have been discussing negative-emissions technologies (NETs) with economists and policy wonks since the 1990s. [But] NETs were conspicuous by their absence from the agenda of the annual UN climate jamboree which ended in Bonn on November 17th 2017.

 Reforesting logged areas or “afforesting” previously treeless ones presents no great technical challenges. More controversially, they also tend to invoke “bioenergy with carbon capture and storage” (BECCS). In BECCS, power stations fuelled by crops that can be burned to make energy have their carbon-dioxide emissions injected into deep geological strata, rather than released into the atmosphere….

The Carbon Capture and Storage (CCS)  technologies that exist today, under development by companies such as Global Thermostat in America, Carbon Engineering in Canada or Climeworks of Switzerland, remain pricey. In 2011 a review by the American Physical Society to which Ms Wilcox contributed put extraction costs above $600 per tonne, compared with an average estimate of $60-250 for BECCS…

Much of the gas captured by Climeworks and other pure NETs firms (as opposed to fossil-fuel CCS) is sold to makers of fizzy drinks or greenhouses to help plants grow. It is hard to imagine that market growing far beyond today’s total of 10m tonnes. And in neither case is the gas stored indefinitely. It is either burped out by consumers of carbonated drinks or otherwise exuded by eaters of greenhouse-grown produce…..

One way to create a market for NETs would be for governments to put a price on carbon. Where they have done so, the technologies have been adopted. Take Norway, which in 1991 told oil firms drilling in the North Sea to capture carbon dioxide from their operations or pay up. This cost is now around $50 per tonne emitted; in one field, called Sleipner, the firms have found ways to pump it back underground for less than that. A broader carbon price—either a tax or tradable emissions permits—would promote negative emissions elsewhere, too…

Another concern is the impact on politicians and the dangers of moral hazard. NETs allow politicians to go easy on emission cuts now in the hope that a quick fix will appear in the future.

Excerpt from Sucking up Carbon, Combating Climate Change, Economist,  Nov. 18, 2017

Unjustifiable Extinctions

The world’s botanic gardens contain at least 30% of all known plant species, including 41% of all those classed as ‘threatened’, according to the most comprehensive analysis to date of diversity in ‘ex situ’ collections: those plants conserved outside natural habitats.

The study, in September 2017 in the journal Nature Plants, found that the global network of botanic gardens conserves living plants representing almost two-thirds of plant genera and over 90% of plant families.  However, researchers from the University of Cambridge discovered a significant imbalance between temperate and tropical regions. The vast majority of all plants species grown ex situ are held in the northern hemisphere. Consequently, some 60% of temperate plant species were represented in botanic gardens but only 25% of tropical species, despite the fact that the majority of plant species are tropical.

For the study, researchers analysed datasets compiled by the Botanic Gardens Conservation International (BGCI)….

“The global network of botanic gardens is our best hope for saving some of the world’s most endangered plants,” said senior author Dr Samuel Brockington, a researcher at Cambridge’s Department of Plant Sciences as well as a curator at the University’s own Botanic Garden….“Currently, an estimated one fifth of plant diversity is under threat, yet there is no technical reason why any plant species should become extinct.   “If we do not conserve our plant diversity, humanity will struggle to solve the global challenges of food and fuel security, environmental degradation, and climate change.”

The plants not currently grown in botanic gardens are often more interesting than those that are, say the researchers. Hydrostachys polymorpha, for example, an African aquatic plant that only grows in fast flowing streams and waterfalls, or the tiny parasitic plant Pilostyles thurberi – only a few millimetres long, it lives completely within the stem tissue of desert shrubs.  Species from the most ancient plant lineages, termed ‘non-vascular’ plants, are currently almost undocumented in botanic gardens – with as few as 5% of all species stored in the global network. These include plants such as the liverworts and mosses.

“Non-vascular species are the living representatives of the first plants to colonise the land,” said Brockington. “Within these plants are captured key moments in the early evolutionary history of life on Earth, and they are essential for understanding the evolution of plants”

Excerpts from World’s botanic gardens contain a third of all known plant species, and help protect the most threatened, Press Release of Botanic Gardens Conservation International, Sept. 25, 2016

Lithium Resources and Markets

Lithium is a coveted commodity. Lithium-ion batteries store energy that powers mobile phones, electric cars and electricity grids (when attached to wind turbines and photovoltaic cells). Joe Lowry, an expert on the lightest metal, expects demand to nearly triple by 2025. Supply is lagging, which has pushed up the price. Annual contract prices for lithium carbonate and lithium hydroxide doubled in 2017, according to Industrial Minerals, a journal. That is attracting investors to the “lithium triangle” that overlays Argentina, Bolivia and Chile .  The region holds 54% of the world’s “lithium resources”, an initial indication of potential supply before assessing proven reserves.

Chile dominated the world lithium markets for decades. The Atacama salt flat has the largest and highest-quality proven reserves. The desert’s blazing sun, scarce rainfall and mineral-rich brines make Chile’s production costs the world’s lowest. Allied to this is the region’s most benign investment climate. Chile is far ahead in rankings of ease of doing business, levels of corruption, and the quality of its bureaucracy and courts (see charts). Its lithium deposits are close to Antofagasta and other Chilean ports;

But growth has flattened, allowing Australia to threaten Chile’s position as the world’s top producer…Laws enacted in the 1970s and 1980s classify lithium as a “strategic” material on the ground that it can be used in future nuclear-fusion power plants. There is little prospect that Chile will soon build one of these, but controls on lithium production remain as a way of protecting the desert’s fragile ecosystem.

Just two companies, Chile’s SQM and Albemarle of the United States, are allowed to extract brine under leases that were signed in the 1980s. In addition, they are subject to quotas on the lithium they can produce from the brine, which also yields other minerals

Argentina: Under the constitution, provinces, not the federal government, own the country’s minerals. Mining firms had to find their way through a confusion of provincial rules and regulations. “It was like the Tower of Babel,” says Daniel Meilán, the country’s current mining secretary. I Argentina’s newish president, Mauricio Macri, has tried to unblock investment, including that in lithium….  The federal government is trying to harmonise provincial regulations. It has hammered out agreement on a standard royalty (3% of revenue, plus 1.5% to improve local infrastructure)…

These advances have started to unfreeze investment in lithium. In 2016 the sector attracted $1.5bn; production rose by nearly 60%……..Ending the metal’s strategic status and getting rid of quotas would make still more sense. So would improving Chile’s institutions and infrastructure.

Under the left-wing government led by President Evo Morales since 2006, Bolivia has pulled out of numerous bilateral investment treaties, denying investors access to international arbitration. His government has nationalised parts of the oil and gas industries, along with the biggest telecoms company and most of the electricity sector.  The government keeps an even tighter grip on lithium than it does on gas, its biggest export. YPFB, the state-owned natural-gas company, at least enters into joint ventures with private-sector firms. Since 2010 the right to extract lithium brine has been reserved for the state. Private firms can now do no more than gaze longingly upon the Uyuni salt flat near Potosí, the largest in the world…

Like Chile, Bolivia hopes to form partnerships with private firms to make value-added products, including batteries and electric cars, through a new lithium enterprise, Yacimientos de Litio Bolivianos. But the government’s insistence on keeping a controlling stake is discouraging potential investors. In 2016 Bolivia sold 25 tonnes of lithium carbonate to China, pocketing a princely $208,000.

The white gold rush: The lithium triangle, Economist, June 17, 2017

Final Development Frontier in Nepal

While India, Pakistan and China have all developed massive hydropower plants along the Himalayan mountains, Nepal’s civil war and political instability scared off investment for decades.  Now, thanks to an inclusive peace process that allowed the country’s main rebel leader to be elected prime minister twice, the focus is shifting to Nepal. Hydropower projects worth billions of dollars are in progress, with geologists and investors scouring the landscape for more.

Government surveys show Nepal’s abundant water resources can feasibly yield hydropower equal to more than 40% of U.S. output, a 40-fold increase from today. Officials project almost a third more hydropower capacity will come online this year. More than 100 projects under construction—over 40 since last year—and others in development will yield at least a tenfold increase in the next decade to 10 gigawatts of power, they say.

Nepal is ramping up its development of hydroelectric power plants in the Himalayas, but building in the region can be risky work. Photo: Brian Sokol for The Wall Street Journal  “There’s such an energy shortage that any project you build will find a market,” said Allard Nooy, CEO of InfraCo Asia, a development body funded by the U.K., Swiss and Australian governments that is financing one hydro project and seeking to develop two more.

Still, power companies don’t face an easy ride.  Among the hurdles are natural ones: earthquakes, landslides and inland tsunamis from glacial lakes as warmer temperatures prompt ice melt. Two years ago a series of massive quakes killed 9,000 people and shattered the country.

Opposition from environmental groups is another difficulty, especially for a new generation of dam projects. In the past, the World Bank and Japan’s Asian Development Bank have withdrawn support for projects amid opposition from environmental groups that say large dams can damage natural habitats like wetlands, threaten migratory fish stocks, and displace traditional farming communities.

Activists are concerned over the effects hydropower projects have on the environment and communities. Here are some of their top worries.

Displacement Dams flood valleys and in many cases require communities to abandon their land. A number of dam projects under consideration in Nepal would require whole villages to relocate.
Earthquakes A growing body of research suggests large dams can trigger quakes by adding pressure to areas near fault lines, a phenomenon known as “reservoir-induced seismicity.”
Wildlife Projects can disrupt the natural migration of fish and other river life. Environmentalists in Nepal are particularly concerned about the country’s small population of endangered Ganges River Dolphins.
Seasonal River-based hydropower projects, which are popular in Nepal, only generate electricity when water is flowing, making them less effective in the dry season. Dams can generate power in any season.

The greater stability has boosted momentum for rising investment in the Himalayas—a region dominated by Nepal, India and Bhutan that is considered the final development frontier in South Asia. Hydro energy projects are the biggest focus.  “The only resource we have, like the Arabian countries have oil, is water,” said Chhabi Gaire, project manager at the Rasuwagadhi Hydroelectric Project, a 1f11-megawatt plant under construction near China’s border.

Funding for projects is increasingly coming from Nepalese working abroad, says the Nepal Electricity Authority. Their remittances reached $6.7 billion in 2015, according to the World Bank, more than even Thai and South Korean workers abroad sent to their own countries.  Meanwhile, India’s cabinet approved $850 million in February to build a plant on Nepal’s Arun River that would export most of its energy to India. A month earlier, the Chinese-state owned China Three Gorges Company agreed to a joint venture with Nepal’s government to build a $1.6 billion hydropower plant on Nepal’s Seti River, also mainly for electricity export to India…

Workers on Nepal’s hydropower projects face sometimes deadly risks in the steep mountain valleys of the Himalayas such as landslides, falling boulders and flash floods…  [T] he 456-megawatt Upper Tamakoshi project, funded by a group of Nepal’s major banks and pension funds, is now under construction and set to open in mid-2018 with a reservoir to enable energy generation in the dry season.  It’s is also a risky project.

To the East the dangerous glacial lake Tsho Rolpa threatens to burst its banks. To the West, the Gongar river routinely spits boulders the size of two-story buildings over the valley wall. A bridge the developers built over the Gongar was swept away in a flash flood during monsoon season. Landslides triggered by quakes swept away swaths of the access road. To keep working, project developers built a steel truss bridge and drilled a new road tunnel through a collapsed valley wall.  Moreover, the project is built on such volatile terrain that the turbines and delicate transmission equipment were buried 460 feet beneath the surface.

Excerpts from In the Himalayas, a New Power Rises: Water, Wall Street Journal, May 18, 2017

 

Dams and Drought: the Amazon

The São Luiz do Tapajós (SLT) project… would dam one of the last big unobstructed tributaries of the Amazon. The project would provide about a third of the hydropower that Brazil plans for the forthcoming decade, but it would also flood 376 square km (145 square miles) of land where the Munduruku hunt, fish and farm. “The Tapajós valley is our supermarket, our church, our office, our school, our home, our life,” explained Mr Kabá.

The tussle over the Tapajós dam is part of a bigger fight about Brazil’s energy future. SLT is an example of a new sort of hydropower project, which floods a smaller area than traditional dams and therefore ought to cause less disruption and environmental damage. The massive Itaipu dam on the border with Paraguay inundated an area nearly four times as large. But critics of hydropower say “run of river” projects like SLT, which use a river’s natural flow to turn turbines, do not work as well as advertised. Though less destructive than conventional dams, which require bigger reservoirs, they still provoke opposition from people like the Munduruku. Other energy sources, such as gas and wind, are becoming more competitive. Brazil has “an opportunity” to rethink its energy policies, says Paulo Pedrosa, an energy official.

Hydropower has long been Brazil’s main way of generating electricity. Most forecasts suggest it will remain so. The government intends to build more than 30 dams in the Amazon over the next three decades. 

Climate change may worsen the problem. Some climate models predict that river flows in large parts of the Amazon will fall by 30% in coming decades. Deforestation is delaying the onset of the rainy season in some areas by six days a decade, according to research published in Global Change Biology, a journal.   Drought can be expensive. In 2014 power from conventional dams dipped because of a dry spell, forcing electricity companies to buy from gas- and coal-powered generators at high spot prices. The risk of such fluctuations rises with run-of-river dams. Carlos Nobre, a former chief of research at the ministry of science, technology and innovation, thinks more frequent droughts will make future hydropower projects in the Amazon unprofitable.

Brazil’s potential for solar and wind energy is among the highest in the world. The government has promoted them with lavish tax breaks. In the blustery north-east, wind power overtook hydropower this year; wind turbines now generate 36% of the region’s electricity, up from 22% in 2015. The Energy Research Company, a firm linked to the energy ministry, expects renewable generating capacity apart from hydropower to double by 2024.

Generators fuelled by natural gas have been hurt by the subsidies lavished on renewable energy. But, though less climate-friendly than hydropower, they are beginning to compete with it as a source of steady baseload electricity. Brazil now produces gas in abundance as a by-product of pumping oil from its offshore wells. Its marginal cost of production is nearly zero. The future of baseload energy is “hydro-thermal”, rather than hydro alone, says Adriano Pires of the Brazilian Infrastructure Centre, a think-tank in Rio de Janeiro.

Excerpts from Dams in the Amazon: Not in my valley, Economist,  Nov. 5, 2016

Ozone Layer at 2016

In 1974 scientists discovered that chlorofluorocarbons (CFCs), chemicals used in refrigeration and as propellants in products such as hairsprays, release chlorine into the stratosphere as they decompose. This depletes the ozone that protects Earth from ultraviolet radiation. CFCs are also powerful greenhouse gases, which absorb solar radiation reflected back from the planet’s surface and so trap heat in the atmosphere.

Initially, the consequences for the ozone layer caused most concern. In 1985 a gaping hole in it was found above Antarctica. Two years later, leaders from around the world acted decisively. They signed a deal, the Montreal protocol, to phase out CFCs. Now ratified by 197 countries, it has prevented the equivalent of more than 135 billion tonnes of carbon-dioxide emissions, and averted complete collapse of the ozone layer by the middle of the century. Instead, by that point the ozone hole may even have closed up….

In order to manage without CFCs, firms replaced them in applications such as refrigeration, air-conditioning and insulation with man-made hydrofluorocarbons (HFCs). These substances do not deplete ozone and last in the atmosphere for just a short time. However, they still contribute hugely to global warming.  The average atmospheric lifetime for most commercially used HFCs is 15 years or less; carbon dioxide can stay in the atmosphere for more than 500 years. But, like CFCs, HFCs cause a greenhouse effect between hundreds and thousands of times as powerful as carbon dioxide while they linger. Total emissions are still relatively low, but are rising by 7-15% a year. Controlling HFC emissions has been under discussion for the past decade; America and China, the world’s two biggest polluters, made a deal on the issue in 2013, which paved the way for co-operation on limiting carbon emissions ahead of UN-sponsored climate talks in Paris last year. There leaders agreed to keep warming “well below” levels expected to be catastrophic.

Average global temperatures are already 1°C higher than in pre-industrial times….America wants action on HFCs speedy enough that emissions will peak in 2021 and then start to fall; after recent talks in Hangzhou between Mr Obama and Mr Xi China may be ready to commit to reaching that point by 2023. Brazil, Indonesia and Malaysia lean towards 2025, and India has lobbied for a later date, closer to 2030.

Some sectors firms are already preparing to move away from HFCs: in 2015 the Consumer Goods Forum, an international industry group whose members include Walmart and Tesco, began enacting a plan to phase out the substances.

A big question is what to use instead….Some HFCs commonly used in refrigeration could be replaced by others that would have an impact more than 1,000 times smaller. Honeywell, an electronics giant, already makes these less-damaging alternatives. But patents covering such substances have been a sticking point in past discussions, says Achim Steiner, until recently the head of the UN Environment Programme….Other possible replacements include isobutane, propane and propylene, all of which occur naturally. These hydrocarbons are cheap and non-toxic, and can be used as coolants without the same harm to the ozone layer….

Excerpts from The Montreal protocol, Economist, Sept. 24, 2016,at 58

The Most Dangerous Dam

Sensors installed by American army engineers in December 2015 show widening fissures in the fragile gypsum base underneath the Mosul dam,  though no one can predict when a breach might occur….The Iraqi government has now contracted with the Trevi Group, an Italian firm, which it hopes will offer a more advanced and permanent method of plugging cavities in the stone base than the constant maintenance it has required for the past 30 years. That maintenance came to an abrupt halt after IS seized the dam in August 2014, and has continued only intermittently after it was seized back three weeks later. Essential equipment went missing then, and half its staff decided not to return to work.

One study says that if the dam collapses, Mosul would be submerged within hours. Another warns that half a million Iraqis could be killed by floodwaters, and more than a million forced from their homes. Disease and looting as the floodwaters raced through Baiji, Tikrit, Samarra and even parts of Baghdad would complete that dreadful scenario.

The dam was built by an Italian-German consortium and started operating in 1986. Because of the high proportion of gypsum in the area, the construction included a grouting tunnel to allow almost constant injection of cement and drilling mud into crevices in the base that are widened by the water flowing through them. America’s Army Corps of Engineers warned in 2005 that the “extraordinary engineering measures” needed to maintain its structural integrity made the structure potentially the most dangerous in the world.*** But taking the dam out of commission is not an attractive option. Emptying the reservoir would leave Iraqis seriously short of drinking and unpolluted irrigation water in the summer.

Excerpts from The Mosul dam: A watery time-bomb, Economist, Feb. 13, 2016, at 42

***  The dam was constructed on a foundation of water soluble gypsum!!! More than 50,000 tonnes  of material have been injected into the dam since leaks began forming shortly after the reservoir was filled in 1986, and 24 machines currently continuously pump grout into the dam base. Between 1992 and 1998 four sinkholes formed downstream of the dam and a fifth sinkhole developed east of the dam in February 2003 which was filled several times. In August 2005 another sinkhole developed to the east (Wikipedia).

Eco-Peace for the Middle East?

EcoPeace, a joint Israeli, Jordanian and Palestinian NGO thinks it just might. In December it presented an ambitious, if far from fully developed, $30 billion plan to build a number of desalination plants on the Mediterranean shore of Israel and the Gaza Strip. At the same time, large areas in Jordan’s eastern desert would host a 200 square km (75 square mile) solar-energy plant, which would provide power for desalination (and for Jordan) in exchange for water from the coast. “A new peaceful economy can be built in our region around water and energy” says Gidon Bromberg, EcoPeace’s Israeli director. Jordan and the Palestinian Authority are already entitled to 120 million cubic meters of water a year from the Jordan river and West Bank aquifers but this is not enough to meet demand, particularly in Jordan, which regularly suffers from shortages….

The main drawback to making fresh water from the sea is that it takes lots of energy. Around 25% of Jordan’s electricity and 10% of Israel’s goes on treating and transporting water. Using power from the sun could fill a sizeable gap, and make Palestinians less dependent on Israeli power. Renewables supply just 2% of Israel’s electricity needs, but the government is committed to increasing that share to 17% by 2030. Jordan, which has long relied on oil supplies from Arab benefactors, is striving for 10% by 2020.,,, Over the past 40 years there has been a series of plans to build a Red Sea-Dead Sea canal that would have irrigated the Jordan Valley and generated power, none of which have been built.

Beyond many logistical and financial obstacles, the plan’s boosters also have to navigate a political minefield.

Excerpts from Utilities in the Middle East: Sun and Sea, Economist, Jan. 16, 2016, at 54

Dams on Nile: winners and losers

Egyptian politicians discussed sabotaging the Grand Ethiopian Renaissance Dam in 2013, they naturally assumed it was a private meeting. But amid all the scheming, and with a big chuckle, Muhammad Morsi, then president, informed his colleagues that their discussion was being broadcast live on a state-owned television channel.

Embarrassment apart, it was already no secret that Egypt wanted to stop the largest hydroelectric project in Africa. When Ethiopia completes construction of the dam in 2017, it will stand 170 metres tall (550 feet) and 1.8km (1.1 miles) wide. Its reservoir will be able to hold more than the volume of the entire Blue Nile, the tributary on which it sits. And it will produce 6,000 megawatts of electricity, more than double Ethiopia’s current measly output, which leaves three out of four people in the dark…

This boon for Ethiopia is the bane of Egypt, which for millennia has seen the Nile as a lifeline snaking across its vast desert. The river still provides nearly all of Egypt’s water. Egypt claims two-thirds of that flow based on a treaty it signed with Sudan in 1959. But even that is no longer enough to satisfy the growing population and sustain thirsty crops. Annual water supply per person has fallen by well over half since 1970. The UN warns of a looming crisis. Officials in Egypt, while loth to fix leaky pipes, moan that the dam will leave them high and dry.,,

Only recently has the Egyptian government adopted a more conciliatory tone. In March of last year Abdel-Fattah al-Sisi, who ousted Mr Morsi in a coup, joined Hailemariam Desalegn, Ethiopia’s prime minister, and Omar al-Bashir, Sudan’s president, to sign a declaration that tacitly blesses construction of the dam so long as there is no “significant harm” to downstream countries. The agreement was affirmed in December. 2015, when the three countries settled on two French firms to study the dam’s potential impact. The impact studies were meant to be completed last year, but bickering over the division of labour, and the withdrawal of one firm, caused delays. Many Egyptians believe that Ethiopia is stalling so that the dam becomes a fait accompli. Already half-finished, experts worry that it may be too late to correct any problems. Representatives of the three countries are now meeting to discuss “technical” issues. The contracts for studying the dam are not yet signed.

A sense of mistrust hangs over the dam’s ultimate use. Ethiopia insists that it will produce only power and that the water pushing its turbines (less some evaporation during storage) will ultimately come out the other side. But Egypt fears it will also be used for irrigation, cutting downstream supply.  …A more reasonable concern is over the dam’s large reservoir. If filled too quickly, it would for a time significantly reduce Egypt’s water supply and affect the electricity-generating capacity of its own Aswan Dam. But the Ethiopian government faces pressure to see a quick return on its investment. The project, which is mostly self-funded, costs $4.8 billion….

A potential wild card in the negotiations is Sudan, which long sided with Egypt in opposition to the dam, some 20km from its border. But as the potential benefits to Sudan have become clear, it has backed Ethiopia…Short on energy itself, Sudan will receive some of the power produced by the dam. By stabilising the Nile’s flow, it will also allow Sudan to prevent flooding, consume more water and increase agricultural output (once old farming methods are updated). Currently much of the country’s allocation of water under the 1959 treaty is actually consumed by Egyptians…

The Renaissance Dam is merely the latest test of countries’ willingness to share water. There may soon be more difficulties. Ethiopia plans to build other dams on the river, which could further affect downstream supply. Sudan has promised foreign investors an abundance of water for irrigation…

Sharing the Nile, Economist, January 16, 2016, at 49

The Scramble for Lithium

SQM, Chile’s biggest lithium producer [has]Its headquarters in the military district of Santiago bears no name. The man who for years ran the business, Julio Ponce, is the former son-in-law of the late dictator, Augusto Pinochet. He quit as chairman in 2015, during an investigation into SQM for alleged tax evasion. (The company is co-operating with the inquiry.) Last month it emerged that CITIC, a Chinese state-controlled firm, may bid for part of Mr Ponce’s controlling stake in SQM, as part of China’s bid to secure supplies of a vital raw material…

SQM is part of a global scramble to secure supplies of lithium by the world’s largest battery producers, and by end-users such as carmakers. That has made it the world’s hottest commodity. The price of 99%-pure lithium carbonate imported to China more than doubled in the two months to the end of December, to $13,000 a tonne…

The industry is fairly concentrated, which adds to the worry. Last year Albermarle, the world’s biggest lithium producer, bought Rockwood, owner of Chile’s second-biggest lithium deposit. It and three other companies—SQM, FMC of America and Tianqi—account for most of the world supply of lithium salts, according to Citigroup, a bank. What is more, a big lithium-brine project in Argentina, run by a joint venture of Orocobre, an Australian miner, and Toyota, Japan’s largest carmaker, is behind schedule. Though the Earth contains plenty of lithium, extracting it can be costly and time-consuming, so higher prices may not automatically stimulate a surge in supply.

Demand is also on the up. At the moment, the main lithium-ion battery-makers are Samsung and LG of South Korea, Panasonic and Sony of Japan, and ATL of Hong Kong. But China also has many battery-makers…Tesla Motors, an American maker of electric cars founded by Elon Musk, a tech tycoon, is also on the prowl. It is preparing this year to start production at its “Gigafactory” in Nevada, which it hopes will supply lithium-ion batteries for 500,000 cars a year within five years….[I]n August Bacanora, a Canadian firm, said it had signed a conditional agreement to supply Tesla with lithium hydroxide from a mine that it plans to develop in northern Mexico. Bacanora’s shares jumped on the news—though analysts noted that shipping fine white powder across the United States border would need careful handling.Bigger carmakers also have a growing appetite for lithium…

Another big source of demand may be for electricity storage. The holy grail of renewable electricity is batteries cheap and capacious enough to overcome the intermittency of solar and wind power—for example, to store enough power from solar panels to keep the lights on all night.

Excerpts from  An increasingly precious metal, Economist, January 16, 2016

Demand for Carbon Tax

“You can argue that Big Oil is becoming Big Gas,” says Occo Roelofsen of McKinsey, a consulting firm. Others are going in for renewables. Total of France has a majority stake in SunPower, one of the world’s biggest solar-power firms. Eldar Saetre, the boss of Statoil, Norway’s state-run oil company, says that in 15 years there may be more opportunities outside oil and gas than within.

Plenty of oil firms (Exxon among them) are also calling for governments to enact a “carbon tax” on emitters of greenhouse gases. Their critics argue that this is less altruistic than it appears. For one thing, such a tax would hurt the coal industry especially, thereby boosting the oil firms’ gas businesses. And governments, especially in the developing world, where fossil-fuel demand is still surging, may find such a tax politically impossible anyway; the oilmen are calling for it, opponents say, in the knowledge that such countries will never introduce it….

On November 4th New York’s attorney-general, Eric Schneiderman, subpoenaed documents from Exxon to investigate how much it has known since the 1970s about the effects of fossil fuels on the climate. Exxon is reportedly being investigated under the Martin Act, dating back to 1921, which gives prosecutors wide-ranging powers to investigate securities fraud. Exxon says it has long disclosed information about the risks to its business from climate change, and from action to prevent it, in reports to its shareholders. But the firm’s run-in with the New York justice department may be a portent of what is to come.

Another worry for oil executives is pressure from investors spooked by the financial risks of climate change. Policymakers, such as Mark Carney, governor of the Bank of England, talk about the possibility of many oilfields turning into “stranded assets”, or “unburnable carbon”, if governments get serious about climate-change action. Anthony Hobley of Carbon Tracker, a climate-advisory firm, says that if the Paris pledges are taken at all seriously, the oil and gas industry may become “ex-growth”. Oil executives dispute that. But shareholders, if motivated, could force the industry to shrink just by limiting the funds they provide for new oil discoveries.

Curiously, the present situation may provide a foretaste of this—though cyclically, because of falling oil prices, rather than structurally, because of rising temperatures. Faced with a world awash in crude, oil majors are abandoning high-cost reserves in the Arctic, Canada, North Sea and Gulf of Mexico. One oil executive ruefully calls it a “practice run” for the day in the distant future when fears of global warming, or the emergence of cheap, clean alternative technologies, mean that demand for fossil fuels starts to wane.

Excerpt from Oil Companies and Climate Change: Nodding Donkeys, Economist, Nov. 14, 2015, at 61

Nuclear Fusion Technologies: ARPA

ARPA-E, or Advanced Research Projects Agency-Energy is a United States government agency tasked with promoting and funding research and development of advanced energy technologies. It is modeled after the Defense Advanced Research Projects Agency (DARPA).

From the ARPA website

Fusion energy holds the promise of virtually limitless, clean power production. Although fusion has been demonstrated in the laboratory, scientists have been unable to successfully harness it as a power source due to complex scientific and technological challenges and the high cost of research….Attaining [the conditions for the production of fusion] conditions is a very difficult technical challenge. Additionally, many current experimental techniques are destructive, meaning that pieces of the experimental setup are destroyed with each experiment and need to be replaced, adding to the cost and time required for research.

Los Alamos National Laboratory (LANL), along with HyperV Technologies and other partners, will design and build a new driver technology that is non-destructive, allowing for more rapid experimentation and progress toward economical fusion power.   LANL’s innovation could accelerate the development of cost-effective fusion reactors, which may provide a nearly limitless supply of domestic power and eliminate dependence on foreign sources of energy.

Fusion reactors offer nearly zero emissions and produce manageable waste products. If widely adopted, they could significantly reduce or nearly eliminate carbon emissions from the electricity generation sector. LANL’s approach, if viable, could enable a low-cost path to fusion, reducing research costs to develop economical reactors.

Partners
HyperV Technologies Corp.
University of Alabama in Huntsville
University of New Mexico
Brookhaven National Laboratory
Tech-X Corporation

Biofuels Revolution? not really

B]iofuel schemes—ranging from fermenting starch, to recycling cooking oil, to turning algae into jet fuel—have drawn more than $126 billion in investment since 2003, according to Bloomberg New Energy Finance (BNEF), a research outfit… [But]Those biofuels that can best compete commercially are not, in fact, green. Those that are green cannot compete commercially.

The biggest cause of ungreenness is that biofuels made from food crops—or from plants grown on land that might otherwise produce such crops—hurt food supplies. A committee of the European Parliament agreed this week to cap the use of “first-generation” biofuels of this sort. The current European target is for renewables to make up 10% of the energy used in transport by 2020. The new proposal says only seven-tenths of this can come from first-generation fuels. The difference must be made up by more advanced ones based on waste products and other feedstocks that do not impinge on food production. That could mean European demand for advanced biofuels of 14 billion litres by 2020, reckons Claire Curry of BNEF.
Only two such advanced fuels, she thinks, are capable of large-scale production. One is turning waste cooking oil and other fats into diesel—a process for which Europe already has 2 billion litres of capacity. The other involves making ethanol from cellulose by enzymatic hydrolysis. Everything elseis at least four years from commercial production. That includes the much-touted idea of renewable jet fuel.  This is promising on a small scale. South African Airways (SAA), in conjunction with Boeing and other partners, is developing fuel based on the seeds of the tobacco plant—once a big crop in the country, but now fallen on hard times.

Biofuels: Thin harvest, Economist, Apr. 18, 2015, at 72

Energy Self-Sufficiency: Argentina

Despite the precipitous fall in global oil prices (from 110 dollars in 2014 to under 50 dollars in 2015), Argentina has continued to follow its strategy of producing unconventional shale oil, although in the short term there could be problems attracting the foreign investment needed to exploit the Vaca Muerta shale deposit,  Argentina’s energy trade deficit climbed to almost seven billion dollars in 2014, partly due to the decline in the country’s conventional oil reserves.  Eliminating that deficit depends on the development of Vaca Muerta, a major shale oil and gas deposit in the Neuquén basin in southwest Argentina. At least 10 billion dollars a year in investment are needed over the next few years to tap into this source of energy…

According to the state oil company Yacimientos Petrolíferos Fiscales (YPF), Vaca Muerta multiplied Argentina’s oil reserves by a factor of 10 and its gas reserves by a factor of 40, which will enable this country not only to be self-sufficient in energy but also to become a net exporter of oil and gas. YPF has been assigned 12,000 of the 30,000 sq km of the shale oil and gas deposit in the province of Neuquén.  The company admits that to exploit the deposit, it will need to partner with transnational corporations capable of providing capital.

It has already done so with the U.S.-based Chevron in the Loma Campana deposit, where it had projected a price of 80 dollars a barrel this year….YPF has also signed agreements for the joint exploitation of shale deposits with Malaysia’s Petronas and Dow Chemical of the United States, while other transnational corporations have announced their intention to invest in Vaca Muerta.

Excerpts from Fabiana Frayssinet, Plunging Oil Prices Won’t Kill Vaca Muerta, PS, Apr. 10, 2015

Nile Water: Egypt, Sudan, Ethiopia

Egypt, Ethiopia and Sudan on March 23, 2015 signed an initial agreement on sharing water from the Nile River that runs through the three countries, as Addis Ababa presses ahead with its construction of a massive new dam it hopes will help alleviate the country’s power shortages.  The dam had been an issue of contention among the three countries, with Egypt concerned it would reduce its share of the Nile established under a colonial-era agreement that gave Egypt and Sudan the main rights to exploit the river’s water…..

“While you are working for the development of your people, keep in mind the Egyptian people, for whom the Nile is not only a source of water, but a source of life,” el-Sissi said, addressing his Ethiopian counterpart after the three watched a short film about the Grand Renaissance Dam highlighting how it could benefit the region.

Cairo previously had voiced fears that Ethiopia’s $4.2 billion hydro-electric project, announced in 2011, would diminish its share of the Nile, which provides almost all of the desert nation’s water needs, especially under previous governments.

The agreement, hashed out by officials from the three countries weeks beforehand in Khartoum, outlines principles by which they will cooperate to use the water fairly and resolve any potential disputes peacefully, leaving details on specific procedures to be determined later after the release of joint, expert studies.

“The Egyptians don’t really have any other options,” said Ethiopian water researcher Seifulaziz Milas, adding that once the dam had been built and the land behind it flooded, the amount of water flowing down the Nile would return to normal. “It’s just a question of filling up the reservoir, after that there’s nowhere else for the water to go besides downstream.”

Until recently, Ethiopia had abided by the colonial-era agreement that gives downstream Egypt and Sudan rights to the Nile water, with Egypt taking 55.5 billion cubic meters and Sudan 18.5 billion cubic meters of the total of 84 billion cubic meters, with 10 billion lost to evaporation.

That agreement, first signed in 1929, took no account of the eight other nations along the 6,700-kilometer (4,160-mile) river and its basin, which have been agitating for a decade for a more equitable accord.  But in 2013, Ethiopia’s parliament unanimously ratified a new accord that replaced previous deals that awarded Egypt veto powers over Nile projects….  Experts have estimated that Egypt could lose as much as 20 percent percent of its Nile water in the three to five years needed for Ethiopia to fill the dam’s massive reservoir.

Excerpt from MOHAMED OSMAN and BRIAN ROHAN , Egypt, Ethiopia and Sudan Sign Accord Over Nile, Associated Press, Mar. 23, 2015

Green Dams that Kill

A planned mega-dam in Guatemala, whose carbon credits will be tradable under the EU’s emissions trading system, has been linked to grave human rights abuses, including the killing of six indigenous people, two of them children.  Several European development banks and the World Bank’s International Finance Corporation (IFC) have provided funds for the $250m (£170m) Santa Rita dam.

But human rights groups back claims from the Mayan community that they were never consulted about the hydro project, which will forcibly displace thousands of people to generate 25MW of energy, mostly for export to neighbouring countries.  The issue has become a focus of indigenous protest in Guatemala – which has led to a march on the capital and severe political repression.

“At the moment our community is living under the same conditions as they did during the war,” Maximo Ba Tiul, a spokesman for the Peoples’ Council of Tezulutlán told the Guardian. “Our civilian population is once again being terrorised by armed thugs.”  Around 200,000 Mayans died or were “disappeared” during the civil war of the early 1980s, leading to the conviction of the country’s former president, Efraín Ríos Montt, in 2013 on genocide charges.

Augusto Sandino Ponce, the son of a local landowner who community leaders allege worked as a contractor to Montt’s junta during the civil war, is at the centre of new accusations of human rights violations. Last April Ponce and his bodyguards allegedly opened fire on a Mayan community ceremony in which families asked the Earth for permission to plant their crops. One local man, Victor Juc, was killed and several were injured. Ponce reportedly claims he was acting in self defence…

In a letter to the United Nations Framework Convention on Climate Change’s (UNFCCC) clean development mechanism (CDM) executive board,  the People’s Council of Tezulutlán outlined a litany of human rights abuses in the region, including kidnappings, evictions, house burnings, attacks by men wielding machetes and guns, and the arrest of community leaders.  The council also says that an environmental impact assessment for the dam suggests that it would create a 40ft-high wall, flooding local communities and depriving them of access to water, food, transport and recreation.  In approving projects, the CDM board pursues a narrow remit focused on emissions reductions. The reign of terror in the Alta Verapaz region, falls outside it – as did similar events in Honduras….

Perhaps the most shocking incident took place on 23 August 2013, when two children were killed by an allegedly drunken Santa Rita hydroelectricity company worker looking for David Chen, a community leader in the Monte Olivo region.   Chen was meeting with the rapporteur of the Inter American Commission on Human Rights at the time. When the worker could not find him, he is said to have lined up two of Chen’s nephews, David Stuart Pacay Maaz, 11 and Haggai Isaac Guitz Maaz, 13, and killed them with a single bullet to one child’s head that continued through the throat of the other. The killer has since been killed himself.  The annual report of the UN’s High Commissioner for Human Rights implicitly blamed the approval of the dam project for the killings….

Eva Filzmoser, the director of Carbon Market Watch said: “We want the CDM board to take responsibility and establish a grievance and redress mechanism for local communities to appeal, ask for problematic decisions to be rescinded and gain redress. We will be pushing for this at the Paris climate summit to apply to all forms of climate finance in the future.”Efforts to reform the CDM were boosted last month, when 18 countries signed a “Geneva declaration” calling for human rights norms to be integrated into UNFCCC climate decisions….Signatory countries to the declaration include France, Sweden, Ireland, Mexico, Uruguay and Peru.

Excerpts Green’ dam linked to killings of six indigenous people in Guatemala, Guardian, Mar. 26, 2015

Nuclear Energy Politics: the subsidies

A German energy cooperative will take legal action against the European Commission for approving state aid for a 16 billion pound ($25 billion) nuclear power plant in Britain…arguing it threatens to distort competition.  The project, to be built by French utility EDF at Hinkley Point in southwest England, is crucial for Britain’s plan to replace a fifth of its ageing nuclear power and coal plants in the coming decade while reducing carbon emissions. The plan to pay a guaranteed price for power produced at the plant faces opposition from some other countries and some EU policymakers, as well as some other energy suppliers.

“Highly subsided nuclear power from this plant will noticeably distort European competitiveness,” said Soenke Tangermann, managing director of Greenpeace Energy, which describes itself as Germany’s largest national independent energy cooperative. Tangermann said it would affect prices at the power exchange in Germany and could also set a precedent. “This effect will have economic disadvantages for committed green power providers like us,” he said in a statement. He added the group would file a plea for annulment at the European Court of Justice in Luxembourg as soon the Commission’s approval was published.

Excerpt from German energy cooperative plans legal action over UK nuclear plan, Reuters, Mar. 4, 2015

Exploiting Himalaya Rivers

Himalayan rivers, fed by glacial meltwater and monsoon rain, offer an immense resource. They could spin turbines to light up swathes of energy-starved South Asia. Exports of electricity and power for Nepal’s own homes and factories could invigorate the dirt-poor economy. National income per person in Nepal was just $692 last year, below half the level for South Asia as a whole.

Walk uphill for a few hours with staff from GMR, an Indian firm that builds and runs hydropower stations, and the river’s potential becomes clear. An engineer points to grey gneiss and impossibly steep cliffs, describing plans for an 11.2km (7-mile) tunnel, 6 metres wide, to be blasted through the mountain. The river will flow through it, before tumbling 627 metres down a steel-lined pipe. The resulting jet—210 cubic metres of water each second—will run turbines that at their peak will generate 600MW of electricity.  The project would take five years and cost $1.2 billion. It could run for over a century—and produce nearly as much as all Nepal’s installed hydropower.

Trek on and more hydro plants, micro to mighty, appear on the Marsyangdi. Downstream, China’s Sinohydro is building a 50MW plant; blasting its own 5km-long tunnel to channel water to drive it. Nearby is a new German-built one. Upstream, rival Indian firms plan more. They expect to share a transmission line to ill-lit cities in India.

GMR officials in Delhi are most excited by another river, the Upper Karnali in west Nepal, which is due to get a 900MW plant. In September the firm and Nepal’s government agreed to build it for $1.4 billion, the biggest private investment Nepal has seen.

Relations between India and Nepal are improving. Narendra Modi helped in August as the first Indian prime minister in 17 years to bother with a bilateral visit. Urged by him, the countries also agreed in September to regulate power-trade over the border, which is crucial if commercial and other lenders are to fund a hydropower boom…. Another big Indian hydro firm agreed with Nepal’s government, on November 25th, to build a 900MW hydro scheme, in east Nepal, known as Arun 3. Research done for Britain’s Department for International Development suggests four big hydro projects could earn Nepal a total of $17 billion in the next 30 years—not bad considering its GDP last year was a mere $19 billion.

All Nepal’s rivers, if tapped, could feasibly produce about 40GW of clean energy—a sixth of India’s total installed capacity today. Add the rivers of Pakistan, Bhutan and north India and the total trebles.  Bhutan has made progress: 3GW of hydro plants are to be built to produce electricity exports. The three already generating produce 1GW out of a total of 1.5GW from hydro. These rely on Indian loans, expertise and labour….

A second reason, says Raghuveer Sharma of the International Finance Corporation (part of the World Bank), was radical change that opened India’s domestic power market a decade ago. Big private firms now generate and trade electricity there and look abroad for projects. India’s government also presses for energy connections over borders, partly for the sake of diplomacy. There has even been talk of exporting 1GW to Lahore, in Pakistan—but fraught relations between the two countries make that a distant dream.

An official in India’s power ministry says South Asia will have to triple its energy production over the next 20 years. Integrating power grids and letting firms trade electricity internationally would be a big help. It would expand market opportunities and allow more varied use of energy sources to help meet differing peak demand. Nepal could export to India in summer, for example, to run fans and air conditioners. India would export energy back uphill in winter when Nepali rivers dry and turbines stop spinning.

Governments that learn to handle energy investments by the billion might manage to attract other industries, too. Nepal’s abundant limestone, for example, would tempt cement producers once power supplies are sufficient. In the mountains, it is not only treks that are rewarding.

South Asia’s Hydro-Politics: Water in them hills, Economist, Nov. 29, 2014, at 38

Nuclear Power – Sweden

Sweden may be facing the phase out of nuclear power following agreement by the country’s Social Democrats and their junior coalition partner, the Green Party, to set up an energy commission tasked with achieving a 100% renewable electricity system….The parties said in separate, but identical statements that nuclear power should be replaced with renewable energy and energy efficiency. The goal, they said, should be at least 30 TWh of electricity from renewable energy sources by 2020. A goal for 2030 has yet to be set, they added. Support for offshore wind and solar power are needed “in addition”, they said.

Nuclear power “should bear a greater share of its economic cost”, they said. “Safety requirements should be strengthened and the nuclear waste fee increased.”  Waste management in Sweden is undertaken by SKB while safety regulations are set by the Swedish Radiation Safety Authority. Both of these operate independently of government.  State-owned utility Vattenfall’s plan to build a new nuclear power plant has been “interrupted”and the company will lead the country’s energy system towards a higher share for renewable energy, they said.

Excerpt from Sweden faces future without nuclear, World Nuclear Association, October  12014

Floating Power Plants: Cayman Islands

A United States company OTEC International is in talks with Caribbean Utilities Company (CUC), Grand Cayman’s electrical provider, to supply renewable energy to the island via Ocean Thermal Energy from a platform at North Side.  According to the company:

“The Cayman Islands has documented its storm history with precision, which made it easier for OTEC International to identify locations where  Floating Power Platforms (FPPs) can be securely sited and appropriately designed to survive strong storm conditions.  The first phase of the Cayman project would be the generation of 6.25-MW renewable electricity* from an FPP that would be permanently moored less than a mile from shore. At this distance from shore, the plant’s visual impact will be minimal because of the platform’s overall low profile. The power generated would be transported to a substation onshore via cable and connected to the island’s CUC grid…..A comprehensive Environmental Impact Assessment (EIA) will be completed before the project can receive all necessary licenses and permits from various governmental authorities.”

*This type of ocean-thermal electricity plant takes advantage of the temperature difference between warm surface water and cold deep seawater.

Excerpts from Company providing floating ocean power platform technology to supply renewable energy to Cayman Islands in talks, Cayman inews, Sept. 21, 2014

 

The Power of Batteries and Micro-Grids

Who needs the power grid when you can generate and store your own electricity cheaply and reliably? Such a world is drawing nearer: good news for consumers, but a potential shock for utility companies. That is the conclusion of a report this week by Morgan Stanley, an investment bank, which predicts that ever-cheaper solar and other renewable-energy sources, combined with better and more plentiful batteries, will allow many businesses and other electricity users to cut the cord on their electricity providers.

Tesla Motors, an American maker of electric cars, recently said it will build a “gigafactory”, which by 2020 will turn out as many lithium-ion batteries as the whole world produced last year (2013). These batteries can do more than power cars; they can also store electricity which is produced when it is not needed, and discharge it when it is….

In poor, volt-starved countries, a lorry-mounted aircraft engine can become a mobile gas-fired power station. GE recently installed 24 such units in Algeria, providing 30MW of power. Local difficulties meant it took six months; that was fast by the standards of big power stations, “but we could have done it in ten days,” says Lorraine Bolsinger, who heads GE’s new distributed-generation business….

Morgan Stanley reckons that if Tesla’s factory provides the cheap batteries it promises, Californian households will be able to run off a solar-plus-storage system costing just $350 a year. Buying electricity off the grid may cost them around $750 a year by then.

Morningstar, an investment-research firm, says that though distributed generation represents only 1% of America’s installed capacity now (compared with 20% in Germany), it could make up a third by 2017 and could “kill” utilities in their current form. Small-scale producers will dump their surplus power on the market at prices below those at which the utilities can recoup their cost of capital—and thus pay to maintain the grid.

America’s Electric Power Research Institute last month produced a paper highlighting the dangers of an unplanned move to distributed generation, using Germany as an example. The dash for renewables there has strained the power network and made life hard for utilities. This week one of the country’s largest, RWE, announced that it made a net loss of €2.8 billion ($3.8 billion) in 2013, its first annual loss in more than 60 years, as the rising supply of electricity from (subsidised) renewable sources undercut its prices.

Distributed generation: Devolving power, Economist,  Mar. 8, 2014, at 69

Rivers as Fiefs: Dams in China

Though the Chinese authorities have made much progress in evaluating the social and environmental impact of dams, the emphasis is still on building them, even when mitigating the damage would be hard. Critics have called it the “hydro-industrial complex”: China has armies of water engineers (including Hu Jintao, the former president) and at least 300 gigawatts of untapped hydroelectric potential. China’s total generating capacity in 2012 was 1,145GW, of which 758GW came from coal-burning plants.

An important motive for China to pursue hydropower is, ironically, the environment. China desperately needs to expand its energy supply while reducing its dependence on carbon-based fuels, especially coal. The government wants 15% of power consumption to come from clean or renewable sources by 2020, up from 9% now. Hydropower is essential for achieving that goal, as is nuclear power. “Hydro, including large hydro in China, is seen as green,” says Darrin Magee, an expert on Chinese dams at Hobart and William Smith Colleges in New York state.

There is also a political reason why large hydro schemes continue to go ahead. Dambuilders and local governments have almost unlimited power to plan and approve projects, whereas environmental officials have almost no power to stop them.

The problems begin with the planning for China’s rivers, which are divided into fiefs by the state-owned power companies that build dams in much the same way as the Corps of Engineers and the Bureau of Reclamation divided up American rivers in the early 20th century. Though the staff of the water-resources ministry in Beijing know a lot about the environment, they have no say. “Big hydro projects are designed and approved by everybody but the ministry of water resources,” says Mr Magee.

Local governments, meanwhile, view dams as enticing economic development projects. The dambuilders, which have special privileges to borrow, put up the financing. The extra electricity supports industrial expansion and brings in revenues. Local officials are promoted for meeting economic performance targets and some collude for personal gain with the dambuilders. Because of the decentralised nature of the industry, local officials try to include dams in their plans. Once they have done so, they can expect the environmental impact assessments that follow to be a formality—if only because the consultants who undertake them are paid by the hydropower companies.

Environmental officials who have not been financially captured by the dambuilding economy find themselves as scarce as some of the fish they are charged to protect. Environmental activists, meanwhile, can request access to public records and demand public hearings, both required by law. But they say that these avenues are barred when they are most needed—on controversial projects that face vocal opposition. For example, the authorities have rejected requests for public records on Xiaonanhai and they have not granted a public hearing.

If environmental regulators and activists want any hope of halting a project, they must go outside normal bureaucratic channels to lobby powerful Politburo members or the national media. Although that may not always work, it did in 2004, when Wen Jiabao, then prime minister, halted construction of a cascade of 13 dams on the Nu River in south-west China in order to protect the environment. Even then some work on the projects still proceeded. Meanwhile, smaller schemes race ahead unchecked. Promoted by dambuilders and local governments, nearly 100 smaller hydroelectric projects in the Nu river region went forward without needing permission from higher up. Some began before they had even received the final approval.

China’s new leaders in recent months have signalled that they want yet more dams, approving several ambitious new projects, including what would be the highest dam in the world, on the Dadu river. After Mr Wen stepped down from his posts in the party and the government, the dams on the Nu river that he blocked received the go-ahead again.

Chinese leaders have for millennia sought to tame the country’s great rivers, which have sustained and destroyed countless lives with cycles of abundance, famine and floods. Indeed their legitimacy as rulers has long been linked to their ability to do so. The Communist Party has built thousands of large dams since 1949. China is also the world’s leading builder of big dams abroad; International Rivers, a pressure group, says that Chinese companies and financiers are involved in about 300 dam projects in 66 countries.

The politics of dam-building: Opening the floodgates, Economist, Sept. 21, 2013, at 47

Biofuels from Agricultural Waste

Ethanol, for instance, is an alcoholic biofuel easily distilled from sugary or starchy plants. It has been used to power cars since Ford’s Model T and, blended into conventional petrol, constitutes about 10% of the fuel burned by America’s vehicles today. Biodiesel made from vegetable fats is similarly mixed (at a lower proportion of 5%) into conventional diesel in Europe. But these “first generation” biofuels have drawbacks. They are made from plants rich in sugar, starch or oil that might otherwise be eaten by people or livestock. Ethanol production already consumes 40% of America’s maize (corn) harvest and a single new ethanol plant in Hull is about to become Britain’s largest buyer of wheat, using 1.1m tonnes a year. Ethanol and biodiesel also have limitations as vehicle fuels, performing poorly in cold weather and capable of damaging unmodified engines.

In an effort to overcome these limitations, dozens of start-up companies emerged over the past decade with the aim of developing second-generation biofuels. They hoped to avoid the “food versus fuel” debate by making fuel from biomass feedstocks with no nutritional value, such as agricultural waste or fast-growing trees and grasses grown on otherwise unproductive land. Other firms planned to make “drop in” biofuels that could replace conventional fossil fuels directly, rather than having to be blended in…..

Even if second-generation processes can be economically scaled up, however, that might in turn highlight a further problem. To make a significant dent in the 2,500m litres of conventional oil that American refineries churn through each day, biofuel factories would have to be able to get hold of a staggering quantity of feedstock. Mr Ghisolfi of Beta Renewables points out that a factory with an annual output of 140m litres needs 350,000 tonnes of biomass a year to operate. “There are only certain areas, in Brazil and some parts of the US and Asia, where you can locate this much biomass within a close radius,” says Mr Ghisolfi. “I am sceptical of scaling to ten times that size, because getting 3.5m tonnes of biomass to a single collection point is going to be a very big undertaking.”

Billions of tonnes of agricultural waste are produced worldwide each year, but such material is thinly spread, making it expensive to collect and transport. Moreover, farms use such waste to condition the soil, feed animals or burn for power. Diverting existing sources of wood to make biofuels will annoy builders and paper-makers, and planting fuel crops on undeveloped land is hardly without controversy: one man’s wasteland is another’s pristine ecosystem. Dozens of environmental groups have protested against the EPA’s recent decision to permit plantations of fast-growing giant reed for biofuels, calling it a noxious and highly invasive weed. Just as the food-versus-fuel argument has proved controversial for today’s biofuels, flora-versus-fuel could be an equally tough struggle for tomorrow’s.

Biofuels: What happened to biofuels?, Economist Technology Quarterly, Sept. 7, 2013

Water Conflicts: Tajikistan versus Uzbekistan

Rogun is both a town [in Tajikistan], some 100km (60 miles) from the capital, Dushanbe, and a long-stalled dream: to build the world’s tallest hydropower dam.  Dirt-poor but water-rich, Tajikistan hopes to sell electricity to Afghanistan and South Asia. In theory, the dam, 335 metres high, could save the country from poverty and isolation, doubling Tajikistan’s power-generating capacity. But the project seems quixotic, if not outright delusional: it would cost up to $6 billion (GDP in 2012 was about $7.6 billion); Uzbekistan, a big neighbour, is fiercely opposed; and the investment climate is clouded by corruption.

Plans for the dam were drawn up long before the collapse of the Soviet Union, but were revived in the early 2000s as Tajikistan recovered from civil war. Each winter energy shortages shave an estimated 3% off GDP. Rogun will solve all problems, state propaganda and many Tajiks say.

But international donors struggle to trust Mr Rakhmon [Tajikistan’s president]. Two-fifths of Tajikistan’s electricity is diverted to a state-run aluminium smelter, TALCO. Each year, TALCO produces hundreds of millions of dollars in profits that are routed to a shell company in the British Virgin Islands. Mr Rakhmon personally oversees TALCO. Why does he not use that cash for his dam?

Central Asia’s energy and water resources were once run from Moscow. In summer upstream republics such as Tajikistan and neighbouring Kyrgyzstan released water from their dams to generate electricity and help irrigate downstream republics, such as Uzbekistan. So Tajikistan already boasts the world’s highest dam, the 300-metre Nurek, built in the 1970s. In winter Uzbekistan delivered gas. That deal broke down after independence. Mr Rakhmon and Uzbekistan’s Islam Karimov do not get along. It is the custom among autocrats in these parts.

Uzbekistan thinks Rogun would parch its cotton crop and give Tajikistan political leverage. In protest, Uzbekistan has halted gas sales to Tajikistan and blocked shipments of construction materials for Rogun. Mr Karimov has warned the dispute could lead to war.

Into this morass has waded the World Bank, sponsoring two three-year assessments of the project on condition that construction is suspended. When completed, probably later this year, the studies are expected to judge the project itself feasible, but to present nine other options—of differing heights and turbine capacities—that may offer better value.  But questioning the dam’s height does not go down well with Mr Rakhmon. In 2004 Russia offered to get RusAL, an aluminium giant, to build Rogun. But after RusAL said the dam should be 50 metres lower (and perhaps tried to muscle into TALCO), the president told them to leave…

Tajikistan cannot build Rogun alone. A brain drain has left it woefully ill-equipped to handle such a project. One of Rogun’s chief engineers, asked to confirm a few statistics, consults Wikipedia. The only realistic patrons for the project are outsiders who might be able to stomach the corruption, such as Russia or China. But neither wants to anger Uzbekistan, Central Asia’s most populous country, with its largest army.

Hydropower in Tajikistan: Folie de grandeur, Economist, July 27, 2013, at 36

The Renewable Energy Bubble in Japan

The shining light that was once Japan’s renewable energy industry is beginning to dim as reality sets in and it faces competition from a rejuvenated nuclear power industry…According to a February nationwide survey by the Japan Renewable Energy Foundation, 34 of the 79 solar energy producers who responded said they had given up on at least one solar power project. Roughly 45 percent of those respondents cited difficulties in land procurement, followed by 25 percent who said they had problems joining the power grid.

One such project in Hokkaido, located near the New Chitose Airport, called for a 100-hectare solar power generation facility. The site adjacent to the Abiragawa river remains covered in weeds to this day.  “We call it an April 17 crisis,” said Hiroaki Fujii, the 43-year-old executive vice president at SB Energy Corp., a Tokyo-based company that designed the plans.  On that date this year, Hokkaido Electric Power Co. said it would only purchase a total of 400 megawatts of electricity as part of the feed-in tariff system from the so-called mega-solar power plants, each with a generation capacity of 2 megawatts or more. That amounts to turning down as many as 70 percent of the 87 applications to sell it power, filed through March, with a combined output capacity of 1.568 gigawatts.  One Hokkaido Electric official justified the decision: “Our power grid has a limited capacity. Accepting too much power from solar plants, where output levels fluctuate wildly depending on the weather, compromises a stable supply of electricity.”

One Sapporo-based real estate company lost money speculating. The company purchased two plots of land to host solar power plants that never materialized. “We were taken in by a renewable energy bubble,” the company’s president lamented.

The renewable energy feed-in tariff system was introduced in July 2012. It obligates utilities to purchase electricity generated by solar and wind plants at predetermined prices. The then-ruling Democratic Party of Japan initiated the system in a bid to bolster the nation’s renewable energy production, which accounted for less than 2 percent of the total power generation at the time, to 30 percent.

The regional utility’s decision to limit its purchases of solar power cannot be assigned to grid capacity alone. The decision was taken in large part due to Hokkaido Electric’s expectations that all three idled reactors at its Tomari nuclear power plant will eventually go back online…But if utilities revert to relying on nuclear power to levels before the Fukushima disaster, that could leave very little room for the emerging renewable energy industries to grow.

Enter the savior of Japan’s nuclear energy sector: Prime Minister Shinzo Abe’s growth strategy. The Abe administration is eager to export Japan’s nuclear technologies and expertise. Not only did his government help secure a contract to build nuclear reactors in Turkey, but Abe himself, acting as the country’s top salesman, visited Saudi Arabia, India and Central Europe to promote Japanese nuclear capabilities.  In late March, a group representing the Japan Atomic Industrial Forum (JAIF) also visited the Sizewell nuclear power plant 160 kilometers northeast of London. The forum’s constituent members include power utilities and manufacturers dealing in nuclear technologies.  There are plans to build two more nuclear reactors on the grounds of the Sizewell site.

“Expanding our nuclear operations overseas has come to play a larger role in our perspective since the Abe administration came to power,” said Akihiro Matsuzaki, an official in the JAIF Department of International Affairs and a member of the mission to Sizewell. Foundation work is already under way there.  Hitachi Ltd., which acquired Britain’s Horizon Nuclear Power Ltd., said it also hopes to boost the annual sales of its nuclear business division from the current 160 billion yen ($1.64 billion) to 360 billion yen by fiscal 2020.  “We will be part of Abenomics (Abe’s economic policy),” Hitachi Senior Vice President Tatsuro Ishizuka told a briefing session for investors on June 13.

MARI FUJISAKI, Japan’s growth in renewable energy dims as nuclear strives for comeback, Asahi Shimbun July 7, 2013

Blackstone, China, Secrecy: Guyana

The government of Guyana wants to move forward with an $840m project at Amaila Falls, deep in the forested interior. At full capacity of 165MW, it could supply more power than Guyana’s present needs.  The lead developer is Sithe Global, part of the Blackstone Group. Sithe wants a guaranteed 19% return on its equity stake, and plans to start construction this year. China Railway First Group signed an engineering contract in September. The China Development Bank will lend most of the money. The Inter-American Development Bank has been asked to chip in $175m; the World Bank was initially involved, but has pulled out.

Amaila’s supporters point out that it will flood less than 55 square km (21 square miles). No villages will be displaced and little wildlife will be disturbed. Guyana would no longer rely on fossil fuels for electricity. After two decades, ownership would pass to the government, construction costs paid off.

Opponents worry that clean electricity will not come cheap. Guyana Power and Light (GPL), the state-owned electricity company, will pay about $100m a year to the Amaila consortium. Electricity bills are unlikely to fall (three people were killed last year in protests over electricity charges). And Amaila’s power may not be reliable. The El Niño weather pattern can bring a year-long drought. In normal years, the plant will run below capacity between October and April. GPL will have to pay for backup thermal power. The IMF has urged “careful consideration of the [financial] risks”.

Plans to build Amaila date from 1997, though Sithe only got involved in 2009. The estimated cost has risen steadily. An access road is unfinished. There is as yet no economic feasibility study for the project; when completed, the study will remain confidential, as is GPL’s outline power-purchase agreement. Opposition parties complain that the government is being “secretive” about Amaila. On April 24th they blocked funds for a government equity-stake in the project. If Amaila is as beneficial as its backers claim, an open debate might generate broader support for the project, and cut its $56m bill for political risk insurance.

Hydropower in Guyana: Shrouded in secrecy, Economist, May, 4, 2013, at 39

Dams in Brazil

Some 20,000 labourers are working around the clock at Belo Monte on the Xingu river, the biggest hydropower plant under construction anywhere. When complete, its installed capacity, or theoretical maximum output, of 11,233MW will make it the world’s third-largest, behind China’s Three Gorges and Itaipu, on the border between Brazil and Paraguay.  Everything about Belo Monte is outsized, from the budget (28.9 billion reais, or $14.4 billion), to the earthworks—a Panama Canal-worth of soil and rock is being excavated—to the controversy surrounding it. In 2008 a public hearing in Altamira, the nearest town, saw a government engineer cut with a machete. In 2010 court orders threatened to stop the auction for the project. The private-sector bidders pulled out a week before. When officials from Norte Energia, the winning consortium of state-controlled firms and pension funds, left the auction room, they were greeted by protesters—and three tonnes of pig muck.

Since then construction has twice been halted briefly by legal challenges. Greens and Amerindians often stage protests. Xingu Vivo (“Living Xingu”), an anti-Belo Monte campaign group, displays notes from supporters all over the world in its Altamira office… But visit the site and Belo Monte now looks both unstoppable and much less damaging to the environment than some of its foes claim…

Brazil already generates 80% of its electricity from hydro plants—far more than other countries. But two-thirds of its hydro potential is untapped. The snag is that most of it lies in untouched rivers in the Amazon basin. Of 48 planned dams, 30 are in the rainforest. They include the almost completed Jirau and Santo Antônio on the Madeira river, which will add 6,600MW to installed capacity. But it is Belo Monte, the giant among them, that has become the prime target of anti-dams campaigners.Opponents say that dams only look cheap because the impact on locals is downplayed and the value of other uses of rivers—for fishing, transport and biodiversity—is not counted. They acknowledge that hydropower is low-carbon, but worry that reservoirs in tropical regions can release large amounts of methane, a much more powerful greenhouse gas.

In the 20th century thousands of dams were built around the world. Some were disasters: Brazil’s Balbina dam near Manaus, put up in the 1980s, flooded 2,400 square km (930 square miles) of rainforest for a piffling capacity of 250MW. Its vast, stagnant reservoir makes it a “methane factory”, says Philip Fearnside of the National Institute for Amazonian Research, a government body in Manaus. Proportionate to output, it emits far more greenhouse gases than even the most inefficient coal plant.

But many dams were worth it (though the losers rarely received fair compensation). Itaipu, built in the 1970s by Brazil’s military government, destroyed some of the world’s loveliest waterfalls, flooded 1,350 square km and displaced 10,000 families. But it now supplies 17% of Brazil’s electricity and 73% of Paraguay’s. It is highly efficient, producing more energy than the Three Gorges, despite being smaller.

Of Brazil’s total untapped hydropower potential of around 180,000MW, about 80,000MW lies in protected regions, mostly indigenous territories, for which there are no development plans. The government expects to use most of the remaining 100,000MW by 2030, says Mr Ventura. But it will minimise the social and environmental costs, he insists. The new dams will use “run of river” designs, eschewing large reservoirs and relying on the water’s natural flow to power the turbines. And they will not flood any Indian reserves.,,,

The protesters’ legal challenge to Belo Monte is based on the claim that they have not been properly consulted, something the government denies. The constitution says that before exploiting any resource on Amerindian lands, the government must consult the inhabitants. But it is silent on how this should be done. The International Labour Organisation (ILO) has a similar clause in its Convention 169 on indigenous rights, to which Brazil is a signatory.  The government says that since no demarcated territories will be flooded, such formal protections do not apply. “We hold consultations about the projects we’re doing not because we have to, but because it is right,” says Mr Ventura. Between 2007 and 2010 there were four public hearings and 12 public consultations about Belo Monte, as well as explanatory workshops and 30 visits to Indian villages.

In 2011, in response to a complaint filed by Indian groups, the Inter-American Commission on Human Rights called for a halt to construction pending further consultation. That was “precipitate and unjustified”, said the government, refusing the request. The ILO has asked Brazil’s government for more information on how it intends to fulfil its legal obligations.

The legal uncertainty surrounding Belo Monte is bad for both the Indians and contractors, says Mr Sales—not to mention Brazil as a whole. A draft law detailing how to consult indigenous people is expected by the end of the year. But before Congress legislates, ground is likely to have been broken on most of the new dams….

Belo Monte was given an initial budget of 16 billion reais, which had risen to 19 billion reais by the time of the auction. Norte Energia’s winning bid for Belo Monte offered a price of 77.97 reais/MWh. Since then, its budget has risen by a third.  Officials insist that the costs are Norte Energia’s problem. That looks disingenuous. The group is almost wholly state-owned. In November, the national development bank gave Norte Energia a loan of 22.5 billion reais—its largest-ever credit. If Belo Monte turns out to be a white elephant, the bill will fall on the taxpayer.

Dams in the Amazon: the Rights and Wrongs of Belo Monte, Economist, May 4, 2013, at 37

The War on Dams

An Amazonian community has threatened to “go to war” with the Brazilian government after what they say is a military incursion into their land by dam builders.  The Munduruku indigenous group in Para state say they have been betrayed by the authorities, who are pushing ahead with plans to build a cascade of hydropower plants on the Tapajós river without their permission.  Public prosecutors, human rights groups, environmental organisations and Christian missionaries have condemned what they call the government’s strong-arm tactics.

According to witnesses in the area, helicopters, soldiers and armed police have been involved in Operation Tapajós, which aims to conduct an environmental impact assessment needed for the proposed construction of the 6,133MW São Luiz do Tapajós dam.  The facility, to be built by the Norte Energia consortium, is the biggest of two planned dams on the Tapajós, the fifth-largest river in the Amazon basin. The government’s 10-year plan includes the construction of four larger hydroelectric plants on its tributary, the Jamanxim.

Under Brazilian law, major infrastructure projects require prior consultation with indigenous communities. Federal prosecutors say this has not happened and urge the courts to block the scheme which, they fear, could lead to bloodshed.  “The Munduruku have already stated on several occasions that they do not support studies for hydroelectric plants on their land unless there is full prior consultation,” the prosecutors noted in a statement.

However, a court ruling last week gave the go-ahead for the survey. Government officials say that neither researchers nor logistical and support teams will enter indigenous villages. The closest they will get is about 30 miles from the nearest village, Sawré Maybu.  The ministry of mines and energy noted on its website that 80 researchers, including biologists and foresters, would undertake a study of flora and fauna. The army escort was made possible by President Dilma Rousseff, who decreed this year that military personnel could be used for survey operations. Officials say the security is for the safety of the scientists and the local population.

Missionaries said the presence of armed troops near Sawré Maybu village, Itaituba, was intimidating, degrading and an unacceptable violation of the rights of the residents.  “In this operation, the federal government has been threatening the lives of the people,” the Indigenous Missionary Council said. “It is unacceptable and illegitimate for the government to impose dialogue at the tip of a bayonet.”

The group added that Munduruku leaders ended a phone call with representatives of the president with a declaration of war. They have also issued open letters calling for an end to the military operation. “We are not bandits. We feel betrayed, humiliated and disrespected by all this,” a letter states.  One of the community’s leaders, Valdenir Munduruku, has warned that locals will take action if the government does not withdraw its taskforce by 10 April, when the two sides are set to talk. He has called for support from other indigenous groups, such as the Xingu, facing similar threats from hydroelectric dams.

Environmental groups have expressed concern. The 1,200-mile waterway is home to more than 300 fish species and provides sustenance to some of the most biodiverse forest habitats on Earth. Ten indigenous groups inhabit the basin, along with several tribes in voluntary isolation.  With similar conflicts over other proposed dams in the Amazon, such as those at Belo Monte, Teles Pires, Santo Antônio and Jirau, some compare the use of force to the last great expansion of hydropower during the military dictatorship. “The Brazilian government is making political decisions about the dams before the environmental impact assessment is done,” said Brent Millikan of the International Rivers environmental group.  “The recent military operations illustrate that the federal government is willing to disregard existing legal instruments intended to foster dialogue between government and civil society.”

Jonathan Watts, Amazon tribe threatens to declare war amid row over Brazilian dam project, Guardian, Aprl. 3, 2013

 

The Battery of Europe – Swiss hydroelectricity is not Green

Swiss energy companies are determined to turn the country into a ‘battery for Europe’. Vast investments are made in big-scale water power projects. But it is not certain they will eventually pay off.  With the decision for a nuclear shutdown, the spotlight in Switzerland and Germany has switched to renewable energy sources. In Germany there’s a massive boost to solar and wind energy production, while Switzerland’s energy companies focus on increasing their storage capacities in the Alps.  About 11 percent of Europe’s electricity flows through Switzerland. The Swiss electricity industry stresses the advantages of the country’s central location in Europe and its topography. On the European energy map, Swiss mountain lakes could function as a huge battery for unsteadily generated renewable energy, and generate high revenues.

Natural and artificial mountain lakes are an essential component of Switzerland’s energy supply. Water power makes up 57 percent of the country’s electricity production. Some of these lakes aren’t just natural water reservoirs though, but serve as basins for pumped-storage hydro power plants (PSPs).  The system is simple and has long been a good business. Throughout the day, cheap, spare electricity is bought on the market and then used to pump water from a lower reservoir to a basin further up the mountain. At times when demand for electricity is high, stored water is released and drives turbines that produce electricity, which can then be sold on the market for a higher price.  Currently, 11 such plants are running in Switzerland with a combined 1400 megawatt capacity. Three other projects are under construction, to increase Swiss pumped-storage capacity to 3500 megawatts by 2017. Two more PSPs are being planned: ‘Grimsel 3′ at the Grimsel Pass in the Bernese Alps and ‘Lago Bianco’ at the Bernina Pass in Grisons.

“The symbiosis between nature and technology has defined the character of this landscape,” writes the Grimsel region’s tourism agency. Ernst Baumberger, press officer at the regional energy company KWO looks at Grimsel through two lenses: while praising the region’s beauty, Baumberger points out that a plenty of precipitation, glaciation, rock as building ground and the immense altitude difference make it ideal for water power use. KWO put its first power plant at Grimsel in operation 80 years ago.  The company recently was licenced to implement its 1.2 billion Swiss francs project ‘KWOplus’, including the construction of a second PSP (‘Grimsel 3′). The plant will have a 660 megawatt capacity, which is about the power of an average Swiss nuclear plant. The plan is controversial, both politically and economically.

“Switzerland doesn’t need any additional PSPs. There’s neither a lack of batteries, nor a grid stability problem,” argues Jürg Buri, managing director of the Swiss Energy Foundation (SES). He says that no country operates as many flexible power stations as Switzerland….Environmental organisations say that mainly cheap electricity from coal and nuclear plants is used for the pumping and that during the process, about a quarter of the energy is lost. Even worse, at windy times, PSPs keep coal and nuclear plants running.  There’s nothing green about pumped-storage hydroelectricity anyway. “If today’s PSPs were supplied with clean energy, that business would be unprofitable,” Buri says. “The revenues of the peak current wouldn’t make up for the purchase price and the energy lost for pumping.”

According to the licence, KWO is obliged to run Grimsel 3 with as much renewable energy as “economically and technically possible.” No fixed share was defined however. KWO’s Baumberger stresses that in the long term, the company’s PSPs should run solely with green electricity. “However, the primary criteria will remain the profitability,” he adds.  While the energy company praises Grimsel 3 as an important contribution to the security of energy supply for the country, Jürg Buri claims that the pumped-storage business further strains transmission lines. “In fact, to run Grimsel 3, even more lines would have to be built, something which people often forget about….

The Swiss Association for Water Management (SWV) views investments in PSPs as risky and their profitability as volatile. At the Bernische Kraftwerke (BKW), which holds half of KWO’s shares and manages electricity trade, the media officer declines to comment on the prospects of pumped-storage hydroelectricity…

In contrast to environmental organisations, KWO’s Baumberger remains optimistic. He stresses that in the light of booming wind and solar energy in Europe, the demand for further storage capacities will grow. “What Switzerland so far offers in terms of energy storage is nothing but a drop in the ocean.”  While opinions on the future of Swiss pumped-storage hydroelectricity differ sharply, one thing seems sure: the industry’s prospects lie in the hands of European, not Swiss politicians and businessmen.

Excerpts from Ray Smith, Swiss Battery May Lose Power, IPS, Dec. 8, 2012

How Iran Copes with Sanctions?

According to the latest figures from the Natural Gas Vehicle Knowledge Base, Iran, with the world’s second-largest natural gas reserves after Russia, in 2011 became the world leader in natural gas vehicles with some 2.9 million on the road, narrowly edging Pakistan, which is trailed by Argentina, Brazil and India, respectively.  Iran’s reliance on its cleaner fossil fuel seems unlikely to diminish as international sanctions continue to bear down on its nuclear program, which in turn have curbed imports of gasoline; though Iran has large oil reserves, its ability to refine its own gasoline falls well short of its needs.  But for ordinary Iranian motorists, natural gas is less a geopolitical or environmental issue than a pocketbook concern. “This sort of fuel is cheap, and it gets me home every day — that’s what I care about,” said Sasan Ahmadi, a 42-year-old office assistant filling up his Iranian-made Kia Pride at a natural-gas station for his hour commute home.

The government began promoting natural gas about a decade ago, and not just in response to American-led sanctions. A big initial reason was the increasingly thick yellow blankets of smog that often engulf greater Tehran and its 12 million inhabitants. That was a result of rising auto sales by domestic carmakers like Iran Khodro and Saipa, which took off as oil revenue began rising sharply around 15 years ago, enriching tens of millions of Iranians…..

As a means to counter outside economic pressure, natural gas’s usefulness is clear. Because of its inadequate investment in oil refineries, Iran has long been forced to refine a portion of its own crude at refineries in Europe to satisfy rising domestic demand for gasoline. So when the European Union in July barred gasoline sales to the country, natural gas helped to blunt the blow.

Despite the sanctions against Iran, motorists like Mr. Ahmadi can make their commute for the equivalent of less than a penny a mile using the alternative fuel at subsidized prices. Gasoline is more expensive, especially because government subsidies have been reduced, but it is still incredibly cheap by Western standards: less than $1 a gallon….

Excerpt, THOMAS ERDBRINK, Oil-Rich Iran, Natural Gas Turns Wheels, New York Times, Oct. 23, 2012