Potential Twitter version: Bushies, asleep at switch, drunk on oil, missed boat."
Meanwhile, guess who's taken up the emerald green mantle?
It might be startling to realize that China is far outpacing the U.S. on green-energy investment."
He is picking up on a recent report by the Washington-based think tank, Center for American Progress: "We Must Seize the Energy Opportunity or Slip Further Behind."
Osnos is, I think, one of the finest correspondents writing from China today. But here I beg to differ. Or at least urge a bit of a reframing.
But let's put this in perspective: First, as a general point, China has had ambitious green goals for several years, especially on energy efficiency, but implementation still lags behind reality. Before we cheer, or worry, too much about Beijing's presumed green-technology progress, let's see what actually gets built. Large earmarks for infrastructure, green or otherwise, are particularly susceptible to local corruption. (The shiniest government office buildings in Lanzhou, capital of Gansu province, were built out of something called the"poverty reduction fund.") Alas, lately we've seen a relaxing of green construction standards in China for the sake of putting economic stimulus money to work quickly. In sum: Setting budgets and targets is easy; follow-through is harder.
Second, on the particular matter of green-energy investment, pretty please stop putting so much faith in the framing of the Center for American Progress. I like CAP. They do good work. But they also have a long-standing habit of beating up on U.S. policy by pointing out that even China is doing more. I'm not against beating up on the U.S., or against giving kudos to China when due. But I am wary of how this formula can lead to exaggerated estimations of what China is in fact doing. (A few years back, CAP put out similar statements when Beijing announced lofty, and as yet unmet, energy efficiency targets.)
Lastly, and most importantly, I think that highlighting the competition angle could ultimately be counter-productive, as fun as it is to envision a U.S. vs China jolly green smackdown. Stressing a rivalry could ultimately lead -- not necessarily in Osnos’s hands, but in looser, more politically-minded interpretations -- to the impression that the race for green energy is somehow a zero-sum game. That any progress made by China (again, let’s be careful to avoid exaggeration here) is somehow threatening to the U.S. Like if the Soviets got to the moon first; oh no. It’s us or them; only one racer breaks the ribbon; get off our green lunar pathway!
Some might argue that Americans do best when their competitive instincts are aroused. But I tend to agree with Charles McElwee, an environmental lawyer in Shanghai whom Osnos cites and whose insights I've long found valuable: Fanning the flames of us-vrs-them-ism -- in the context of global issue that isn't so much a race to win as to survive -- could backfire. It could undercut political support on Capitol Hill for cooperative efforts, technology sharing, and perhaps even climate-treaty negotiations.
For too long, on climate matters, the U.S. and China have been stuck in a dusty stalemate, with both sides refusing to budge first -- especially with regards to seriously considering carbon caps -- while they eye each other as threats, and competitors. Somehow this Gunsmoke scenario needs to end.
Photo by Feng Li/Getty Images
The Moscow Times has a great story about how a pro-Kremlin think tank was contracted by a state-controlled hydroelectric company to create a fake indigenous rights group to overcome local opposition to a new dam.
It's not surprising that the Kremlin is creating fake civil society groups to front for its policies, but what's impressive is that none of the parties involved are even trying to hide what's going on. The think tank even put the project in its own PR:
The think tank, the National Institute for Development of Modern Ideology, trumpets the social organization, which is called Evenkia for Our Descendants, as a "successful PR project" in its recently released annual bulletin.
Institute deputy director Yury Barklyansky confirmed by telephone that the institute had been involved in the social organization, which he said it "worked on with RusHydro." ... Two pages of the institute's annual bulletin are devoted to the Evenkia social organization, and the section is titled, "Forming Positive Public Opinion About Large Investment Projects Among the Inhabitants of Evenkia."
Here's how the group operates:
Evenk residents confirmed that Evenkia for Our Descendants is active in the region, distributing flyers, but they said it lacks public support. "They have talked to everyone in Tura, and only a couple people have joined them," Vladimir Lvov, an opponent of the dam, said by telephone from Tura.
He said he knows of three people working for the organization: Viktoria Merkulyeva, a local schoolteacher who heads the organization, and two people who have been living in a Tura hotel for months. "They take pictures and interview locals and then change our quotes and mix up information," he said.
While the organization may not have the support of the locals, it has been recognized by RusHydro and was the first indigenous organization to meet with company management in January.
"Our Descendents" website, featuring letters to the president from residents supporting the dam and children's drawings of the region's hydro-powered future, is here.
Considering that their states are still technically at war, Russian President Dmitry Medvedev and Japanese Prime Minister Taro Aso got along remarkably well during their summit meeting in Yuzhno-Sakhalinsk on Wednesday. While palling around on Sakhalin Island at the opening of a new $22 billion LNG plant (the first such plant in Russia), Aso and Medvedev praised the economic cooperation that has helped Russia and Japan strengthen their relationship over the past ten years.
Annual trade has now reached $30 billion, tripling in size since 2004. The first phase of the massively expensive ESPO pipeline, connecting oil reserves in Siberia with Russia's Pacific coast, has been completed and the construction of phase two has been announced. This is rare good news for two economies that have been hit particularly hard by the global financial crisis.
But it's still not all smiles between the two countries. The violent reaction of Vladivostok's workers to the imposition of a tariff on Japanese vehicles in late December displays the importance of Japanese commerce to Russia's remote Far East provinces. More seriously,a Japanese ship carrying ¥12.8 million worth of medical aid at the request of Russian residents on the disputed Kuril Islands was turned away in January because the Japanese delegation refused to show disembarkation cards, a move that the Japanese consider tantamount to recognizing Russian sovereignty over the Kurils. T
The Japanese claim that the Kuril islands -currently under Russian control - are historically Japanese and were seized illegally by the Soviet Union at the end of World War II. The dispute over the islands has prevented Russia and Japan from signing a peace treaty and officially ending the war.
Until the Kuril issue is resolved, Japan and Russia will continue to be in the contradictory position of building ever closer ties while still officially fighting World War II.
NATALIA KOLESNIKOVA/AFP/Getty Images
So much for weaning ourselves off dependence on foreign energy sources.
It turns out Bolivia has almost half of the world's supply of lithium, and President Evo Morales wants to cash in. As the movement towards producing battery powered vehicles gains momentum, analysts expect demand for the element to grow with it. Unfortunately, a huge portion of these reserve are in a single country, run by a president with a penchant for nationalizing major commodity industries and an aversion to the United States. This could cause major problems for car makers as they seek promote new models such as the Chevy Volt and a plug-in version of the Ford Escape. As one local leader puts it:
We know that Bolivia can become the Saudi Arabia of lithium."
That doesn't sound promising.
When Russia ceased natural gas flows into Europe through Ukraine on Jan. 7, many people -- and animals -- in southeastern Europe got left in the cold. At the Sofia Zoo, about 1,300 animals were left without central heating, and electric heaters, such as the one Larry is with here on Jan. 12, were brought in. The zoo’s four Siberian tigers, however, appear to be enjoying the colder temperatures.
Georgia and its pipelines may be central to plans to bypass Russia as Europe's main gas supplier, but the country may soon be partially dependent on Russia for its own power supply.
Georgia has sold a partial management stake in the hydroelectric plant that supplies almost half the country's power to a Russian state-controlled energy firm for $9 million. The plant straddles the border between Georgia-proper and the Russian-occupied territory of Abkhazia. Even though Russia is now paying for electricity that Abkhazians and nearby Russians were already using for free and Georgia will maintain ownership, Georgian opposition leaders smell hypocrisy:
Salome Zurabishvili, leader of the opposition Georgian Way party, sharply criticized the move. “The government is a traitor, which says, on the one hand, that Russia is an occupier, and on the other hand makes deals with the same country.”
Even though this seems like a decent deal for Georgia, Mikheil Saakashvili's government had to expect to take a hit from the public. It may be a sign that while top Georgian officials continue to decry the Russian occupation of their territory, in reality they're learning to live with it.
Another cold Russian winter, another dispute about Russian gas prices. Time's Yuri Zarakhavich has a useful summary:
In the buildup to Dec. 31, Russia accused Ukraine of having arrears of more than $2 billion on its expired gas contract. Ukraine said that it had paid all its debt. Moscow said it would start charging a new price, which it presented as both the "market" price and a "preferential" rate—just $250 rather a sharp rise on the 2008 price of $179.5 per 1000 cubic meters of gas. Ukraine said that it could pay $201.
In response, Gazprom, Russia's state-run natural gas monopoly, dropped its "preferential" offer and said it would have to charge the real "market" rate of $418. It also insists that Ukraine still owes Moscow $ 614 million, and, at 10am on Jan. 1, turned off gas taps to Ukraine.
Pretty much the same thing has happened for the last three winters. Worried about its own supply, the EU is anxiously working to broker a compromise between Ukraine and Russia. As a European Commission representative said:
"Since we are the main market for Russian gas ... we have an obvious interest in applying pressure on these parties to reach as soon as possible an agreement which is definitive."
It's easy enough to cast Gazprom -- a state monopoly with a penchant for heavy-handed ultimatums -- as the villain in this recurring drama. But that lets Europe off the hook a bit too easily. As energy investor Jérôme Guillet wrote for FP during the 2007 edition of the dispute, Gazprom doesn't behave all that differently from any other company and its demonization is a convenient way for European leaders to divert attention from their lack of a coherent energy policy:
[I]t’s a bit rich to see the supposedly pro-market Westerners calling for heavy subsidies. And a country like Ukraine that’s angling to join NATO (an organization that Russia understandably perceives as anti-Russian) can hardly expect a discount on its gas. So why is Russia getting demonized for defending its interests? The answer lies with European leaders, who are trying to distract the public from the mess they’ve made of European energy policy. Europeans themselves are to blame for their dependency on Gazprom, which is doing what any company would do in its place. [...]
As for European leaders, they have no one but themselves to blame for turning worrying domestic gas problems into a major international crisis. Europe, led by the United Kingdom, has made a conscious choice to rely on gas as its main new source of energy at a time when its domestic supplies are declining—and declining a lot faster than everybody expected. And Europe’s economic liberalization encourages market players to build easier-to-finance gas-fired plants, thus feeding demand for more gas. If political leaders were really worried about gas supplies from Russia, they should change that structural feature of the market rather than wailing about Gazprom’s clumsy—but ultimately harmless—fights with its neighbors.
Two years after Guillet wrote that, Europe is still just as dependent on Russia for its energy supply, meaning that this New Year's tradition is likely to continue. If the corner store continually rips you off, yet you continue to patronize it, can you really keep blaming the store?
Photo: SERGEI SUPINSKY/AFP/Getty Images
Very cool news out of Tel Aviv where Project Better Place, a company working to develop electric car charging stations, demonstrated a plug-in charging post yesterday. Better Place has been contracted to set up the posts throughout Israel and will soon expand its service to Denmark and Australia. Using these posts, drivers will be able to charge their cars through sockets like the one shown above.
For more on this exciting project, check out Wired's excellent profile of Better Place founder Shai Agassi.
Photo: David Silverman/Getty Images
Petroleum Intelligence Weekly's annual ranking of the world's top oil companies - based on criteria like reserves, refining capacity, and sales - was just released, and there is just a bit of shuffling near the top. Four of the five top oil companies now are state owned - Saudi Aramco, Iran's NIOC, Venezuela's PDV, and China's CNPC. A few highlights:
- Saudi Aramco remains No. 1, and China's CNPC surpasses BP and Shell.
- Russia's Rosneft makes biggest jump, from 24th to 16th.
- Majority state-owned national oil companies now make up 27 of 50.
Good for the Washington Post's editorial board for injecting some sense into the energy debate in the United States by calling for higher gas taxes to shore up falling prices and encourage smarter consumer choices.
Unfortunately, this falls into the category of "stuff that won't happen, but should." Note that in President-elect Barack Obama's interview Sunday on 60 Minutes, he gave no hint that he is going to risk his political future by calling for a tax:
Kroft: When the price of oil was at $147 a barrel, there were a lot of spirited and profitable discussions that were held on energy independence. Now you've got the price of oil under $60.
Mr. Obama: Right.
Kroft: Does doing something about energy is it less important now than…
Mr. Obama: It's more important. It may be a little harder politically, but it's more important.
Mr. Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it's not important, and we start, you know filling up our SUVs again.
And, as a consequence, we never make any progress. It’s part of the addiction, all right. That has to be broken. Now is the time to break it.
And yesterday, TNR's Brad Plumer reports, Jeff Bingaman, chair of the Senate's Energy and Natural Resources Committee, said "flat out... that a gas tax or 'floor' on oil prices was never going to happen, because 'the politics are problematic.'"
So, instead of the one tool that we know for a fact spurs innovation and encourages people to change their oil-consumption habits -- higher prices -- we're probably going to get massive, complicated subsidies and tax credits for powerful, well-connected constituencies (e.g. the corn lobby). The U.S. government, rather than the market, is going to decide which technologies to support.
Somehow, I don't think the House of Saud is too worried about that pledge to wean the United States off of oil from the Middle East in 10 years.
There's a lot of talk, in Thomas Freidman's columns and elsewhere, about how the U.S. auto industry deserves its current plight. I have some sympathy for this view, since I do believe GM and Ford have largely failed to innovate, fought hard against gas taxes or mileage standards, and generally managed their brands into the ground.
However, a couple points to consider:
As oilman T. Boone Pickens put it this morning on Meet the Press, "If you want to blame somebody for it... all of us in America used the oil. The reason we did? The gasoline was cheap." Watch him here:
The International Energy Agency's upcoming World Energy Outlook predicts that oil prices, which have sunk to nearly $60 per barrel, will likely rise once again to above $100 a barrel when the world economy rebounds. By 2030, the report estimates that the prices could exceed $200.
This price increase will be driven primarily by a decline in the supply of oil, as production from the world's older oil fields begins to slow. In order to counter this decline in production and provide for the growing demand in developing countries, the IEA estimates that oil companies will have to invest $350 billion each year until 2030 to develop new fields and improve their equipment. Naturally, that cost will be passed on to the consumer.
I'm reminded of Tony Soprano's famous advice to buy real estate: "Because God's not making any more of it." That maxim may not be working out so well these days when it comes to real estate in particular, but investors should certainly keep it in mind when it comes to oil.
Photo: YASSER AL-ZAYYAT/AFP/Getty Images
The Financial Times reports:
Six of the biggest publicly traded US ethanol producers have lost more than $8.7bn in market value since the peak of the boom in mid-2006 and the beginning of this month, according to an analysis by the Financial Times.
Among the biggest losers? Bill Gates, who has invested big bucks in ethanol.
In my bored stupor, I totally missed this question during the debate last night. In retrospect, the way it's phrased seems designed to tell us more about Tom Brokaw's energy plan (or Thomas Friedman's) than that of John McCain or Barack Obama:
Should we fund a Manhattan-like project that develops a nuclear bomb to deal with global energy and alternative energy or should we fund 100,000 garages across America, the kind of industry and innovation that developed Silicon Valley?
Hmm... Silicon Valley or a nuclear bomb? Tough choice.
Still, while it's an absurdly loaded -- and probably flubbed -- question, the candidates at least had answers for it. When Brokaw pushed them to name their Treasury secretary in advance or call Russia evil, I have a hard time believing that he actually expected them to respond to what he asked.
At this point, perhaps he just expects them to ignore the question and go straight to talking points anyway, so he decided to have a bit of fun.
Despite all the turmoil in Congress these days, a bill authorizing the U.S.-India nuclear deal has been quietly moving forward, and yesterday it passed the Senate 86-13. This is one of the last steps in the approval process -- it follows what I and many others thought were almost insurmountable obstacles to the deal in the Indian Parliament and the Nuclear Suppliers Group.
The summary of the bill, released yesterday, lists several notable provisions that I want to highlight briefly. It notes explicitly that approval of the deal is based on U.S. interpretations of the terms. This means that, contrary to a declaration by Indian Prime Minister Manmohan Singh, the agreement would not mitigate any penalties incurred by future Indian nuclear tests. For instance, the United States views fuel supply assurances as a political, not a legal, commitment that would almost certainly be suspended in the event of further nuclear tests.
In addition, before any licenses can be approved by the Nuclear Regulatory Commission under this agreement, India's safeguards agreement with the International Atomic Energy Agency must enter fully into force. At the same time, India's declaration of civilian nuclear facilities must be consistent with the one issued by New Delhi in 2006.
This and several other provisions seem to be designed to allow the United States opportunities to prevent or halt technology transfer if circumstances call for it. Such potential loopholes also highlight one particularly important fact: The deal's approval does not necessarily mean the United States will actually sell much civilian nuclear technology to India. It is now legal to do so in most cases, but political, bureaucratic, economic, or diplomatic barriers may nonetheless end up being too problematic to overcome. Indeed, the Bush administration secretly told Congress it would not sell "sensitive" nuclear technologies to India in a letter earlier this month. For those unhappy with this deal, the details of the bill leave America with plenty of wiggle room.
A cursory search for Sarah Palin's foreign policy credentials comes up with, well, nothing. It seems that John McCain figures he's got that avenue covered, and has picked Palin to please the conservative base, add some youth to the ticket (she's 44), and reach out to female voters.
More importantly for McCain, one of Palin's strengths may be energy. She's in favor of drilling in ANWR, but has been careful to consider environmental concerns. An interview from July reveals some potential Republican talking points on energy independence:
Alaskans are frustrated because there is opposition in Congress to developing our vast amount of natural resources. We want to contribute more to the rest of the United States. We want to help secure the United States, and help us get off this reliance of foreign sources of energy."
Later, she even comments on the vice presidential speculation, and once again brings up energy:
I think that any kind of national profile, if there is any elevation of that, it's for Alaska itself. People are looking up here (and saying) we need you as leaders for energy policy. We have a willingness to develop responsibly and supply the rest of the United States, and that's why we are being looked at. I just happen to be in a position of leadership where I get drawn into that."
She can boast about standing up to big oil, having won a state tax increase on oil company profits. But, like McCain's summer gas tax holiday, she's been prone to gimmicky energy strategies, such as a botched plan to offer $100-a-month energy debit cards to Alaskans.
As governor of Alaska, she hasn't had anything to say about national security. Her oldest son will deploy to Iraq next month, which puts her in the same position as her new rival, Joe Biden. Other than that, her only statements have been vague offerings of support for Alaska's national guard. And I don't buy the argument that because Alaska borders Canada and Russia, her experience as governor should count for something there.
I think it's safe to say McCain will handle national security for the ticket. He'll use Palin's credentials on energy to hammer away at a message that served Republicans well over the summer -- more drilling.
Sure enough, McCain's official statement seems to follow this exactly.
Today, in his final term, the wildly unpopular President George W. Bush boarded Air Force One bound for the Beijing Olympics and a meeting with his chum Hu Jintao, the dapper ruler of a nuclear armed, communist dictatorship. ... Perhaps our Compassionate Conservative-in-Chief will bring our absent Democrat Congress some 'Made in (communist) China' souvenir t-shirts: 'Bush went to Beijing and all I got was this lousy five week, paid vacation.' "
McCotter wants President Bush to call Congress back from its August recess to vote to expand offshore drilling. Na ga ha pen. As the White House explained, there's no way the House Democrats would allow a vote anyway. Speaker Nancy Pelosi is hoping to run out the clock and get an energy bill more to her liking next year. The GOP obviously senses a political winner, never mind the dubious case for more drilling. But Pelosi's got the gavel.
Short answer: yes.
The longer answer is provided by Anthony Rubenstein in the LA Times:
Texas oil billionaire T. Boone Pickens is pushing a national campaign to make the U.S. "energy independent" through wind power and vehicles that run on natural gas. His blitz of TV ads featuring his own down-home voice has picked up a lot of admiring news coverage. To date, Pickens has yet to explain whose dime will pay for this.
Well, Californians can clarify exactly whose dime it will be: Ours. Along with being the country's biggest wind power developer, Pickens owns Clean Energy Fuels Corp., a natural gas fueling station company that is the sole backer of the stealthy Proposition 10 on California's November ballot. This measure would authorize the sale of $5 billion in general fund bonds to provide alternative energy rebates and incentives -- but by the time the principal and the interest is paid off, it would squander at least $9.8 billion in taxpayer money on Pickens' self-serving natural gas agenda.
The initiative deceptively reads like it's supporting all alternative-fuel vehicles and renewable energy sources. But a closer read finds a laundry list of cash grabs -- from $200 million for a liquefied natural gas terminal to $2.5 billion for rebates of up to $50,000 for each natural gas vehicle.
Pickens's ideas may have some merit -- at least the wind part anyway -- but his motives deserve much more careful scrutiny. Pickens shouldn't be getting a free ride (I'm talking to you, Reuters).
Cue the "hot air" jokes.
The United Nations plans to go casual for the month of August in a bid to cut back on electricity use. The idea, inspired by a similar initiative in Japan called "Cool Biz," is that you can turn down the air conditioning when everybody isn't wearing wool and stuffy ties:
The campaign calls for raising the thermostats in most parts of the U.N. Secretariat building from 22.2 C to 25 C  and from 21.1 C to 23.9 C [75 F] in the world body's conference rooms.
The initiative would save some 2 million tons of steam during the month of August, or the equivalent of 300 tons of carbon dioxide in terms of greenhouse gas emissions, [a U.N. spokesman] said.
I love this quip from David Malone, a former Canadian ambassador:
If the rise in the temperature could cut back on the interminable negotiations running late into the evening for often disappointing results, then the outcome of the initiative would be a very good one."
If it works, the U.N. plans to ask its employees to bundle up in the winter. Now if they can just take care of that smoking problem...
Despite the recent biofuel backlash, there is one place still singing the praises of ethanol. It's estimated that Brazil has cut fuel costs by 30 percent since switching to fuels based on sugarcane -- an agricultural commodity that the country produces in droves. And the country hasn't just saved money from its biofuel habit: it has been turning some profit too, exporting several million tons of its crop to the United States, Europe, and even Japan this year and last.
Brazil's happiness with the ethanol boom underlies an important point about biofuel production: namely, that a regional or country-tailored approach works best. For a nation with a high production of sugarcane -- which packs more than five times the energy of corn and hasn't resulted in major environmental degradation -- it's understandable why biofuel is so popular and promising.
The sugarcane situation in Brazil isn't without its shortcomings: some sugarcane workers face slave-labor conditions, while some worry that their jobs will be replaced by more mechanized cane-cutting. But sugarcane production is an overwhelming boon for Brazil, and other countries would do well to learn from it's success -- and to benefit from it themselves.
The U.S. could step up its imports of cheaper, greener Brazilian fuel rather than continuing to subsidize domestically produced corn-based ethanol. The anti-biofuel crusaders could also stop lumping together Brazil's sugarcane with other "bad" ethanols so that countries like the U.S. will continue to lower trade barriers. That'll be a sweet deal for everyone.
The Rolls-Royce brand is most firmly associated with ultra-luxury cars, but its engineering wing, Rolls-Royce plc, is also actually the second-largest maker of airplane engines in the world. Now, the company is diversifying even further, with plans to set up a full-fledged nuclear division to "manufacture equipment and provide advice to governments on their atomic energy programs."
Rolls-Royce has been supplying safety instrumentation and control technology to France's nuclear reactors for some time now, and it also has nuclear clients in the United States, China, and the Czech Republic -- creating a separate nuclear division is likely part marketing and part expansion. Since the company projects an almost 70 percent increase in the value of the civil nuclear industry by 2023, it's no surprise that it would try to leverage its unique skills and experience to cash in on the purported "nuclear renaissance."
It is surprising that the article explicitly mentions decommissioning (of aging nuclear plants) and cleanup (of plants and other nuclear sites) as potential moneymakers. Companies that deal in nuclear reactors and related products usually focus on the potential for profit in new nuclear plants and a large expansion in the use of nuclear power. Decommissioning and cleanup will become increasingly prominent issues as the world's current nuclear fleet ages, and often responsibility for such problems is laid at the government's doorstep.
Hopefully, more private entities will see fit to focus on concerns like these in the future -- and if we must have new nuclear power plants, we might as well make them Rolls-Royces.
Baghdad's streets are looking a bit brighter, thanks to a little help from solar power. The Iraqi government has started installing solar-powered streetlamps to improve nighttime security in the country's capital, where an insufficient grid system has long failed to provide enough night light. Plans call for 5,000 of the sun-powered streetlights to be installed in Baghdad, as well as 1,000 more for each of Iraq's 18 provinces.
Iraqi officials are pumped about the new lights, which have already allowed some businesses to stay open later. Aziz Shimari, a spokesman for the Electricity Ministry, said that more people "are likely to go out at night."
But its unlikely that a few thousand solar-powered streetlamps, which still often rely on gas-powered generators to supplement their less-than-bright light, are going to shore up major security problems. Nor do they get to the heart of the country's power woes. Since Saddam's fall, Iraqis have been snatching up electronics and appliances, putting pressure on the nation's already shaky grid system. Demand still outstrips supply, and many Iraqis end up paying a pretty penny for generators and other power alternatives.
The U.S. government is pitching in with almost $5 billion to help the country's electricity infrastructure, even putting up bullet-proof lights around Baghdad, Fallujah, and other major cities. But the United States refused to undertake bigger solar-powered projects because of their prohibitive cost.
As for the new solar-powered lights, they might alleviate a little stress on the national grid -- but not without bringing their own share of problems. Desert dust and grime prevent the photovoltaic solar cells from functioning properly, and extreme heat reduces a panel's lifespan. Solar-power might be a start, but Iraq will need total energy security before it can get the real street security it needs. That means a bigger effort to improve the national grid system, and not just piecemeal -- albeit environmentally-friendly -- efforts.
On a ridiculously early flight this morning, I finally got around to finishing the Sunday New York Times and noticed this little gem in the lead story in the Business section, a sweeping look back at how the United States failed to prepare for today's oil crisis:
Mr. Helms, of course, would be Sen. Jesse Helms, the long-serving senator from North Carolina, who died early Friday, some two days before the paper hit newsstands. The NYT's excuse? The section went to press on Thursday. Egg, meet face.
There's no question airlines are hurting right now. The price of jet fuel has shot up more than 80 percent since 2007, and carriers are now charging for services that were once included in the ticket price.
But did you know that airlines are actually cutting back on fuel to save money? IEEE Spectrum blogger Tekla Perry found that out the hard way when his Continental flight to Newark, New Jersey, had to make an emergency pit stop at Stewart Air National Guard Base in Newburgh, New York.
It so happens that Continental has made more "minimum fuel declarations" than any other airline, meaning that its pilots have more often notified air traffic controllers that they may need to land in a hurry. Perry cites a remarkably unsubtle October memo sent from management to pilots that reads, "[A]dding fuel indiscriminately without critical thinking ultimately reduces profit sharing and possibly pension funding." Perhaps a little more critical thinking is needed in the board room?
To avoid haggling with "unstable regions and unfriendly regimes," U.S. President George W. Bush recently called for an expansion in domestic oil production to fill the United States' "short run" oil needs. Part of that call involves exploring new areas of supply, such as the Outer Continental Shelf (sections of U.S. coastline) and parts of ANWR (the Arctic National Wildlife Refuge).
But how quickly can we actually pump out the needed "short run" supply from these places? It can take from three to 10 years from the time the decision is made to explore to actual oil delivery, according to OPEC.
Of course, the time required to produce oil depends on where the oil is and how difficult it is to reach. For instance, drilling in deep water, like in the Gulf of Mexico, can take longer for technical and financial reasons. U.S. companies will likely incur some added expense in trying to reach the undersea oil -- there is a global shortage of deepwater drilling ships equipped to do the job, and each one costs a pretty penny (i.e. several hundred millions of dollars) to construct.
According to OPEC, oil exploration alone, which involves surface-mapping and test drilling, costs "tens or hundreds of billions of dollars." Hundreds of billions of dollars better spent on developing new energy technologies, perhaps?
And what about the controversial ANWR drilling? That'll take about 10 years to bear fruit, two or three of which will be spent just collecting necessary leases and paperwork. Even if that timeline holds and the wells start producing a decade from now, peak production isn't expected until the 2020s. At which point, with any luck, the United States will have started to wean itself off its most enduring addiction.
Much has been made about the close ties between U.S. President George W. Bush and the ruling family of Saudi Arabia. But recent comments by Saudi King Abdullah regarding the recent rise of oil prices sound less like Bush and more like a certain other politician:
The king spoke of the "selfish interests" of speculators as a primary reason and urged the gathered ministers to "rule out biased rumors" and to "reach the real causes for the increase in price."
For the past years, our energy policy in this country has been simply to let the special interests have their way -- opening up loopholes for the oil companies and speculators so that they could reap record profits while the rest of us pay four dollars a gallon."
That was Barack Obama on Sunday. It looks like even if the Democrats win in November, the White House and the House of Saud will still get along just fine.
Good stuff today from Clive Crook:
The US does not know whether to tax energy or subsidise it, promote domestic oil production or forbid it, treat ExxonMobil and Chevron as champions or pariahs. So it does all of the above.
I should note that both Barack Obama and John McCain are incoherent on this point. As the New York Times dryly observes, Obama favors ethanol subsidies, "some of which end up in the hands of the same oil companies he says should be subjected to a windfall profits tax." As for John McCain, he seems not to understand what cap and trade means.
The biggest winner from the Kyoto protocol, the 1997 treaty that requiries participating countries to reduce their greenhouse-gas emissions?
That would be China, Fiona Harvey reports for the Financial Times:
China has been by far the biggest winner from the Kyoto protocol, receiving tens of billions of dollars in investment to finance low-carbon technology. Last year, 73 per cent of carbon credit projects certified by the United Nations under the protocol were based in China.
The next-biggest shares of the carbon pie went to Brazil and India, with 6 percent each, while the entire continent of Africa captured just 5 percent of U.N.-certified carbon credit projects.
What's going on? Under Kyoto, developed countries can meet their carbon targets partly by investing in emissions-reduction projects in the developing world. And China, as Harvey explains, produces a great deal of hydrofluorocarbons or HFCs, greenhouse gases produced as a byproduct of manufacturing refrigerants. HFCs are roughly 11,000 times more potent than carbon dioxide, so investing in relatively cheap HFC projects in China gives you a lot of bang for your carbon credit buck. (The World Bank has played in major role in promoting these projects, with some controversy.)
Most carbon credit projects in China, therefore, are related to HFCs rather than things like windmills and solar panels -- at least so far. New HFC projects are increasingly hard to come by since most factories already have the proper equipment installed.
But what about Africa? Why so little investment? Well, the continent has few factories -- hence few carbon projects.
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