We've all heard about cars powered by wacky biofuels, including switchgrass and leftover French fry oil. Now, two British men who love the environment are trekking from Britain to Timbuktu in a truck whose fuel comes from cocoa butter extracted from waste chocolate (as in, like, misshapen Easter bunnies).
The vehicle is a Ford Iveco cargo truck, and as it travels 4,500 miles to Timbuktu, it will burn 2,000 liters of biodiesel originating from 4,000 kg (8,800 lbs.) of misshapen chocolate. That's enough of the sweet stuff to make 80,000 chocolate bars.
On Friday, the chocomobile crossed the English Channel by ferry, and after a sweet ride through France and Spain, it will hop onto another ferry to Morocco. Once it vrooms through Mauritania, it will plow through Mali's deserts until it arrives at Timbuktu, the city once regarded in the West as being at the ends of the Earth and which today is in a region that is being buried under sand.
The two Brits behind this stunt are, of course, trying to bring attention to biodiesel, a renewable resource that generates lower carbon emissions than fossil fuels. It seems unlikely that fueling vehicles with cocoa butter could be achieved at a large scale—that would require a tremendous amount of chocolate or, perhaps, tanning oil—but if the men's journey makes more people aware of the benefits of biofuels in general, that would be a sweet success.
Australia, known for its expansive wilderness and biodiversity, is also one of the world's worst polluters, according to an informative new emissions monitoring website from the Center for Global Development.
Per capita, Australians produce 10 tons of carbon dioxide every year from generating power. That's two tons more than the average American and almost eight tons more than the average Chinese person. Australia relies heavily on coal and as such, the country has some of the world's least efficient power plants. In terms of total emissions, the United States is still on top with more than 2.5 billion tons of CO2. Like with everything else, however, China is closing the gap fast.
Australia is also one of the world's top exporters of coal, and China is becoming a good customer now that its power needs exceed its domestic coal production. As The Economist puts it, "Energy lore has it that in China a new coal-burning plant is fired up every week... Freighters are literally queuing up off Newcastle, Australia, the world's busiest coal port."
Russia has been in the news a lot lately following President Vladimir Putin's big trip to Iran and what look suspiciously like efforts to stay in power after his term expires. But without much media fanfare, the Russians have been quietly working on an initiative that could do a world of good.
Over the past few years, Russia has been collaborating with the United States and other supplier nations to limit the spread of sensitive enrichment technologies that can be used to produce fuel for civilian uses as well as for nuclear weapons. Cooperation here is a matter of necessity: Efforts to halt the spread of atomic weapons simply won't get very far without Russia, one of the world's most important suppliers of nuclear technology and fuel for energy production.
The Russians are about to launch an "international fuel enrichment center" in Angarsk, a city in eastern Siberia. The precise details of the arrangement are still unclear, but it appears as if all countries will be able to participate in the center "without any political preconditions," according to Vitaly Churkin, the Russian ambassador to the United Nations. In return, it was initially believed that participating states would receive assured access to nuclear fuel from Angarsk. However, a recent report by Oxford Analytica merely noted that participating countries would "share in profits" from the facility — a vague formulation that leaves open many questions about the nature of the agreement.
Assured access to fuel, though, is the main principle behind each of the handful of "multilateralization" proposals that have been put forth for the nuclear fuel cycle. Certain states, such as Iran, argue that they need to develop their own fuel-cycle capabilities (i.e. centrifuge enrichment plants) to guard against disruptions in the international market for nuclear fuel. Even though the market has never seen a notable disruption, this argument is valid to a certain degree; for a state that is heavily reliant on nuclear power, a disruption would be crippling, and just because market disruptions haven't happened doesn't mean they won't. Development of enrichment facilities, moreover, is allowed under the Nuclear Nonproliferation Treaty (NPT).
The current fuel-cycle countries hope that multilateral initiatives such as the center in Angarsk will reduce incentives for more states to build enrichment capabilities. They could also help reveal Iran's true intentions — why refuse to participate in the Angarsk center if their only concern is reliable access to fuel? With a possible renaissance for nuclear power on the horizon, initiatives like Angarsk are promising attempts to slow proliferation of dangerous technology without eviscerating the NPT.
In his article "Think Again: Oil" (subscribers only) from the new issue of FP, Vijay Vaitheeswaran of The Economist argues that despite all the doomsday predictions you hear, the world is not running out of oil. He singles out the tar sands in Alberta, Canada as an example of a relatively unexplored source. As it happens, Canada is already the largest supplier of oil to the United States. Tar-sand extraction has exploded since oil prices began to rise with the start of the Iraq war, and Canada's total oil output will soon double Kuwait's. But as Vaitheeswaran notes, tar-sand extraction comes at a much higher environmental cost than traditional drilling. A new article by Aida Edemariam in The Guardian makes clear just how great this cost is:
The extraction of the oil requires heat, and thus the burning of vast amounts of natural gas - effectively one barrel of gas to extract two of crude - and some estimate that Fort McMurray and the Athabasca oil sands will soon be Canada's biggest contributor to global warming; nearly as much as the whole of Denmark. This in an area that has already seen, according to David Schindler, professor of ecology at the University of Alberta, two degrees of warming in the past 40 years.
The oil sands excavations are changing the surface of the planet. The black mines can now be seen from space. In 10 years, estimates Schindler, they are "going to look like one huge open pit" the size of Florida. Acid rain is already killing trees and damaging foliage. The oil companies counter that they are replanting - grass for bison, 4.5m trees by Syncrude alone - but the muskeg (1,000-year-old peat bog and wooded fen, which traps snow melt and prevents flash floods, and is home to endangered woodland caribou) is irreplaceable.
Two barrels of water are required to extract one barrel of oil; every day as much water is taken from the Athabasca river as would serve a city of a million people. Although the water is extensively recycled, it cannot be returned to the rivers, so it ends up in man-made "tailings ponds" (tailings is a catch-all term for the byproducts of mining), which are also visible from space.
Edemariam profiles the town of Fort McMurray, Alberta. In addition to the environmental impact of the nearby mining, Fort McMurray is struggling to deal with a population that has doubled in the last decade—not including the 10,000 itinerant construction workers from around the world who live there at any given time. Perhaps unsurprisingly, prostitution and gambling are booming as well. So, there's no such thing as a free lunch: The crude found in Canada's sands may be "safe oil" compared with what we buy from unsavory regimes in the Middle East, but it's hardly an attractive alternative.
For anyone who has every seen the sorry state of Egypt's infrastructure up close, this is terrifying news:
CAIRO - President Hosni Mubarak announced yesterday that Egypt, which lacks the oil reserves of some of its Middle East neighbors, would build several nuclear power plants to meet rising energy demands.
The statement was made in a nationally televised address and seemed to have twin purposes: overhaul an energy policy to keep pace with economic growth and support his son, Gamal, who has stressed the need for nuclear power and who many analysts regard as a front-runner to succeed the 79-year-old president.
Gamal first proposed this idea at the 2006 conference of the ruling National Democratic Party, an annual meeting that is coming up again soon. It's a winning issue for the president's son, who lacks populist credentials and is often tagged by his critics as a momma's boy. So far, the United States is OK with Egypt's plan:
In Washington, State Department spokesman Sean McCormack said the United States would not object to Egypt's program as long as Cairo adhered to the nuclear Non-Proliferation Treaty and International Atomic Energy Agency guidelines.
The subtext here is, of course, Iran's own nuclear program, which makes daily headlines in Cairo. It's highly doubtful that the Egyptians would pursue nuclear weapons and even more doubtful that they would get away with such a thing, nor is it even clear that Egypt would seek to enrich uranium on its own rather than purchasing it from abroad. But the enrichment route is certainly a possibility, given the national pride at stake and the concomitant political benefits for Gamal. And Egypt may be looking for more than simple acquiescence from the United States. Commenting last year on Gamal's proposal, an analyst at the Al-Ahram Center, a government-funded think tank in Cairo, asked, "Why should the U.S. assist India in its nuclear program and not Egypt?"
In the next issue's Think Again: Oil (sorry, subscribers only), the Economist's Vijay Vaitheeswaran, right after he argues that the world still has plenty of oil left to pump, takes aim at the ecos' beloved Prius, reasoning that any car that still takes gasoline—hybrid or not—doesn't solve the world's oil addiction. Remaking the automobile altogether, he says, is the only serious way to wean the world off crude.
In that spirit, FP has compiled a short list of the cars of the future—plug-ins hybrids, diesels, all-electrics—in a special Web-only photoessay. Sure, some of the models still rely on a little oil to get from point A to point B. But they're a snapshot of where the auto majors (and a few start-ups) are heading in the quest to perfect the 21st century car. (Personal favorite: The all-electric Tesla Roadster at right, which goes from standstill to 60mph in a scant 4 seconds.)
Yesterday, Honda's chief executive, Takeo Fukui, took aim at one of cars profiled, the forthcoming Chevy Volt, which GM's Chairman Bob Lutz has said is more important to him than anything he's done in four decades in the auto business. Fukui argued that the Volt's electric motor (which is powered after a certain distance by a diesel fuel engine) is simply not as environmentally friendly as the auto industry ultimately needs to be, and that better, high-performing electric batteries that eschew the fuel engine backup are what's needed. It's clearly just a bit of corporate smack talk, but Fukui's thinking is on the right track. Hybrids are just the first step in what needs to be an auto revolution.
Most of the press on Vladimir Putin's historic trip to Tehran has focused on his warning to the U.S. not to attack Iran and the possibility of some sort of strategic partnership between the Kremlin and the ayatollahs. One could almost be forgiven for thinking that the meeting that Putin attended was some sort of trans-Caspian "death to America" summit. In fact, the real substance of the meeting was about the distribution of the Caspian Sea region's energy resources. On this front, almost no progress was made and more was revealed about Russia and Iran's differences than their agreements.
The Kremlin still views the Caspian as Russia's "near-abroad," and Iran's growth as a regional power is troubling to the Russians as well. The two countries didn't really see eye to eye at the summit, as the AP explained:
Iran, which shared the Caspian's resources equally with the Soviet Union, insists that each coastal nation receive an equal portion of the seabed. Russia, Azerbaijan and Kazakhstan want the division based on the length of each nation's shore, which would give Iran a smaller share.
Another back story behind the summit is CIA Director Michael Hayden's unexplained recent visit to Baku, Azerbaijan where he met with President Ilham Aliyev. Azerbaijani analysts have speculated that the U.S. is preparing to use the country as a staging ground for a war on Iran, though the Azeris and the Iranians continue to enjoy strong cultural and economic ties. But Hayden's visit might also have had something to do with the construction of a trans-Caspian natural gas pipeline to bypass Russia, a deal the Russians have wanted to scuttle from the beginning. Witness Putin channeling Al Gore here:
Projects that may inflict serious environmental damage to the region cannot be implemented without prior discussion by all five Caspian nations," Putin said, apparently suggesting each capital should have a virtual veto on energy transport.
The governments of Azerbaijan, Turkmenistan, and Kazakhstan are somewhat wary about that proposal as they seek to navigate a middle ground between Russia and the West. In the end, the five countries failed to come up with a formula for sharing the Caspian's resources—which was supposed to be the point of the whole summit—and could agree only on a resolution banning foreign military action from the region. That doesn't look like success to me.
Gazprom officials are shocked, shocked (!) that anyone would accuse them of playing politics with natural gas. Just when Ukraine appears to have reelected the pro-Western coalition led by Yulia Tymoshenko, Gazprom suddenly warned that the country's $1.3 billion gas tab hasn't been payed. Ukraine, the company says, may find its gas cut off if it doesn't pay up, pronto. But it's just business, company officials say:
The problem is objective," the state-controlled oil and gas company said. "It is not connected in any way with who wins or does not win in Ukraine. But it is connected to debts that have to be paid."
They might have added, "Who ya gonna believe? Me or your lyin' eyes?" But as one analyst put it to the FT, "[T]his is sort of a way to send a signal to the next government that if Tymoshenko comes to power, expect things to get tougher."
Ukraine is a major gas transshipment center for the rest of Europe. If this dispute doesn't get resolved quickly, we can expect European leaders like Angela Merkel to start sounding the alarm again about Europe's energy security and blaming Russia for its brutal blend of politics and business. But pointing the finger at Russia and Gazprom is self-serving, energy banker Jérôme Guillet argued earlier this year for FP. Europe's bleating over Gazprom's heavy-handed negotiating style, Guillet says, ignores the fact that poor decisions made by European leaders have made the continent vulnerable to these kinds of tactics. Check it out.
I spoke today with Jim Rogers, chairman, president, and CEO of Duke Energy, and Tom Kuhn, president of the Edison Electric Institute (EEI), which represents shareholder-owned electrical utilities. Along with leaders of seven other utilities, Rogers announced an initiative "seeking regulatory reform and approvals to increase [the utilities'] investment in energy efficiency by $500 million annually to about $1.5 billion annually." His group's commitment will mean the equivalent of taking nearly 6 million cars off the road, Rogers says, and "avoid the need for 50 500-megawatt peaking power plants."
FP: What is motivating Duke Energy, and why aren't more utilities getting on board?
Jim Rogers: Well, I think the seven utilities who are here today are all very progressive with respect to energy efficiency and addressing the climate issue. And in fact, our entire industry—and Tom Kuhn's here, president of the EEI—as you know, early this year our industry changed our policy position on this and really said, "We support regulation of CO2 consistent with a set of principles." So we are going to work, because we realize our industry has about 35 to 40 percent of all the emissions of CO2, and our assignment is to find a solution. And so we turned our attention to finding the right regulatory framework and finding the right technical solutions so that we can solve the problem.
FP: Does that mean lobbying on Capitol Hill for mandatory emissions caps?
JR: We are now—There's a rich debate going on on the Hill today, and we are very involved.
Tom Kuhn: We're very much in favor of establishing a price for carbon. And I think that we are very strongly behind the whole idea that the only way you're really going to accomplish it ... is also to move these technologies together aggressively. And that means all the technologies, starting with energy efficiency, which is the fifth fuel (but maybe we call it the first fuel, too), but then renewables, moving the transmission that it takes to get the renewables to market; moving nuclear energy forward, which is a zero-emission technology ... We now generate 50 percent of our electricity with coal. If we want to maintain coal as an important option for the future, we've got to move forward aggressively with carbon capture and storage. So, it is the full basket of things that we need to do, the full toolset that we need to make our global climate goals, but we fully agree with the need to get a price for carbon.
JR: President Clinton really said it pretty well today with respect to this whole energy efficiency issue. While we call it the fifth fuel, it's really the number one option right now. And while people and politicians are debating how to move forward with climate regulation and how to develop an international framework, we can go today to work in implementing these energy efficiency regulatory changes and investing in energy efficiency as a way to reduce our carbon footprint right now. And what we need is action right now.
Make no mistake: Self-interest is motivating these guys, who are uneasy about patchwork, state-level regulation and fear the uncertainty that could come from not having a seat at the table. EEI opposes, for instance, a federal renewable portfolio standard that would require a certain percentage of electricity to come from renewable sources. Moreover, it's far from clear what, exactly, the proposed regulatory reforms entail. They certainly deserve scrutiny going forward. Still, the fact that they're seeing the light on energy efficiency is a good thing.
The fracas over Mahmoud Ahmadinejad has already soaked up much of the media oxygen regarding this week's United Nations General Assembly opening session. Iran's lightning-rod president probably won't make it to Ground Zero, but he will be speaking to rapt audiences at Columbia University and the National Press Club on Monday. More interesting to me, though, is who's not coming: Pervez Musharraf. The embattled Pakistani leader is apparently so afraid of a coup that he's staying in Islamabad along with his prime minister and foreign minister. It's probably a wise precaution. After all, look what happened to Thaksin Shinawatra, who was ousted as prime minister by a military junta while in New York for last year's U.N. meetings.
The main event this year is Monday's high-level day of fun, "Addressing the Leadership Challenge of Climate Change." The U.N. is billing it as "the largest meeting ever of world leaders on climate change," and more than 70 heads of state will reportedly be in attendance. Arnold Schwarzenegger is kicking off the day with a major address highlighting his own efforts as governor of California, which, if it were a country, would have one of the world's largest economies. Today is really a warm-up for December's U.N. Climate Change Conference in Bali, when, U.N. Secretary General Ban Ki-moon hopes, real decisions will be made that will lead to "Kyoto II"—a new, improved global agreement on reducing emissions of greenhouse gases. (Eileen Claussen of the Pew Center on Global Climate Change told FP what this might look like back in June.)
I'll be covering the festivities live from New York courtesy of U.N. Dispatch and the U.N. Foundation, which invited me and a number of other bloggers to attend. (U.N. Dispatch will aggregate all of our posts here.) On Tuesday, I'll be blogging the U.N. General Assembly, which begins its year in earnest tomorrow with speeches from various heads of state—notwithstanding the best efforts of the UNGA's incoming president to turn these monologues into a dialogue (indulge me in being the first to make the joke that if the U.N. were truly serious about combating climate change, it would put a lid on some of the gasbags who will be speaking that day). On Wednesday and Thursday, I'll be at the annual meeting of the Clinton Global Initiative. CGI has become a major player on climate change thanks to some innovative thinking and, well, Bill Clinton's Rolodex. Plus, Brangelina will be there, so it should be a pretty cool event.
German Chancellor Angela Merkel, in a 2006 press conference with Tony Blair, said the European Union needed to work towards a common energy policy to limit the influence of Gazprom, the Russian-controlled energy giant. Merkel's statement came after Russia, unhappy with the Orange Revolution in the Ukraine, turned off that country's gas in the middle of the winter. Not long after, Merkel pirouetted and signed a unilateral deal with Russia to supply about 90 percent of German energy. Other large countries have signed similar deals (all under different terms). So much for EU solidarity.
However, smaller EU countries have become increasingly concerned about Gazprom as it has expanded its business interests in Europe. On Thursday, EU Competition Commissioner Neelie Kroes presented what she said was a concrete step to counter the company's influence. According to Forbes, the European Commission is expected to publish a new law that mandates separate ownership for non-EU gas distribution and gas production companies. This is known as "unbundling," and it means that the same company cannot produce and distribute the gas. Because the measure is clearly directed at Russia, it has become known in the EU as the Gazprom Clause.
On the surface, this law suggests a shift towards a common energy policy. But a deeper examination shows it has no teeth. First, Germany, Italy and France will oppose the deal, as they all have national utility companies with substantial foreign ownership. They do not want to break up those firms, which would be required by the proposed law. Without both of those countries on board, it's unlikely the law will make it through the EU parliamentary process.
Perhaps anticipating this opposition, the Commission also presented a second plan that allows joint ownership as long as an independent operator controls one of the companies. In other words, Russia would have to create a separate company to distribute gas, while Gazprom produces it. This separation is insignificant, as both companies answer to the same master.
So, the Commission's victory for collectivism appears to be a hollow one. Until more forceful steps are taken towards EU consensus, Russia will keep striking unilateral deals with European countries, making a common energy policy less and less likely.
The coal market isn't as sexy or as global as oil, so it often works outside the media spotlight. But when it comes to understanding how the U.S. energy-security-enviro challenge is shaping up, coal is an excellent place to look because, in America, coal is cheap, plentiful within the country, a huge provider of jobs and megawatts, and a tremendous source of greenhouse gases.
The global outlook for demand is strong, as Asia's appetite for electricity grows. This year, China became a net importer of coal. As for the United States, part of its energy challenge is improving security of supply — reducing dependence on the understandably dreaded "foreign oil." Making liquid fuels using our own American coal sounds appealing. And perhaps no consumer is more interested in coal-to-liquid (CTL a.k.a. "Fischer-Tropsch") than the U.S. military, which has huge transportation fuel needs and few alternatives to oil (it's kind of hard to build a jet that runs on electricity).
For the coal industry, getting access to the American gas tank would be a tremendous boost, giving it a whole new market outside of power generation and heavy industries like steel. The WSJ filed a must-read report last week, "Coal Industry Hopes Pentagon Will Kindle a Market," that really gets at the key issues. CTL is a huge emitter of carbon dioxide, and the process uses between 5 to 7 gallons of water for every gallon of fuel it produces. But those inconvenient facts aren't dissuading some folks:
The effort nevertheless has some backers at the Pentagon. The Air Force, which consumes the most fuel of the military services, supports using coal-to-liquids fuel. It recently certified the B-52 bomber to run on a blend of Fischer-Tropsch fuel and normal fuel. The Air Force plans to do the same for its entire fleet by 2011. The Air Force intends to buy about 400 million gallons annually by 2016. The service supports legislation that would allow it to sign 25 year contracts for supply, even at historically high prices above $50 per barrel, said William Anderson, assistant secretary of the Air Force for installations, environment and logistics.
"If the legislation helps spur on a market that is necessary, we believe, to ensure our long term national security, we believe it's something that has a lot of merit," Mr. Anderson said.
According to Jeff Goodell, the author of Big Coal, the rise of Wyoming coal is one of the key industry dynamics fueling the CTL push. At 18:05 minutes into this excellent June interview with NPR's Terry Gross, Goodell explains how Wyoming coal, in comparison to Appalachian coal, is easier to mine, makes less of an environmental impact, contains less sulfur, burns cleaner, and requires utilities to spend less on scrubbers at coal fired power plants (but it has a lower heat content, so you have to burn more of it). You can practically "dig [it] out with a spoon" in Wyoming, Goodell says.
In contrast, Appalachian coal has been mined for over a century, and because much of the easy-to-mine coal has been extracted, the coal remaining is in thinner seams and is more expensive to extract. So part of the push for CTL, Goodell says, comes from eastern coal states, for which CTL could be a huge boost. Sen. Byrd of West Virginia has likened American coal to "acres of diamonds under our feet." A large federal backing of CTL hasn't come yet, but keep your eye on it. China, like the U.S. Air Force, is in the process of building CTL capacity. And we know how much U.S. legislators like to keep up with China.
The economics of corn ethanol have never made much sense. Rather than importing cheap Brazilian ethanol made from sugar cane, the United States slaps a tariff of 54 cents a gallon on ethanol from Brazil. Then the government provides a tax break of 51 cents a gallon to American ethanol producers — on top of the generous subsidies that corn growers already receive under the farm program.
The above passage from today's New York Times editorial recalls nothing so much as this gem from Milo Minderbender, the mad genius businessman in Catch-22:
But I make a profit of three and a quarter cents an egg by selling them for four and a quarter cents an egg to the people in Malta I buy them from for seven cents an egg. Of course, I don't make the profit. The syndicate makes the profit. And everybody has a share."
In a unique environmental scheme, Ecuador's government is asking developed nations to pay $350 million for them NOT to drill for oil in a major field in the heart of the Amazon. The sum represents about half of the estimated revenue that Ecuador would receive from drilling in the Yasuni National Park, a UNESCO-designated biosphere reserve that may contain up to a billion barrels of crude. Since Ecuador proposed the scheme last spring, politicians from Germany, Norway, Italy, Spain, and the EU have expressed interest, according to Ecuador's minister of energy. President Rafael Correa (pictured at left) had this to say:
Ecuador doesn't ask for charity [...] but does ask that the international community share in the sacrifice and compensates us with at least half of what our country would receive, in recognition of the environmental benefits that would be generated by keeping this oil underground."
Local residents are understandably skeptical that the government will be able to resist black gold's temptation for long. And despite their proven penchant for paying people not to do things, it seems unlikely that European governments would be willing to pay to keep the oil in the ground year after year.
Meanwhile, U.S. oil firm Chevron remains embroiled in a 14-year-old lawsuit from 30,000 indigenous Ecuadorians who claim the company poisoned their region by dumping toxic waste water. The controversial case is a major factor in many Ecuadorians' opposition to further drilling:
What happened here we can't let happen anywhere else, least of all Yasuni," said the plaintiffs' lawyer, Pablo Fajardo.
Maybe Rupert's not so bad after all.
Wall Street Journal reporters unhappy with their new boss should be thankful today, as a report in the Times of London indicates it could have been a lot worse. According to the Times, "an international oil and gas company" held private talks in July to buy the company for more than $5 billion dollars. Sources confirmed the unnamed company was Gazprom, the Russian-controlled energy giant.
It's highly unlikely the Gazprom bid could have succeeded—the U.S. government would have likely scuttled the deal, as it has in the past when it strong-armed Dubai Ports World into giving up its American holdings. That doesn't mean, however, that the bid is unimportant. It's yet another indication of Russia's increasingly aggressive international posture, and another attempt by Moscow to use Gazprom as a foreign-policy tool. It is also the second time in recent months that Gazprom has attempted to enter the U.S. market (the first being a potential deal with BP). But trying to buy Dow Jones, owner of one of the best newspapers in the world, a symbol of American capitalism? The Russians are nothing if not ambitious.
Iran and the International Atomic Energy Agency (IAEA) released a new agreement this week called Understandings of the Islamic Republic of Iran and the IAEA on the Modalities of Resolution of the Outstanding Issues (pdf). "Outstanding Issues" refers to the handful of past and current issues with Iran's nuclear program that the IAEA has not been able to resolve to its satisfaction.
Essentially, the agreement lays out a logical order for addressing these issues and begins to set a timetable for doing so. The IAEA is to submit all outstanding questions in writing by September 15, 2007, and Iran will then respond to each in a defined sequence.
The agreement is a mixed bag, from a U.S. perspective. On the upside, the IAEA appears to have resolved its outstanding questions on Iran's plutonium experiments, the first such resolution in four years. And clarifying publicly the issues that remain to be addressed, as well as setting out which should be resolved first, will be helpful as the diplomatic process moves forward.
But the agreement also has its downsides, some of which David Albright and Jacqueline Shire of the Institute for Science and International Security (ISIS) pointed out (pdf) yesterday. They worry that the text's reference to "closing files" could block reconsideration of crucial issues, if new information came to light after a particular issue was "closed." Albright and Shire also note that the timetable for the process has been drawn out at least until late 2007, and possibly even to early 2008.
However, ISIS's press release does not mention a worrisome undercurrent running through the entire agreement. Basically, Iran is putting the burden of proof on the IAEA to show that its nuclear activities are not peaceful. The underfunded, understaffed Agency would benefit greatly from a political push to reverse this state of affairs; member states themselves should be responsible for providing such proof.
A recent report by the Nonproliferation Policy Education Center suggests one way of achieving this: "country-neutral" rules regarding noncompliance, which would go into effect automatically if the IAEA cannot reach consensus on the compliance of a suspected proliferator. Such rules would trigger certain consequences if consensus is not reached, regardless of the country being scrutinized, and would give much stronger incentives for countries like Iran to actively work at dispelling worries about their nuclear programs. If this role reversal could be achieved, Iran and its ilk would have much more difficulty buying time or avoiding sanctions by manipulating the IAEA.
As the so-called "war on terror" rolls on, the balance between security and public oversight remains tense. Recently, this tension surfaced when the Nuclear Regulatory Commission revealed a series of previously undisclosed accidents that took place over the past few years at Nuclear Fuel Services, one of only two U.S. companies that are allowed to process highly enriched uranium (HEU) for nuclear fuel. In 2004, citing national-security concerns, the NRC deemed as "Official Use Only" all documents relating to Nuclear Fuel Services and the other HEU processing company, BWX Technologies, and sealed them away from public view.
As a result, several "abnormal occurrences" remained secret, including one particularly dangerous incident involving a spill of 9 gallons of HEU in liquid solution on March 6, 2006. When in liquid form, HEU must be handled with particular care to prevent creating a critical mass. If enough of the liquid collects within a certain volume, a dangerous, uncontrolled chain reaction can occur. Usually, such reactions will not result in a nuclear explosion, but they do release significant amounts of radiation. Processing facilities have extensive safeguards in place to prevent this, but accidents do happen.
This time, the spill did not turn out to be serious, ranking a lowly 2 out of 7 on the IAEA's International Nuclear Events Scale. (With a 2, there is very little threat to the surrounding area or even to the actual facility. Three Mile Island was a 5. With a 7, you're in Chernobyl territory.)
It's worrisome, however, that the NRC kept such a basic safety breach secret for so long. Rather than examining documents to see which truly contained sensitive information, the NRC just hid everything. And interestingly, the NRC did not fine Nuclear Fuel Services for the violation. Instead, a performance review was initiated. In past years, the NRC fined companies for violations like this and made the events public. Replacing fines with performance reviews is fine, but the NRC should bring back public announcements. To its credit, the NRC at least admits that "the pendulum maybe swung too far" towards excessive secrecy.
Potential terrorists might benefit from knowing the exact details of an accident or the security changes implemented after it, but there will rarely be much harm in disclosing the incident itself. In some cases even the old security procedures that led to such accidents could be safely disclosed, if they were no longer being used. And in general, increasing the transparency of the NRC's oversight role can spur greater vigilance and hopefully help prevent more dangerous "nuclear mishaps" in the future.
As FP has noted in the past, many see the Arctic as the last great frontier for oil and gas exploration. By one prominent estimate, the Arctic region may hold as much as a quarter of the world's undiscovered oil and gas reserves. The area's remoteness and harsh climate, however, mean that the technology is still not sufficient to access these reserves, and therefore profitable exploitation of them might not be feasible until 2050.
But oil and gas companies may not have to wait that long. In 2007, the extent of Arctic sea ice is likely to have declined further than in any other recorded year—reduced by an area greater than the size of California and Texas combined. This means the Arctic could become an energy center sooner than expected, not to mention one of the most critical sea lanes of communication in the world. The melting of the ice caps, along with improvements in shipping technology, will significantly cut the travel time between Asian manufacturing centers and western consumer markets.
While this may have some companies excited, it's certainly bad news for the Arctic's many inhabitants, including whales, walrus, seals, birds, fish and polar bears, as well as the Inupiat people who have resided in the area for 2,500 years. With their livelihoods already severely affected by global warming, the opening up of the Arctic to energy companies and shippers could ultimately mean the end of the Inupiat way of life.
Although it would seem a more natural fit for an eco-conscious country like Norway, whose government pledged to be carbon-neutral by 2050, the world's first carbon-free city will actually be built in Abu Dhabi, the oil-rich Gulf emirate.
By 2009, Abu Dhabi hopes to complete construction of Masdar, a 3.7 mile enclosed city devoid of cars and carbon. To produce energy, Masdar will rely on a combination of wind, solar power and geothermal energy. The city—whose name means “source” in Arabic—is slated to be the centerpiece of The Masdar Initiative, which, according to their website, is “a global cooperative platform for open engagement in the search for solutions to some of mankind's most pressing issues: energy security, climate change and truly sustainable human development.”
According to this, some of Masdar’s main investors are automobile manufacturers and oil companies. British Petroleum, Fiat, and Mitsubishi are all involved. Why? Masdar is guaranteed to produce an excess of carbon credits traded on international markets either for profit or for the right to produce more emissions during other activities, such as oil production or auto manufacturing.
While their intentions might not be completely altruistic, the fact that oil and car companies are investing heavily in a project whose very mission is to consume no oil and use no cars means that carbon trading schemes might be having their desired effect. That is, incentivizing investments in carbon-reducing initiatives. Although, not everyone is playing by the rules. There is some evidence that Chinese companies are actually polluting more in order to make a buck (or about 7.5 Renminbi) off carbon credits.
Forget "Deadliest Catch," the Discovery Channel show about the peril of being an Alaskan king crab fisherman. The most dangerous job in the world has to be mining coal in China. Last year alone, 4,746 miners were killed in China, according to state figures.
Stop and think about that for a second. That's about 1,100 more deaths than the U.S. military has incurred in five years of fighting in Iraq.
Which is why China is ecstatic over yesterday's rescue of 69 miners from a flooded coal shaft in Henan Province. The shaft, part of a 50 year-old state-owned mine, collapsed Tuesday afternoon when a torrent of more than 1 million gallons of water rushed into the mine after a rainstorm. The government said 102 miners were working at the time of the flood. Thirty-three escaped. The remaining trapped miners were kept alive thanks to hundreds of rescuers, who poured 145 gallons of milk down a 2,600-foot ventilation shaft over the course of three days while crews pumped out the mine and cleared tons of mud.
It was a death-defying escape from the jaws of "development at any cost"—and a fate denied to far too many.
UPDATE: A reader writes in, "What on earth are you doing comparing gross number of deaths of Chinese miners to the number of Americans killed in Iraq? At least give us the denominator on the Chinese miners, otherwise the comparison is meaningless."
Just so there's no misunderstanding: I wasn't dissing American servicemen and women. Nor was I comparing apples to apples or trying to make a point that a coal shaft in Shanxian is more dangerous than a pillbox in Baghdad. Neither sounds like much fun to me.
So let's set the record straight. There are about 7 million miners in China. Our in house statistician tells me that, based on back-of-the-napkin calculations, you're about 8 times more likely to die as a U.S. soldier in Iraq than as a coal miner in China. I still don't want to sign up.
Back in 1969, the United States won the space race against the Soviet Union by planting the U.S. flag on the moon. This Thursday, Russia is expected to win the race to claim much of the oil and gas deposits of the Arctic Ocean by sinking its flag to the seafloor beneath the North Pole.
A Russian icebreaker has already broken through ice sheets and cleared a path to the North Pole. Thursday morning, two submarines will dive more than 13,200 feet and drop a capsule containing the Russian flag. The symbolic act seems aimed at strengthening Russia's legal claims to the estimated 10 billion tons of oil and gas deposits that are in a 460,000-square-mile region of the Arctic shelf.
Four other countries — Canada, the United States, Norway, and Denmark — have claimed land inside the Arctic Circle. International law lets them claim only up to 200 miles from their coastlines for economic activity. Russia, however, has been claiming a larger area that reaches the North Pole by saying that Siberia and the Arctic seabed are on the same continental shelf.
If the flag drop succeeds, it will be a small step for submarine pilots, and a giant leap for Russia … into a territorial dispute.
Soap and detergent makers say they are being hurt by a double whammy of federal subsidies and mandates that has reduced the supply and pushed up the costs of a key ingredient, beef tallow. The steeply rising price of corn, driven by a federal requirement to use more ethanol, has pushed up corn prices, making animal feed more expensive and prompting farmers to blend the less-expensive tallow and other fats into their feed.
The upshot: In the past year, beef-tallow prices have doubled.
Further down in the article, there's this gem:
Lou Burke, manager of Conoco's new biofuels program ... blames the market gyrations on hedge funds that have been bidding up futures prices for soybean oil, anticipating a boom in alternative diesel fuels. The move, he says, has spurred a sympathetic rise in other fat-related commodities.
Fat-related commodities? A charming term. Apparently, some folks are suggesting that beleaguered soap manufacturers turn to a different input altogether: petroleum. Gives the phrase "awash in oil" a whole new meaning, don't it?
Perhaps you recall the "Northwest Passage" from your seventh grade social studies class. Until the phrase showed up on the AP newswire and at the center of Canada's aggressive new defense policy, I had almost forgotten about this long-sought-for shortcut to Asia that swallowed up so many European explorers.
Usually frozen, the Passage has historically only been passable for a few days every summer. The onset of global warming has raised its strategic value, since all the ice in the world might be gone soon. In addition to a transcontinental shipping route that's 2,480 miles shorter than going through the Panama Canal, it turns out those northern straits host bountiful fishing stocks, valuable minerals, and—get this—25 percent of the world's undiscovered oil and gas reserves.
In the manner of any self-respecting oil producer (especially given the recent IEA report of an oncoming oil supply crunch), Canada has begun an aggressive campaign to protect what the Canadians say is rightfully theirs. Despite his country's history of turning a blind eye to U.S. usage of the Passage, Prime Minister Stephen Harper has forthrightly asserted Canadian sovereignty over the arctic waterways:
Canada has a choice when it comes to defending our sovereignty over the Arctic. We either use it or lose it. And make no mistake, this government intends to use it. It is no exaggeration to say that the need to assert our sovereignty and protect our territorial integrity in the North on our terms have never been more urgent.
What's more, Canada has recently hoisted the maple leaf over Hans island, a small, barren rock less than a thousand miles from the North Pole. Countering Danish claims of sovereignty over the island, which isn't far from Denmark's Greenland, many Canadians have even called for a boycott of Danish pastries.
First PM Harper won't talk to Bono, and now he's on the warpath, hoping to reap the rewards of global warming. Better keep an eye on this fellow.
The bureaucrats of the European Commission have taken a radical step toward reducing their carbon footprint and halting the progress of global warming: Neckties have been declared "optional."
The logic is that tie-free men will tolerate greater heat, and by setting the air conditioners just one Celsius degree higher, they can cut their 56,000 metric tons of annual carbon dioxide emissions by 10 percent. Apparently, the always snappily dressed Internal Market Commissioner Charlie McCreevy got the idea on a trip to Japan.
Considering that the high in Brussels today is a balmy 66 F (19 C), I can't say I have much sympathy for the EC's noble civil servants (it's 100 F in Washington). If they really want to make a difference, they could probably turn off the air conditioners altogether.
Buoyed by the high price of oil, Brazilian President Ignacio Lula da Silva is trumpeting biofuels as an alternative. And now he says they could be a boon for the poor. And Lula, as quoted by Al Jazeera, seems to be taking a page out of Mao's little red book:
[E]veryone has the technology and the knowledge to dig a little hole of 30 centimeters to plant an oil plant that could produce energy, the energy they couldn't produce in the 20th century.
It's a sentiment that recalls one of Mao's famous exhortations during the Great Leap Forward—that every Chinese should smelt steel in his or her backyard. Lula's economics is not quite as bad as Mao's, but he's still full of it. Lula was responding to a recent report by the U.N. Food and Agriculture Organization and the Organization for Economic Development and Cooperation, who are decidedly less enthusiastic. The rise of biofuels, the report makes clear, is no panacea for poverty.
In fact, Oil-exporting countries, net food importers, and the urban poor are all in for a rough ride thanks to biofuels. As gasoline starts to become so expensive that the world turns en masse to alternative fuels, oil-exporting countries in the Middle East will see their main source of revenue dry up. And since many types of biofuel are made from feedstock, the rising prices of crops such as corn will increase the cost of raising livestock and, ultimately, the price of food. Indeed, this is already happening, and it's bad news for the poor, who spend a significant chunk of their meager incomes on food. (It's also bad news for beer drinkers.)
So while Brazil's sugar producers may be cashing in on the ethanol boom, the hundreds of thousands of Brazilian favelados aren't exactly eager to ride the biofuel wave. After all, many of these people don't have yards in which to grow little "oil plants" ... nor running water, for that matter.
It never hurts to check up on what T. Boone Pickens is saying and doing. The Texas oilman, corporate raider, and philanthropist has serious cred, and it's unlikely that he's giving interviews in order to pump up his investments. His portfolio is well known, and, as he says, "There isn't anybody who can talk a commodity market up more than three or four minutes. The fundamentals will take over at some point."
In a recent interview with the Houston Business Journal, he reiterated his view that global oil production has already peaked:
PICKENS: I think you'll see $80 oil before the end of the year. There's no question in my mind that oil has peaked. If you've already peaked, you'll start to decline. Can you replace it? Probably not.
There's obviously a lot of disagreement on this, but Boone's position is worth noting. Moving on to electrical power generation, he voiced concern on natural gas:
Q: Here in Texas we're struggling with our long-term power-plant needs, trying to pick among coal or nuclear or natural gas. I guess you'd pick nuclear to fuel the Texas plants?
PICKENS: Yes. You've got to get nuclear in because you don't have the other fuel to supply it, unless it's coal. You're not going to have enough natural gas.
You would think that Texas would have access to plenty of natural gas, but Pickens's calculations must show that it won't be enough for a serious ramp-up of gas-fired power plants. Pickens, a stalwart Republican and big fundraiser for presidential contender Rudy Giuliani, has recently endeared himself to greens with plans to build the nation's largest wind farm near Amarillo in west Texas, a burgeoning center for wind energy.
Pickens summed up his emerging ethos to the WSJ recently:
I'm an environmentalist because caring for what we have is a reality that is going to be on page one a long time. We have got to pay for that, and I think we can do that without damaging our economy."
I think that's a sentiment that will resonate on both ends of the political spectrum.
With announcements of new energy technologies coming out constantly, it's sometimes difficult to figure out which ones are actually worth getting excited about.
A power-plant scrubber highlighted in Tuesday's Financial Times is a case in point. The Sugarland, TX-based WOW Energies has developed a device that reduces CO2 emissions in a big way, the company claims:
Daniel Stinger, Wow chairman and inventor of the technology, says standard scrubbers can remove 50-60 per cent of mercury from emissions, while third party testing has shown his technology removes 85 to 95 per cent of heavy metals pollutants, including mercury. In addition, its pilot projects demonstrated carbon dioxide reductions of up to 85 per cent - not even the original aim.
85 percent CO2 reduction? Wow (no pun intended). Although it hasn't been proven on a large scale, this is impressive. Oddly, the WOWClean results (pdf) have been out since December, yet we're only reading about it now. There has to be a catch. The FT reports that WOW energy hasn't found much interest from utilities:
In the six months since Wow began marketing the technology, [WOW's CFO Martin] Brau has found utility groups have little interest in spending money to reduce emissions unless forced by legislation, preferring instead to "chip away" at emissions as new requirements gradually come into effect."A lot of them simply don't want to know," says Mr Brau. "Unless they are forced to, they won't stop. They have a grandfathered right to pollute."
Could the catch be that WOWClean captures the CO2 so that it can be stored somewhere or sequestered underground (boring) rather than eliminate CO2 emissions through some chemical process (potentially very exciting)?
I emailed Brau to get clarification on this. Brau responded:
What we mean is that the CO2 is converted into a stable bicarbonate, such as baking powder, it is not sequestered as a liquid gas.
This is awesome ... but it's probably unwise to get too excited until more work is done to test the large-scale performance and viability of this technology. In energy, there's always a catch. But definitely keep an eye on this. Power plants account for 40 percent of CO2 emissions in the United States, so progress in this area is crucial to major emissions reductions.
It's no secret that ramping up (pdf) corn ethanol production has been rife with problems. The net energy gain from corn-based ethanol is pretty small at best—its corrosive impact on most pipelines usually requires you to truck it to market. And, of course, the use of corn for fuel has been driving up food and feed prices.
But I think it's best to think of corn as the beginning of the ethanol journey, not the destination. There is a furious R&D effort to develop enzymes—the bug or bugs—that can be used to break down cellulosic materials cheaply.
Now, Craig Venter, the man best known for his controversial for-profit contribution to the human genome mapping race, claims to be on the brink of producing a synthetic bug that can do just that, and more. BusinessWeek reported last week that Venter "believes he is within weeks or months of creating the world's first free-living artificial organism in his laboratory." His bug could potentially clean up dirty fossil fuels and help make ethanol.
In his typical down-to-earth fashion, Venter jokes that he's "going from the gene king to the oil king." It's unlikely, though, that any concrete application for his new bug will emerge for quite some time.
But this is about much more than any particular technology, or even the energy business as a whole. Some say Venter is out to become the "Bill Gates" of artificial life, which has huge ethical and legal implications. Arthur L. Caplan, director of the Center for Bioethics at the University of Pennsylvania, tells BusinessWeek that synthetic biologists may be "manipulating nature without knowing where they are going.... There are arrogant scientists, and our friend Venter may be one of them." Time will tell if Caplan's fears are vindicated.
FP contributor Dan Drezner, citing reliable sources in Europe, tells a brief story about Russo-German diplomacy:
Angela Merkel apparently has a fear of dogs. Vladimir Putin is aware of this fact. Therefore, whenever Putin meets with Merkel in Moscow, he makes sure his pet dogs are in the room.
Press accounts suggest this to be true. President Putin loves his dogs, and he appears to use them to intimidate Chancellor Merkel during tough negotiations. This was the initial test, in January 2006:
Putin, who already met Merkel several times when she was opposition leader of the conservative Christian Democrats, said his meeting with her had taken place "in a very good atmosphere." Earlier, Putin, who likes dogs, had given Merkel a gift of a small toy black and white dog, which had a short leash. Merkel, however, does not like dogs - she was bitten by one when she was young and has since kept her distance, according to an aide. German diplomats said they were unsure how to interpret the gift.
One year later, in January 2007, Putin brought in diplomatic reinforcements during a dust-up with Merkel over energy supplies:
Later, when Koni, Putin's black Labrador, made her domineering entrance, Merkel nervously, or perhaps wishfully, commented in Russian, "Now the dog is going to eat the journalists." [...] Kremlin critic and journalist Yulia Latynina, writing for "Yezhednevny zhurnal," said the "friendly meeting in Sochi between Vladimir Putin, Angela Merkel, and Labrador Koni" left her bewildered.
Putin apparently told the German chancellor, "I don't think the dog will scare you. She won't do anything bad, she likes journalists."
I wonder what Vlad does to try to intimidate U.S. President George W. Bush. Show him the latest poll numbers?
In the last week of May, ExxonMobil's CEO proposed shelving plans to build a natural gas pipeline from Canada's Mackenzie Valley to the existing pipelines in Alberta, which continue down into the United States. The cost projections for the project have apparently shot up, in large part due to rising steel prices.
If the project ends up nixed or shelved, it could be a rather big deal. According to energy analyst Andrew Weissman, this is the "biggest energy story of the year" thus far. He told MarketWatch:
About 10% of our future natural gas supplies will disappear as a result.... It's like we know there's a hurricane coming into the Gulf of Mexico that will wipe out all the natural gas there. The gas will just sit in the ground."
It's clear the United States will need to import more natural gas. U.S. natural gas production has basically remained flat for the last decade, fluctuating between 511 and 555 billion cubic feet between 1996 and 2006 (PDF). Even if that number rises, it probably won't offset the need for more imports.
Another big reason this story could (or should) get more attention is that natural gas is the main substitute for coal in electricity generation. Replacing coal with cleaner-burning natural gas is probably a good idea as Congress and presidential candidates consider policy options on climate change.
All that said, the talk about nixing the project could just be a negotiating tactic to get more Canadian government subsidies to build the pipeline. The Globe and Mail's initial report on ExxonMobil CEO Rex Tillerson's comments make it seem as though a juicier subsidy package could change Tillerson's mind.
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