Tuesday, October 15, 2013
Coal will surpass oil as the key fuel for the global economy by 2020 despite government efforts to reduce carbon emissions
Coal will become more in demand than oil by 2020 driven by growth in China and India, despite campaigns to reduce carbon emissions across the globe, a new report reveals.
Marking a return to an era reminiscent of Britain's industrial revolution, the rapidly expanding economies in the East are turning to coal since it is cheaper and more reliable than oil or renewable energy sources, energy consultancy firm Wood Mackenzie said on Monday.
Rising demand in China and India will push coal past oil as the two Asian powerhouses will need to rely on the comparatively cheaper fuel to power their economies. Coal demand in the United States, Europe and the rest of Asia will hold steady.
Global coal consumption is expected to rise by 25 per cent by the end of the decade to 4,500 million tonnes of oil equivalent, overtaking oil at 4,400 million tonnes, according to Woodmac in a presentation on Monday at the World Energy Congress.
'China's demand for coal will almost single-handedly propel the growth of coal as the dominant global fuel,' said William Durbin, president of global markets at Woodmac. 'Unlike alternatives, it is plentiful and affordable.'
China - already the top consumer - will drive two-thirds of the growth in global coal use this decade. Half of China's power generation capacity to be built between 2012 and 2020 will be coal-fired, said Woodmac. China has no alternative to coal, with its domestic gas output limited, and liquefied natural gas (LNG) imports more costly than coal, Durbin said. 'Renewables cannot provide base load power. This leaves coal as the primary energy source,' he said.
Power infrastructure provider Alstom estimated that across Asia close to half of the 600 gigawatt of new power generators to be built over the next five years will be coal-fired, Giles Dickson, a vice president at the company said.
'Coal prices are low,' he said, adding that coal is about one-third of the price of LNG in Asia and about half of the gas price in Europe.
Abundant supply is also supporting demand for coal. The traded volumes of coal will increase by a further 20 per cent by 2020, Dickson said, including supply of lower grade coal from Indonesia, Australia and South Africa.
'As the lower grade coal comes into the market, further downward pressure on prices will further drive demand,' he said.
Excess supply and faltering demand growth have depressed global coal prices this year. European coal futures have tumbled more than 20 per cent, while Australian coal prices have plummeted from the record $130 per tonne hit in 2011 to around $80 per tonne as China's demand grew slower than expected.
'If you take China and India out of the equation, what is more surprising is that under current regulations, coal demand in the rest of the world will remain at current levels,' Durbin said.
High fuel import costs and nuclear issues will support coal use throughout Northeast Asia, while in North America coal is still competitive in many locations despite abundant low-cost shale gas.
'The struggling economy and low coal prices has rendered the European Union (EU) Emissions Trading Scheme (ETS) ineffective,' Durbin said. 'The carbon price will need to reach 40 euros per tonne to encourage fuel switching, which is unlikely before 2020.'
In Southeast Asia, coal will be the biggest winner in the region's energy mix. Coal will generate nearly half of Southeast Asia's electricity by 2035, up from less than a third now, the International Energy Agency said in early October.
This will contribute to a doubling of the region's energy-related carbon dioxide emissions to 2.3 gigatonnes by 2035, according to the IEA.
Get Rid of Ethanol Exchanges Too
Poll after poll shows that the majority of Americans have an unfavorable view of Obamacare. If it were front and center of the newscycle, as Obamacare is, most would also have the same repeal-or-revise attitude regarding ethanol mandates as the two are marching hand-in-hand. In addition to the odd collection of opponents—conservatives and unions in opposition to Obamacare; and environmentalists and big oil, auto manufacturers and anti-hunger groups oppose ethanol—there are numerous other similarities.
Sounds good at the start
Healthcare for all sounds like a good idea, after all who wants to tell a mother holding a sick child that she can’t get care? Likewise, homegrown fuel that will increase America’s energy independence, sounds good—especially when the Renewable Fuel Standard (RFS) was passed by Congress as part of the Energy Policy Act of 2005. The RFS mandates a minimum volume of biofuels (generally corn-based ethanol) is to be used in the national transportation fuel supply each year. Two years later, the Energy Independence and Security Act of 2007 greatly expanded the biofuel mandate volumes and extended the date through 2022. The expanded RFS required the annual use of 9 billion gallons of biofuels in 2008, rising to 36 billion gallons in 2022, with at least 16 billion gallons from cellulosic biofuels, and a cap of 15 billion gallons for corn-starch ethanol.
At the time, US oil imports were growing, fears of shortages due to so-called peak oil were rampant, and the combined technologies of horizontal drilling and hydraulic fracturing weren’t yet widely used and had not unleashed the current abundance of US resource. Growing our gasoline—converting corn from the heartland into ethanol—sounded good. Today, the Renewable Fuels Association claims that the RFS has reduced America’s foreign oil dependence. Perhaps that is true, but unlocking federal lands, expediting permitting for drilling, and approving the Keystone pipeline could totally remove our reliance on Middle Eastern oil in as few as three years.
Have had their day on court
Virginia Attorney General, and gubernatorial candidate, Ken Cuccinelli was the first to file a lawsuit against Obamacare—which the Supreme Court ultimately declared a tax. On October 8, the American Petroleum Institute (API), once again, filed a lawsuit in the DC Circuit Court against the Environmental Protection Agency (EPA) over the RFS volume requirements for 2013. A similar suit was filed in 2012. On January 25, 2013, the US Court of Appeals rejected EPA’s 2012 mandate for refiners to use cellulosic biofuel, which was not commercially available. In response to the court’s decision, Bob Greco, API Group Downstream Director, said: “This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.”
Non-elected bureaucrats setting policy
While both Obamacare and the RFS were passed by Congress, the particulars are left to government agencies to regulate. With the RFS, the EPA has missed statutory deadlines for issuing RFS volume requirements and then released rules mandating that refiners use 4 million gallons of cellulosic biofuel in 2013. Yet, according to the EPA, only 142,000 gallons have been available for refiners to blend so far. Reports indicate that for 2014, the target for cellulosic biofuel would be 23 million gallons—despite the fact that the fuel is virtually nonexistent. The EPA has ignored the 2012 Court of Appeals smack down in which Judge Stephen Williams said the law was not intended to allow the EPA to “let its aspirations for a self-fulfilling prophecy divert it from a neutral methodology” and has again set advanced biofuel targets that are out of touch with reality.
Fines for noncompliance
While the Obamacare exchanges have not been working as expected—with Blue Cross & Blue Shield of North Carolina reporting only one person enrolled after 24 hours, US Secretary of Health and Human Services Kathleen Sebelius admitted to Jon Stewart that if someone doesn’t participate “they pay a fine.” Guess what? Even though there isn’t enough cellulosic ethanol to meet the EPA mandates, refiners are required to blend it into gasoline—and, if they don’t, they pay a fine.
Creates new problems
Obamacare has created a whole new set of problems such as doctor shortages, reduced work hours, and sticker shock. The RFS, also, brings a host of unintended consequences:
* Ethanol reduces miles per gallon—At a time when the White House has upped the MPG a vehicle gets (known as the CAFE standards) it is also mandating the use of ethanol, which lowers MPG. Edmunds did an apples-to-apples comparison of gasoline vs. ethanol (using a flex-fuel vehicle and E85). They conclude: “The fuel economy of our Tahoe on E85, under these conditions, was 26.5 percent worse than it was when running on gas”—and cost about $30 more. Plus, Edmunds found that the carbon emissions savings was negligible. (Note: less than 7 percent of the US vehicular fleet is flex-fuel.)
* Ethanol mandates have devastated the dairy industry (and turkey growers are none too happy, either)—In rural California, dairy farmers have been deeply affected by the rising cost of feed (which has jumped as much as 240 percent since 2005) brought on by mandated ethanol blending by the RFS. John Taylor, who owns and operates Bivalve Dairy with his family, says: “If there’s a requirement to have ‘X’ amount of tons of corn go into renewable energy, that’s just going to reduce the supply…that’s only going to make the price go up for [dairy farmers]…I’m not sure we should be taking our food and putting it into energy.”
California Assemblywoman, Kristin Olsen, reports: “The competition between the corn market and the government corn ethanol mandate is creating grave challenges for our California farmers, and their ability to feed their livestock and, ultimately, the nation.”
About the turkeys, Damon Wells, vice president of government affairs, National Turkey Federation, adds to the discussion. “Too often they’ve tried to say that this was a petroleum vs. ethanol fight. I take great exception to that. I think those in the animal agriculture industry take great exception to that because all of the benefits that have come from this Renewable Fuel Standard have transferred off the backs of small farmers all across this country that are feeding livestock and poultry and ultimately it’s a transfer of cost from one agricultural sector to another.”
* Ethanol damages small engines and outdoor power equipment—In my book Energy Freedom, I have an entire chapter on ethanol. For it, I interviewed Abe at K & S Services Center in Albuquerque, NM—which specializes in small engine service and repair. He told me that 85 percent of the repairs they do are caused by fuel problems. Because of the increased ethanol in the fuel available at gas stations, Abe’s had to change his warranty policy and the center no longer warranties fuel-related damages. For his customers, many of whom are in the lawn-care business, the ten-percent ethanol in gasoline doubled their repair costs until they learned about its hazards and quit using it—converting to more expensive (but cheaper in the long run) pure gasoline.
Kris Kiser, president and CEO, Outdoor Power Equipment Institute, affirms Abe’s observations: “Our small-engine industry and products … is sort of where the RFS meets reality. … you’re introducing fuel to the marketplace for which all of this stuff is not designed or warranted to run on. … You have product failure. Failure can mean economic failure or it can mean safety failure. … There’s a half-billion in engine products in the marketplace today not built or warranted to run on E15.”
Hard to remove once policy is on place
Whether or not you agree with Ted Cruz’s tactics regarding stopping Obamacare, you likely agree with this statement he made about it: “In modern times no major entitlement, once it was implemented, has ever been unwound.” Surprise! The same can be said about the RFS. My friend and colleague, Paul Driessen has penned an excellent column on ethanol in which he addresses “how hard it is to alter policies and programs once they have been launched by Washington politicians, creating armies of special interests, lobbyists and campaign contributors.”
We surely see what Driessen is talking about in an October 11, letter from Governor Terry Branstad (R-IA), published in the Wall Street Journal. In Ethanol Promotes Consumer Choice, Branstad defended the benefits of his state’s leading crop: “It is the ethanol industry, which makes a cheaper, cleaner and higher-octane product, that is ready, willing and able to face free-market competition.” To which a reader, Charles Pierce, responds: “I do not know what planet the Governor is living on but when the Federal Government forces the adding of ethanol to motor fuels there is no choice. It is just like the PPACA [Obamacare] it is a tax that is paid by each consumer being forced to buy a product that the government set up or likes. Want free choice; want cheaper motor fuels? Make it an option, not a mandate.”
When Republicans who generally oppose mandates and subsidies, like Gov. Branstad, Sen. Grassely, and Rep. King, support continuing the RFS, we can surely see the influence of “special interests, lobbyists and campaign contributors,” as a result of federal involvement in what should be a market-based solution.
“Despite over 7 years of effort and the expenditure of about $603 million, the Department had not yet achieved its biorefinery development and production goals,” a report released in September revealed.
It is time to repeal—or at least revise—the costly RPS boondoggle. Fortunately such a plan is on the table. The RFS Reform Act, co-sponsored by both Democrats and Republicans, proposes to eliminate the conventional biofuels mandate and cap the amount of ethanol that can be blended into the fuel supply. Call your Senators and Representatives and tell them to end this eight-year-old policy failure.
We may not be able to repeal Obamacare, but with your help, reforming the RFS can be a reality.
GM food opponents are 'wicked' and leave small children in poorest parts of the world to die, British government minister claims
Opponents of genetically modified crops have been condemned as ‘wicked’ by the Cabinet minister in charge of what the country eats. Environment Secretary Owen Paterson stepped up his attack on green groups who campaign against GM, warning they are scuppering crucial nutrition programmes in the developing world.
He said it was ‘disgusting’ that small children in poor countries were left to die because a small group of people opposed the development of GM crops.
In particular Mr Paterson said the sabotage of a crop of ‘golden rice’ - which is fortified with vitamin A to combat blindness and has the potential to save lives – was risking lives.
The Environment Secretary, a longstanding advocate of GM technology, has previously claimed its adoption in the UK could be as significant as the agricultural revolution.
He argues that 'golden rice' which could be grown in the world's poorest countries was first created in 1999 but has not been used to help solve global hunger.
‘It's just disgusting that little children are allowed to go blind and die because of a hang-up by a small number of people about this technology,’ he told The Independent.
‘I feel really strongly about it. I think what they do is absolutely wicked.’
Speaking of the potential benefits of GM farming, he said: ‘There are 17 million farmers, farming 170 million hectares which is 12 per cent of the world's arable area, seven times the surface area of the UK (with GM) and no one has ever brought me a single case of a health problem.’
Mr Paterson was echoing comments he made earlier in the summer when he said GM crops have the potential to improve the environment and save lives.
He claimed the intense scrutiny placed on genetically modified organisms (GMOs) would actually mean they are safer foods than those produced using conventional means.
The Environment Secretary said an area seven times the size of the UK was already being used for the cultivation of GM crops worldwide and there was ‘no substantiated case’ of an adverse impact on health.
But opponents of GM methods say it contributes to intensive farming practices and pesticide use that are environmentally damaging and that it will not tackle problems facing agriculture or deliver secure food supplies for the world's growing population.
The only benefits are for the large agricultural businesses that develop and sell the technology, they claim.
Speaking in The Independent today, Mr Paterson also defended the Government's badger cull to prevent bovine TB, and criticised animal welfare groups such as the RSPCA that have opposed it.
‘I cannot understand anyone wanting to tolerate this disgusting disease,’ he said.
His comments clash with anti-cull protesters and activists, such as Queen guitarist Brian May, who doubt the science behind the Government's plans.
It’s showdown time for Britain's insane 'green’ energy policy
Politicians are complaining about rises in fuel bills that are largely the result of their own actions
Three events last week brought nearer the showdown that will have to come over the multiple green insanities that in recent years have hijacked Britain’s energy policy. Although two left our excitable media and politicians largely at sea, few even noticed the insidious implications of the third event, which threatens to slam the door on the possibility that we could all be enjoying much cheaper gas and electricity for decades to come,
One event was the hysteria that erupted over that further 8 per cent price hike by SSE, one of our six major energy companies, which tried to explain that two-thirds of the 13 per cent increase in its costs, making that price rise inevitable, were due to “green” taxes and the soaring cost of connecting new wind farms to the grid. While SSE called for a curb on these green levies – such as the crazy “carbon tax”, designed eventually to double the cost of electricity from fossil fuels, which still supply 70 per cent of our needs – the only official response was a fatuous call from our energy minister, Michael Fallon, for consumers to boycott SSE. Mr Fallon was oblivious to the fact that his Government’s policies will soon force all other energy companies to follow suit.
Before that we also had those hysterical predictions that this winter we could face serious power cuts (as one paper’s front page had it, “the winter of blackouts”). This followed a warning from National Grid that, thanks to the closure of several large power stations under EU anti-pollution laws, the safety reserve of our power supplies has shrunk to two gigawatts, its lowest margin for years,
What the BBC and everyone else seemed to miss was the small print in which National Grid insisted that the lights wouldn’t be going out, because it now has “the tools” to cover any shortfall. One reason for its confidence was the story reported here before, of how National Grid has been quietly signing up thousands of diesel generators, linked by computers to the grid, which can be automatically switched on at a moment’s notice to cover for any power shortage. And their main purpose, although National Grid tries to deny it, is to make up for the unreliability of that ever-increasing number of heavily subsidised wind farms the Government wants to see built, in its efforts to “de-carbonise” our electricity supply.
Although National Grid may try to keep quiet about it, the companies piling in to sign up for this scheme – attracted by the colossal sums it is offering to build up its “Short Term Operating Reserve” – make no secret on their websites and planning applications of the fact that it is designed to cover for the disastrous intermittencies of wind power. Even National Grid admits that, within six years, it hopes to have expanded its emergency reserve from 3.5GW to 8GW, equivalent to the output of four large conventional power plants. This is why firms such as Green Frog, Fulcrum Power and Power Balancing Services are pouring millions into building “mini-power stations” – container parks full of diesel generators – to qualify for “availability payments” so lavish that, in proportion, that they make the subsidy bonanza enjoyed by wind-farm operators look like chicken feed.
Mad though it might seem to cover for the deficiencies of wind turbines by pouring a fortune into diesel generators creating the very CO2 the wind farms are meant to save, even this pales into insignificance compared with the implications of an amendment narrowly passed last week by the European Parliament, designed to prevent the EU sharing in the cheap energy revolution made possible by fracking for shale gas.
The powerful “green” movement was exultant at the passing of this amendment, which – if it gets through the EU’s tortuous legislative process – will force energy companies to pay for cripplingly expensive “environmental impact assessments” – even for test drilling to ascertain whether there is gas in the shale.
Furthermore, the MEPs voted to bring even the smallest test-drilling site under the control of a system that makes green lobby groups a key part of the regulatory process, enabling them to put every kind of obstacle in its way. Their openly declared aim is that Europe must not be allowed to join the energy revolution which, in the US, has halved gas prices in just five years.
Instead of this, the only effect of our Government’s policy will be, before long, to double our energy costs, just when the average household energy bill already equates to a fifth of a pensioner’s income. Yet all our brainless politicians can do is complain about rises in those bills, which are largely being made inevitable by their own actions.
Truly, we are looking here at the maddest and most self-deceiving web of idiocies any generation of politicians can ever have put their hands to.
Wind farms are 'green vandalism driven by greed'
Villagers fight plans for four wind farm developments as firms rush to take up lucrative subsidies
The village of Orston used to be the sort of place where nothing ever happened. People liked it that way.
The most notable thing about this quiet, leafy settlement in Nottinghamshire was that the parish church had a drum from the Battle of Waterloo.
But suddenly the 450 villagers have been pitched into a battle of their own, against green energy developers.
Four industrial-scale projects including a pair of huge wind turbines are proposed for fields on the edge of Orston, just outside the village conservation area.
“This is green vandalism driven by greed,” says one local, unfolding a map in the pub, The Durham Ox.
Another says of the feeling in Orston: “This is a sleepy village that just woke up.”
The applications came at a rate of roughly one a month over the summer. The first was for a wind turbine five times higher than the tower of the local church, which would loom over the cricket pitch. It was taller than Nelson’s Column at 242ft.
The next was for another turbine of the same height, in a field just across from the first in Spa Lane. Then in August came a plan for a solar farm with more than 50,000 panels.
And last month there was an application to build a large anaerobic digester plant with gas towers, bringing thousands more tractor journeys to the country lanes.
“We are faced with four major developments within a third of a mile of each other, on the edge of a village which is protected,” says Nick Hammond, who lives here and works as a project consultant for the United Nations, among others. “That is crazy. It is way out of kilter.”
The people of Orston now have a week to register their objections to the anaerobic digester plant. The consultation periods for the wind turbines and the solar farm are over. But even if Rushcliffe borough council turns down these applications, the developers are more than likely to win on appeal.
The battle is being fought not just in this village but across the whole of Britain. There has been a surge in such projects in recent times as companies rush to take advantage of lucrative consumer subsidies, as the Government strives to ensure that 15 per cent of Britain’s energy needs are met from renewable sources by 2020.
Last year, wind turbine owners received help amounting to £1.2 billion. That was effectively £100,000 per job in the wind farm industry, paid for by a supplement on electricity bills. The total subsidy is expected to rise to £6 billion by 2020.
Over the last few days, energy companies have warned the Prime Minister that bills will continue to rise if they have to keep paying for green subsidies and environmental taxes.
Mr Morris, 64, the former renewable energy consultant, says: “The wind turbine situation is absolutely diabolical. Anybody with a business background can look at the economics of it and see that without the subsidies it would be an absolute no-goer.”
Outside, the leaves have not yet fallen from the horse chestnut trees and the centre of Orston looks like a film-maker’s notion of a classic English village. Next to the pub is the 12th century Church of St Mary, which has a handsome square tower and contains the historic battle drum.
The village school is close by and it has an excellent reputation. The charm of the place and the school are the reasons people come to live here.
“There is a premium for living in Orston,” says one villager, whose three-bedroom former council house is now worth £250,000. The bigger homes sell for more than half a million.
Orston is surrounded by open fields and farmland. It sits on a ridge on the edge of the Vale of Belvoir and you can see Belvoir Castle in the distance, from the field where the first turbine will be. If the plans go ahead, this view will be interrupted by a giant, whirring structure and the grass will be replaced with concrete.
“Lincolnshire is full of wind farms, there is no room for any more, so they are coming west,” says David Sims, a former company director who has a map showing the sites for 26 proposed wind farms across the Vale of Belvoir. He understands why the sudden surge in applications is happening.
“The subsidies make all this so lucrative that people are falling over themselves to get involved. You can’t blame the farmers.”
Ann Crockett-McLean, who describes herself as a mother and a personality profiler, lives close to where the projects will be built. “It feels huge. It feels really scary. You don’t know what’s coming next,” she says. “You want to fight, because the moment one of these developments gets through, the whole landscape will start to change.”
She is worried that once the first turbine has been approved the villagers will no longer be able to object on visual grounds. “The Fens have been taken over by wind turbines. That all started with one application that seemed neither here nor there.”
So the people of Orston can only wait and see if developers will be allowed to build turbines on the edge of their village, the heart of which is a conservation area.
“It is perverse that I can’t prune a tree in my back garden without planning permission and yet somebody can build a 74 metre [242ft] tower that we can all see,” says Jeff Dickinson, 61.
“It is also perverse that we are building these monstrosities in these lovely locations, all in the name of the environment. The solution is destroying what we are trying to preserve.”
Merchants of advocacy
Reiner Grundmann has written a fairly damning review of Oreskes and Conway's "Merchants of Doubt". I guess it's fair to say that he is not desperately impressed
It is disappointing to see professional historians reduce the complexity to a black and white affair where it goes without saying what the preferred colour is. The social science literature relevant to the understanding of policymaking in the face of uncertainty is largely absent. The authors mention just one study, about rational decision theory, which is probably cited because it supports the authors’ claim that scientific uncertainty helps to prevent or delay political action.
They missed the opportunity to confront their historical material with approaches that have examined the same case studies but did not come to the same conclusions. Reading Merchants of Doubt gives the impression that no such work exists.
This raises the question of what epistemological status it can claim. Its authors have been critical of the scientific credentials of the contrarians, quoting the lack of peer review or selective use of information. This book has all the hallmarks of science (there are many footnotes) and perhaps it was even peer-reviewed.
But it is what the title and subtitle suggest: less a scholarly work than a passionate attack on a group of scientists turned lobbyists and thus itself a partial account. I wonder if it does not do a disservice to the cause it is advocating.
I haven't troubled to read Merchants of Doubt before. I can't really see that changing in the near future.
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Posted by JR at 7:35 PM